Despite the emergence of managed health care and the resulting dramatic change in the role of the third-party payer in the physician-patient relationship, the liability standards applied to physicians largely have remained unchanged. This has created a tension between physicians' legal and ethical obligations, and the requirements imposed on the physician by managed health care. Specifically, the issue confronts the physician in the context of malpractice liability. Managed Care Organizations impose a significant amount of control over the way physicians practice medicine, often forcing physicians to ration care. Notwithstanding any beneficial cost savings that might result, this approach subjects the physician to the risk of malpractice liability. Current malpractice law enhances this risk, because courts frequently speak of physicians having a duty to resist the pressures of managed care. This presents a significant policy problem, not just for physicians and their patients, but for society at large, as the current legal framework does not further, but in fact undermines, society's overall goal of containing health care costs.

Professor Fine examines the policy problem through a philosophical lens, and maintains that the law's failure to account for the change to a managed care model and the resulting change in the way the physician practices medicine has created a situation that is fundamentally unfair to physicians. More importantly, it is argued that the continued adherence to outdated principles of liability is deficient from a utilitarian perspective, as the current framework hinders society's overall goal of lowering health care costs.

Finally, Professor Fine evaluates proposed solutions to this problem, and concludes that the best approach is one that relies on the medical profession to take the initiative and institute reforms in the way medicine is practiced so that considerations of cost can be responsibly and effectively incorporated into treatment decisions. This would make the standard of care more reflective of the current state of health care, and better promote the goal of cost containment.