SCOPENOTE31

Bioethics Research LibraryThe Joseph and Rose Kennedy Institute of Ethics

Box 571212, Georgetown UniversityWashington, DC 20057-1212

202-687-3885; fax: 202-687-8089bioethics@georgetown.edu

http://bioethics.georgetown.edu

Managed Health Care:New Ethical Issues for All

Martina Darragh Pat Milmoe McCarrick

Revised June, 1996

Changes in the way that health care is perceived, delivered, and financedhave occurred rapidly in a relatively short time span. The 50-year periodsince World War II encompasses enormous growth in medical technology,soaring health care costs, and significant fragmentation of the two-partypatient-physician relationship. This relationship first grew to include thethird-party payer, the health insurance industry, and now "with great speedand relatively little awareness, a significant change has occurred in the waysome decisions are made about a patient's medical care" (III, Institute ofMedicine 1989).

The new means of providing health care bring an increasing number ofparties into clinical decision-making processes. With this change, ethicalissues that once concerned only health care professionals, the physician orthe nurse, have expanded to include patient and the groups who "manage"care—e.g., health maintenance organizations (HMOs), preferred providerorganizations (PPOs), point of service groups (POSs), independent practiceassociations (IPAs), insurance reviewers, hospital institutional managers,and, the most recent purchasers of group health care who base theirdecisions on competitive pricing.

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TABLE OF CONTENTS

I. GENERAL LITERATURE. . . . . 3

II. INSTITUTIONAL ETHICS.. . . . 7

III. ORGANIZATIONAL REPORTS AND STUDIES. . . . . . . . . . . . . . 8

IV. PATIENT-PROFESSIONALRELATIONSHIP. . . . . . . . . . . . 10

V. PROFESSIONAL ISSUES. . . . 11

The term “managed care” refers to a variety ofcontinually adapting and developing arrangementsthat involve four groups. These groups, whichhave been labeled by the world of business, nothealth, are the “consumer” (once the patient), the“provider” (the physician and other health careprofessionals), the “insurer” (the reimburser forany care), and the “purchaser of care” or theprimary buyer of health services (the largeemployer organization). Capitation is a commonway to pay for health services in managed caresystems. A certain dollar amount is negotiated forhealth services for a specified number of patientswhether the care is delivered or not; the providershares with the insurer any financial risk for theactual cost of care (III, Centers for DiseaseControl (U.S.) 1995).

When the Clinton administration’s health carereform movement failed to gain support in theU.S. Congress, the use of managed care to controlrising health care costs accelerated. The literatureon managed care and its effect on thepatient-physician relationship reflects this shift.During the era of health care reform, “debatecentered on how managed care could controlcosts, on the use of technology and patientsatisfaction, [and] on access and barriers to care”(IV, Emanuel and Dubler 1995). When managedcare organizations began contracting withphysicians to provide health care services subjectto the plans’ provisions, these plans becameagents in clinical decision making on awide-spread basis. HMO enrollment grew to 51million persons by 1994 (III, Centers for DiseaseControl (U.S.) 1995). This “corporatization” ofhealth care has sparked a plethora of articles aboutthe effects of the marketplace on the physician’sability to do what is best for the patient, and onthe patient’s ability to trust the physician to do so.

Many authors make it clear that managed careitself is not the problem, but rather thedevelopment of for-profit managed care plans by“corporate conglomerates with billions of dollarsin assets that compensate their executives asgrandly as basketball players” (V, Kassirer 1995)“in a marketplace that is largely unregulated” (I,Zoloth-Dorfman and Rubin 1995). “Some, mostlyolder plans that were created when costcontainment was an unexpected benefit ratherthan their central purpose, deliver high-qualitycare economically. Unfortunately, others cut costsby recruiting the healthiest patients, excluding thesickest, rationing care by making it inconvenientto obtain, and denying care by a variety ofmechanisms” (V, Kassirer 1995).

These cost-containment features now play anintimate role in clinical practice. When a managedcare plan contracts with a physician, the doctorbecomes a “double agent” with contractualobligations to the plan to provide a preset amountof services and professional responsibilities toeach patient to authorize necessary treatment (V,Angell 1993). This duality can undermine thephysician’s fiduciary responsibility to the patientwherein the physician “has power over the affairsof [the patient] . . . and is required by law to acton that person’s behalf” (I, Rodwin 1995).

Some see the physician as being placed in avulnerable position by this duality. “Theincreasing prominence of managed carearrangements has created new opportunities foreconomic discrimination against physicians . . .Physicians who meet their professionalobligations and act as patient advocates riskdeselection; failure to actively oppose utilizationreview denials may result in a malpractice lawsuitfrom the patient” (V, Fielder 1995). Articlesaddress the issue of physicians who attempt bothto fulfill their fiduciary responsibilities and toretain their jobs by “gaming the system” —i.e.,presenting clinical data in such a way that thepatient’s treatment will be covered. “Whencareproviders anticipate that an appeal forexceptional care will not succeed, they mayconsider altering the information that they provideto the MCO [managed care organization] if thiswould enable the patient to receive additionalcare” (V, Howe 1995). This is an uneasycompromise at best. While some see such

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practices as consistent with nonabandonment ofthe patient, “gaming can violate the principles ofnonmaleficence, of veracity, and of justice” (V,Morreim 1995).

“In the vastly more complex present and future,the physician’s obligations to the patient can nolonger be a single-minded, unequivocalcommitment, but rather must reflect a balancing.Patients’ interests must be weighed against thelegitimate competing claims of other patients, ofpayers, of society as a whole, and sometimes eventhe physician himself” (V, Morreim 1995).

An expanded view of the patient-physicianrelationship is derived from the notion of “shareddecision making” for informed consent set forth inthe 1982 report Making Health Care Decisions byU.S. President’s Commission for the Study ofEthical Problems in Medicine and Biomedical andBehavioral Research. “Shared decision makingrequires participation of the patient in setting thegoals and methods of care and, therefore, informulating the alternatives to be considered” (IV,Whitbeck 1995).

Patient participation has become a focus in thedevelopment of clinical outcome measures (I,Sharpe and Faden 1996; I, Stewart et al. 1995),and some managed care organizations are activelyincluding patients in their reviews of programsand services (III, Jacobs Institute of Women’sHealth 1996). Many see these developments aspositive aspects of managed care and propose thatanother, institutional, level of fiduciaryresponsibility be added so that patientparticipation in outcome assessment may have theopportunity to grow and flourish at the same timeas patients and physicians are protected. “Medicalethics must stop being case oriented and becomeinstitutionally oriented . . . we must change ourfocus from articulating principles and rules thatapply to individual cases to devising institutionalstructures that can ensure ethical behavior” (II,Emanuel 1995).

The move to develop institutional ethics is beingaddressed on many fronts. Specialtyorganizations, such as the American College ofObstetricians and Gynecologists, are issuingposition papers on the ethics of managed care (III,ACOG 1996). Bioethics groups are developing

guidelines to be used when consulting withmanaged care organizations (II, Biblo et al. 1995).In addition, the American Medical Association(AMA) continues to develop its position paper“Ethical Issues in Managed Care” and has assuredmembers that it will stand behind any physicianwho comes into conflict with a managed careorganization by advocating for patients.

Well-defined institutional ethics can be seen assupporting the managed care organizationsthemselves in addition to patients and physicians.“The change to managed care might be lessthreatening if the decisions of managed care plansare perceived to be rational, fair, and respectful ofprovider and patient needs . . . managed careorganizations without a commitment to ethics willnot survive in the marketplace” (II, Biblo et al.1995) In addition, development of organizationalethics for managed care may help to protectinstitutions that are in transition themselves. “Theconversion to managed care has the potential tosqueeze hospitals so badly that they will no longerbe able to support research or educationadequately, fund the debt service on their capitalloans, or provide many community services, suchas free care for the uninsured” (V, Kassirer 1995).

It is hoped that this Scope Note will provide anintroduction to the ethical issues raised bymanaged care as these programs grow inimportance into the new century—issues that gobeyond the pros and cons of managed care itself.“Perhaps the most positive consequence ofmedicine’s economic revolution is that it forces usnot only to reevaluate our economic arrangements,but to examine basic ideas about medical ethicsthat should have been reconsidered long ago, quiteapart from any connection with economics” (V,Morreim 1995).

I. GENERAL LITERATURE

Chervenak, Frank A., and McCullough, LaurenceB. The Threat of the New Managed Practice ofMedicine to Patient’s Autonomy. Journal ofClinical Ethics 6(4): 320-23, Winter 1995.

Using the elimination of routine ultrasoundscreening for pregnant women as an example of“an assault on the essential exercise of [patient]autonomy,” the authors hold that the physician“should never practice below a standard based

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on both beneficence and the essential exerciseof autonomy.” If a cost-benefit analysis is tiedonly to beneficence, this combination creates a“resurgent paternalism as a basic, and until nowhidden, ethical feature of the new managedpractice of medicine.”

Fischer, Josef E. Ethical Dilemmas in ManagedCare. Bulletin of the American College ofSurgeons 80(11): 11-25, November 1995.

Fischer thinks that certain assumptions are madewhen managed care issues are discussed,namely, that quality will be constant, physicianassistants will diagnose as competently asphysicians, generalists are as competent asspecialists, and full-time employees will act asprofessionals. He says physicians have alwaysacted as patient advocates, but that managedcare utilization review is performed by otherswho have no personal contact with patients. Hepresents three court cases concerned with thepatient-physician relationship and concludesthat patient advocacy is a principle that must beconstant for physicians.

Harris, Edward. The Mirage Called Choice.Health Care Analysis 3(3): 185-89, August 1995.

Harris says “the promise of choice is perhapsthe most seductive element in the propagandafor commercial medicine.” The patient cannotrealistically make an informed choice,nevertheless, business promotes self-interestedchoice as both rational and virtuous. Harristhinks that to apply commercial principles to theprovision of medical care abandons the idea ofservice—i.e., “the sense of equitable provisionof proper care according to need.” He concludesthat medical markets do not maximize realchoice.

James, Tom, and Nash, David B. HealthMaintenance Organizations: A NewDevelopment or the Emperor’s Old Clothes? InReadings in American Health Care: CurrentIssues in Socio-Historical Perspective, ed.William G. Rothstein, pp. 266-77. Madison:University of Wisconsin Press, 1995.

Reviewing the history of prepaid health plans inthe United States from the 1920s to the present,the authors pay particular attention to the effectof the Health Maintenance Organization Act of1973 on the growth of managed care. The

authors also describe various models ofmanaged care plans and conclude that “healthcare can be provided in an accountable format,giving greater benefits to a larger number ofpeople than under the previous fee-for-servicesystem”.

Managed Care. Trends in Health Care, Law &Ethics 10 (1/2) [Special Issue], Winter/Spring1995. 143 p.

This special issue contains more than 25 articleson ethical issues raised by managed care. Someauthors focus on philosophical issues, such asthe nonabandonment of patients and thepatient-physician relationship, while othersexamine the effects of managed care on clinicalpractice in rehabilitative medicine, urology, andgeriatrics. Also addressed is the integration ofethics programs into managed careorganizations.

Miles, Steven H., and Koepp, Robert. Commentson the AMA Report “Ethical Issues inManaged Care.” Journal of Clinical Ethics 6(4):306-11, Winter 1995.

The authors provide an historical overview ofthe Federal Trade Commission’s allegations inthe late 1970s that the AMA conspired “toinhibit the growth of health maintenanceorganizations (HMOs) in part by the use of itsethics standards.” They claim that the AMA’sCouncil on Ethical and Judicial Affairs “shouldhave more fully disclosed the constraints andinfluences [of the FTC order] on its analysis anddescribed how it managed these pressures inwriting [its] report” Ethical Issues in ManagedCare.

Morreim, E. Haavi. Lifestyles of the Risky andInfamous: From Managed Care to ManagedLives. Hastings Center Report 25(6): 5-12,November-December 1995.

Describing a trend toward a patient’sresponsibility for maintaining good health andhelping to pay for care costs, Morreim notesthat developed managed care programs try toreduce the health risks of enrollees, thuslowering health care risks for the provider andinsurer. Patients will be charged or rewardedwith financial incentives directly related to theirbehavior. The author discusses legal, medical,and economic enforcement of patient

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responsibilities as a way to ensure that allwithin the health care system (payers, providers,and patients) “use its resources more wisely”.

Moss, Mae Taylor. Principles, Values, andEthics Set the Stage for Managed CareNursing. Nursing Economics 13(5): 276-84, 294,September-October 1995.

Moss stresses the importance of ethicseducation in preparing health care professionalsfor decision making in managed careenvironments, which intensify existing ethicalissues and generate new ones. She predicts thata “massive effort on the part of health caredecision makers” will be required to ensureuniversal coverage and quality care in acapitated system.

Pellegrino, Edmund D. Interests, Obligations,and Justice: Some Notes Toward an Ethic ofManaged Care. Journal of Clinical Ethics 6(4):312-17, Winter 1995.

Pellegrino comments on both the AMA’sEthical Issues in Managed Care statement andits critique by Miles and Koepp. In the process,Pellegrino clarifies his position on resourceallocation quoted in the AMA statement. Hereaffirms the primacy of the physician’sresponsibility to individual patients(commutative justice), but says that “this cannotexist apart from a more comprehensive ethic ofmanaged care that would include an ethic of thecollective, corporate, and societal obligations tothe care of the sick as well.” He goes on toenumerate six principles of a “corporate ethic ofmanaged care”.

Pellegrino, Edmund D. Words Can Hurt You:Some Reflections on the Metaphors ofManaged Care. Journal of the American Boardo f Fami ly Prac t i ce 7 ( 6 ) : 505 -10 ,November/December 1995.

Pellegrino decries the use of phrases, such ascase managers, fundholders, gatekeepers, orclinical economists, that replace the “honorabletitle of ‘physician’”. He says that managed careand managed competition “deliberately set outto change physician behavior by incentives anddisincentives.” He urges physicians to remainstewards of the physician-patient relationshipand to guarantee quality care.

Petchey, Roland. General PractitionerFundholding: Weighing the Evidence. Lancet346(8983): 1139-42, 28 October 1995.

Britain’s National Health Service has institutedfundholding, a practice that allocates moneydirectly to certain practitioners to purchaseservices for patients. Petchey raises questionsabout the impact of fundholding on efficiency,planning, and the doctor-patient relationship,and about its consequences for the organizationand culture of primary care.

Plows, Charles W. A Response to “Commentson the AMA Report ‘Ethical Issues in ManagedCare’”. Journal of Clinical Ethics 6(4): 318-19,Winter 1995.

As chairman of the Council of Ethical andJudicial Affairs of the American MedicalAssociation, the author responds to Miles andKoepp’s claim that a Federal Trade Commission(FTC) order in the 1970s limits the scope of theCouncil’s report Ethical Issues in ManagedCare. Plows says that “. . . the restrictions of theFTC played no significant role in the Council’sanalysis, and did not inhibit the ability of theCouncil to fulfill its charge of elaborating andupholding the principles of medical ethics.”

Rimler, George W., and Morrison, Richard D.The Ethical Impacts of Managed Care. Journalof Business Ethics 12(6): 493-501, June 1993.

Reminding readers that the roots of managedcare go back to the 1970s, this article providesan overview of the development of managedcare plans and reviews the findings of the 1989Institute of Medicine (IOM) study ControllingCosts and Changing Patient Care? The Role ofUtilization Management. The authors draw adistinction between the “contractual andmanaged care issues” that were raised in theIOM report, and they question the efficiency ofseveral cost control mechanisms from abusiness perspective.

Robinson, James C., and Casalino, Lawrence P.The Growth of Medical Groups Paid ThroughCapitation in California. New England Journalof Medicine 335(25): 1684-87, 21 December1995.

Robinson and Casalino studied patientenrollment, capitation and other revenue, andwork schedules of six large, independent

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medical groups. They found these independentphysician groups differed from staff-modelHMOs in the way that they faced challengesrelated to continuing rapid growth and financialstability.

Rodwin, Marc A. Conflicts In Managed Care.New England Journal of Medicine 332(9): 604-7,2 March 1995.

Rodwin reviews the concept of fiduciaryresponsibility in health care and calls for thedevelopment of public policies to protect thepatient-physician relationship by prohibitingmanaged care organizations from makingphysicians bear the financial risks of resourceallocation. Rodwin also examines the hiddenrole of the case manager, “nonphysicians whoare employed by managed-care organizations tocoordinate medical care and benefits,” andsuggests several ways in which they could beheld accountable for their decisions.

Schreter, Robert K.; Sharfstein, Steven S.; andSchreter, Carol A. Allies and Adversaries: TheImpact of Managed Care on Mental HealthServices. Washington, DC: American PsychiatricPress, 1994. 231 p.

Clinicians and managed care executives expresstheir ideas on providing accessible, effective,and affordable mental health care. Inpatient andoutpatient services; the roles of the psychiatrist,psychologist, and social worker; as well aspractice guidelines and ethical issues are eachdiscussed from two points of view, that of theclinician and that of managed care.

Schroeder, Steven A. Cost Containment in U.S.Health Care. Academic Medicine 70(10): 861-66,October 1995.

Schroeder urges that the effects of managedcare be watched for possible neglect of thosepersons who already do not have access tohealth care and for diminished employmentopportunities for all health professionals. Hethinks that any savings will go to the businessside of the plans—e.g., to pay shareholderdividends—and will not be used to expandservices to the uninsured. Discussing adverseselection, risk adjustment, and outcomesmeasurement, he opines that such guidingmethods in managed care will result in neglectfor persons with chronic illness.

Sharpe, Virginia A., and Faden, Alan I.Appropriateness in Patient Care: A NewConceptual Framework. Milbank Quarterly74(1): 115-38, 1996.

Following up on the RAND Health ServicesUtilization Study that looked at geographicalvariants in surgery utilization, the authorsdevelop a framework for delineating the threesources of va lue tha t cons t i tu te“appropriateness” in patient care—the clinic,the patient, and society—and suggest that“determinations of the appropriateness of aprocedure should not be regarded simply, oreven primarily, as an evidentiary problem . . .but rather as a problem of values assessment.”The authors put forth this framework to helpproviders and plan administrators “maintain aclear distinction between the clinicallynonbeneficial [procedure] and one that is simplyjudged not cost worthy”.

Spear, Scott. Why There Should Not Be HealthSystem Reform Without Legal Reform.Editorial. Plastic and Reconstructive Surgery95(4): 742-43, April 1995.

Spear calls attention to problems in the nation’slegal system, claiming that they are the same asthose associated with health care: access to care,bureaucratic and administrative waste, andoverall costs. He notes that the 12 percent of thegross national product (GNP) spent in 1990 onlegal “care” is not too different from the 13.2percent spent on health care and points out thatapproximately 2 percent of health costs includeliability insurance premiums.

Stewart, Moira; Brown, Judith Belle; Weston,Wayne W.; et al. Patient-Centered Medicine:Transforming the Clinical Method. ThousandOaks, CA: Sage Publications, 1995. 267 p.

The authors explore the concepts involved inpatient-centered care, the inclusion of theseconcepts in medical education, and research inevaluating patient-centered care. Chapters focuson such topics as the enhancement ofphysician-patient relationships and qualitativevs. quantitative outcome measures.

Sulmasy, Daniel P. Managed Care and the NewMedical Paternalism. Journal of Clinical Ethics6(4): 324-26, Winter 1995.

Sulmasy suggests that physicians who are

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uncomfortable with the current emphasis onpatient autonomy experience a renewed sense ofcontrol over the clinical environment byaccepting the “new role of making decisionsabout the allocation of funds” given to them bymanaged care organizations (MCO). Sulmasycalls the denial of “information that might . . .have been valuable to . . . [patients’] owndeliberations” the “new medical paternalism”and proposes that “. . . cost-control can beachieved in the private sector if an MCOoperates like a ‘medical kibbutz’ in which allmembers . . . participate actively in anydecisions to eliminate tests or treatments”.

Wilder, Daniel. Privatization and HumanRights in Health Care. In Health Care Reform:A Human Rights Approach, ed. Audrey R.Chapman, pp. 263-73. Washington, DC:Georgetown University Press, 1994. 314 p.

Wilder says that once health care providers are“released from their community mission andencouraged to pursue private ends” some maybecome more efficient, but others will try toselect patients in order to avoid those who needexpensive care. He thinks that plans that “wearthe clothing of the market place” will generallyconflict with human rights.

Zoloth-Dorfman, Laurie, and Rubin, Susan. ThePatient as Commodity: Managed Care and theQuestion of Ethics. Journal of Clinical Ethics6(4): 339-57, Winter 1995.

The authors, who serve as ethics consultants toa health maintenance organization and severalhospitals, present numerous examples of poorclinical care received by patients undermanaged care and narratives of frustratedproviders who are prevented from giving whatthey believe to be adequate care due to planlimitations. This article also contains historicalanecdotes about early models of not-for-profitmanaged care.

II. INSTITUTIONAL ETHICS

Barr, Donald A. The Effects of OrganizationalStructure on Primary Care Outcomes UnderManaged Care. Annals of Internal Medicine122(5): 353-59, 1 March 1995.

Barr reviews literature describing therelationship between the organizational

structure of managed care systems and thequality of care within them. He finds that largeorganizations present problems in satisfactionfor both patients and physicians and notes thatcosts increase as the organizations grow larger.He suggests further studies to ascertain the sizeat which a practice group achieves not only costeffectiveness but also patient and physiciansatisfaction.

Biblo, Joan D.; Christopher, Myra J.; Johnson,Linda; and Potter, Robert Lyman. Ethical Issuesin Managed Care: Guidelines for Clinicians andRecommendations to Accrediting Organizations.Kansas City, MO: Midwest Bioethics Group,1995. 24 p. Also published as a supplement toBioethics Forum 12(1), Spring, 1996.

Noting that “. . . hospitals had been motivated tocreate internal mechanisms for dealing withethical issues because of . . . organizationalethics standards promulgated by the JointCommission for the Accreditation of HealthCare Organizations (JCAHO),” the authors havedeveloped guidelines to be used by health careprofessionals and plan administrators forincorporating ethics into managed careorganizations. Using focus groups of managedcare administrators, physicians, and consumergroups to determine the issues to be addressed,the guidelines consider the factors involved inthe creation of an ethical corporate culture, inthe specification of quality-of-life criteria, andin the allocation of resources.

Emanuel, Ezekiel J. Medical Ethics in the Era ofManaged Care: The Need for InstitutionalStructures Instead of Principles for IndividualCases. Journal of Clinical Ethics 6(4): 335-38,Winter 1995.

Since “the physician-patient interaction nolonger occurs in a practitioner’s office in which. . . [the practitioner] has control over thestructures that influence the interaction,” theauthor suggests that “the context of medicalethics can no longer be cases, but institutionalstructures.” Emanuel calls situations in whichthere are financial incentives to provide fewerservices “conflicts of omission” and discussesthe implications of this type of conflict ofinterest for disclosure of information to patientsand for patient autonomy.

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Scott, Robert A.; Aiken, Linda H.; Mechanic,David; and Moravcsik, Julius. OrganizationalAspects of Caring. Milbank Quarterly 73(1):77-95, 1995.

The authors suggest ways in which theadministrative organization of medical servicesmight promote or inhibit expressions of caringby physicians and other medical personnel.They discuss issues of productivity and costconstraints and stress the importance of timespent in the relationship between patients andthose caring for them. Saying that “medicine isa multifaceted practice” that has “scientific andeconomic aspects and must be related to societalneeds as well,” the authors conclude thatmedicine is “fundamentally the art of healing,”which “may be the last real ethical frontier”.

Yentis, S. M. Bad Research Is Not Audit[Letter]. Lancet 347(8997): 330, 3 February1996.

In a letter to the journal editors, the authorobserves that clinical outcome measures arebeing determined by peer-review procedures(audits) rather than by traditional researchmethods. Yentis fears that data from theseinappropriate audits, originally intended forquality assurance, “lack ethical approval,standardization of management, randomisation,[and] blindness” and possibly will be used tochange practice parameters. The author advisesthat “calling a project an audit should not be anexcuse for avoiding ethics committee approvaland doing research ‘on the cheap’”.

III. ORGANIZATIONAL REPORTSAND STUDIES

ACOG. American College of Obstetricians andGynecologists, Committee on Ethics. PhysicianResponsibility Under Managed Care: PatientAdvocacy in a Changing Health CareEnvironment. [Position Paper 170.] Washington,DC: American College of Obstetricians andGynecologists, April 1996. 5 p.

This paper addresses fiduciary beneficence,patient autonomy, “economic credentialing” ofphysicians (where the physician is judged notby clinical performance but by the amount ofmoney spent on patients), and disclosure oftreatment options to patients in managed careenvironments. The committee recommends that

obstetrician-gynecologists become members ofmanaged care boards in order to influencepolicy directives and quality assuranceprocedures.

American Medical Association. AMA Calls onManaged Care Providers to Cancel Gag Clausesand Submit Contracts for Ethical Review [NewsRelease]. Chicago: American MedicalAssociation, 23 January 1996.

The AMA Council on Ethical and JudicialAffairs issued a statement calling for an end to“gag” clauses in physician contracts withmanaged care plans that prevent doctors fromtelling patients about potential treatmentoptions. The organization offered to reviewmanaged care contracts at no charge and alsopromised to support physicians who providedfull disclosure to their patients despite planprovisions. The Council’s statement will bepublished as part of the Code of Medical EthicsReports in June 1996.

American Medical Association, Council onEthical and Judicial Affairs. Ethical Issues inManaged Care. Journal of the American MedicalAssociation 273(4): 330-35, 25 January 1995.

Adopted by the American MedicalAssociation’s House of Delegates in June 1994,and subsequently revised to include peer-reviewcomments, this report broadens the scope of theAMA’s previous report Financial Incentives toLimit Care: Financial Implications for HMOsand IPAs. Reaffirming that “physicians mustcontinue to place the interests of their patientsfirst,” the report “recommends measures topreserve the fundamental duty of physicians aspatient advocates by reducing the risk ofrationing and inappropriate financialincentives.” (See also I, Miles and Koepp 1995and I, Pellegrino 1995.)

American Medical Association, Council onEthical and Judicial Affairs. Financial Incentivesto Limit Care: Financial Implications forHMOs and IPAs. In Reports of the Council (No.28). Chicago: American Medical Association,June 1990. 15 p.

The Council analyses the ways in which theorganizational structures of managed care plansare distinct from fee-for-service systems anddiscusses the potential effects of financial

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incentives on quality of care and physicianautonomy.

American Psychiatric Association. Council onPsychiatry and Law. The ProfessionalResponsibilities of Psychiatrists in EvolvingHealth Care Systems. Washington, DC:American Psychiatric Association, 1995. 14 p.

Although not official policy of the AmericanPsychiatric Association, this resource documentwas approved by its Board of Trustees in 1995and outlines the principles of psychiatricpractice that the Association deems necessary topreserve in any new health care system. Fourprinciples are discussed: fiduciary obligations topatients, patient participation in health caredecisions, access to appropriate psychiatriccare, and quality of care. The paper alsodiscusses physicians’ responsibilities to theirpatients, including: the responsibility to discloseinformation to patients, the need to appeal onthe patient’s behalf if care is denied, and furtherresponsibilities if coverage is denied.

Centers for Disease Control and Prevention(U.S.). Prevention and Managed Care:Opportuni t i es f or Managed CareOrganizations, Purchasers of Health Care, andPublic Health Agencies. Recommendations andReports. Morbidity and Mortality Weekly Report44(RR-14): 1-12, 17 November 1995.

A Managed Care Working Group set up in 1995prepared this Centers for Disease Control andPrevention (CDC) report, which presents asummary of the systems for the finance anddelivery of health care and looks at ways thatpreventive health care can be included bymanaged care organizations in order to improvepublic health.

Institute of Medicine, Committee onTechnological Innovation in Medicine.Technology and Health Care in An Era ofLimits. Volume 11 in the series MedicalInnovation at the Crossroads. Ed. Annetine C.Gelijins. Washington, DC: National AcademyPress, 1992. 283 p.

The Committee looks at the likely implicationsof any restructured health care system forpractitioners, patients, and the generators ofnew medical technology. Managed care systemsboth proposed and in place throughout the

world were studied, and cost containmentpolicies reviewed. Speculation about theimplications of the systems for patients andproviders, as well as for those involved in thedevelopment of drugs, medical devices, andsurgical techniques, are discussed.

Institute of Medicine, Committee on UtilizationManagement by Third Parties. Controlling Costsand Changing Patient Care? The Role ofUtilization Management. Ed. Bradford H. Grayand Marilyn J. Field. Washington, DC: NationalAcademy Press, 1989. 312 p.

The Committee traces the evolution ofutilization review and its effect on health careservices and clinical decision making. Thisreport includes an appendix on the assessmentof quality assurance in health maintenanceorganizations.

Jacobs Institute of Women’s Health. Proceedingsof Women’s Health and Managed Care:Balancing Cost, Access, and Quality. [SpecialIssue] Women’s Health Issues 6(1):January/February 1996. 64 p.

Contains summaries of panels and transcripts ofdiscussions from a July 17, 1995, conference onmanaged care and its potential contributions towomen’s health held in Washington, DC. Panelsincluded representatives from managed careorganizations, federal agencies, physiciangroups, and private health care foundations.Speakers focused on utilization patterns, qualityassurance, and models of care in healthmaintenance organizations.

National Health Council. Putting Patients First.Washington, DC: National Health Council, 1996.24 p.

The Council proposes ten principles governingthe rights and responsibilities of patientsenrolled in managed health care programs.Composed of national voluntary health careorganizations, it asks the managed care industryto join in endorsing such rights and principles asinformed consent, confidentiality, decisionmaking and appeals about coverage, fullinformation about cost, and choice of providers.Patient responsibilities include pursuit of ahealthy lifestyle, full knowledge of the healthplan, participation in health decisions, andcooperation in acceptable treatments.

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U.S. Congress. Congressional Budget Office.Managed Competition and Its Potential toReduce Health Spending. Washington, DC:Government Printing Office, May 1993. 43 p.

Managed competition is described asemphasizing motivation for “consumers,insurers, and providers to be morecost-conscious,” and “imbuing the health caresystem with the efficiency, flexibility andinnovation of competitive markets.” The studypresents different proposals to achieve savingsin health care spending.

Woodstock Theological Center. EthicalConsiderations in the Business Aspects ofHealth Care. Washington, DC: GeorgetownUniversity Press, 1995. 39 p.

Through two years of study and fourconferences, the Woodstock Seminar inBusiness Ethics explored the business aspects ofhealth care and the ethical dilemmas faced byhealth care professionals. This report presentsan ethical framework for practice, examinesspecific instances in which ethical principlesconflict, and calls for “. . . institutional andsystemic reforms . . . [to] help create a climatethat fosters rather than frustrates ethicaldecision making”.

IV. PATIENT-PROFESSIONALRELATIONSHIP

Crawshaw, Ralph; Rogers, David E.; Pellegrino,Edmund D.; et al. Patient-Physician Covenant.Journal of the American Medical Association273(19): 1553, 17 May 1995.

In this statement, the authors reaffirm theprimacy of patient welfare and the physician’srole as patient advocate in the face of threatsfrom “for-profit forces [that] press the physicianinto the role of commercial agent to enhance theprofitability of health care organizations.” Theauthors call for all health care providers,professional societies, and health careorganizations to participate in the “covenant oftrust with patients” in order to maintain theintegrity of the medical profession.

Emanuel, Ezekiel J., and Dubler, Nancy Neveloff.Preserving the Physician-Patient Relationshipin the Era of Managed Care. Journal of theAmerican Medical Association 273(4): 323-29, 25

January 1995.To provide a context for discussing the impactof managed care on clinical ethics, the authorspropose an ideal physician-patient relationshipto be used as a normative standard for assessingmedical care. This ideal consists of six C’s:choice, competence, communication,compassion, continuity, and (no) conflict ofinterest. The authors enumerate potentialadvantages and disadvantages to maintainingeach of these qualities within planenvironments, and they suggest some practicalsteps to eliminate the threatening aspects ofmanaged care.

Glass, Richard M. The Patient-PhysicianRelationship: JAMA Focuses on the Center ofMedicine. Journal of the American MedicalAssociation 275(2): 147-48, 10 January 1996.

Saying that the patient-physician relationship is“under siege” both from the “tension betweenthe science and the art of medicine” and fromthe “rapid changes in economics,” Glass urgesscientific studies of the communication betweenpatients and doctors and the behavior of thephysicians. He fears that trust is threatened byreliance on technology and by economicconsiderations.

Mehlman, Maxwell J., and Massey, Susan R. ThePatient-Physician Relationship and theAllocation of Scarce Resources: A Law andEconomics Approach. Kennedy Institute ofEthics Journal 4(4): 291-308, December 1994.

The authors maintain that legal precedentssupport and preserve trust in thepatient-physician relationship, and they discussthe relative merits of contract, tort, andfiduciary law in this regard.

Mirvis, David M. Doctor-Patient andDoctor-Patient-Society Relationships afterHealth Care Reform. Annals of the New YorkAcademy of Sciences 729: 56-61, 4 December1994.

Mirvis says there has been a shift from thinkingof health care as being within the purview of theindividual or the employer to thinking of it as aright that changes both the role of the patientand that of the physician. The patient “assumesa role as an individual member of society atlarge which has its own goals and objectives.”

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The physician becomes an “agent of society formeeting these objectives, rather than anindividual entrepreneur.” Mirvis concludes,however, that the role of the physician as thepatient’s advocate remains critical.

Orentlicher, David. Health Care Reform and thePatient-Physician Relationship. Health Matrix5(1): 141-80, Winter 1995.

The author reviews studies of patient outcomesunder managed care and finds that “there are notsufficient empirical data to draw definitiveconclusions about the effect on patient welfarefrom incentives to limit care.” Orentlicherobserves that individual rationing decisions canbe made appropriately when there is continuityin the patient-physician relationship, but thepossibility for continuity of care is greatlyundermined by managed care arrangements.

Pellegrino, Edmund D. Allocation of Resourcesat the Bedside: The Intersection of Economics,Law, and Ethics. Kennedy Institute of EthicsJournal 4(4): 309-17, December 1994.

Responding to Mehlman and Massey’s reviewof the legal aspects of the patient-physicianrelationship, Pellegrino provides an ethicalanalysis of the same issues. The author calls forthe primacy of patient welfare within legalconstraints and notes that this is balanced by“physicians being advocates for a just system”.

Perry, Clifton B. Conflicts of Interest and thePhysician’s Duty to Inform. American Journalof Medicine 96: 375-79, April 1994.

The author discusses standard notions of thefiduciary relationship between a physician anda patient and discusses three court cases on thisissue.

Thurston, Jeffrey M. Death of Compassion: TheEndangered Doctor-Patient Relationship. Waco,TX: WRS Publishing, 1996. 189 p.

Deploring the fact that managed care is alteringthe traditional doctor-patient relationship to abusiness transaction that usurps the physician’sdecision-making power, the author sees adanger for patients when decisions aboutdiagnosis and treatment are dictated by fiscalconsiderations. He urges the use of medicalsavings accounts to help solve the problem ofrising costs and says all pre-existing conditions

must be covered.

Whitbeck, Caroline. Trust. In Encyclopedia ofBioethics, revised edition, ed. Warren T. Reich,pp. 2499-2504. New York: Simon and SchusterMacmillan, 1995.

The author traces the development of thefiduciary relationship between the patient andthe physician into the era of “shared decisionmaking” and recommends institutionalsafeguards to protect patient-physicianrelationships.

V. PROFESSIONAL ISSUES

Angell, Marcia. The Doctor as Double Agent.Kennedy Institute of Ethics Journal 3(3): 279-86,September 1993.

Calling the weighing of patients’ medical needsagainst monetary costs to society a danger to thepatient-centered ethic that is central tomedicine, Angell urges restructuring the systemto remove inflationary pressures. Thecommitment to care for individual patientsshould “not be abridged lightly. And it shouldnot be nullified by a budgetary crunch”.

Arnesen, Trude, and Fredriksen, Stole. Copingwith Obligations Toward Patient and Society:An Empirical Study of Attitudes and PracticeAmong Norwegian Physicians. Journal ofMedical Ethics 21(3): 158-61, June 1995.

Arnesen and Fredriksen questioned 109Norwegian physicians of whom 96 percentagreed or partly agreed that setting economicpriorities was necessary. Responses indicatethat the physicians acted more in the interests oftheir patients than in the interests of society, but68 percent had refrained from giving the besttreatment because it was too costly. The authorsfound that 60 percent wanted more publicguidelines.

Dunham-Taylor, Janne; Marquette, R. Penny; andPinczuk, Joseph Z. Surviving Capitation.American Journal of Nursing 96(3): 26-29, March1996.

The authors define capitation as “accepting afixed amount of money per enrolled person perperiod (usually a year), and agreeing to providesome defined set of health services to all planmembers with no additional billing.” They

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describe the steps leading to the growth ofhealth maintenance organizations and say thatnurses are at high risk during any cost cuttingmeasures. Preventive health care is seen as anarea that nurses are eminently qualified to enter.

Fielder, John H. Disposable Doctors: Incentivesto Abuse Physician Peer Review. Journal ofClinical Ethics 6(4): 327-32, Winter 1995.

After describing several cases in whichcompetent physicians were disciplined unjustlyby peer review, Fielder states that “. . . what weare seeing is not just a few isolated instances ofabuse of peer review but a disturbing pattern ofreliance on peer review to remove unwanteddoctors, frequently for underlying financialreasons.” The author reviews the lack of dueprocess available to physicians who wish tochallenge adverse peer-review decisions ordeselection by managed care organizations anddiscusses existing case law and pendinglegislation aimed at safeguarding physicianswho advocate for their patients.

Gold, Marsha R.; Hurley, Robert; Lake, Timothy;et al. A National Survey of the ArrangementsManaged-Care Plans Make with Physicians.New England Journal of Medicine 335(25):1678-83, 21 December 1995.

The authors surveyed 108 managed care plans,inquiring about how plan physicians wereincluded. They found complex systems forselection, payment, and monitoring of thechosen physicians. The article includes statisticsand the methods used.

Howe, Edmund G. Managed Care: “NewMoves,” Moral Uncertainty, and a RadicalAttitude. Journal of Clinical Ethics 6(4):290-305, Winter 1995.

Howe discusses the conflicts providers andpatients face when they challenge a managedcare organization’s decision not to provide care.The author gives specific clinical examples of“gaming the system” that simultaneouslysupport the bond of trust between the patientand physician and undermine the physician’sduty to be truthful. The author also describesthe ethical quandary involved in “implementinga so-called ‘Robin Hood solution’ by which[providers] would charge some patients more”to fund pro bono services for other clients.

Kassirer, Jerome P. Managed Care and theMorality of the Marketplace. New EnglandJournal of Medicine 333(1): 50-2, 6 July 1995.

Affirming that “managed care itself is not theenemy,” Kassirer sees “market-driven healthcare” as a threat to both medicalprofessionalism and to “superb [managed care]plans [that] are being underbid by wealthyinvestor-owned plans.” The author exhorts us“to persuade our leaders to speak out . . . [to]acknowledge that managing care can limit costs. . . [but] that the enormous profits ofmegahospital systems and huge insuranceconglomerates should be used for medicalcare,” rather than for investor profit.

Morreim, E. Haavi. Balancing Act: The NewMedical Ethics of Medicine’s New Economics.Washington, DC: Georgetown University Press,1995. 184 p.

The focus of Morreim’s book is a redefinitionof the physician’s fiduciary responsibility to thepatient in an era of economic constraints and areframing of the patient’s role to include anactive sense of responsibility rather than apassive notion of autonomy based on freedom.The author discusses the problems inherent indeveloping practice parameters, the pros andcons of “gaming the system,” the physician’sobligation to negotiate with plan administratorson behalf of patients, and the physician’sresponsibility to discuss with patients theeconomic aspects of medical options—i.e., theactual costs to the patient plus plan limitationsand physician incentives where applicable.

Pellegrino, Edmund D. Ethics. Journal of theAmerican Medical Association 271(21): 1668-70,1 June 1994.

The author reviews the “tangled nexus of moral,legal, economic, and professional obligations”for physicians practicing in managed careenvironments and holds that, even if laws arepassed to protect physicians from litigation forfollowing plan directives, “immunity to liabilitywould not relieve physicians of their ethicalobligations to the patient.” Pellegrino lists anew set of questions posed by managed care,including whether physicians are ethicallybound to provide pro bono services not coveredby the plan and whether plan directives found tobe harmful should be met with “collective

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action by the whole profession to change thesystem”.

Wasnick, John D. The Physician Ethic andManaged Care: Reformation Parallels. Pharos59(1): 27-28, Winter 1996.

Asking if physicians can “reconcile their ethicalduty to individual patients to provide care of thehighest quality with the demands of managedcare trusts to maximize cost effectiveness,”Wasnick says that managed care demands thatphysicians “work within the limitationsdemanded by society.” He compares the currentsituation of physicians with that of the 16thcentury religious reformation when monasticlife lessened, and religious figures enteredsociety to combine a high religious ethic withthe demands of commerce and government.Wasnick thinks that now physicians mustrecognize such a dual ethic.

Wolf, Susan. Health Care Reform and theFuture of Physician Ethics. Hastings CenterReport 24(2): 28-41, March-April 1994.

After analyzing ethical issues relating to thethen viable Health Security Act, Wolf notes thatexisting ethical guidelines from professionalorganizations focus on serving the patientversus serving social goals, when in fact the“conflict [is] between the patient andorganizational goals of profit.” The author callsfor clarity in delineating the ground rules as“our society is, in effect, renegotiating a key

part of what many call its ‘contract’ with themedical profession.” Wolf suggests levels ofphysician advocacy within managed care thatcorrespond to standard notions of thephysician’s fiduciary responsibility, and sheproposes adding a new level of organizationalethics to support the patient-physicianrelationship.

Woolhandler, Steffie, and Himmelstein, David U.Extreme Risk—The New CorporateProposition for Physicians. New EnglandJournal of Medicine 335(25): 1706-8, 21December 1995.

The authors think that managed care plans thattie physicians’ incomes to curtailing servicecreate pressures to exploit patient trust forphysician financial gain. They say that the nextstep in such businesses will be to avoid sickpatients. The authors suggest that “salariedpractice in nonprofit, community-controlledregional plans” might achieve better results.

This Scope Note was prepared by MartinaDarragh, M.L.S., and Pat Milmoe McCarrick,M.L.S., Reference Librarians at the NationalReference Center for Bioethics Literature. Theauthors would like to acknowledge the assistanceof Virginia A. Sharpe, Ph.D., Assistant Professorof Medicine and Ethics, Georgetown UniversityMedical Center, in developing this publication.

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