Managed Care Organizations

As your third assignment toward completion of the Session Long Project you are
asked to review the paper by A. Mains, A. Coustasse, K. Lykens: Physician Incentives:
Managed Care and Ethics and answer the questions below.
1.Consider this idea from the paper: Medicine is a moral enterprise. Because MCOs
are involved in the delivery of medical care, they too, are moral entities. However, MCOs
are also businesses.”
2.Explain the idea that the authors sought to convey.
3.Discuss the physician’s dual function under an MCO model of care.
4.What concerns do you have about the physician- patient relationship under
MCOs?

Managed Care Organizations

“Medicine is a moral enterprise. Because MCOs are involved in the delivery of
medical care, they too are moral entities. However, MCOs are also businesses.”
MCOs are moral entities because they aim at deliver quality, safe and effective medical
care. They are responsible of doing what is right and best for the service users while ensuring
equitable distribution of the scarce health resources. However, the managed care control changes
the patient physician relationship to a business-consumer relationship. This implies that the main
goal of MCOs is to ensure that physicians adopts the principle of distributive ethic; which is
basically providing the most safe and best quality of care to the greatest number of patients as
possible using the allotted budget or incurring losses (Mains, Coustasse, & Lykens, 2004).
Under this moral obligation, the MCOs are guided by the utilitarianism- which basically
entails performing the best action that maximizes utility. However, the MCOs are economic
tenets that aim at reducing costs for service users and aims at generating profit simultaneously.
Therefore, when making decisions regarding MCOs, providers should consider the economic
effects when maintaining aggregating costs of care so as to avoid loses in either the MCOs or the
physicians. This involves establishing control, incentives, bonuses, and withholds as well as

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other quality assurance initiatives that will ensure that physician practices are safe, quality and
profit generating (Cooper and Rebitzer, 2004).
Physician dual function
In managed care, the physicians have dual functions namely a) patient fiduciary and b)
Financial advocates. The physician play the unrestricted role of patient advocates by ensuring
that the managed care model puts into consideration to patient’s autonomy, respects it, and
exercise the ethical principle of beneficence. This implies that the physicians are patient’s
advocates in voicing their concerns whenever the managed care model prioritizes its benefits
over the patient’s interests, or any other good that is beyond establishing effective physician-
patient relationship. This is an important role because the MCOs require expects the physicians
to choose the society wellbeing over individual patient’s interest (Mains, Coustasse, & Lykens,
2004).
Therefore, when enrolling in these organizations, it is important for the physicians to
understand that their first role is to be patient advocates. Under patient fiduciary role, the
physicians are legally responsible for advising patients about all possible alternative care or
technological advancement that can be used to manage their illness. The physicians are expected
to remain prudent steward when advising and deciding the limits of patient care. This entails
balancing between medical merits and financial risks. Trust, honesty and caring are foundation
of establishing effective physician-patient fiduciary relationship (Cooper and Rebitzer, 2004).
Concerns about physician-patient relationship

Managed Care Organizations

3
Managed care is associated with moral and professional ethical dilemmas. For instance,
MCOs focus on financial incentives and social optimal outcomes instead of single patient well-
being. This brings forth the concept of “countervailing agency” which is basically the physician’s
role to choose between individual patient’s interests and the society wellbeing. If a patient does
not receive care as by MCOs, the physicians can be sued for malpractice. This puts the
physicians at dilemma of delivering care based on MCOs expectations and risk for liability
(Mains, Coustasse, & Lykens, 2004).
In addition, the MCOs emphasize on utilitarianism approach when solving the healthcare
expenditure. Despite its advantages, this approach raises concerns of its validity and morality in
physician- patient relationship. The professional sovereignty vs. physician financial incentives
complex interaction results into a conflict of interest. It is important for the managers in
healthcare system to choose a strategy that helps them identify how to favor the interests of the
patients and the society. This calls for reforms to re-define the moral mission for MCOs to fulfill
their goals and to preserve efficient physician-patient relationship ( Improving Health Care,
2004).

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References
Cooper, D.J., and Rebitzer, J.B. (2004). Managed Care and Physician Incentives The Effects of
Competition on the Cost and Quality of Care.
Mains, D.A., Coustasse, A., & Lykens, C.K. (2004). Physician Incentives: Managed Care and
Ethics. The Internet Journal of Law, Healthcare and Ethics. Volume 2 Number 1. DOI:
10.5580/24ae –
Improving Health Care (2004). A Dose of Competition: A Report by the Federal Trade
Commission and the Department of Justice.

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