Treatment Decisions: Tort or Contract

An issue that must be resolved under any health insurance policy is the locus of decisions on treatment. There will be times when a patient may want some treatment that the insurance company (HMO) will not want to provide. There may be other situations when a decision must be made about the amount to spend on care; two issues that come to mind are treatment at the end of life and amount of treatment for premature newborns. There are essentially two ways of making such decisions. They can be made ex ante through contract, or ex post through tort law. That is, it is possible to specify in advance what sort of payments will be provided through a contract between the patient and the HMO, or it is possible to wait until after some illness occurs and some treatment decision is made and then use tort law (or its variant, malpractice law) to decide if the treatment offered was adequate.