Medicine and Management

The majority of hospitals in the United States remain to be non-profit, that is, having a charitable purpose and sometimes affiliated with some religious denomination. Non-for-profit hospitals have been a traditional means of delivering medical care in the United States; however, by the late twentieth century they have been supplemented by competing investor-owned hospitals created for the purpose of making profit. While many non-profit hospitals have successfully fulfilled their charitable mission by receiving various forms of subsidy, now their existence became threatened by the expansion of well-run, investor-owned hospitals and ambulatory care facilities. Their mission is to deliver medical care efficiently and cost-effectively.

The issue of whether medical care should remain a non-profit rather then a for-profit business have been debated fiercely as health care have always been a special category of business in which every decision, clinical as well as economic, has had an ethical dimension to it. Some advocates of the transition from the non-profit to for-profit medicine argue that the for-profits are simply the future of health care with its need for constant improvement of services and introduction of new technology. In turn, the defenders of non-profit medicine counter that the profit motive would naturally lead to a focus on short-term profits rather than long-term improvement of the public health. It is difficult to assess which system would eventually win out. Although the non-profit health care delivery system now looks like a sort of anomaly in the United States economy, it is impossible to underestimate the benefits that it has brought to the nation’s public health as well as to the development of the world’s medicine.

Currently the congress is considering several initiatives to help address the rise of for-profit medicine in the U.S. One consideration is the passage of Physician Full Disclosure Laws.

One can examine the passage of such legislative act from quite different, even contrasting, points of view. Whatever the outcome of such debate would be, it is apparent that the cost of today’s decisions would be a long-lasting range of effects which, if not beneficial, would take an equally large efforts and a long time to be reversed.

For instance, the head of the Common Cause – non-partisan non-profit consumer advocacy organization, could debate the necessity of such laws for the following reasons. He/she could argue that the managed care has become inherently unethical in its organization and operations. And, among the need of correction in such areas as: monitoring of contracting arrangements with physicians and denials of care, development of open grievance procedures, mandate of strict ethical guidelines and other, would need the mandatory full financial arrangements disclosure, in particular – of the cost-cutting strategies. The reason for such position is clear: policies and practices prevailing in health care field have caused most physicians, whether in a non-profit or for-profit enterprise, to find themselves using their medical expertise to the financial benefit of the organization, sometimes at great harm to some patients. For example, it is common in the increasingly heartless health care system to multiply exclusions until pulling them out to justify a denial, using marketing strategies to make the benefits of a plan well-known to the targeted group of patients, while leaving its potential problem areas out of sight, designing physician contracts which are difficult for them to understand and using their economic vulnerability to make them sign rather then being excluded, making the denials for “medical necessity” according to a non-standard criteria, etc. Those are just a few points that justify the position stated above. As a conclusion, the claimed “best health care system in the world’ has truly become the best “business” in the world, where a physician, instead of providing care, can be significantly rewarded for denying it for purely economic reasons.

However, the position of a Human Corporation President, a leading for-profit hospital and HMO, would be a different one. He/she could argue the for-profit medical facilities to be not less trustworthy than the competing non-profit establishments and the existing system, while needing some improvements, has proved to be beneficial on a larger scale. While the for-profit hospitals are just as much committed to the high-quality patient care and are striving for continual improvement of their services, they are also aimed at providing those services cost-effectively. For-profit hospitals, just as non-for-profit ones, provide support to their local communities and often become the largest employers in the area. Due to market conditions, the for-profit medical establishments must constantly strive to maintain high-quality service, high-efficiency, successful management and low-cost operations, however, it does not necessarily imply that they must forgo their immediate product – quality health care. The passage of the Physician Full Disclosure Laws, in contrast, can sufficiently damage for-profits’ competitive position in the market which could have a prolonged negative effect on all operations and hamper their ability to provide the highest-quality service to their customers. Such legislative efforts would not only cause the for-profits to disclose their potentially competitive information to their rivals, but also would make it a subject to the unnecessary public discussion and excessive interference into organizations’ practices and operations. All this could cause an irreversible damage to their ability for providing profit to the stockholders and, in the case of a worst scenario, even threaten their existence.

As for the non-for-profit hospital president, his/her opinion probably would not be in favor of the proposed legislation for the following reasons. Although, non-for-profit medical organizations are not driven by the motive of stockholders’ benefit, they are still a subject to the intensive market competition with their for-profit rivals as well as with other charitable medical establishments. The intensive development of for-profit medicine in the U.S. alone has enough threatened their existence. Moreover, non-profit heath care facilities do not need to bee subjected to the Physician Full Disclosure Laws, since they have always been treated with the greater public trust and community support and in their primary reasons for existence there is not profit motive that may cause the need for such legislation.

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