Quality Control, Enterprise Liability, and Distintermediation in Managed Care

In this article, the authors examine the potential of enterprise liability in light of current health-care finance realities. The article begins by addressing background issues of medical malpractice theory and the development of proposals for a form of plan-based enterprise medical liability centered on managed care organizations (MCOs). The authors then describe recent trends in the evolution of more loosely structured MCOs, including the emergence of disintermediated, or patient-directed, plans. The authors examine the extent to which these developments weaken the rationales for plan-based enterprise liability. The article concludes nevertheless that plan-based enterprise liability best serves the goal of reducing medical injury by permitting a focus on entities with sufficient scope to translate liability pressure into support for systemic risk-reduction measures. Advancing plan-based enterprise liability in an era of disengaged MCOs will require an extension of tort liability to firms with little control but much influence over their business partners