Term Paper on "Ethics of Managed Healthcare Policy"

Term Paper 10 pages (2882 words) Sources: 15

[EXCERPT] . . . .

Reactive Healthcare vs. Preventative Care

The American fee-for-services compensation model instead of positive-results-based managed care compensation in other countries raises another fundamental ethical concern: namely, the essential focus on human health (Beauchamp & Childress, 2009; Rosenstand, 2008). Specifically, the entire approach of the American healthcare system relies on (1) treating human disease after it manifests itself in acute illness, and (2) an isolated system whereby multiple physician specialists rendering concurrent treatment for the same patients do not coordinate their respective care except in the most superficial manner designed more to protect them from potential liability for malpractice for delivering medically contraindicated care than to achieve the best possible comprehensive care and results for their patients (Goldhill, 2009; Levine, 2008; Reid, 2009; Tong, 2007).

Treating disease after it manifests itself in acute illness is precisely analogous to performing no periodic maintenance on an automobile and servicing it only whenever a major component system malfunctions or deteriorates to the point where the vehicle requires repairs to operate. In both cases, that approach is tremendously more expensive that preventative maintenance. In the U.S., it is not atypical for physicians in isolated specialties to completely ignore (or make only cursory mention of) medical concerns that to not pertain directly to their specialty (Reid, 2009).

Meanwhile, in Britain, every physician has a natural incentive to encourage and assist overweight patients lose weight and smoking patients to stop smoking (for just two of the most obvious examples) because their compensation is tied directly to their patients' overall health status rather than to the volume of services they render (IOM, 2006; Kennedy, 2006; Reid, 2009; Rosenthal, Frank, & Li, 2005; Tumulty, Pickert, & Park, 2010). In essence, the American managed care system that guarantees third-party and government subsidized payment rewards illness while the British system (and those of other nations that have already embraced the preventative medicine perspective) reward optimal health and the combined and coordinated efforts of all physicians and other healthcare professionals in that regard (Kennedy, 2006; Reid, 2009).

Waste, Fraud, and Abuse

With respect to major problems in American managed healthcare, it is a system that is fundamentally predisposed to waste, fraud, criminal abuse, and negligent care. The fact that patients do not pay for their healthcare costs directly and that either health insurance companies or government programs pay negotiated bulk-service-based prices for healthcare services rendered provides a natural disincentive to worry about keeping the costs of healthcare services down (Carey, 2009; Kennedy, 2006; Reid, 2009). Since physicians receive only a fraction of the prices that their services would command in a direct-payment market, they have a natural incentive to increase the volume of services they render. Similarly, since patients pay for healthcare premiums instead of paying the actual costs of their healthcare when rendered, they have no incentive to worry about cost or unnecessary or redundant care (Carey, 2009; Kennedy, 2006; Reid, 2009).

Those factors are even more of an issue in connection with government-funded healthcare programs because they pay the least for specific services and generally impose the least stringent criteria for the types (and amount) of service for which they reimburse providers (Carey, 2009; Kennedy, 2006; Reid, 2009). In addition to providing no real incentive to reduce costs, that managed care format also creates a ripe situation for criminal abuse of federally-funded healthcare programs that drains billions of dollars of public funds annually (Halbert & Ingulli, 2008; Kennedy, 2006; Levine, 2008; Reid, 2009; Tong, 2007).

Healthcare-Caused Illness

Finally, perhaps the best illustration of the manner in which the American managed healthcare system contributes to unnecessary waste as well as directly to preventable human disease is the situation involving hospital-acquired ("nosocomial") infections (Goldhill, 2009; Kennedy, 2006; Levine, 2008; Reid, 2009; Tong, 2007). Every year, approximately two million patients acquire nosocomial infections that are entirely unrelated to their reason for hospitalization American in hospitals and other clinical healthcare facilities such as nursing homes. The treatment necessary to resolve those unnecessary infections costs as much as $50 billion annually, almost all of which either comes directly from public funds in the form of institutional reimbursements or indirectly from private patients who must absorb ever-increasing health insurance premiums raised to prevent those costs from reducing healthcare insurance company profits. Furthermore, those two million preventable infections end up costing the lives of approximately 100,000 patients annually. (Goldhill, 2009; Kennedy, 2006; Levine, 2008; Reid, 2009).

Precisely because nosocomial infections are so directly attributable to healthcare errors, oversights, and deviation from standard universal antiseptic protocols, in 2007 the Centers of Medicare and Medicaid Services (CMS) terminated institutional reimbursements for certain kinds of nosocomial infections, such as those associated with the use of Foley catheters (Levine, 2008; Reid, 2009). Immediately, rates of those infections began to drop throughout American clinical healthcare institutions for one specific reason: suspension of reimbursement for those infections shifted the burden of their costs directly to the institutions themselves (Levine, 2008; Reid, 2009). Their immediate response was beneficial to patients and to the effort to conserve public funds; however, it fully illustrates the degree to which the exact same measures were never previously implemented simply because there was no incentive for clinical institutions to do so until CMS created a financial incentive.

Recommendations

Certainly, there are numerous areas of American managed healthcare that absolutely require remedial attention to resolve fundamental ethical concerns in relation to the equitable provision of healthcare services and the necessary improvement in the quality of healthcare services. They include addressing the structural problems posed by demographic changes and economic realties of contemporary American society, resolving the paradox of non-paying patients straining the healthcare system and often receiving the most expensive healthcare services, and the prevention of healthcare waste and criminal abuse.

However, the three most important aspects of the American managed healthcare system that require immediate fundamental changes to reduce costs and improve the quality of healthcare services are: (1) the dismantling of the political lobbying mechanism that allows private-sector, for-profit corporate conglomerates to encourage congressional representatives to promote their financial interests in Washington; (2) the elimination of the fee-for-services model of healthcare professional compensation model and its replacement with a positive-results-based healthcare professional compensation scheme; and (3) a complete reorientation of the treatment-for-acute-illness-based approach of American healthcare services to a preventative-medicine approach designed to prevent the development of disease proactively.

Conclusions

Naturally, none of those changes will be easy to accomplish, largely because of the extent to which those problems are current entrenched within the managed healthcare system in the U.S. In particular, the control enjoyed by private-sector healthcare lobbyists in Washington must be eliminated through determined leadership in that regard from the executive branch of government. The fee-for-services compensation model for healthcare professionals must be replaced with a results-based model; that change will require the combined efforts of both legislators and the professional leadership ranks within the medical professions. In that regard, the entire healthcare system must learn the lesson presented by the nosocomial infection issue and adopt a comprehensive approach to mitigate waste and preventable disease attributable to human error. Finally, even that change must be part of a more general framework that shifts American healthcare from a disease treatment model to a disease prevention model.

References

Beauchamp, T.L. And Childress, J.F. (2009). Principles of Biomedical Ethics, 6th

Edition. Oxford University Press.

Carey, J. "Smarter Patients, Cheaper Care." Business Week, (June 22, 2009): 22-23.

Dykman, J. "Five Truths about Health Care in America." Time, Vol. 172, No. 22;

(2008):

42-51.

Goldhill, D. "How American Health Care Killed My Father." The Atlantic; Vol. 304,

No. 2; (2009): 38-55.

Institute of Medicine (IOM). "Pay-for-performance preferable for Medicare." Healthcare

Financial Management. Healthcare Financial Management Association. (2006).

Retrieved April 30, 2011, from:

http://www.highbeam.com/doc/1G1-154391028.html

Halbert, T. And Ingulli, E. (2008). Law & Ethics in the Business Environment. Cincinnati:

West Legal Studies.

Kennedy, E. (2006). America: Back on Track. Viking: New York.

Levine, C. (2008). Taking Sides: Clashing Views on Bioethical Issues. Dubuque, Iowa:

McGraw Hill.

Reid T. (2009). The Healing of America: A Global Quest for Better, Cheaper, and… READ MORE

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