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Since World War II, the healthcare environment has undergone considerable changes. There have been advances in medical technology which have served to greatly increase the costs of health care (McCarrick &Darragh, N.d.). Still, healthcare managers and stake holders are looking towards increasing profits, personnel productivity while also reducing risks and costs (A &G Health Services, N.d.).
One common form of health care incentives is financial in nature, which is also referred to as Physician Incentive Plans. (PIP) or pay for performance. The plans are usually compensation agreements between health care providers, including HMO’s, and doctors. Doctors are compensated or offered bonuses for their performance. Thus, performance criteria are put in place so as to gauge the physicians (A &G Health Services, N.d.). Another form of financial incentive involves the signing of contracts which specify exactly what facilities may be used for purposes of covered care. Such contracts then mean that the facilities available for use by doctors are greatly reduced. Consequently, the doctor is forced to choose which patients to treat and since the facilities are few to attend to all (Bondenson & Jones, 2002). The major reason why the financial incentives have been proposed in healthcare management has to do with controlling risks. For instance, the HMO’s plan on achieving is passing on the bulk of risk to the doctors and consequently, protecting themselves and their financial positions. While it can be argued that the plans are working as expected (A &G Health Services, N.d.). They have nonetheless, brought to the fore certain ethical and legal issues.
Ethics is related to the principles of what one considers as wrong or right. In most instances, ethics specify what is expected of human beings in relation to each other (Velasquez, Andre, Shanks & Meyer, N.d.). Doctors are expected to give the best possible services to the patients. This is because according to Bondenson & Jones, the most important duty that doctors are charged with is to serve the need of the patients (2002). Doctors are expected to help their patients and to always make decisions that are fair and just to the patients. This is supported by the ethical principles of beneficence and justice (Rainbow, 2002). However, with the financial incentives in place and the performance criteria being used to judge, the question then arises on just how well the doctors are going to render their services. How can the doctors also be expected to be fair in their choice of patients in the face of insufficient resources? It would then be correct to argue that patients are then likely to suffer in the hands of the doctors. It is openly clear that the promise of more financial compensation will result in a conflict of interest for the doctors. It is to be expected doctors may be more inclined towards meeting their performance goals as opposed to doing what’s best fair and just for the patients (A &G Health Services, N.d.). Accordingly, patient will lose faith in the ability of the health professionals to attend to their needs.
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The ethical issues have legal complications. Patients go to hospital with the hope of receiving the best possible care. It is to be expected that when they are offered less than satisfactory services and not because the doctors and the healthcare facilities are not able, there is bound to be trouble. Patients often pay for the services rendered to them. Consequently, they expect to receive services worth the value of their money. It is then possible for the patients to sue the doctors for not rendering services as expected. Another legal issue lies in the anti kick back statute that prohibits remuneration of physicians for services rendered. In this case it is not only the individual doctor who is sued rather the hospital as well. In the event that a doctor and a hospital are convicted of this offence in the US, they are then excluded from such federal health care programs as Medicare (Istone, 2007).
Financial incentives are supposed to cut costs but it is clearly evident that they may also increase the costs. Think of all the legal costs that are to be incurred for flouting the anti kick back statute.
References
Bondenson, W. & Jones, J. (2002). The ethics of managed care: Professional integrity and patients rights. Warren MI: Springer Publishing.
Financial incentives as healthcare cost containment. (N.d.). A & G Healthcare Services. Retrieved February 20, 2009 from http://www.aghealth123.com/incentiveshealthcarecostcontainment.html
Istone, R. (2007). Taking health care’s pulse: Legal issues involved in healthcare business transactions. Retrieved February 20, 2009 from http://law.pepperdine.edu/organizations/jbel/publications/vol1/Pistone_-_Final.pdf
McCarrick, P & Darragh, M. (N.d.). Managed health care: New ethical issues for all. Retrieved February 20, 2009 from http://bioethics.georgetown.edu/publications/scopenotes/sn31.pdf
Rainbow, Catherine. (2002). Description of ethical theories and principles. Retrieved, February 20, 2009 http://www.bio.davidson.edu/people/kabernd/Indep/carainbow/Theories.htm
Velasquez, M., Andre, C., Shanks, T. & Meyer, M. (N.d.). What is ethics? Mark Kula Center for Applied Ethics. Retrieved February 20, 2009 http://www.scu.edu/ethics/practicing/decision/whatisethics.html
