The Ethics of Modern Managed Care

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Perspectives on the physician-businessman

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The Ethics of Modern Managed Care

  1. 1. The Ethics of Modern Managed Care The Physician-Businessman Brian A. Wells
  2. 2. Introduction <ul><li>Managed Care has increasingly forced the physician to consider the cost of treatment </li></ul><ul><li>This presents a conflict in the physician-patient relationship </li></ul><ul><li>Is it ethical for a physician to play the role of a businessman in dealings with a patient? </li></ul>
  3. 3. The Hippocratic Oath <ul><li>Upon graduation, many medical students take a modern version of the oath written by Louis Lasagna in 1964. </li></ul><ul><li>At the heart of the Hippocratic Oath, both classical and modern, is the vow to avoid doing harm and to help when appropriate and necessary. </li></ul>
  4. 4. Situation <ul><li>Consider the following situation: </li></ul><ul><ul><li>Dr. X is a family practitioner with a large practice. Dr. X’s practice has recently been experiencing financial hardship ever since XYZ HMO changed its reimbursement policy from discounted FFS to capitation. Dr. X’s patient utilization has always been high and it is now having an even greater effect on his practice. Dr. X is worried that by continuing to see his patients from XYZ HMO, it will eventually cause his income to plummet and his practice to suffer. </li></ul></ul>
  5. 5. Dr. Solomon’s Dilemma <ul><li>Martin Solomon is a physician at Beth Israel Deaconess </li></ul><ul><li>Sold his practice to CareGroup HMO in 1998. </li></ul><ul><li>Solomon began to manage the financial risk of many of their patients, effectively taking on the role previously held by HMOs. </li></ul>
  6. 6. Dr. Solomon’s Dilemma <ul><li>“ Pods” of 11 doctors each were formed to manage risk </li></ul><ul><li>Majority of the discussion was not about the actual care of the patient – instead it was about the cost of the care </li></ul><ul><li>“ Report Cards” were distributed at these meetings to show how each physician was doing compared to the other members of the “Pod” </li></ul>
  7. 7. Dr. Solomon’s Dilemma <ul><li>“ I think it's important for doctors to know the value of the services they're providing. That means they have to know both the quality of the care and the cost of the care.” - James Reinertsen, MD, CEO of CareGroup in 1998 </li></ul>
  8. 8. Dr. Solomon’s Dilemma <ul><li>“ The very best way for a doctor to be paid is on a salary where whether the doctor makes decisions to do something for the patient…or not to do something is totally irrelevant to the doctor’s income.” - James Reinertsen, MD, CEO of CareGroup in 1998 </li></ul>
  9. 9. Is this Ethical? <ul><li>It creates the need for a balancing act – the more control a physician has over the treatment of a patient, the more that physician tends to bear the burden of risk. </li></ul><ul><li>It interferes with the autonomy of the physician. </li></ul>
  10. 10. Is this Ethical? <ul><li>It may be difficult for physicians to remain objective about treatment decisions if a monetary reward or penalty is associated with a particular course of action. </li></ul><ul><li>&quot;Bed side rationing.&quot; In situations requiring them to balance the interests of a particular patient with those of other patients, physicians are prevented from carrying out their fundamental obligation of individual patient advocacy. </li></ul><ul><li>Source: 1997 Report from AMA Council on Ethical and Judicial Affairs </li></ul>
  11. 11. Is this Ethical? <ul><li>If the patient thinks that the doctor is making treatment decisions based on his or her own financial interest, the relationship of trust between patient and doctor is eroded. </li></ul><ul><li>Doctors may become resentful of patients who require the most care and resources. </li></ul><ul><li>Source: 1997 Report from AMA Council on Ethical and Judicial Affairs </li></ul>
  12. 12. Is this Ethical? <ul><li>Should the physician have to worry about the cost of treatment? </li></ul><ul><li>Should the physician be allowed to act in the best interests of the patient regardless of cost? </li></ul><ul><li>Is it just a sign of our times that this is the case or is indicative of a greater problem? </li></ul>
  13. 13. Statistics and Trends <ul><li>In the United States, it is estimated that 60 percent of doctors are at some financial risk for the cost of care of their patients </li></ul><ul><li>Half the primary care doctors in the US are at some financial risk for the care they give. </li></ul><ul><li>  The top five states for doctors involved in risk-based contracts are: California, Arizona, Minnesota, Florida and Massachusetts. </li></ul><ul><li>Source: Peter Bowland – The Capitation Sourcebook </li></ul>
  14. 14. Statistics and Trends <ul><li>In California, the state where risk-based, capitated contracts have the longest history, doctors receive monthly fees ranging between $35-$50 for each patient they see who is covered by a commercial plan. They must manage the total care of that patient for that amount. If a patient needs extensive care, that patient becomes a money-loser for the physician's practice. </li></ul><ul><li>Source: Peter Bowland – The Capitation Sourcebook </li></ul>
  15. 15. Statistics and Trends <ul><li>According to PriceWaterhouseCoopers, 10 percent of the medical groups in California are operating under Chapter 11 protection, while one-third of the medical groups are at or near bankruptcy. The cause: Doctors are not able to cover the operating costs of their practices based on the reimbursement rates of these risk arrangements. </li></ul><ul><li>Source: Peter Bowland – The Capitation Sourcebook </li></ul>
  16. 16. Statistics and Trends <ul><li>The number of patients doctors have in capitated, risk-bearing contracts varies from practice to practice. However, when as little as 25 percent of a doctor's patient pool is capitated, that provider will generally treat all patients as capitated, meaning he or she will become cost-conscious indiscriminate of the fact that many are covered by traditional indemnity health plans. </li></ul><ul><li>Source: Peter Bowland – The Capitation Sourcebook </li></ul>
  17. 17. Conclusion <ul><li>This is a widespread problem. </li></ul><ul><li>It has no clear-cut, easy solution. </li></ul><ul><li>There is a difference in the way things should be and the way things are. </li></ul><ul><li>Physicians should consider the cost of the care but should strive to maximize the care that patients receives at that cost level. </li></ul>

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