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One might

process, state boards are reluctant to pull a

consumers.

license or make public the results of an inves-

conclude that

tigation due to the financial consequences

licensure offers

Consumer Protections

for the sanctioned professional. Just issuing

more protection

Offered by the Market

formal charges against a physician, which

become public record, affect a doctor's repu-

and the Courts

to malfeasant

tation and potential income.58

clinicians than

As a result of these forces, formal disciplinary

A closer look suggests that most patient

protections are unrelated to state licensing.63

actions typically do not focus on improper or

to consumers.

Concern over reputation and potential liabili-

negligent care. Instead, the bulk of disciplinary

ty for medical malpractice creates incentives

actions involve inappropriate prescription of

for private efforts to assess clinician knowl-

controlled substances, drug and alcohol abuse,

edge, skills and competence that well exceed

mental illness, sexual improprieties and other

issues.59 Researchers have found a high rate of

those associated with state licensing. Indeed,

repeat offenders among physicians sanctioned

health care providers regularly review informa-

by state medical boards, suggesting that licens-

tion on their clinicians that is broader and

ing does not deal with offenders in an effective

more up-to-date than information associated

way.60

with licensure. At the point of care, hospitals

and other institutions dictate what services

Reporting Negative Outcomes to the

each individual clinician may provide. On top

Public?

of that, the structure of medical malpractice

The licensing system also comes up short

liability insurance rates creates some incen-

in the area of reporting substandard care to

tives for providers to avoid medical errors and

the public. There are often long delays.

other negligent care.

California reports an average of 934 days in

getting a case to judicial review.61 To avoid the

Medical Malpractice Liability

high costs of lengthy hearings, boards rou-

Hospitals, health maintenance organiza-

tinely negotiate voluntary settlements for less-

tions, and other healthcare providers may be

er offenses. In the Federation of State Medical

liable for negligence in the credentialing, selec-

Boards' database, the nature of the investiga-

tion, retention, and supervision of health pro-

fessionals.64 Courts have established that a

tion is not recorded in more than 65 percent of

hospital or health maintenance organization

cases that ended in sanctions between 1994

has a "non-delegable duty to select and retain

and 2002. In those cases, the state board and

only competent physicians [and] to oversee all

the physician entered an agreement without

the physician being found guilty.62 These

persons who practice medicine" in its facility

or system.65 The courts have ruled that health-

dynamics deny consumers information that

care organizations have a duty of proper selec-

would help them avoid low-quality physicians.

tion and a duty to supervise clinicians.66

Licensing, then, does little to prevent clin-

Therefore, hospitals and other health care

icians from rendering improper or negligent

providers are legally liable for the actions of

medical care. Disciplinary actions are not pri-

clinicians whose background and skills they

marily related to the quality of medical care

have assessed. When a negligent clinician is

per se, and many disciplinary actions are kept

employed by a health care organization, the

below the public radar. If, as some suggest,

courts may hold the employer liable.67 Even if

concerns about financial and reputational

the clinician is not employed by the provider,

consequences diminish efforts to discipline

the provider may still be liable if there is any

clinicians formally or publicly, or encourage

reason for patients to think that clinicians are

confidential consent agreements, then one

tied to a provider, such as when a hospital

might conclude that licensure offers more

advertises the quality of its clinicians. Similarly,

protection to malfeasant clinicians than to

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