Trust and Betrayal in the Medical Marketplace

M. Gregg Bloche

Georgetown University Law Center

Stanford Law Review, Vol. 55, 2002

In health care law, as in other regulatory spheres, many rules are meant to promote trustworthiness. Market-oriented scholars have long urged that parties be permitted to contract out of such rules. They have argued, on efficiency grounds, for contractual enjoining of clinical decisionmaking authority; relationships among providers and health care payers; and physicians' conflicting obligations to patients, payers, and other third parties. To a large degree, courts and regulators accommodated, clearing a path in the 1980s and 1990s for the rise of managed care. But a growing body of research on the psychology of trust, altruism, and health risk raises doubts about contractual departure from rules meant to reinforce trustworthiness. Rising consumer hostility to managed care cost control methods has lent urgency to these doubts. While some contractarian scholars dismiss these doubts, others, most notably Mark Hall, take them seriously. Drawing upon some of the same empirical studies that have led others to question contractarian prescriptions, Hall argues that consumer trust is robust, indeed often present in excess, and that regulation on trust-related grounds is mostly unnecessary, even counterproductive.

I contend in this essay that contractarian prescriptions for health law pose large risks for our health system's trustworthiness. Hall's case to the contrary misreads both the psychological evidence and the import and irony of Americans' backlash against managed care. Because people are uncomfortable, to the point of denial, with health care's cost-benefit tradeoffs, the medical marketplace delivers evasion and euphemism about how these tradeoffs are made. But there is also a thriving market for the exposure of evasion. Regulatory and legal deference to contractual arrangements that ration covertly thus engenders consumer anger and distrust. Rather than tolerating such arrangements, the law should demand contractual honesty as the price for deference to contractual freedom.

Accepted Paper Series

Not Available For Download

Date posted: February 25, 2003  

Suggested Citation

Bloche, M. Gregg, Trust and Betrayal in the Medical Marketplace. Stanford Law Review, Vol. 55, 2002. Available at SSRN: http://ssrn.com/abstract=383220

Contact Information

M. Gregg Bloche (Contact Author)
Georgetown University Law Center ( email )
600 New Jersey Avenue, NW
Washington, DC 20001
United States
202-662-9123 (Phone)
202-662-9680 (Fax)
Feedback to SSRN

Paper statistics
Abstract Views: 531

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.437 seconds