Opinion ID: 1969808
Heading Depth: 2
Heading Rank: 3

Heading: The Current Situation

Text: If, contrary to my view, we were to conclude that Granger established the doctrine as a part of Minnesota common law, I would not be reluctant to reexamine that doctrine in light of the substantial changes that have occurred since 1933. And, because the doctrine would then be a creature of this court, not the legislature, I would not defer to the legislature, but see it as the court's responsibility to reexamine our own ruling. [2] As early as 1987, one commentator observed these dramatic changes in the health care industry: One industry expert predicts that by the mid-1990s, ten national firms will provide fifty percent of the nation's medical care. Nationwide, hospital chains, nonexistent twenty years ago, now own or manage twelve percent of the nation's hospitals. The proliferation of health maintenance organizations, freestanding emergency centers, and other proprietary health care delivery systems exemplify the increased commercialization of medicine. Jeffrey F. Chase-Lubitz, Note, The Corporate Practice of Medicine Doctrine: An Anachronism in the Modern Health Care Industry, 40 Vand. L.Rev. 445, 446 (1987) (citations omitted). These trends have continued, causing these observations in 1998: The delivery of health care changed tremendously over the eighty years since the AMA first articulated the corporate practice of medicine doctrine. Health care costs in the United States now constitute 14% of the gross national product, translating to over $1 trillion annually. These numbers have been increasing dramatically over the last three decades, from 5.9% of the gross national product and $42 billion each year in 1965 when the Medicare and Medicaid programs were enacted, to 12% of the gross national product and $700 billion annually in 1990, to the current 14% of the gross national product. The causes of these dramatic increases include factors which are inevitable such as the aging of the population, advances in expensive technology and service-cost inflation, and factors which may be susceptible to control, chief among them the long-standing system of third-party payors (insurance carriers) which has kept health care consumers largely insensitive to the price of medical services. It has been estimated that despite the increasing revenues generated by health care generally, as many as half of the acute-care hospitals now in existence will close. Part of this trend has been significant merger and acquisition activity involving hospitals, with one transaction occurring every three days in 1995 and 1996. Adam M. Freiman, Comment, The Abandonment of the Antiquated Corporate Practice of Medicine Doctrine: Injecting a Dose of Efficiency Into the Modern Health Care Environment, 47 Emory L.J. 697, 733-34 (1998) (citations omitted). Whether as the cause or an effect of these trends, the AMA has lifted its ethical ban on the corporate practice of medicine. In 1975 the Federal Trade Commission (FTC) charged the AMA with antitrust violations, alleging that its Principles of Medical Ethics, including its prohibitions of corporate practice, were anticompetitive because, in part, they restricted arrangements between physicians and nonphysicians and prevented the creation of more economical business structures. See Chase-Lubitz, supra, at 475-77; Freiman, supra, at 708-712. [3] As a result, the AMA revised its ethical principles to state that [a] physician shall    be free to choose whom to serve, with whom to associate, and the environment in which to provide medical services. American Medical Association, Principles of Medical Ethics § VI (1980), available at http://www.ama-assn.org/ama1/pub/ upload/mm/369/1980  principles.pdf. These changes have fundamentally altered the public policy considerations relied on 70 years ago to support the judicial creation of the corporate practice of medicine doctrine in some states. To the extent that our decision in Granger is seen as one of them, I would overrule it.