For-Profit Enterprise in Health Care (1986) / Chapter Skim
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2 Ethical Issues in For-Profit Health Care
2 Ethical Issues in For-Profit Health Care
Pages 224-249
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From page 224... ...
In what follows, "for-profit" will be used only to denote a distinctive legal status and not as a vague reference to "commercial" motivation or decision making and organizational structure, or as a synonym for the equally nebulous concept of"competitive health care." We shall explore, however, some moral concems about the rise offor-profit institutions in the legal sense that focus on the profit motivation, decision-making forms, and organizational structures common to those institutions. Serious moral criticisms of for-profit health care have been voiced, both within and outside of the medical profession.
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From page 225... ...
undermine medical education, and (6) constitute a "medical-industrial complex" that threatens to use its great economic power to exert undue inDuence on public policy concerning health care.
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From page 226... ...
There is another way in which the cream skimming charge can be understood. Sometimes it is suggested that for-profits are acting irresponsibly or are not fulfilling their social obligations by failing to provide their "fair share" of indigent care and unprofitable care, as well as making it more difficult for nonprofits to bear their fair share
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From page 227... ...
For-profits can then reasonably claim that they are doing their fair share to support overall government expenditures by paying taxes. If the government is subsidizing health care for the poor as part of overall government expenditures, then for-profits would appear to be doing their fair share towards supporting subsidized health care for the poor.
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From page 228... ...
Granted that the obligation to provide access to health care for the poor rests ultimately with the federal government, is there any reason to hold that for-profit health care institutions such as hospitals have any special obligations to provide such care? The usual reason offered is that health care institutions, whether nonprofit or for-profit, are heavily subsidized directly or indirectly by public expenditures for medical education and research and by Medicare and Medicaid reimbursement which have created the enormous predictable demand for health care services that has enabled health care institutions to flourish and expand so dramatically since the advent of these programs in 1965.
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From page 229... ...
Thus, we conclude that none of the current forms of public subsidy of health care will establish any significant special obligation of for-profits to provide free care, and so the claim cannot be sustained that for-profits do not do their fair share in providing access to health care for the poor. We emphasize that we believe there is an obligation to guarantee some adequate level of health care for all, but the obligation is society's and
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From page 230... ...
There is no generally accepted standard for a "decent minimum" or "adequate level" of care to be ensured for all, no systemwide plan for coordinating local, state, and federal programs, charity, and private insurance so as to achieve it, and no overall plan for distributing the costs of providing care for those who are unable to afford it from their own resources. Absent all of this, no determinate sense can be given to the notion of an institution's special obligation to provide a "fair share" of the burden of ensuring an "adequate level" or "clecent minimum" of care for everyone.
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From page 231... ...
Assuming that as members of this society we all share a collective obligation to ensure an "adequate level" or "decent minimum" of health care for the needy, those who control health care institutions, as individuals, have the same obligations the rest of us have. However, because of their special knowledge ofthe health care system and the disproportionate influence they can wield in health policy debates and decisions, health care professionals may indeed have an additional special obligation beyond the general obligations of ordinary citizens to help ensure that a just system of access to health care is established.
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From page 232... ...
Three main arguments can be given in favor of perpetuating the nonprofit legal status for health care institutions and, hence, for social policies that are designed to protect them from destructive competition from for-profits. First, nonprofit health care institutions are properly described as charitable institutions.
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From page 233... ...
At present, however, most nonprofit hospitals are not charitable institutions in this sense; they are "commercial" rather than "donative" institutions insofar as the major portion of their resources comes from selling services rather than from donations.7 The more closely nonprofit health care institutions approximate the purely "commercial" nondonative type, which is becoming the dominant form among nonprofit hospitals, the weaker the value of charity appears as a justification for perpetuating the 233 nonprofit legal status. Nevertheless, even if only a small portion of most nonprofits' revenues comes from charitable donations and is in turn used for unpaid care, nonprofits may still be properly regarded as "charitable" if money ao In tact serve as the provider of last resort for those who are unable to pay for their care and who are not covered by any insurance or government program to fund their care.
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From page 234... ...
The market distribution of health care, as with other goods, will only be just if the distribution of initial assets, including income and wealth, is just. However, there are specific characteristics of health care, and of health care markets, which further ensure that a market distribution of health care will fail to satisfy the demands of any theory of justice requiring that some minimally adequate level of access to health care be guaranteed to all.
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From page 235... ...
A right to an adequate level requires some minimal floor of health care access below which no one should be allowed to fall. That level does not, on the other hand, constitute a ceiling above which no one is permitted to nse, and so is compatible with individuals using their resources to purchase in the market more or better health care or health care insurance than the adequate level guarantees.
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From page 236... ...
Limited market price competition among providers offering only a single level of care to all would be possible, and so equality in health care does not foreclose all use of market competition, though it is likely that such competition would spread to quality and quantity of care, thereby undermining the single level of care for all. However, if markets for different amounts or quality of health care are allowed to exist alongside whatever system ensures the equal level to all, then any differences between persons in either income and wealth and/or preferences for health care as opposed to other goods and services will produce inequalities in the overall distribution of health care.
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From page 237... ...
When we ask whether an institution's or an individual's pursuit of profits is prejudicial to the patient's interests, the appropriate sense of the phrase "pursuit of profits" is quite broad, not the narrower legal sense in which nonprofit institutions do not by definition pursue profits. After all, the issue is
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From page 238... ...
In some cases, licensing and certification laws and reimbursement eligibility requirements for Medicare, Medicaid, and private insurance require nonphysician health care professionals to be supervised by a physician, thus creating a dependence which malces it possible for physicians to reap this secondary income. Physicians may also charge fees for interpreting diagnostic tests, such as electrocardiograms, that they recommend and which are performed by others even if they do not split the fee for the procedure itself.
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From page 239... ...
There are two major factors that have led to this loss of "professional dominance" which are quite independent of the growth of forprofits.~7 One is the institutionalization of medicine which itself arose from a variety of factors, including the proliferation of technologies and specializations which call for large-scale social cooperation and cannot be rendered efficiently, if they can be rendered at all, by independent practitioners. The other is the increased pressure for cost containment in a more competitive environment, which has led to a greater reliance on professional management techniques within health care institutions and more extensive regulatory controls by government.
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From page 240... ...
Some critics of for-profits suggest that we must either pay the price of this overutilization or cope with it by methods that do not undermine physicians' commitments to doing what is best for their individual patients. They then conclude that even if it could be shown that the growth of for-profits would restrain overutilization by introducing greater price competition into health care, the price would be too high to pay because the physician's all-important commitment to do his best for each patient would eventually be eroded by the increasing "commercialization" of health care that is being accelerated if not caused by the grown of forprofits.
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From page 241... ...
Nor is it plausible to claim that the organized profession has led efforts to address some of the most serious moral deficiencies in our health care system, such as the continued lack of access to health care of large numbers of the poor. As we noted above, the history of the profession's opposition to national health insurance and to Medicare and Medicaid belies any such role of altruism or moral leadership.
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From page 242... ...
An alternative, and we believe more plausible, perspective is that in part just because the medical profession has been exceptionally successful in promoting and protecting an institutional and organizational setting that well serves physicians' economic and other interests, individual physicians have thereby been freed to follow the traditional patient-centered ethic in their relations with their individual patients. Put oversimply, a physician whose overall practice structure assures him a high income need not weigh economic benefits to himself when considering treatment recommendations for his individual patients.
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From page 243... ...
This is not to say that some additional consumer skepticism of physician recommendations and increased attempts by patients to become knowledgeable health care consumers would not be a good thing- they would. It is rather to say that many of the various inequalities in the physician/patient relationship are sufficiently deep and difficult to eradicate that some substantial trust of the physician's commitment to the patient is likely to remain necessary and valuable.
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From page 244... ...
Utilization of health care should reflect the financial costs as well as benefits of care, but that will not be appropriately achieved by, nor need it inevitably lead to, physicians making utilization decisions solely according to their own economic self-interest. Whatever the right mix of incentives for reasonably limiting health care utilization and costs, simply making physicians fillly subject to incentives of economic selfinterest by breaking down the patient-centered ethic seems not the path to that mix.
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From page 245... ...
Faced with growing pressures for cost containment, nonprofit institutions would presumably have strong incentives to reduce all "unprofitable" activities, including medical education, even in the absence of competition from for-profits. And here, as in the case of cross-subsidi7~tion for indigent care, whether one laments these developments or welcomes them will depend upon one's views on the efficiency and ethical acceptability of a system which in effect disguised the true costs of medical education and upon whether one thinks that the political process is likely to produce a workable alternative system for funding medical education through explicit public policy choices.
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From page 246... ...
While it would be unjustified to maintain that the growth of for-profits is a major source of the reported crisis in funding for medical education, it can perhaps be said that for-profits are one element in a complex array of changes which will test the strength of the public commitment to medical education and challenge the moral assumptions on which that commitment is based. FOR-PROFITS AND THE POLITICAL POWER OF THE MEDICAL-INDUSTRIAL COMPLEX The widespread view that the medical profession's dominance in the U.S.
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From page 247... ...
We have been generally critical of the argument that for-profits fail to do their fair share in providing health care to poor or unprofitable patients. That argument assumes that for-profits have special obligations to care for these patients, that a determinate content can now be given to that obligation, and that the obligation can be discharged without unreasonable sacrifice on We part of the for-profit.
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From page 248... ...
We have argued that potential adverse effects on medico education, like those on access, may indeed be worrisome, but the data on them are at this point very limited and they probably arise more from other forces such as cost containment efforts than from for-profits. Similarly, although the possibility that a small number of large health care corporations may come to wield disproportionate influence on public policy is a serious matter for concern and vigilance, it would be a mistake to assume that the potential for political abuse of economic power exists only with for-profit corporations, rather than with large institutions generally.
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From page 249... ...
ETHICS OF FOR-PROFIT HEALTH CARE 14Starr, P
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