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Ethical Issues in Hospital Based Healthcare Delivery Systems

by Dawn J. Lipthrott


Healthcare delivery is becoming increasingly governed and delivered by large corporate systems. Some states prohibit the 'corporate practice of medicine' because of concerns that corporate goals would influence the way physicians practiced medicine and negatively impact patients.

In states where the corporate practice of medicine is allowed, there is a renewed trend toward 'integrated delivery systems'. While there are varieties of integrated systems, the one I am going to address is hospital-based integrated systems and what I think are some of the ethical issues related to negative impact on both patients and independent physicians who do not become employed or owned by the larger system. Such an integrated system typically includes hospitals, imaging centers, rehabilitation centers, employed physicians or hospital ownership of physician practice, and other treatment components combined into one large corporate group that attempts to keep everything in-network in order to maintain and increase market share and revenue.

To illustrate some of those issues, this series will look at Adventist Health -Sunbelt in Central Florida. Adventist Health is only one of many systems that create these arrangements. Because Adventist Health has indeed demonstrated quality in the past, I believe the ethical issues become even more important because of the trust that the people in this community have historically placed in this system.

Specifically, some of the issues I will address are the ethical issues of presenting its network of employed or owned physicians in ways that make them seem as though they are independent, possible expectations of those physicians to refer in-network without patient knowledge that they are in the network (patient steering), the negative impact that has on independent physicians trying to compete with such a massive system, the potential impact on patients, the unnecessary duplication of services and the impact on healthcare costs which tend to bepassed on to patients.

The McGraw Hill Dictionary of Modern Medicine defines 'integrated delivery systems" as "a coordinated health care system formed by physician groups and hospitals which increase efficiency and decrease redundancy in providing health care." While that sounds attractive, the system I looked does create redundancy which cannot be efficient, although it can be profitable.

These systems have found ways to use the employment exceptions to create what would normally be prohibited by federal laws to protect patients, especially the Stark laws that govern self-referral, anti-kickback laws and antitrust laws related to anti-competitive behaviors. While the systems may technically fit into an 'exception' in the laws, I am concerned that the 'intent' of the law in protecting patients is forgotten in how such systems operate. Not every integrated system operates the same. But in my view, patients everywhere need to become more educated and aware, not to completely avoid these systems, but to be empowered to ask questions and to make informed choices about which physicians and services are best for them and their particular situation.

Part 1: Concealed Ownership/Employment of Physicians

Part 2: The Power of Patient Steering by a Large System

Part 3: Negative Impacts on Physicians and Patients

Part 4: Community Need vs. Capturing Market Share and Revenue

As always, I welcome your constructive comments and suggestions about the material on this website and how we can all be most effective in co-creating the kind of healthcare system we all want.
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© Dawn Lipthrott, Ethical Health Partnerships, 2009

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