Hippocratic Hypocrisy

A new move to limit investments by medical doctors in diagnostic and treatment facilities is being made in Congress, an appropriate response to the conflict of interest inherent in many of these arrangements. As a report of the Institute of Medicine affirmed earlier, “It should be544367975for physicians to have ownership interests in health-care facilities to which they make referrals or to receive payments for making referrals.”

Under legislation introduced by Rep. Pete Stark (D-Oakland), physicians would be prohibited from referring Medicare patients to any service, clinic or facility in which the physician has a financial interest or from which the physician receives compensation. Exceptions would be made to protect the traditional physician-hospital relationship and to assure adequate investments in remote areas where doctors might be the sole source of investment for diagnostic and special treatment centers.

The objectives of the legislation have widespread support from such diverse organizationsas the Washington Business Group on Health, the American Society of Clinical Pathologists and the American College of Radiology. But not yet the American Medical Assn., whose policy-makers have indicated opposition to any across-the-board barrier to doctor investment in health-care facilities. One medical association policy-maker has argued that financial involvement is likely to ensure better-quality care and service --a concept that raises some profound questionsconcerning the meaning of the Hippocratic oath. There is nothing imaginary or theoretical in the risks of abuse. A Blue Cross study in Michigan five years ago showed that the average cost and frequency of use of doctor-owned laboratories was double that of the other labs. Times reporter Claire Spiegel reported charges from a radiology facility in Orange County that it was being frozen out of referrals by a newer facility owned by the physicians themselves. Dr. Arnold Relman, editor of the New England Journal of Medicine, branding the practice “wrong” and “unethical” and “not in the public interest,” estimates that more than 50,000 physicians nationwide have a financial stake in ancillary medical services. The AMA estimate is 10% of all doctors.

The controversy goes beyond commercial enterprises seeking to lock physicians into their enterprises with often highly profitable investments. It includes commercial arrangements being apparently forced on nonprofit hospitals as well to create joint ventures for outpatient surgery centers, imaging facilities and even prescription pharmacies as a means of assuring the loyalty of staff doctors by sharing the profits from these operations.

The legislation that is now on the books in states like California, requiring doctors to reveal their financial interest when making referrals, is not adequate protection. Stark’s broader legislation on Ethics in Patient Referral, with its specific prohibitions for Medicare, would be a welcome additional safeguard.