The New Health Care for Profit Doctors and Hospitals in a Competitive Environment (1983) / Chapter Skim
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Ethical Dilemmas of For-Profit Enterprise in Health Care
Ethical Dilemmas of For-Profit Enterprise in Health Care
Pages 125-152
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From page 125... ...
AMA Judicial Council Opinions and Reports, 1969 The type of financial arrangement between a physician and a hospital, corporation or other lay body is important and relevant in determining whether or not such an arrangement is ethical. We further believe that the amount of a physician's income or whether or not an institution is making a profit on his services is irrelevant in whether an arrangement is ethical.
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From page 126... ...
Yet over the years, beginning with concern about restraining unorthodox practitioners and continuing in debates over physician control of pharmacies, patents, advertising, and financial arrangements in group practice, organized medicine has constantly been nervous about the pestilential taint of commercialization. History of the Ethics Controversy The International Context If we are to understand the new ethical problems that may emerge with the evolution of for-profit enterprise in health care, it is worth, first, examining the history of the ethical controversy over some historical analogues of that relationship and then attempting to synthesize a description of the potential problems to be anticipated.
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From page 127... ...
The Australian Medical Association Code of Ethics has the same principle stated verbatim, with similar examples, followed by an impossibly convoluted set of sentences attempting to walk a tightrope on the subject of ownership of pharmaceutical companies.6 The American Medical Association The codes of the American Medical Association (AMA) have shown similar ambivalence through the years.
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From page 128... ...
suit claiming that prohibition on solicitation was restraining free trade, the AMA began emphasizing that what it wanted to prohibit was "deceptive practices," "false or misleading statements," and the "creation of unjustified expectations." In short, the AMA's position had shifted to one that any good Madison Avenue advertising executive might endorse. What began as an effort to distinguish medical professionals from quacks, and others whom they tried to identify with mere business people, ended up making them demand to be recognized (by the FTC and others)
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From page 129... ...
In 1947 the ophthalmologists aggravated the AMA Judicial Council by presenting so many schemes for rebates that the Council was uncharacteristically exasperated in its response.~7 Among the tasks of the Council was review of ethical queries from members. Ophthalmologists were seeking ways in which they could receive some remuneration, beyond their usual professional fee, for prescribing eye glasses.
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From page 130... ...
While such a conclusion is debatable, at least it suggests that the unanimous, vitriolic condemnation of fee splitting may have latent functions, perhaps, such as maintenance of the idea that the health care professional is significantly different from a business person, for whom commissions, royalties, finder's fees, and the like are standard. Ownership of Health Facilities and Corporate Relations The problems examined thus far advertising, patents, rebates, and fee splitting constitute the classic issues of the ethics of physician finances.
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From page 131... ...
The other two, however, are more directly relevant to for-profit health care enterprise: hospitals collecting fees for professional services of staff physicians and absorbing them as hospital income, and universities employing fulltime hospital staffs and sharing such fees for the professional care of patients "as to net the university no small profit." Several things are worth noting. First, the cJudicial Council is concerned that the right and the dignity of the profession is assaulted by such practices of lay corporations.
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From page 132... ...
From this complex and shifting pattern of professional attitudes it may be possible to glean a pattern or at least a set of principles that informs the Judicial Council and other AMA pronouncements. Basic Principles of the Professional Stance Service to the Patient Historically, all of medical ethics in the Hippocratic tradition, including that of AngIo-American medical ethics, affirms as the basic principle the idea that the physician should use his or her judgment to do what he or she thinks will benefit the patient.
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From page 133... ...
This had led some to suggest that self-interested motives have led organized medicine to label certain business practices unethical. In fact the author of an anthropological study of Chinese medical ethics argues that the primary function of medical ethics is the control of financial and other rewards of professional service.28 Pauly's analysis of fee splitting, in contrast to the professional physician literature, simply assumes that physicians will primarily pursue self-interest and only at the margin be influenced by patient welfare.
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From page 134... ...
As recently as 1981 the AMA Judicial Council condemned commercialization (while affirming the right to make a "fair compensation"~.29 An Interpretation of the Professional Stance The question of immediate importance for this essay is the relevance of this professional history and the principles derived from it for the evolution of for-profit enterprise in health care delivery. While some of the elements have clear connections with the recent development of commercial hemodialysis and hospital chains owned by large profitmaking corporations, there is a sense of discontinuity that something of moral significance is at stake beyond the ethical problems faced by the small-town general practitioner whose income was tied to his or her medical advice.
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From page 135... ...
Ethical Dilemmas of For-Profit Enterprise in Health Care 135
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From page 136... ...
Corporate medicine as practiced by company physicians is the closest analogue and that is a small-scale development in comparison with the potential of for-profit enterprise. Traditional organized medicine, if this is correct, was capable of tentative accommodation to the complex realities of the business of medicine when some commercialization was involved, provided physicians retained dominance in medical decision making.
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From page 137... ...
The older version of the Canons of Professional Ethics of the American Bar Association includes a relevant provision originally adopted in 1928. This provision states that "the professional services of a lawyer should not be controlled or exploited by any lay agency, personal or corporate, which intervenes between the client and the lawyer."34 The same provision makes clear that it is acceptable for a lawyer to be employed by an organization but then goes on to place a critical limitation prohibiting legal services to persons within the organization.
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From page 138... ...
A Philosophical Evaluation of the Problem Problems with Evaluations Based on Professional Codes The commission for this paper emphasized examination of the ways in which physician involvement in for-prof~t health care enterprise has been addressed in professional codes of ethics. We have seen that
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From page 139... ...
The fact that the codes reflect a good-faith consensus of what the professional groups take to be ethical conduct is not enough to legitimate the use of the codes for resolving matters of professional ethics. For a rule of ethical conduct to be justified it must conform to a set of basic ethical principles derived from sources that are far more universal and far more fundamental than mere professional consensus.
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From page 140... ...
Likewise, it may be that business people and physicians ought to act somewhat differently toward clients even though they subscribe to the same general principles. A commonly held stereotype that expresses such differences is that physicians and other health care professionals are expected to act primarily or exclusively for the welfare of the patient, whereas it is perfectly acceptable for an ordinary business person to pursue selfinterest even at the expense of the welfare of others.
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From page 141... ...
Physicians, on the other hand, increasingly see themseIves as having elements in common with business persons, including a degree of legitimate self-interest. This is not to say that the ethical norms for physicians and for business people are identical.
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From page 142... ...
Physician ethics is even more unique in that in comparison to, say, public policy analysts, many of whom also are consequentialist in their ethics, the relevant consequences for physicians are limited, at least in the classical expressions of the Hippocratic tradition, to those accruing to patients (rather than to other individuals, bystanders, or society at large)
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From page 143... ...
The profit motive itself, which we have seen to be compatible with traditional professional physician ethics, is jeopardized in the health care sphere if health care is a right. The Double Agent Problem Another basic theme that makes the business/health care relationship unique is what has been referred to by medical ethicists over the past decade as the double agent problem.
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From page 144... ...
Differences Between Business and Physician Ethics It has been argued that it is too simple to distinguish between the ethics of the physician and the business person by holding that physicians, as professionals, are collectively oriented and business people are self-oriented. Still it was held that there are differences in traditional ethical expectations in the two roles.
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From page 145... ...
The newest version of the Principles of Medical Ethics of the AMA holds the physician to "deal honestly with patients." That is a new recognition of the rights of patients. Prior to these recent developments, however, physicians and business people had clear differences on the morality of lying differences, oddly enough, in which the business person held a position closer to traditional Western morality.
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From page 146... ...
A good profit-oriented hospital should be expected to do just that by promoting elective procedures; making efficient use of resources; and encouraging or giving incentives to physicians to "order" marginal tests, treatments, and services. Although business people probably would find unacceptable the intentional inducement of a consumer to use a product that would actually be harmful, little objection is ever offered to harmless enticement to consume.
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From page 147... ...
The morally correct solution to this dilemma probably will depend directly on whether health care is a right or a mere commodity. The Duty to the Indigent Another dilemma closely related to the question of whether health care is a right is what business people and physicians feel they owe to those who cannot afford to purchase services at the prevailing market rate.
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From page 148... ...
Still we can anticipate potential tension, for example, when physicians in a commercially owned hospital feel accountable to outsiders within their profession and the business managers resist professional efforts to control their business practices. Conclusion We can anticipate many points of ethical difficulty as for-profit health care enterprises evolve and force more direct interactions between the medical profession and its system of ethics and business with its system of ethics.
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From page 149... ...
Many of the recent changes in professional physician ethics the development of the rights perspective, the movement away from an exclusively consequentialist ethic, and the acceptance of the legitimacy of a limited self-interest stem from lay pressures on the professional community to return to the mainstream of Western ethics. Physicians and lay people alike may find attractive a liberation from the unreasonable expectation of unlimited altruism on the part of physicians.
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From page 150... ...
14. American Medical Association, Judicial Council Opinions and Reports (Chicago: American Medical Association, 1971)
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From page 151... ...
24. Judicial Council Opinions and Reports (Chicago: American Medical Association, 1977)
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From page 152... ...
42. Willard Gaylin and Daniel Callahan, "The Psychiatrist as Double Agent," Hastings Center Report 4 (February 1974)
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