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Flashback in Medical Economics

25 years ago: 1976

No state was hit harder in the ’70s malpractice barrage than Florida. Little wonder that high-risk specialists found the idea advanced by a Jacksonville lawyer both simple and beautiful: Ask patients to pledge–in writing, before treatment–that no matter what happened, they wouldn’t sue. In return, their doctors, relieved of the need for ever-more-costly liability insurance, would hold down fees.

In contract terminology, the pact was an "exculpatory agreement." Its originator, attorney David R. Lewis, was persuasive enough that a number of specialists began offering it to patients as a condition of care. One report estimated that within a few months, at least 4,000 patients had accepted. Those who wouldn’t sign were referred to other physicians.

Lewis built several provisions into the contract to fortify it against challenges in the Florida courts:

• When the agreement was offered, the patient had to be told how much higher the doctor’s expenses and fees would be without it.

• The contract could cover only treatment for a newly diagnosed problem. It couldn’t be made retroactive for care that was already under way.

• Neither could it be applied to treatment of an emergency.

• The contract had to stipulate that the patient had declined referral to an equally qualified local doctor who didn’t use the agreement. Names of two such doctors had to be included in the contract.

• The terms had to be explained fully, in language clear to a layman, before the patient signed.

Lewis added two further precautions. He discouraged doctors from using the agreement to cover care of minors. The law, he felt, wasn’t clear about parents signing away a child’s right to file a malpractice action at a later date. Also, in case a patient who’d signed the agreement sued anyway, there was a clause requiring binding arbitration rather than a trial.

Patients who were offered the contract didn’t react negatively, even if they turned it down, doctors told Medical Economics. But there were plenty of critics, just the same. Elements of organized medicine, the insurance industry, and the legal fraternity condemned the contract, long and loud. Such an agreement was not only unconstitutional, they insisted, it was unethical.

One of the strongest opponents, malpractice defense attorney Jack E. Horsley of Mattoon, IL, declared that the contract "couldn’t stand up in Florida or anywhere else, because it violates basic common law." And the pact might well backfire on the doctor, Horsley warned.

"Suppose a patient who’d signed it went ahead and sued later," he said. "The plaintiff’s attorney could have a field day against a contract designed to let the doctor avoid liability for negligence."

David Lewis argued just as strongly that the agreement he’d conceived was sound. "People keep saying it’s not legal," he said, "but no one can show me a precedent that proves it’s not."

The controversy soon proved to be noise about nothing. For whatever reason, the idea of a contract to head off lawsuits dropped off the malpractice radar not long after it first appeared.

50 years ago: 1951

The scene at Passavant Memorial was a familiar one in teaching hospitals across the land: physicians-in-training listening in while a faculty doctor spoke with patients and their families.

But there was a twist to what was going on at the Chicago institution. Loyal Davis, professor of surgery at Northwestern University, wasn’t exploring symptoms in order to arrive at a diagnosis or a treatment regimen; those decisions had already been made. Instead, he was asking about the patient’s job, family life, and finances. That information helped the surgeon calculate a fee that would be appropriate for his service, without putting undue strain on the patient’s ability to pay.

Why did Davis bring along residents, interns, and occasionally even med students to hear such discussions? Because, like more and more faculty physicians, he realized that most young doctors entered practice with little or no schooling in how to determine fair charges.

Davis didn’t teach any specific formula for fee setting. But he gave his pupils plenty of opportunity to watch him set his own–and he used an informal "pop quiz" method to drive home the message that every patient faces unique financial constraints.

Approaching a student in the hospital corridor, for example, Davis might suddenly ask: "What do you think we should charge Mrs. Jones–the glioblastoma case? I’m going to operate tomorrow, and you’ll remember that we talked with her husband yesterday."

It was a common error for a student, caught off guard, to stammer out a figure that, while it might reflect the clinical challenge and the surgeon’s reputation, was far more than the Joneses could afford. Or, in a different case, a student might suggest a charge much lower than the one that should be levied.

The corridor quizzes often ended with a polite, firm correction by Davis, and with students making a mental note never again to forget about the fiscal consequences of a doctor’s fee. New practitioners who’d trained under Loyal Davis said they’d learned valuable lessons in his "fee clinics"–lessons such as these:

• When a doctor openly discusses the reason for his fee, the patient is less inclined to feel overcharged.

• Your patient will pay more promptly if he believes you’ve taken into account his ability to pay.

• A patient isn’t likely to dispute an unitemized bill if the fee was established at an informal conference with the doctor.

• When a single fee is charged–covering all postoperative care, regardless of the number of visits–the patient is more likely to return for checkups than if he is charged for each post-op visit.

75 years ago: 1926

These days, "health fairs" are common. Doctors, hospitals, and big employers across the country stage them regularly to educate the public about medical concerns (while also promoting medical practices). But in the mid-1920s, they were still rather rare, and Medical Economics found one of them–in Concordia, MO–especially noteworthy.

The "Baby Health Conference," held in conjunction with the Concordia Annual Street Fair and Agricultural Show, was the brainchild (pardon the expression) of Edmund Lissack, a local practitioner. He offered free exams for toddlers between 6 months and 2 years old, as well as presentations on child care for mothers and mothers-to-be.

"Five rooms in the Farmers Bank Building were used for the examinations and health exhibits," the article said, "and all were tastefully decorated. Beautiful posters adorned the walls and advertised what is absolutely necessary to have good health. Thousands of booklets were given away, and it is believed that more than 600 people visited the rooms."

Those visitors got verbal and printed advice on a variety of topics, including "For Health–a Bath a Day" . . . "Let Nature Guide You Aright" . . . "You Need Not Fear the Second Summer If His Diet Is Correct" . . . "A Clean Tooth Never Decays" . . . "Steady Eyes, Steady Nerves, Steady Hands," and, most intriguing all, "Flies or Babies, Which?"

Lissack weighed and measured each baby, scoring the youngster against the "normal child" by AMA standards. Prizes were awarded for the "healthiest"child in each age bracket, and the "best formed" boy and girl. How the nonwinners’ parents reacted to Lissack’s selections was not reported.

–James D. Hendricks
Executive Editor

James Hendricks. Flashback in Medical Economics.

Medical Economics

2001;16.