Bargaining with Hippocrates: Managed Care and the Doctor-Patient Relationship

Abstract

In order to reduce the number of unnecessary, and potentially even harmful, medical interventions, managed care imposes oversight on health care expenses. Oversight includes external controls on physician spending and internal financial incentives intended to bring the self-interest of the individual physician in line with the fiscal goals of the managed care organization. The current legal framework for such incentives presumes that patients can negotiate with physicians and other health care providers for their desired mix of cost savings and professional fidelity, if only the playing field is leveled through appropriate disclosures. This article will focus on the financial incentives provided to physicians by MCOs in order to change physicians' practice methods and patterns, and the conflicts of interest caused by those financial incentives. The article proposes a new way of thinking about regulation of financial incentives - a paradigm of respect for the personhood of patients and their unique position within the health care system, and proposes that the traditional physician-patient relationship be protected by insulating the central features of the doctor-patient relationship from the operations of the health care marketplace.

Keywords: conflicts of interest, health law, bioethics

JEL Classification: K32