Managed Care, Consumers' Welfare, and

Physicians' Potential Conflicts of Interest

by by Susan Moke

Do managed care organizations improve their bottom lines at the expense of their enrollees' health? What protections now exist to safeguard consumers' interests? What further safeguards must we develop to effectively protect managed care consumers from practices that might lead to poor quality of medical care or undertreatment?

Marc Rodwin, an associate professor at the School of Public and Environmental Affairs at IUB, investigates these questions. Rodwin, an attorney with a doctorate in health and social welfare policy, recently published a book on physicians' financial conflicts of interest and is currently working on a book about the quest for accountable health care.

In his 1993 book, Medicine, Money, and Morals: Physicians' Conflicts of Interest (Oxford University Press), Rodwin argues that whether physicians are paid on a fee-for-service or on a per capita basis, their mode of payment creates a potential conflict between patients' needs for appropriate care and doctors' interests in maximizing their incomes. In a fee-for-service payment system, greater volume of treatment means greater income. When physicians are paid on a per capita basis, their profits increase if services are minimized. Both incentives to increase and decrease services pose risks for patients. The size and directness of financial incentives affect how serious the conflict of interest is. In his book, Rodwin examines alternative financing arrangements in detail and suggests ways to minimize conflicts.

In the first section of Medicine, Money, and Morals, "The Problem and the Profession's Response," Rodwin points out that the medical profession has not adequately addressed physicians' conflicts of interest and that its ethical codes have reflected physicians' financial interests. The second section, "Current Problems and Institutional Responses," details the range of practices that promote conflicts of interest and the potential dangers such conflicts pose for patients. In the final section of the book, "Inferences for Policy," Rodwin compares the diversity of regulations that govern the professional conduct of lawyers, financial professionals, and civil servants with the much less developed legal framework used to oversee the professional conduct of doctors. Rodwin concludes by exploring the pros and cons of different policy options including disclosure, different regulation of clinical practice, new fiduciary law standards, the creation of a federal Medical Regulatory Commission, and organizational-level audit and review.

What can and is being done to effectively promote accountable health care in managed care organizations is the subject of Rodwin's current book project, Accountable Health Care: Competing Interests, Goals, and Policy Approaches. Funded by a grant from the Robert Wood Johnson Foundation, Rodwin's book will be for policy makers, managers, clinicians, legislators, and consumer groups. "The book," Rodwin notes, "will look at how our conceptions of accountability have changed over a century, compare those conceptions to what we have learned about accountability in areas outside of health care (e.g., policing and education), and look at five different approaches used to promote accountability." These approaches are 1) ethics and informal norms; 2) political voice or representation; 3) financial controls and incentives (including market incentives); 4) administrative processes; and 5) law. Believing that current legislation fails to effectively address the problems consumers experience and that proposed legislation falls short of its goals, Rodwin recommends a combination of these approaches to promote accountability. "None," he says, "will work effectively by themselves. The hope is that these approaches can be combined and reinforce each other."