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The Costs of Avoiding Physician Conflicts of Interest: A Cautionary Tale of Gainsharing Regulation

JUST MEDICARE: WHAT'S IN, WHAT'S OUT, HOW WE DECIDE, Colleen M. Flood, ed., University of Toronto Press, 2006

Posted: 12 Jul 2006  

Richard S. Saver

University of North Carolina (UNC) at Chapel Hill - School of Law

Abstract

This book chapter considers the many difficulties involved in attempting to regulate physicians' financial conflicts within the U.S. and Canadian Medicare programs. All trends seem to be leading toward an increasing array of conflicts of interest for physicians as gatekeepers. Such conflicts merit serious concern regarding the allocation of governmental healthcare services, as they threaten to compromise physician judgment, bias clinical decisions, and create cost pressures. However, a more aggressive and tightly regulated approach to dealing with such conflicts can easily result in the imposition of overly broad bans. As a cautionary example, the chapter looks to the U.S. experience in trying to restrict hospital-physician gainsharing. Under gainsharing programs, hospitals typically reward their medical staff physicians with bonuses for contributing to productivity improvements for the institution. U.S. regulation of gainsharing has been heavy-handed and counterproductive, crowding out potentially important disease management programs that could therapeutically benefit patients as well as undermining productivity and quality reforms aimed at better managing the use of expensive new medical technology. Gainsharing may be better managed through regulatory safe harbors and other safeguards, rather than through the imposition of broad restrictions. The chapter concludes by considering how gainsharing may be a useful strategy for experimenting with health care reform within the U.S. and Canadian Medicare programs.

Keywords: medicine, hospital, gainsharing, physicians, financial incentives, conflicts of interest, Medicare

Suggested Citation

Saver, Richard S., The Costs of Avoiding Physician Conflicts of Interest: A Cautionary Tale of Gainsharing Regulation. Available at SSRN: https://ssrn.com/abstract=913404

Richard S. Saver (Contact Author)

University of North Carolina (UNC) at Chapel Hill - School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States

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