Physician Incentives: Managed Care and Ethics

Module 4 – SLP
Managed Care
As your fourth 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?
SLP Assignment Expectations
1.Limit your responses to a maximum of two pages, not including title and reference pages.
2.Be sure to utilize at least 3-4 scholarly references to support your discussions.
3.Be sure to properly cite your references within the text of your assignment and listed at
the end.
4.Be sure to apply critical thinking skills to the write-up of your assignment, especially
numbers 2,3, and 4 above.
Below are the required readings for this task:
Module 4 – Background
Managed Care
Required Reading
D.A. Mains, A. Coustasse, K. Lykens: Physician Incentives: Managed Care and Ethics. The
Internet Journal of Law, Healthcare and Ethics. 2004 Volume 2 Number 1.
Managed Care and Physician Incentives: The Effects of Competition on the Cost and
Quality of Care. David J. Cooper and James B. Rebitzer. March 2004 .
Diagnosing Physician-Hospital Organizations. Susan A. Creighton. Federal Trade
Commission Remarks Before American Health Lawyers Association, Program on Legal
Issues Affecting Academic Medical Centers and Other Teaching Institutions. January 22,

  1. Washington, DC.
    Federal Trade Commission; Competition in The Healthcare Market place; Statements of
    Health Care Antitrust Enforcement Policy; Statement 9. (July 8,

Improving Health Care: A Dose of Competition: A Report by the Federal Trade
Commission and the Department of Justice (July 2004)

Physician Incentives: Managed Care and Ethics

“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.”
In the previous decade, managed care systems have grown as a mode of healthcare
delivery in the United States. This is in reaction to the demands by governments and employers
for enhanced access, improved, quality, and cost containment. The primary care physician is
placed as the gatekeeper with the intention of controlling utilization in the entire system.
Capitation and contracts influence the behavior of providers through limited referral pathways.
There is use of a collaborative approach so as to affect financial resources and clinical decisions.
There is present society concern for increased individual responsibility where patients are
required to be more accountable for their health (Creighton, 2004). Moreover, patients are made
aware of their responsibilities and rights as far as health issues are concerned, and this is more so
in the prevention area. In this regard, there is increased concern about economic responses to
costs that are lifestyle-induced. If patients participate in reducing over-utilization, then MCOs
and insurers may deem financial incentives as unnecessary. Financial incentives cause conflicts
of interest among physicians through encouraging care cut back. There is a concern regarding
who should discuss cost when the money in mention belongs to the patient as opposed to the
physician. The patients are only aware of the co-pays and nothing else in regard to cost (Mains,
Coustasse, Lykens, 2004). Since they are not so much involved in the cost component, they are
more likely to use the system.


The ideas the authors are conveying

Basically, the authors seek to review the cardinal managed care system’s features with
the aim of understanding the inherent ethical assumptions in managed care. People who
influence scarce resources’ allocation in managed care systems are faced with ethical tensions.
The administrative controls of managed care have significantly transformed the patient-doctor
relationship to a business consumer-person relationship (Ettinger & Lasser, 2008). The goals of
managed care of access and quality demand the physicians to be both organizational and patient
advocates, regardless of the fact that these roles are in conflict. Therefore, there is a need to re-
emphasize the moral mission of managed care so as to enable payers, patients, physicians, and
policymakers to satisfy their novel roles as well as preserve the doctor-patient relationship’s
fidelity (Mains, Coustasse, Lykens, 2004). Managed care brings along professional and moral
challenges to the ethics of medicine, assumed clinical practice prerogatives, and fundamental
values. Ethical considerations result from incentive systems and exist at the level of patient-
physician and physician-physician. Regardless of the fact that managed care systems are
involved in healthcare provision, they are more of businesses (Creighton, 2004).

Physician’s dual function: discuss

Physicians who have financial incentives act as patient fiduciary as well as financial
advocates. In the role of the patient’s unrestricted advocate, social justice is the secondary
consideration to exercise of beneficence and autonomy respect. In the significantly restricted
advocate role, social justice arguments precede the interests of the patient. The focus is on the
greater good that is beyond the physician-patient relationship’s traditional prism (Ettinger &
Lasser, 2008). According to ethicists, there is a concern if personal patient well-being or the
socially optimal outcomes are more significant. Physicians are also subjected to a dual process of

decision making where they have to consider their personal clinical decisions’ economic effects.
In addition, they are required to protect the traditional obligation of ensuring maximum
independent clinical advantage to patients irrespective of the cost. The providers’ dual decision
process is central and crucial as far as managed care is concerned. Moreover, it has been the
cause of resistance among ethicists, patients, and physicians.

The physician- patient relationship: concerns

The relationship between the patient and physician is still fiduciary. The patients are
treated by the physician one at a time as valued and unique individuals. The physician is required
to act as a prudent steward who judge care limits wisely (Mains, Coustasse, Lykens, 2004).
Since the physicians are patient advocates, they should assist patients in balancing financial risk
and medical benefits. The relationship between the two should be founded on honesty, a caring
nature, and trust. These values indicate the need for transparency, which promotes maximum
care (Cooper & Rebitzer, 2004). According to Dubler and Emanuel, managed care is likely to
erode all aspects of an ideal relation between the patient and physician; there could be a
restriction in choice, the indictors of poor quality may undermine competence assessments, the
requirements for productivity may eliminate the necessary time for communication, changing
primary providers could disrupt continuity easily, and there could be financial interest conflicts
for providers.
There is a concern from Pellegrino that physicians light lose the professional integrity
sense. Moreover, managed care might make physicians feel excluded from the ancient ethical
imperatives and as a result, place their blame on the bigger system to evade moral defection
(Mains, Coustasse, Lykens, 2004). Since these dangers are critical, physicians need to
respectfully and carefully address them as they consider engaging in managed care agreements.



Cooper, D. J. & Rebitzer, J. B. (2004). Managed Care and Physician Incentives: The Effects of
Competition on the Cost and Quality of Care.

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