In the Eye of the Storm: A Regulator's Perspective on Managed Care Organization Liability

The basic cost control mechanisms of managed care are under assault in the courts through vicarious liability suits and class actions. This response to Richard Epstein and Alan Sykes provides a regulator's practical insights into the judicial regulation of managed care. After briefly establishing the relevance of cost controls in an expensive health care market, the paper describes the author's experience administering the Illinois Managed Care and Patient Rights Act of 1999 and concludes that the regulatory tools provided by that law differ significantly from those sought by plaintiffs in recent lawsuits. The author also places the struggle over patients' rights laws and managed care organization lawsuits in context as the extension of a colossal interest group struggle that resulted when doctors, unable to resolve their differences with insurers at the negotiating table, turned to political and legal solutions for their fundamental problems with the structures of managed care. Copyright 2001 by the University of Chicago.