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The Ethical Revolution, Autonomy, and "Managed Care" by Dr George Halasz.

National Association of Practising Psychiatrists - 1998

Currently we are passing through a historic juncture in the development of health care in Australia. The government, bureaucrats, regulators, medical profession, and the general population are increasingly alarmed at the prospect of the introduction of the American styled "managed care" to replace the Australian health care system, Considerable debate is currently focused on the clinical. economic and ethical advantages and disadvantages posed by the introduction of "managed care".

On balance, the American experience of "managed care" has been judged most unfavourably on all three counts. This should not be surprising given that "managed care" is a slogan for "mismanaged care", an interference in the doctor-patient relationship by-non-medical economists.

The unfavourable attitude to "managed care" has highlighted two emerging areas of concern in America which 'seem quite likely to bring about legislative initiatives. consumer concerns about the quality of care and doubts over the long-term cost saving'. (Budetti, 1997, pg 197). This paper will focus oil the impact of the American pseudoethical system of "managed care" (Halasz, 1997) on the ethical principle of autonomy as it relates to the doctor-patient relationship.

"Managed Care" Strategies

It is evident from the insights of the accumulated American experience of "managed care" that the focus of patient care has radically shifted from 'care' to 'cost'. "Managed care" has effectively dismantled the medical priorities that regulated the traditional doctor-patient relationship. Promoted in the mistaken belief that 'cost effective' can be equated with 'cheap', the architects of "managed care" have overemphasised 'costs' and ignored 'effectiveness' (Gabbard et. al., 1997). Notwithstanding the healthy dividends in evidence for stockholders in "managed care" companies, there seems little evidence of the benefits of "managed care" at the national level, with the, American health system spending 14% of GNP on health, while the Australian system's level of expenditure is in the region of 7% (Southon, 1995, pg 20-21).

Beyond the alleged economic benefit of "managed care" is the obvious ethical cost: the profound disruption of the rights of patients. How does a society 'cost' the violation of a fundamental human right: the essential right to exercise autonomy in the choice of treatment? The advocates of "managed care" argue that it is better to worry about the good of everyone in general, and that 'it's essential not to worry too much about anyone in particular. Just remember that nobody is special, and the rest comes naturally' (Alper, 1997, pg 508). Is Australian society prepared to embrace the unethical attitude to health care as embodied in the "managed care" ethos?

The Pseudoethics of "Managed Care"

Sabin (1995) advanced the view that the topic 'ethics of managed care' is an oxymoron, given that "managed care" is inherently unethical 'because its concern about the financial bottom line subverts health care's fundamental commitment to the welfare, of the patient' (pg 293). Put simply, "managed care" alters the foundations of the doctor-patient relationship.

In the complex maze of medico-legal legislation, ethical guidelines, and the subtle individual variations in treatment plans, the patient's basic trust and confidence in the doctor has been predicated on a basic shared assumption: that the patient and doctor jointly pursue the patients best interest. The basic principle of the 'best-interests-of-the-patient' criteria for clinical decision making is the prime target of "managed care".

"Managed care", founded on economic parameters, has radically redefined the traditional doctor-patient relationship. As Kassirer (1995) noted, '(F)orced to choose between the best interest of their patients and their own economic survival'...the 'incentive to remain employed is so strong that many physicians in a capitated system may not provide all the services they should, may not always be the patient's advocate, and may be reluctant to challenge the rules governing the services are appropriate. In some cases, in fact, their contracts forbid them to disclose the existence of services not covered by a plan' (pg 50). Are such unethical 'gag clauses' acceptable in the Australian social context?

The evolution of the American style of "managed care" was always eligibility dubious. As a health reform, it caused much pain and grief, having bypassed the essential debates on its profound ethical and moral impact on the doctor-patient relationship. How did "managed care" bring about such ethically impermissible standards to the American health system? Do we realise that unless it is effectively challenged, the tragedy will be repeated with our health system?

"Managed Care" Strategies

Briefly, "managed care" brings about changes by two strategies: '(T)he first is the ruthless pursuit of economic efficiency by subjecting physicians' behaviour to cost-efficiency tests and cost-benefit analysis. The second is the development and implementation of practice guidelines that minimise variability in patient care while maintaining quality' (Chervenak & Mc Cullough, pg 320). In practice, minimising variability in patient care implicitly demands a drop in the quality of that care, as tailoring to the individual needs of patients becomes impossible.

Patients cared for under such guidelines are denied information that they need in order to make fundamental human decisions, to make choices, acts that involve the 'essential exercise of autonomy' (pg 320). The consequences of denying patients their right to choose are far reaching. Emanuel & Dubler (1995) detailed the six major arcs that "managed care" impact on the doctor-patient relationship: choice, competence, communication, compassion, continuity, and (no) conflict of interest.

Potential Improvements
Potential Threats

  • Expanded choice of managed care plans, particularly in areas with low managed care penetration
  • Expanded choice of preventive and pediatric services
  • "Cherry picking" increasing the number of uninsured Americans
  • Employers restricting patients choice of managed care plans and physicians
  • Price competition forcing patients to choose between continuing with their current physicians or switching to a cheaper plan.
  • Financial failures of managed care plans forcing change in managed care plan without choice.
  • Restrictions by managed care plans of choice of specialists and particular services

  • Development and use of measures to assess quality of physicians and managed care plans
  • Greater use of preventive medical care
  • Underutilization of specialists and specialized facilities
  • Unreliable and non-risk-adjusted quality measures providing a distorted view of competence

  • Increased number of generalists and primary care providers
  • Creation of physician-nonphysician provider terms to provide a broader range of providers knowledgeable about the patient's condition
  • Productivity requirements creating shorter office visits, reduced telephone access, and other provider access barriers to physicians
  • Advertising creating inflated patient expectations

    Less time for interaction with patients during stressful decisions
  • Less time for interaction with patients during stressful decisions

    Less time for interaction with patients during stressful decisions
  • Price competition forcing patient choice of continuity at a higher price vs the cheapest plan
  • "Deselection" of physicians disrupting existing physician-patient relations
  • Frequent changes by employer of managed care plans forcing changes of physician

(No) Conflict of Interest
    Less time for interaction with patients during stressful decisions
  • Linking physician salary incentives and bonuses to reduced use of loses and procedures for patients

Table 1 highlights that the potential and actual threats of "managed care" to the doctor-Patient relationship far outweigh the potential benefits. The fundamental ethical transgression of "managed care" has been observed to be the 'undermining (of) the essential exercise of autonomy for the, purpose of economic efficiency (which) is ethically impermissible, because it involves systematic disrespect for the patient as a person'.

The College and Patient Advocacy

By disrupting the patient's basic trust and confidence in the doctor-patient relationship, "managed care" fosters a 'resurgent paternalism' (Sulmasy 1995, pg 324). By doing so, "managed care" effectively places both the doctor and the patient in the doctor-patient relationship 'at risk', either for diminished or lost autonomy. Against this background, how has our College responded to the threat to the doctor-patient relationship posed by "managed care"?

It behoves us to recall Dr George Lipton's words, the then President-Elect of the RANZCP, who declared that it 'is taken as a given, and It is usually true, that patient advocacy is the responsibility of the College itself and all its Fellows' (Lipton 1995, pg 5). Nevertheless, in tile present political climate, as President of the College, he promoted and sponsored the President's Task Force to produce the document The RANZCP and Funding of Psychiatric Services - Principles of Practice. This document has elicited widespread criticism from many Fellows of the College precisely for its lack of patient advocacy, paving the way for the introduction of "managed care"!

Taking an Ethical Stand

Fortunately, the protest of many Fellows of the College was reflected at a' special meeting of the Victorian Branch of the RANZCP, on 25th February 1997. In possession of the evidence against the ethically impossible. and clinically dangerous effects of "managed care", based on the erosion of the autonomy of the doctor-patient relationship, 70 Fellows unanimously chose to remain true to our College's credo of patient advocacy and to stand by the traditional standard of autonomy in medical ethics. The Fellows of the College voted unanimously to reject the President's Task Force document!

This vote reflected a clear message from the Fellows that the slogan of "managed care", as experienced by the American health care system, repeatedly condemned for its fatal flaws in patient care. is unacceptable in the health care system of Australia.

Acknowledgement. I would like to express my appreciation to Dr Ian for his penetrating insights and most helpful suggestions both to the Vic Newsletter article that appeared in February 1997, and to the current one.


  • Alper, PR. "Learning to accentuate the positive in "managed care"." New England Journal of Medicine, 336. (1997): 508-509.
  • Budetti, PP. "Health reform for the 21st Century?" JAMA 277, (1997): 193-198.
  • Chervenak, FA., Mc Cullough, LB. "The Threat of the New Managed Practice of Medicine to Patients' Autonomy." Journal of Clinical Ethics 6 (4 1995): 320-323.
  • Emanuel, EJ. Dubler, NN. "Preserving the Physician-Patient relationship in the Era of Managed Care." JAMA, 273, (1995): 323-329.
  • Gabbard, GO, Lazar, SG., Hornberger, J., Spiegel, D. "'The economic impact of psychotherapy: a review." Am, J Psychiatry 154 (1997): 147-155
  • Halasz, G. "The ethical revolution: ethics and pseudoethics." Newsletter of the Victorian Branch of the Australian and New Zealand College Psychiatrists. February 1997 (1997): 5.7.
  • Kassirer, JP. "Managed Care and the Morality of the Market Place." N England Journal of Medicine. 333 (1995): 50-52.
  • Lipton, G. "The College and professional political issues." Australasian Psychiatry 3 (1995): 5-8.
  • Sabin, E. "General Hospital Psychiatry and the Ethics of Managed care." General Hospital Psychiatry 17 (1995): 293-298.
  • Southon, G. "Professional autonomy and accountability: a critique of current health reforms and an alternative proposal." Healthcover. April-May (1995): 20-26.
  • Sulmasy, DP. "Managed Care and the New Medical Paternalism." Journal of Clinical Ethics. 6 (1995): 324-326.7


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