Conflict Of Interest In Acute Care

As indicated by McLaughlin and McLaughlin (2008), governments must respond to the concerns of healthcare providers having a conflict of interest as it relates to patients and for others. In the 1990s, the United States saw the emergence of many physician-owned hospitals specializing in certain high-dollar procedures such as cardiac care and orthopedics. They had many reasons for their development. First of all, physicians sought to funnel the private insured patients to facilities in which they had a financial stake. Additionally, they were able to pick and choose patients who might have a better outcome. Moreover, the doctor had more control over the patient's care and length of stay in a facility in which he had ownership. This created problems

Physicians like them because they have greater control over their patient mix, payer mix, and over the care that is provided directly to the patient. On the other hand, many see these facilities as a potential conflict of interest in providing impartial patient care when the physician who is directing the care has a financial interest in the facility. Physicians tend to refer the better-insured patients to the specialty hospitals and the uninsured and Medicare patients to general hospitals for care. Additionally, these actions on the part of the doctors compromise the acute care hospitals' ability to subsidize less profitable services with higher-cost services such as cardiac and orthopedic care (McLaughlin & McLaughlin, 2008). As a result of the apparent conflict, the "Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 mandated research on this matter and applied an eighteen-month moratorium against self-referral to allow policymakers to consider the issue" (Kahn, 2006, p. 131). Also, the MMA directed that studies be performed by the Medicare Payment Advisory Commission (MedPAC) and the Centers for Medicare and Medicaid Services which determined that specialty hospitals routinely treated

On the one hand would be an outright ban, as has been suggested by some members of Congress. Others have suggested that existing facilities be allowed to continue to function and new ones be prohibited from establishing. Another proposal has been that physicians could be required to disclose any financial interests when referring patients to facilities in which they had ownership (Armstrong, n.d.). Other solutions involved reforming the diagnosis-related group (DRG) payment policy, which would discourage specialty hospitals from "cherry picking" among the most profitable patients with the highest margins of payment and, hopefully, reduce their profitability (Kahn, 2006). Many of these solutions now seem a moot point in light of changes, which have come about with implementation of the Affordable Care Act. However, it appears that physicians in ownership arrangements with specialty hospitals have found ways to circumvent the intentions of the law and many are even prospering by "cashing in on other measures of the new health law — particularly one that rewards hospitals based on quality measures, and another that penalizes hospitals with high re-admittance rates" (Lobello, 2013, para. 8). It seems that doctor-owned hospitals have found new ways to expand their market share by offering extended hours, new procedures, and also by rejecting Medicare patients. All