{'fraction_non_alphanumeric': 0.025999509443218053, 'fraction_numerical': 0.004660289428501349, 'mean_word_length': 4.834048640915594, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
The serpent in the Garden of Eden: a look at the impact of physician financial incentive programs and a reconsideration of Herdrich v. Pegram.

I. INTRODUCTION When you are sick, you call your doctor. As the patient, you believe that your doctor will examine you and make a decision on the best course of treatment for you. You trust that your medical interests are at the forefront of their mind. Simply stated, this is the age old patient-doctor relationship. However, modern health care systems have blurred this otherwise straightforward relationship. (4) More money is spent on health care per person in the United States than anywhere else in the world, and each year the costs grow higher. (5) Americans spend greater than $1 trillion annually on medical care forcing the use of cost containment programs in order to curb these costs. (6) Thus came the birth of the Health Management Organization (HMO). HMOs use financial incentives to prompt physicians to recognize the cost consequences of their treatment decisions and thus reduce the amount of care subject to insurance reimbursement. (7) Financial incentives place physicians in a tempting situation by encouraging them to order less treatment and reap greater financial reward. (8) Financial incentive programs have taken the place of the "serpent of temptation" in a modern day medical Garden of Eden. (9) The cutting of costs comes with a price to the patient. Sixty-one percent of managed care patients surveyed stated they were very or somewhat worried that if they became sick, their insurer would be more concerned about saving money than about their medical care. (10) In addition, many of the methods of cost-containment commonly used are found to be ethically objectionable by physicians themselves. (11) The Proverb stands true, "He who pays the piper calls the tune." (12) This Note will begin by examining the emergence of managed care starting with the "fee-for-service" system and moving to the modern HMO. Section IIIA. of this article explore several types of HMOs, compared with the different types of physician reimbursement mechanisms utilized by HMOs. Physician reimbursement programs often contain direct financial incentives. The main types of financial incentives utilized by HMOs will be discussed. These incentive programs place the physician in a dilemma when attempting to determine a patient's best course of treatment. In addition, Section IIIB. of the background addresses the Employee Retirement Income Security Act (ERISA), focusing on the state action preemption clause and the roadblock that ERISA creates for patients who want to bring claims against their HMO. The impact of physician incentive programs is at the heart of the recent Supreme Court case Herdrich v. Pegram. In Herdrich, the patient, Cynthia Herdrich, challenged the use of a common incentive structure that allowed physicians to profit from decreased utilization of expensive medical procedures. (13) Ms. Herdrich alleged that the use of these incentive programs created a conflict of interest for her treating physician and that conflict of interest caused a misdiagnosis of her appendicitis. (14) The Seventh Circuit Court of Appeals agreed with Ms. Herdrich but was later overruled by the Supreme Court. (15) This article suggests that Herdrich v. Pegram was wrongly decided. It will be shown that the case should have been remanded to the District Court for further review. In Section IVA., this article suggests that a fiduciary duty exists between the HMO and it's membership. Even under an ERISA standard a fiduciary duty could be perceived. In Section IVB., this article establishes that physician financial incentive agreements implemented by an HMO can rise to the level of a breach of fiduciary duty. The article will show that the bonus distribution utilized by the HMO in Herdrich could cause a breach by improperly influencing the physician decisionmaking process. This Note will attempt to persuade the reader that the U.S. Supreme Court decision in Herdrich v. Pegram was a missed opportunity. …