Fiduciaries abound in health care. Employers pretend they can act in the best interests of employees when maintaining health plans – even though they pay (directly or indirectly) for claims against those plans. Physicians pretend they can act in the best interests of patients – even when hospitals and group practices pressure them to see more patients and spend less time with them, and even though physicians and their employers are incentivized to order expensive tests and procedures. But what if, instead of ignoring these conflicts of interest, the American healthcare system abandoned the fiduciary fallacy?

Building on recent scholarship showing that targeted legislation, regulation, and self-policing – rather than broad fiduciary duties – better manage these conflicts, I use game theory to analyze different scenarios relating to the financing and provision of health care involving two actors – a provider and a payor. For this analysis, I assume that the actors are rational and behave in their own self-interest until constrained by external rules and social and professional norms. My goal is to advance this scholarship by arguing that broad fiduciary duties are inadequate to address conflicts in our healthcare system, while also proposing paths forward.