The Corporate Practice Of Medicine

"In the past two decades or so, health care has been commercialized as never before, and professionalism in medicine seems to be giving way to entrepreneurialism," commented Arnold S. Relman, professor of medicine and social medicine at Harvard Medical School (Wekesser 66). This statement may have a great deal of bearing on reality. The tangled knot of insurers, physicians, drug companies, and hospitals that we call our health system are not as unselfish and focused on the patients' needs as people would like to think. Pharmaceutical companies are particularly ruthless, many of them spending millions of dollars per year to convince doctors to prescribe their drugs and to convince consumers that their specific brand of drug is needed in

In an attempt to understand the impact of managed care in the U.S, I look at the most commonly expressed complaints against the organization. In a survey of consumers, 60% said that managed care had not made a difference in health care cost or had actually been the cause of the increase of health care cost. Managed care has had an impact on slowing the rates of growth in the costs of two major health care producers: hospitals and physicians. Little evidence has suggested that the current reimbursement are inadequate to the care provided. The quality of care is a highly debated issue. Physicians are concerned that the quality of care in managed care organizations may reflect the loss of professional autonomy through pre-authorization procedures.

How did American healthcare become big business? Some blame the lack of government regulation, that which allows medical industries to profit off of sick or injured patients. Others point fingers at those who benefit from government sponsored healthcare, claiming that tax increases and excessive use of government money are the true root of the problem. In Elisabeth Rosenthal’s An American Sickness: How Healthcare Became Big Business and How You Can Take it Back, the acclaimed journalist (and licensed physician) explores the growing link between healthcare and profit. Rosenthal expertly analyzes the rise of profit-driven insurance agencies, hospitals, and pharmaceutical companies; as well as describes the effect that these institutions

Managed care has been around since the twentieth century, which managed care has continued to develop. Therefore, the definitions of managed care may vary from different scholars and/or textbooks. As a result, one meaning of managed care is to provide health care services at a reduced rate to members of an insured group through an agreement among specific suppliers and an insurer (Ereflect, 2009). Furthermore, some relevant scenarios for the meaning of managed care are the ability to increase access to a variety of healthcare services, managing medical practice, curbing medical spending, and restricting physician entrepreneurialism (Rodwin, 2010). In addition, managed care has been used by the states and private entities to promote diverse goals (Rodwin, 2010). Therefore, the initial growth of managed care was partly

In chapter 4, I learned about managed care organizations (MCOs), preferred provider organization (PPOs), and health maintenance organizations (HMOs). In PPO there is a list of in-network providers that patients are allowed to see but pay a lot more if they see a physician that is not on the list. In a HMO patients are only allowed to see physicians that are employed by them and may not see anyone else. There are a variety of methods to pay providers for healthcare services. Two of them are widely known as capitation and per diagnosis. Under capitation, organizations receive a fixed amount of money each month regardless of use. In per diagnosis, organizations are paid based on the diagnosis of the patient. The chapter also explained cost shifting

Understanding the forces affecting physicians discusses the extreme struggles private practice physicians have obtained. The increase in malpractice insurance and benefit costs, horizontal or declining revenue, and the extreme requirements to obtain EHR are contributing factors. Private practice physicians have looked for ways to work with hospitals and other health organizations. There are three offerings that were designed to meet the needs of physicians: “independent physician programs, employed

Less than a hundred years ago, in the late 1920’s and 30’s, almost 90% of Americans did not have health insurance (Fall of HMO’s 4). They used a variety of home remedies and when medical assistance was truly needed, they paid for it out of pocket, even incurring vast amounts of debt. This had been the case throughout history, and it changed due to an important factor, medical equipment. The industrial revolution finally caught up with the medical industry and the country saw a vast change in the scientific instruments used by physicians. These instruments required a lot of money to make and care for which caused prices to rise. Due to this massive problem, a committee was formed of health care professionals and after a 5 year study, the Committee on the Cost of Medical Care suggested that health insurance co-operatives start. These corporate medical practices became known as Health Maintenance Organizations (HMO’s) and preferred provider organizations (PPO’s), and up until the 1970’s, were an experiment to regions across the U.S. Factors that hindered health care included bullying of “money politics” from both sides of the isle as well as Presidential views and tactics as well. President Nixon first

The balance between providing high-quality medical care and running a profitable business is a constant battle in the medical community. Thirty years ago, less than two percent of physicians changed jobs during their career. Today, approximately ten percent of physicians change jobs on an annual basis. As physician mobility begins to rise, the medical community’s need to protect its business interest become increasingly necessary. Physician restrictive covenants, or covenant not to compete provisions, have gradually become the prominent tool in order to facilitate that protection. As such, it is important to note and analyze the significant impact that enforcement of these restrictive covenants has not only on the business and the physician individually, but on third parties such as the community and the public at large. This paper will provide a brief outline the history of restrictive covenants, detail the application of those restrictive covenants in the healthcare context, and finally analyze the effects that judicial enforcement of those restrictive covenants has on the physician-patient relationship, the patient’s right to choose, and medically underserved areas.

In fact, in a recent survey of health care leaders, 90% indicated they have intentions to pursue a population health strategy (Gamble & Sachs, 2015). While there is evidence that ACO’s are saving money, most of the cost savings are coming from physician run ACO’s (Steckler, Feldman, & Watts, 2015). In comparison, ACO’s run by integrated health systems are saving relatively little money (Williams, 2016). Even the Federal Trade Commission (FTC) is wary of the intentions of healthcare leaders who claim the pursuit of population health management as a goal of consolidation. The FTC’s skepticism of population health management was demonstrated when they blocked an acquisition of a 43-physician practice by St. Luke’s Health System in Boise, Idaho. Regulators stated that the acquisition was anticompetitive and would lead to higher prices (Galewltz,

The hospital system back then was far more fragmented than it is today. In the 1980s, corporations began to integrate the hospital system and consolidate control. Here begins the privatization and corporatization of healthcare. A shift was seen in payments. Under President Reagan, insurance plans begin to offer payment by diagnosis instead of treatment, because of complaints from insurance companies (PBS). They argued that physicians were exploiting the previous system to get paid more. This continues to be a problem today as many complain about the defensive medicine practices of healthcare providers. Physicians order more tests than are necessary for diagnosis. This adds to the increasing cost of

Many have felt that the intentions of this new enactment were to prevent Americans from receiving the proper care that is needed. However, within managed care organizations is the ability to provide all those Americans with better and more affordable care. The formation of managed care organizations grew rapidly during the Great Depression, “not because consumers were demanding insurance against the risk of medical expenses or because nonphysician entrepreneurs were seeking to establish a business, but rather because providers wanted to maintain and enhance patient revenues” (Kongstvedt, 2). There was a major increase to company wide health care organizations when the government decided to enact the federal Health Maintenance Organization Act. This act “authorized start-up funding and ensured access to the employer based health insurance market” (Kongstvedt, 4). Many advocates of managed care organizations like to point out that, “managed care is unique in that it did not arise out of a specific legislative initiative but instead represents a market response” (Health Care Manager, 54). From this we are better able to understand that the wishes of consumers of traditional health care programs felt that something needed to be improved for success. Now that we know where managed care started, we can venture in to how it has evolved throughout the

Many healthcare organizations are driven by profit. Their primary goal is to ensure that their business is profitable. Patients are seen as numbers instead of human beings. Depending on their health coverage, they often encounter discrimination because of lower reimbursement rates. Some physicians refuse to take Medicaid and other government funded programs due to their fee schedule. Facilities and physician offices prefer commercial payers because they receive larger reimbursements which generate more revenue for the business. Even in the emergency room, if you have limited or no insurance, you are given minimal treatment, stabilized, and discharged to go home or even transferred to a different facility for continuous care. We witness

Within the capitalistic economic structure that defines American commerce, the delivery of healthcare has largely shifted from an emphasis on public service to the pursuit of commoditized profit generation, but because good health is unlike any other product on the market the evolution of healthcare economics has been muddled by the advent of managed care. While the law of supply and demand reigns supreme in the exchange of traditional goods and services, emergency surgical procedures, prescription medications, and in-patient care are all provided through a relatively competition-free environment. The traditional model in which a Primary Care Physician (PCP) served the vast majority of his or her local community, providing the full spectrum of basic healthcare services from the delivery of infants to annual immunizations, precluded consumers from exercising that fundamental right guaranteed by capitalism: the ability to shop for the best deal. Despite the high costs associated with the microeconomics of the PCP model, Americans largely tolerated the proverbial monopolization of healthcare delivery because they invested a tremendous amount of trust in their PCPs, who in many small- to medium-sized towns developed lifelong relationships with patients, assisting their births, providing pediatric care, administering adult physical examinations, and even providing convalescent and end-of-life care to members of their community.

Healthcare in the United States is big business. Analyzing the principles of business organization as found in the healthcare environment requires several avenues to be investigated.

In the administration of medical services in the United States law and regulation now control much of professional life. (p. 586)