Top Ten Myths about the Uninsured

Myth: The uninsured are all alike.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004.

"This is manifestly false. The uninsured tend to be somewhat lower- income and in somewhat poorer health, but because there are so many of them and because they do span various dimensions of American life, there are many who are young and healthy but there are many who are not; there are many who are reasonably well off, including a sizable fraction above the median income. And then, as is also important to note, there is a sizable fraction below the poverty line who are also sick and in a very bad way. The message of this diversity for policy design in a world of public budget constraints is that you probably want to be careful and clever in making limited funds go as far as they can toward expanding coverage. Of course, policies that are target efficient are also more complex. In addition, there are inherent trade-offs in choosing a target population, for example, in extending lower cost coverage to a larger number of relatively healthy uninsured vs. extending higher cost overage to a smaller number who are likely to have more health risks. Value judgments are unavoidable when making actual policy choices in this case."

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Myth: There were 44 million uninsured Americans in 2002.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004.

"Forty-four million is the 'official' number from the most recent Current Population Survey, but the truth could be (and is) on either side. The CPS asks: did you have health insurance at any time in the 12 months ending two months ago? Penn State Professor Pamela Farley Short’s chapter clarifies the overwhelming evidence that many respondents answer the CPS insurance questions incorrectly. Even if answered perfectly, this concept omits quite a large number of people who lack insurance for a period shorter than 12 months or the interval in which they lacked insurance did not match the particular window asked about. So the truth is that far more than 44 million are uninsured for a period shorter than 12 months in a given year.

On the other hand, other surveys make clear that the 44 million number overstates by as much as a factor of two the people who were uninsured for all of the prior 12 months. The Census Bureau’s Survey of Income and Program Participation, HSC’s Community Tracking Household Survey, and AHRQ’s Medical Expenditure Panel Survey, as well as the Urban Institute’s National Survey of America’s Families, all have probed survey respondents for years and said, now, are you really sure that you didn’t have any insurance for that time period?

The subtle lesson here is to pay attention to time frame. The longer the period of time, the smaller the number of people who are always without health insurance and the larger the number of people who are without insurance for some of the relevant time period.

Perhaps the most important thing to establish from a policy perspective is not the precise number, as long as we are confident that the number of uninsured for an entire year is in the tens of millions, and researchers are confident of this. The most important analytic measurement may be the time trend in the percentage of non-elderly Americans who are uninsured, which has recently been quite adverse. Trends are more reliably calculated, assuming that the same kinds of respondent errors and measurement imperfections are present each year, which is a reasonable assumption."

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Myth: Coverage is Coverage is Coverage.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"Designs of insurance policies really do matter. Insurance is not insurance. Insurance differs in terms of the kind of financial protection it offers, in the potential for improvement in health it offers, and the humanity of the treatment when you contact the healthcare system. To put it slightly differently, imagine a policy that gave every American as much insurance as $100 could buy. Every American would then have insurance, we’d have zero uninsured, but we wouldn’t really be in that much better of a situation than we are now.

But the punch line is that the head counts of coverage are not enough, that the actuarial value* of insurance may vary, and even given the same number of dollars spent on insurance, the consequences of insurance may be different, depending on the form that insurance takes. Furthermore, the harm of not having insurance may vary with the length of time coverage is lost, as well as with nature of the people without coverage.

Moreover, the kind of insurance that people get depends very strongly on where they get it. If they work for a large Fortune-500 firm whose benefits department is run by professionals, they will get very good and well-designed coverage. If they get it from Gus and Otto’s Garage, and neither Gus nor Otto was trained as an actuary, it may not be such great coverage. And if they get it in the individual market, it depends on how good the consumers are at searching through the wide range of possibilities available to find the best buys out there compared to other less satisfying policies that are also available and may be easier to find."

*Actuarial value can be thought of as the percentage of expected health-related costs for an average risk person that the policy is designed to cover. It is thus a measure of generosity of a health insurance policy.

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Myth: Individuals without insurance choose to be so.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"In some general sense this is true. No law prohibits people from buying insurance, and most could buy individual insurance, although if you are a very high risk person you might find the price quoted to exceed what you expect to get back in benefits, and a small fraction of people are outright denied access to insurance at any price. But, more generally, if we think of realistic choice or reasonable choice for low- income people or for people at high levels of risk, if they don’t have insurance now, obtaining insurance voluntarily without further subsidies is probably not a realistic option.

We also know – especially from some of the studies described in the chapter that Linda Blumberg of the Urban Institute and I wrote – that job matching is not perfect and there are some people who probably want insurance who can only find a job in firms that do not offer insurance. Now, they do not want it so much they are willing to pay whatever it may take in the non- group market, but they do want insurance and can not get it. There are also some other people who would rather have higher wages than health insurance but can only find a job in a firm that offers health insurance to them along with an acceptable wage. The out-of-pocket premium required of them may even be low enough to induce them to take-up this employer offer, but maybe not, and thus this low relative demand – or willingness to pay – for health insurance may be the core reason roughly 20% of workers do not accept their employer’s offer."

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Myth: U.S. employers spend $400 billion a year for workers’ health care.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"This issue reveals how differently economists think from most people. Imagine that somebody could wave a magic wand and end $400 billion of employer payments for health insurance. First, the definition of 'pay' in economics is not who writes a check, but the definition is wrapped up in the question, would employers then get to keep $400 billion more of profits that they could distribute to stockholders on to increase compensation of their senior executives, or to do whatever they wanted to do with it? And the answer that economics gives – well summarized in a couple of chapters in the ERIU volume – is no. One way to think about why the answer is no is to think about why employers offer health insurance. Now maybe some of them do it out of the goodness of their heart, and some of them do it because they think insurance makes employees healthier and therefore more productive, and under certain circumstances there may be a business case for doing that. But most employers, at least if you locked them in a room and asked them, 'Why are you doing this if you whine and complain about it all the time, why don’t you just stop offering health insurance?' And their answer is, 'Well, we need to offer health benefits to be competitive in the market for workers, to be able to attract and retain high-quality workers,' which is another way of saying they offer health insurance to obtain a given quality of worker for less total compensation outlay than they would have to expend in the absence of health insurance.

And so the punch line is that if somehow employers were not allowed to spend $400 billion on health insurance, then in order to attract the workers that they were formerly attracting with this benefit, they would have to use money or some other benefit that could well eat up or even exceed all of the savings. So that’s at least one way to think of why economists are out of step with the rest of the world. Our theoretical logic – and some careful empirical work – tells us that (most) employers actually do not pay for health insurance (and by the way, then, health insurance costs are not what makes U.S. products noncompetitive internationally). Economists believe that ultimately most workers end up paying for health insurance in the form of lower wages.

This argument also works in reverse, which may be more germane for the current situation. Imagine that employers are mandated to provide health insurance, as has been passed in some states and introduced at the federal level from time to time. Who’s going to actually end up paying for that? Well, the story is just the same as above but in reverse. Initially of course employers will do most of the complaining about it, as they have, and threaten to lay off workers, but that will, at least over time, soften the labor market, cause raises to be smaller than they otherwise would have been, and sooner or later, the bulk of workers will end up paying for the health insurance that policy makers gave them with the best of intentions. They’ll end up paying for it themselves through reduced wages and fewer jobs unless they receive a subsidy. Of course, if they receive a generous subsidy or their employer does, that subsidy will ultimately go to workers."

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Myth: Workers used to be reluctant to switch jobs; HIPAA fixed that.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"'Job lock' is the shorthand term economists applied to the phenomenon of workers remaining with less productive jobs than they could get because they fear losing health insurance if they were to switch. This was originally investigated with some vigor in the early 1990s during the debates over the Clinton Health Security Act, for it was argued that if the aggregate amount of lost productivity was large enough, there could be a very large hitherto uncounted gain to universal coverage, and thus the net cost to society might be much lower than simple budgetary cost estimates.

Since then, much research was done, and HIPAA was passed, which among other things, was designed to make the portability of insurance more real and reduce job lock. Jonathan Gruber of MIT and Bridget Madrian of the University of Pennsylvania reviewed the complex research evidence and concluded that the studies with the most defensible methods do indeed find some pre-HIPAA job-lock, though the welfare cost from this job lock is essentially impossible to quantify. This means economists cannot tell, at the moment, if additional policy interventions are justified. Gruber and Madrian also highlight two broad reasons to believe that many workers are still reluctant to switch jobs for health insurance-related reasons, even after HIPAA: They stem from Myth # 3, coverage is coverage is coverage. First, workers could have more generous coverage on their current job than HIPAA requires, in terms of preexisting condition waiting periods, actuarial value or access to preferred providers. Second, insurance in the individual market costs more per dollar of coverage, so that higher wages – exactly equal to what the previous employer “paid” toward health insurance, for example – may not be able to make one whole. Thus, workers are often reluctant to leave a job with health insurance for a job that might pay higher wages but does not have health insurance attached. The cost advantages of group purchase are large."

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Myth: Health insurance would surely improve the health status of the uninsured.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"This is among the more complicated and emotional disputes in health policy analysis. I will clarify how the literature may be correctly interpreted on what is accepted as proven now, and take some care to distinguish this from what we would like to know and from what we might think policy should do in the face of real-world imperfect knowledge.

Helen Levy and David Meltzer, both professors at the University of Chicago, were asked to review the literature to assess this question: 'Does health insurance really affect health status?' They were rightly concerned that standards of proof about causation in this area have often been lower than they should have been in many published papers, even in many prestigious journals over the years. And they chose to use a standard of proof that is quite high, but is nonetheless becoming increasingly common in the social sciences, that causation is not likely to be appropriately inferred unless there has been an adequate natural experiment or a true experiment in which a representative sample of people are assigned to have or not have insurance for the duration of the experiment. This standard of proof for causation has become more widely shared as researchers have realized that there may be important but unobservable differences in people that make different choices about things like insurance, diet, exercise and education. If we merely observe what people do, it is hard to be sure what caused and what merely reflected health outcomes. For example, if some people (for whatever reason) have a low value for their health, it is likely that they will not obtain health insurance but also will not take steps (like preventive care and better health habits) that are known to affect health. We can easily observe the association of lack of insurance and low health, but it will be their low demand for health that causes the poor health, not lack of insurance per se.

Now, this standard of proof has rarely been met in the research literature, but when it has, the bulk of the evidence suggests that health insurance does indeed have positive effects on the health of certain populations, and indeed, those most often at the center of a policy debate: the poor, the elderly, the truly sick and children. What has not been proven by this standard is that universal coverage would improve the health of all of the uninsured, and this leads economists to the following three inferences. (1) Because we do not have an unbiased measure of the effect of health insurance on health in general, we cannot say with certainty that more public subsidies for health insurance for the general population would improve health status more than would an increase in the capacity of public health centers or public hospitals, better education about diet and exercise, or a more equal income distribution for that matter; (2) Understanding more about the complicated pathways that different types of people traverse from coverage to health status through health services, and indeed, health insurance and health education, would help us make far better calibrated recommendations to policymakers; (3) There are many reasons to support universal coverage, but the analytic case for the short-run positive health effects is not the strongest one, at least for the higher income and basically healthy uninsured who comprise roughly 40 percent of the uninsured today."

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Myth: Universal coverage would eliminate health disparities.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"Another element of this generalized myth is that universal coverage would eliminate poor health status among vulnerable populations. Despite considerable policy attention and focus, rather large disparities in health care outcomes among different population subgroups persist in our country. At least part – and perhaps a very large part – of the reason lies in differential access to health insurance. Harold Pollack and Karl Kronebusch, from the Universities of Chicago and Yale, respectively, have written a chapter that focuses on access to health insurance by six subgroups that are often considered vulnerable for one or more reasons. The groups are the low-income population, children, racial and ethnic minorities, people living with chronic conditions, the near elderly, and people suffering from psychiatric and substance use disorders.

Each group raises distinct concerns for public policy, health insurance and the healthcare delivery system. Pollack and Kronebusch conclude there are four basic reasons vulnerable populations often lack health insurance: (1) they have medical and social needs that hinder their access to good jobs and to private health insurance markets; (2) they have general economic disadvantages, including lower incomes, which impede their ability to pay for health insurance when it is available and less access to jobs with employer-sponsored insurance, which makes it cheaper; (3) they sometimes face discrimination based on race, ethnicity or language; and (4) they sometimes suffer from impaired decision-making and rather imperfect proxy decision-making. And unfortunately, many people in vulnerable populations face multiple barriers at the same time.

As an example of troubling disparities, taken from AHRQ’s recent healthcare disparities report*, black women have lower rates than white women of cancer screening and higher rates of diagnosis in late stage and consequently higher death rates. These death rates apparently persist even after controlling for education and income. They also appear to persist after controlling for insurance. This suggests that insurance alone cannot solve the problems faced by vulnerable populations. Pollack and Kronebusch wrote: “The data provide ample warning that one should not oversell the possibilities of improving health status and individual well-being through expanded health coverage. Expanded coverage is unlikely to eliminate the high rates of death and illness that arise from multiple causes and require multifaceted interventions.” In other words, insurance will help these populations and reduce gaps**, but eliminating the disparities gap will require multiple policy changes."

*http://qualitytools.ahrq.gov/disparitiesReport/download_report.aspx

**Hargraves, L. and J. Hadley. “The Contribution of Insurance Coverage and Community Resources to reducing Racial and Ethnic Disparities in Access to Health Care,” Health Services Research 38:3 (June 2003).

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Myth: A worker's decision to remain uninsured has no effect on anyone else.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"An overarching feature of modern labor markets is worker heterogeneity; we all differ in many important dimensions, including our preferences for health insurance arrangements. One consequence of heterogeneity is that different kinds of compensation packages may exist in equilibrium, some with a broad array of health insurance choices attached, some with one health insurance option embedded, and some with only cash wages to entice a prospective employee to give up their leisure time. Michael Chernew and Richard Hirth of the University of Michigan focus their critical review essay on the connections between decisions made by different people in the nexus of labor and health insurance markets. This myth was chosen to highlight the reality that some workers’ willingness to work at jobs without health insurance – while this may be a minority of workers today – has important consequences for the rest of us.

First and foremost, it means employers have a choice about whether to offer health insurance, and they will make this decision largely based on the preferences, expectations and productivity of the dominant type of worker they need to produce their products and services, as well as on their own unique costs of delivering health insurance to their workforce. For example, higher-wage workers are likely to be willing to pay more for health insurance in the form of reduced wages, and so employers of highly productive high-wage workers are more likely to offer than are employers who can get by with mostly lower-wage workers. This effect is amplified by our current tax subsidy for premiums nominally paid by the employer, a subsidy that works out to be roughly proportional to the marginal income tax rate of the worker. It is also amplified for large firm employers of high wage workers, since they have the lowest costs of providing health insurance, for they can take advantage of various economies of scale.

But worker heterogeneity also means that local labor market conditions can significantly affect offer rates, since firms offer only when they must to compete for the workers they want, and we do observe offer rates differ by as much as 20 percentage points across the United States. This variation in offer rates also affects ultimate coverage rates, of course. Differential offer rates and employer-sponsored insurance (ESI) coverage rates also affect the contours of the coverage problem faced by policy makers. For example, states with high offer rates find it cheaper and easier to be more generous with Medicaid and SCHIP eligibility – Minnesota and Wisconsin come to mind – than do states with very low employer offer rates, like Arkansas and Mississippi."

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Myth: Economists don't really know why people are uninsured.
Testimony of Len M. Nichols, Ph.D.,
Taken from a Hearing on the Uninsured before the U.S. House of Representatives Committee on Ways and Means Health Subcommittee.
March 9, 2004

"Sometimes it seems that a normal person might listen to economists argue among themselves or read a whole book devoted to methodological flaws in prior work and reasonably conclude that economists actually think we know exactly nothing, that nothing has been satisfactorily proved, and we therefore need millions of dollars and years more to study and argue before we will be able to say anything at all that is useful to policymakers. This is not the case, and this idea is so important, I will devote the last two 'myths' to embellishing the point. There are three things I think most economists actually do believe about the lack of insurance coverage. And I think the chapter by Linda Blumberg and myself make these fairly clear, even, and maybe especially, to noneconomists.

(1) The single most important reason people are uninsured in this country is they are not willing to pay what it costs to insure themselves. This unwillingness to pay is highly but not perfectly correlated with low income. Thus, if policy makers really want to increase coverage, they’re going to have to subsidize people, probably quite substantially, since most of the uninsured have incomes below twice-times poverty.

(2) The prices people are required to pay for health insurance vary a lot across different circumstances and insurance markets. Workers at large firms probably face the lowest prices, and they, correspondingly, have the highest offer rates and the most generous policies on average. Thus, to economists, price really, really matters.

(3) Even though price really, really matters, most people and firms have fairly inelastic demands for health care and health insurance. That is to say, those of us who can pay quite a bit more would pay more than we have to now before we would go uninsured, and those who do not buy it now will require substantial subsidy before they will buy it voluntarily."

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MANAGED CARE ETHICS: THE CLOSE VIEW

PREPARED FOR U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON COMMERCE
SUBCOMMITTEE ON HEALTH AND ENVIRONMENT
MICHAEL BILIRAKIS, CHAIR
BY
LINDA PEENO, M.D.
3807 ELMWOOD AVENUE
LOUISVILLE, KENTUCKY 40207
TELEPHONE: 502-895-9761 FAX: 502-897-2461
EMAIL: LindaPeeno@aol.com
MAY 30, 1996

I. INTRODUCTION Mr. Chairman and Members of the Committee: My name is Linda Peeno. I am a physician with training in Internal Medicine and Infectious Diseases. Currently, I work in the field of medical and health care ethics. As part of this effort, I chair a hospital ethics committee (University of Louisville Hospital), for which I do consultation, education and policy development. I am the executive director of an international academic society (International Society for the Systems Sciences), and as chair of its Medicine and Healthcare group, I work on ethical issues in international health care systems. I serve on the national board of Citizen Action, a non-partisan consumer organization, through which I work toward equitable health reform. I am the founder of the CARE Foundation, a nonprofit group organized to promote consumer education, public accountability, and ethical responsibility in managed care. I am here to represent the largest interest group in our health care system: those affected by its design and operations, those who validate its consequences within their lives. II. SUMMARY As a former medical director, I have done the dirty work of managed care. This prompted me to leave and work aggressively for health care ethics. Because I know how the "system" works, I am best able to identify its ethical transgressions and suggest corrections. Health care is a special category of business in that every decision, whether clinical or economic, has an ethical component. The ethical issues for "managed care" fall into four major categories of concern: professional, medical, business, and social. Some of the more important areas for attention include: the lack of professional code of ethics for physician executives; interference with the principles of informed consent and patient autonomy; violation of consumer rights; and social maleficence in obstruction to access and delivery. I contend that "managed care," as we currently know it, is inherently unethical in its organization and operation. Furthermore, I maintain that we have an industry which can exist only through flagrant ethical violations against individuals and the public. Based on my experience, a health plan's resistance to ethical correctives will be proportionate to its reliance on ethical transgressions for its "success." We must not sanction their unethical practices at the expense of individual rights and public good will. Although the "managed care" industry is quick to defend its actions with high-sounding justifications, their claims break down under examination. For example, can they really support the argument that the effects of "managed care" are necessary for the "good of society." What does this mean? Who should decide this? Can this be appropriately determined by the entity who stands to benefit the most from an economic definition of this "good"? The systemic ethical problems in managed care require urgent correction in several areas: the monitoring of denials of care; the elimination of certain contracting arrangements with physicians; the requirement for full disclosures of financial arrangements, cost-cutting strategies, and consumer information; the development of open and reported grievance procedures; and the mandate of ethical guides and processes. How could the industry object? After all, this is just a way for "managed care" to apply its own processes of "quality management" and "outcome analysis" to itself? Nothing less than the life and well-being of our society depends upon this. We have gone too far under our current system called "managed care." How much more harm and death must occur before we have the courage to do something about it? III. ETHICS FROM THE FRONTLINES I wish to begin by making a public confession: In the spring of 1987, as a physician, I caused the death of a man. Although this was known to many people, I have not been taken before any court of law or called to account for this in any professional or public forum. In fact, just the opposite occurred: I was "rewarded" for this. It bought me an improved reputation in my job, and contributed to my advancement afterwards. Not only did I demonstrate I could indeed do what was expected of me, I exemplified the "good" company doctor: I saved a half million dollars! Since that day, I have lived with this act, and many others, eating into my heart and soul. For me, a physician is a professional charged with the care, or healing, of his or her fellow human beings. The primary ethical norm is: do no harm. I did worse: I caused a death. Instead of using a clumsy, bloody weapon, I used the simplest, cleanest of tools: my words. The man died because I denied him a necessary operation to save his heart. I felt little pain or remorse at the time. The man's faceless distance soothed my conscience. Like a skilled soldier, I was trained for this moment. When any moral qualms arose, I was to remember: I am not denying care; I am only denying payment. At the time, this helped avoid any sense of responsibility for my decision. Now I am no longer willing to accept this escapist reasoning that allowed me to rationalize this action. I accept my responsibility now for this man's death, as well as for the immeasurable pain and suffering many other decisions of mine caused. For me, "ethics" must be done close range. Distance blurs the complexities of human experiences. Those who argue that "the further removed, the clearer the thinking" are those who too often use "ethics" as legalism, public relations, or high-sounding rationalization. I would argue that, at least in medicine, one's ethical "authority" diminishes the further one is from the frontlines of patient experiences. This is why I do not call myself an "ethicist." I am less interested in the theoretical claims and more interested in the experience of persons who suffer the effects of these claims. For me "ethics" is the process of determining how to function day in and day out, in the tiny, painful, exhausting step by step decisions of everyday life. I maintain that we can never escape accountability for the consequences of our decisions and actions, however remote they seem. Furthermore, I believe we are responsible not only for what we do, but what we set in motion. Since leaving my last corporate position, I have devoted my personal and professional life to concerns for medical and health care ethics at the level of the consumer/patient experience. If I am an expert, it is in the ways in which harm occurs in our system, and the ways it affects the lives of people who have trusted doctors and insurance companies with their care. I have forged this knowledge not from the safe, painless study of ethics from a distance, but from the close participation in a system's ethical transgressions. s. Nothing in my education as a physician prepared me for what I experienced as an "executive doctor." I thought I could easily translate my professional code of ethics as a physician to my work in the business of health care. I left my job as a medical reviewer for Humana's national market, to become the medical director of a 35,000 member HMO. Later, my work as a medical director in a hospital and as a physician executive at Blue Cross/Blue Shield of Kentucky convinced me that the place made no difference. Whether it was non-profit or for-profit, whether it was a health plan or hospital, I had a common task: using my medical expertise for the financial benefit of the organization, often at great harm and potentially death, to some patients. When I realized this, I could no longer do these jobs. I left a six figure job in order to work for the persons with the least voice in health care: patients. This required more than medical education. I have spent the past four years studying in areas of ethics and philosophy; medical and health care law; health care organization and financing; utilization and quality management; information resources management; and international health care systems analysis. I have used my "expertise" to assist in health reform, public and professional education, and international health system design. My work has taken me from community rooms in rural USA to townships in South Africa. I struggle with the tensions between individual and society, between care and cost, between ethics and economics -- close range. I do not take the luxury of doing this remotely, safe from the "battlefield." As difficult as it is, I put myself continuously at the level of pain and suffering so I cannot ever forget the connection between the "system" and its consequences. Also, I have taken seriously my own ethical responsibilities: I have educated myself not only with the books, but with the stories of people who suffer. I have painfully dissected every experience of my own from the inside out, until I understand the ways they represent industry practice, their ethical implications, and how it is possible to go awry. I have taken every penny "earned" from my work in this and folded it back into work to benefit those affected by an increasingly heartless health care system. I do this because I know the system inside and out. I know where the dangers are. Although many persons are quick to extol the ease and affordability of their plan, the real tests come when someone needs something expensive. Like a bucolic pasture turn battlefield, the landmines start exploding everywhere. (I know because I have helped set more than a few.) These landmines were part of my ordinary armamentarium -- including some of the below: benefits restriction, or making the covered benefits as narrow as the market would allow (sneaking in a few exclusions that most consumers would not be knowledgeable enough to understand, e.g. in one of my plans we had regular meetings to determine what our highest costs were and how we could redesign benefits to control them); exclusions, which would multiply every year, and would rarely be known to the member or a treating physician until pulled out by plan to justify a denial; pre-existing exclusions, to ensure that persons with known conditions would either forgo our plan, or give us the mechanism to avoid payment for services, creating a game of wits to figure out ways to make current needs connect with some prior diagnosis; evasive and uninformed marketing so individuals in groups we wanted would only know the attractive elements of the plan, but none of the potential problem areas; in addition members would never know the exact coverage limits and rules of the plan until after the enrollment period when they would receive their benefit booklet; underwriting, or selection of the "best" groups, which meant that medical information of individuals and groups were reviewed in detail, with projections made about economic liability to the plan; making these kinds of predictions often put me, as a physician, into the roll of "bookie" for the plan; contract design, especially for physicians; it is common knowledge in the health care business that few physicians read, much less understand, most of the terms of the contracts they would sign for us; furthermore we would exploit their economic vulnerability by telling them they could either sign or be excluded; maze of rules for authorizations, referrals and network availability created ed in order to make "technical" denials possible (e.g. failing to go through convoluted procedures set out in a "certificate of coverage," which we knew few persons ever read, would be grounds for denial of payment); claims of authority to extract compliance from members and physicians for the desired economic outcomes, e.g. offering a grievance process but making it a sham in its results or eliciting certain practice patterns by threats to de-selection; and finally denials for "medical necessity," whether prospectively or retrospectively, determining that something is not "medically necessary," according to criteria that is non-standard and rarely developed along accepted clinical methods, becomes the ultimate weapon for the plan, the "smart bomb" for "cost-containment." I am the evidence that managed care is inherently unethical, in the areas of both medicine and business. Had my experiences been the result of merely local aberrations, I would not have had anything to do for the past six years. On the contrary, I discovered that my experiences are standard practice and quite ordinary for the managed care business. This fuels my work in ethics. The greatest irony to me is how the words "quality" and "outcome" have come to be industry buzz words, yet neither are ever applied to the managed care practice itself. We have enough stories of maleficence by managed care to fill tomes, and yet we continue to allow the industry to claim that these occurrences are simple anecdotes. As long as we accept that rationale, we sanction a system that is functioning with virtually no checks and balances -- ethical or legal. At a time when nearly every other human endeavor faces ethical scrutiny, how can we allow a particular industry to escape -- especially one with so much potential harm? At the level of medical practice, we have rightfully abandoned the paternalistic model of medicine -- i.e. we not longer believe that a professional can do certain things in certain ways regardless of effects so long ng as it is justified by benevolent reasons. Furthermore, we do not subscribe in this country to authoritative use of power to override individual protection and rights for some purported "greater good," especially if that "good" has not been worked out through the democratic process. We have two major reasons to scrutinize the unethical practice of managed care. Our claims to the "best health care system" in the world is beginning to have a cynical truth. We certainly do the business of health care better than anyone else. As a result, we have entered a dire phase others should avoid. We have created a monster system, one in which among other transgressions, a physician can receive a high income for doing the reverse of the profession. Instead of delivering care, a physician can be significantly rewarded for denying it. What matters if individual patients are harmed or killed, if the professional is true to a higher mission for society? Ethical action produces trust, dependability, harmony. It depends upon equity and disclosure. We have no ethical foundation if we are producing discord and destruction of human bodies and spirits. The ethical process of managed care must be worked out within the context of its effects, close to its consequences, attentive to the stories of those who are most adversely affected. The real societal good -- our well-being and lives -- depend upon it. IV. MANAGED CARE ETHICS A. "MANAGED CARE": DEFINITION I define "managed care" generically to include all the processes and systems, both overt and covert, which are used to control costs, and influence patient and physician behavior. This includes the "management" of Medicare, Medicaid, and other fixed payment groups by hospitals, as well as the "management" of patients by health plans. Implied in the word "manage," is the act of directing and controlling. More specifically, in the health care industry, "managed care" has become an organized system designed to direct or control clinical access and distribution for ends other than the clinical needs of the patient. These ends include efficiency, productivity, and cost containment, even if meeting these ends requires the neglect or obstruction of clinical care. The act of "management" is most successful when the processes are internalized, and indeed this is the trend in health care plans. Early "managed care" relied mostly upon the use of data to "challenge the individual physician authority."1 By identifying averages, and using varying mechanisms to drive physician practice to the mean, physician decisions could be questioned and overturned through prospective, concurrent or retrospective review and authorization. Under such a model, another physician or health professional would make a determination regarding access and payment for the care of a patient. In the arrangement, the practicing physician would remain the unquestioning patient advocate, battling, if necessary, for his or her patient's needs. As we are coming only now to realize, the tension between a professional representing the interests of the plan and a professional committed to the interests of his or her patient is a necessary corrective for over-zealous and unreasonable denials by a health plan. However, sophisticated managed care plans now are pushing this process down to the level of the gatekeeping physician. If the plan designs its physician contracts and payment strategies effectively, they can essentially make each physician a "medical director" of the plan -- i.e. someone who holds the plan's interest pre-eminent over the needs of the patient before him or her. This can be done negatively (e.g. penalty clauses), positively (e.g. bonuses), or through some combination of both (e.g. withholds). As a result of this, we are approaching something akin to "economic totalitarianism," in which physicians are willing agents of health plans in exchange for a patient base and continued revenue. Few can afford the distinction of being a "difficult" player. Even worse, no savvy physician today can afford the label: "unsuited for managed care." Managed care's stronghold in many communities ensures that even necessary care is being denied, not just by medical directors protecting the plan, but now by the practicing physicians themselves who have many reasons themselves to protect the plan over the patient. Economics reigns over ethics. B. ETHICAL CONCERNS: PRINCIPLES FROM BOTH MEDICINE AND BUSINESS The core premise underlying any consideration of ethical concerns in managed care is this: every significant medical and health care decision has an ethical component. As a business, medicine and health care are special cases. Human well-being and life depend upon the decisions made. Individuals and communities will flourish or die as a result of the way health and disease are approached. Comprehensive and lengthy discussion of ethical concerns is not possible here, but brief discussion of the four major applicable categories for ethical concerns follow below: 1. Professional ethics These are ethical principles and obligations recognized as guides for the work of designated groups, traditionally manifest as codes of ethics. Since ancient times, codes for physicians have served as a model for other professionals. The rise of "managed care" calls into question the very definition of the two most restricted professions in medicine: physicians and nurses. What is a "physician executive" or a "utilization nurse"? By what codes of ethics do they adhere? To what governing body of peers do they submit? How is the inherent conflict between allegiance to a corporate mission and the commitment to patient advocacy resolved? In addition to the obvious problems with medical professionals doing the business of health care, more and more practicing professionals, physicians and nurses, become "agents" of plans. How are these ethical conflicts of interest identified, worked out, and overseen? We see the results of dual agency, divided loyalties, breech of patient trust, and interference with the patient/physician relationship, but we currently have no consistent way to prohibit their causes or mitigate their consequences. 2. Medical ethics Although, technically the other categories could be subsumed under this, I use "medical ethics" to refer to those traditional principles of clinical care: Informed patient decision-making and choice; Patient autonomy; Beneficence At the bedside, we support these principles, and yet we are creating a health care system in which they are increasingly impossible. A patient is not fully informed until he or she knows all options available, which does not mean "all options approved." A patient cannot be "fully informed" if he or she cannot trust the accuracy or motive of the information given to him or her by the physician. "Autonomy," or the right to make medical decisions for oneself, has previously supported competent adults' rights to refuse treatment. All such decisions will be made difficult in the context of possible deception and manipulation. Is it possible that a physician, for financial reasons, could mislead a patient regarding prognosis to create the conditions for refusal by the patient? Will we see "autonomy" become the principle by which patients will need to demand the treatment they need? Beneficence, or doing no harm, should be a principle which runs through out the health care system. In health care, doing harm from a distance by a corporate act should be as morally repugnant as doing harm at the bedside. 3. Business ethics This is a complex area few approach within the health care business. Just as other businesses wrestle with principles, such as fair-dealing, truth- in-advertising, integrity, social responsibility, disclosure, etc., so should the managed care industry. Even the ethical issues in the process of management itself should be questioned: to what degree can or should another human (consumer or physician) be controlled; how should this be done ethically; can this be done without deception, fraud, exploitation, etc.? Is capitation inherently unethical in view of its goals and consequences (the withholding or denying of care)? To what extent can a business contract away the rights of another? To what degree can they contract to interfere with the needs of another? These are only a few of the questions to be considered. 4. Social ethics There are many aspects to this area as well which are rarely addressed. The most serious issues have to do with obstruction of access and receipt of care. How can this be ethically justified? Who is responsible when social ills are compounded from the neglect of medical needs? How do we distribute resources equitably? Can we really talk about rationing health care when executives and stockholders reap such hefty rewards from the business of rationing? C. ETHICAL CONSIDERATION OF CLAIMS BY MANAGED CARE 1. Resources are scarce so rationing care is necessary. Although there are many complexities to this, the underlying presumption is that we have limited resources. Generally, there is a limit to all resources, but what does this mean for health care? Take, for example, hip replacements: do we have a scarcity of hip replacements? Are the materials, facilities, and professionals needed for this procedure scarce? No, if anything we have too many resources compared to the rest of the world. Recently, I worked with a group of international physicians who were trying to understand the US health care system. They ended our session in exasperation, lamenting that the problem with American health care is that we have too much, and the problems faced by much of the rest of the world is that they have too little. For us in the US to bemoan our state of "scarcity," is as absurd as a typical suburban wailing about what they do not have to an African villager. When the rest of the world talks about limited resources, they mean real scarcity -- lack of medicine, equipment, or the more basic necessities for medicine like hot water. When we talk about "scarcity" we use it as leverage for some economic gain or justification. For example, we use the language of "infinite needs" to dramatize the limitations, but do we need infinite hip replacements? No, this is absurd. Although it is possible to imagine that someone might receive a hip replacement that they did not need, there are natural limits to the need: the number of hip joints possible to replace, the subset of those joints that are diseased and may need replacement, the subset of patients who are willing to undergo such a procedure, etc.. The real question, which we are not asking,[LP1] is: are we willing to pay for all the hip replacements that are needed? If not, the thorny corollary is: who will not get something they need? Someone too poor to pay? Someone in too much pain to figure out the game? Someone with money and means to play by the rules, but who has a physician who has exceeded his or her quota, and who will never offer the procedure? As an aside, it is interesting that we always speak of the rationing of care, and never of rationing compensation or corporation. We have seen during the past decade an explosion in the health care business -- more and more companies, executives, titles, six-figure incomes. Why is it we are concerned about a glut of physicians, but not about the greater glut of health care administrators and executives who are far removed from the delivery of care; why do we disparage the incomes of physicians but disregard the increasingly obscene incomes of some health care executives and entrepreneurs; why do we give persons titles like "utilization and quality management specialist" and erode the distinctions between nurse, aid and housekeeper in many institutions? 2. Cost savings occur from cost reduction. We have allowed ourselves to be seduced in health care by the organizational obsession of "efficiency." In a simple systems' definition, efficiency means getting the most output for a particular input. If we are producing a product, then we attempt to reduce the costs of production for the most immediate cost savings. However, in all endeavors involving human well-being and life, there is no certain correlation between cost reduction and cost savings. In the health care system, we have been able to delude ourselves that this relationship is direct by our narrow definition of the system's boundary. If I am the medical executive in an HMO, I am able to achieve significant cost reduction by choosing my members carefully, limiting their coverage, denying them access even to the covered benefits, contracting with a network of less-costly providers, etc. My balance sheet may look impressive. But what about the "costs" we are not measuring? What about the individual and societal costs from excluding certain members from any health benefits? What about the real dollar costs to families who may be potentially destroyed by out-of-pocket expenses above and beyond their "insurance"? What about the additional pain, suffering, and even death, and its emotional toll on families and communities, when necessary treatment is unavailable because a plan refuses to pay? What about the erosion of trust and good will, both of which are necessary for the psycho- social benefits of medicine, which occurs when physicians become agents of a plan driven by economic motives? 3. Cost-containment measures, however harsh, are for the larger good of society. Although a source of great academic analysis and political rhetoric, the emphasis on "societal good," is actually a dangerous road to follow. Its plain meaning should be made obvious to the average person. It means that certain individuals' needs are superseded by the needs of the whole, i.e. some individual's well-being and life will be sacrificed for some larger group. One of the unique distinctions traditionally of American health care is that we place great emphasis on the value of each individual. This means that we are not accustomed to thinking in terms that make some lives expendable. (Although, of course, we can find many examples of this in subtle forms throughout society, we do not make it explicit.) Generally, we are not a culture willing to give up something that is important to us in order for someone else to share in the goods; we are even less a culture to give something for the benefit of someone else if it requires our sacrifice. When you listen to the average person talk in some places of the world, one can actually hear this kind of willingness and sense of commitment to the whole group. However desirable it might be to change our cultural thinking, it is certainly not what most believe now. If we are going to rely on this line of argument to justify certain actions of the health care industry, then the implications of this should be made known to the public. Are there ethical implications to imposing a certain value position without debate on to the public? The process of both deciding the "societal good" and what it is worth should be something in which we should all participate. It should not be left to the organizations who benefit from their own definitions of "societal good" to define it. Nor should it be left to them to determine the means by which we achieve it. It is to be expected that a system driven primarily by economics (whether for- profit or non-profit) would use cost values to achieve this "societal good." What this means in health care is that the vulnerable populations are those who are expensive and least able to fight for their worth and their share. This group already includes many who are chronically ill; who are disabled; who are too old or young; who are too poor to pay. Advocates for managed care claim however that we must resort to our severe control strategies in order to make health care more available. This too is an argument that evaporates in the light of reality. In our current organization of our health care system, there is no way to insure that "savings" anywhere go back to something abstract called "society." Who is "society" anyway: the average consumer, the employer, the health industry? Certainly our macro-level savings in health care are not going back into providing for more research, more access, more services, etc. -- the areas which benefit patients. If anything, we are seeing just the opposite: benefits to consumers are increasingly cut, while the "benefits" to executives, stockholders, etc. are increasing. Furthermore, if anything, the numbers of uninsured and underinsured are increasing. When you get to the micro-level of any given plan, do the enrollees see any of the benefits from the stringent control of costs? Do the "savings" we achieve by cutting the reimbursement of physicians, by extracting deep discounts from other providers, by severely restricting coverage, go back to any increase of benefits for any members of a health plan? Of course, there are convoluted arguments claiming that the control of the costs enables the plan to function, hire necessary employees, upgrade computer systems, etc., but even these arguments break down when one discovers that these systems are not for the benefit of the members. They are for the benefit of the plans' cost-cutting and controlling machinery. Do any of the dollars we "save" from denying necessary services to one patient go to benefit another? Is there even a mechanism to insure that savings from denials go to add benefits elsewhere, e.g. to provide a patient with an extra needed day in hospital, or to help pay for an MRI or extended rehabilitation benefits for someone else in the plan? Is there any evidence that a managed care plan has ever added benefits proportional to their "savings" or profits over the years of their operation? 4. Managed care's conception of ethical responsibility is limited to holding itself out as the locus for rationing decisions. Managed care advocates couch their claims of the "good" in grand ideology: those who perform this task empower themselves with their claim of creating a "new order." They have a vision for a social good, and are as fanatic in their pursuit of this as any group driven by the fervor of a righteousness cause. Although a leading textbook in managed care has fifty- two pages listed under the index heading of "capitation," it has only four for "ethics"! Every one of the references for "ethics" in this text discusses the concept as part of managed care's mission of rationing! It is described as the "third wave" of managed care -- "one that most will not welcome but will probably accept." Rationing means "no," the author tells us, and "managed care systems are now saying 'no' to physicians more than traditional plans ever did." The author goes further to say that: "Managed care systems will be the best suited to ration healthcare...."2 Throughout this discussion, there is clearly the presumption that "managed care," as an endeavor itself, is above ethical scrutiny. This "system," which must not account to anyone for its own ethical philosophies and operations, claims the right to be the mechanism for the most serious of ethical decisions: determining who gets care. 5. Medical decisions are made in managed care by physicians of good character and competence, professionals who are committed to the greater needs of health care. Character and competence become irrelevant when one is guided by a mission independent of these traits. I discovered painfully that my character and competence were incidental to my performance as an employee of a corporation. When my performance is measured in numbers and quotas, my job and character are severed. I learned how easy it is to do many things diametrically opposed to everything medicine stands for, not only willingly, but often with great belief (supported by my peers and prevailing sociologic/economic/scientific assumptions of the organizational culture) that I was right and my actions were good. It was even easier when I was "rewarded" for such professional action. It is important then to distinguish between character and decision- making. There is enough material from many sources which demonstrates and explains how you can have persons of wonderful character (e.g. good parent, goes to church, civic leader, etc.) who buckle under certain pressures and make unethical/unprofessional/inappropriate decisions. When one is part of a larger organization, one can create distance and diffuse responsibility such that all ethical responsibility shifts elsewhere or is eliminated all together. In my work as an executive physician, I sat from a desk never facing patients or physicians whose lives I held in my hand. I wielded the power of payment, which translates to the power of life and death. Was I responsible when an adverse consequence occurred? No, never. The physician taking care of the patient would be, never mind that his or her hands may be too shackled to do what was necessary. Was I responsible if the patient did not get something necessary? No, never. I denied payment, not care. Was I responsible for another's suffering? No, never, not when any accountability was canceled out by my greater mission to society. 6. The spiraling health care costs justify anything necessary to control the decision-making of physicians. This is a grave claim we have come to believe. Historically, at least part of the success of our health care system lies in the education, skill and professional autonomy of our physicians. Now we enter a time when that is being eroded by many forces. We disparage specialists; we have persons of little medical background dictating medical standards and operations; we undercut the very foundations of the doctor-patient relationship. Although each of these are important, and could provide lengthy analysis on its own, the increasing power over physician decision-making should concern us the most. When a "system" tightly connects its goals and consequences of non- compliance with economics, predictable behaviors occur. We can see these at work now in health care as: Ideological indoctrination, which currently occurs in such rationalizations as, "we are doing this in health care for 'the good of society,'" even if it requires some kind of sacrifice -- even harm -- at level of individual patient; Emphasis on "efficiency," which inherently strips complex, human engagements (e.g. what happens between a doctor/patient, and what happens when we need medical care) into artificial delineation, e.g. money involved with patient needs becomes a "loss" or a "savings"; care is divided between "unnecessary" and "necessary," etc.; Diffusion of responsibility, such that no one is responsible solely for adverse decisions; Fragmentation of behavior, enabling professionals to act one way in their role of work and different ways in other settings; Disconnection of conscience from conduct as a means to further insulate oneself from consequences; Depersonalization of beings who comprise this context, which here means patients who become a "member per member month"; a statistic on a data sheet fractured into a lab result, an x-ray, a procedure, etc.; a profit "loss" or "savings"; an "approval" or a "denial," etc.; in fact, the entire language used by the managed care industry reflects this -- no personal or human references are made; Instrumentalist thinking, i.e. treating every action as a means to something else, rather than an end in itself, e.g. the professional act of caring for a patient becomes a means to keep one's numbers "in line"; a means to increase one's bonus, or the profit of a company; a means to keep one's job, etc.; patient care is no longer an end to itself. V. ETHICAL CORRECTIONS FOR MANAGED CARE The current activity called "managed care" presents us with a conundrum: is it possible to have ethical managed care? Have we created a system which is so dependent upon misrepresentation, deception, manipulation, and coercion (and fraud in some cases) to achieve its results, that it is impossible to do this business ethically? If the "success" of managed care really depends upon responsible practices, then the health care industry should have no problems implementing ethical correctives. However, if it is not, can we justify a "system" so blatantly unethical? I maintain that the health care business should be held to the same professional, organizational and social standards as other businesses. Even these standards alone are not enough, however, for health care must also meet the standards set by medical ethics as well. Some areas in which we should consider ethical correctives for managed care include: 1. Withholding or denials of necessary care. When an individual has contracted for services, and relies upon the trust and care of professionals for receipt of those services, then it is blatantly unethical to withhold or deny those services for financial gain. To claim that this does not happen is further misrepresentation and deception. We are seeing the results of this practice everyday. The severity and seriousness of this practice should shift the burden of proof to the health plans to demonstrate that they either do not engage in this, or have developed a means to prevent its occurrence in their attempts to control costs. Suggestions for this include: Develop medical standards and criteria for approvals and authorizations by accepted protocols for any other clinical trials using accepted research methods, e.g. if the length of stay for a procedure is going to be reduced, this should be studied as any other experiment on human subjects with controls, monitoring for adverse results, informed consent, etc.; Standardize and publish all medical standards and criteria for professional and public review and knowledge; Train providers, especially physicians, using these standards as early as medical school; Provide a means to regularly review and change standards as medical knowledge advances; Preserve the doctor-patient relationship based on trust and advocacy through professional codes and support for good clinical care; a physician should be seen by patients and public alike as being only the agent of the patient; checks and balances for larger societal interest should be worked out in other ways that will not erode the primary commitment to healing the individual patient by the practicing physicians; this can be done by enhancing the importance of public and social health issues at the level of all education, coupled with more public involvement in making decisions about the distribution of resources, including the capital and compensation resources from the health care industry; Track and review all "medical necessity" denials; plans should be required to pursue this monitoring and reporting with the same vigor as they claim for utilization and quality management; "outcome analysis" should include the adverse outcomes of organizational decisions made by a plan; Physician executive and medical reviewers should have standardized job requirements that are published; their names should always be available to other physicians and plan members; there should be a code of ethics for such physicians; there should be a process by which they can be reviewed and monitored; Abolish all financial incentives for denying care. 2. Contracting arrangements with physicians. All arrangements which interfere or obstruct patient-physician relationships should be unacceptable. Arrangements should be made with adherence to accepted medical ethical principles: there should be no interference with informed consent, including information that is necessary to determine non-clinical factors that may influence a physician's decision-making; there should be no outside financial or political obstruction to a patient's autonomous decision-making regarding his or her own medical needs; likewise, in cases in which families are the decision-makers, medical decisions should be made primarily on clinical factors, without the adverse influence of non-medical factors; there should be, finally, no arrangements which encourage physicians to violate their primary ethical duty of beneficence in patient care. 3. Disclosure of financial arrangements. Full disclosure should be required of all financial arrangements with physicians and other practitioners whose clinical decisions will affect patient care. 4. Disclosure of cost-cutting strategies. Full disclosure should be required of cost-cutting strategies, especially those which may adversely effect access, distribution, or delivery of necessary clinical services. 5. Disclosure of consumer information. Full disclosure should be required of any information necessary for consumers to make fully informed decisions about plans' philosophies, practices, and performance. All materials should be understandable and guides about plan usage, coverage limitations, exclusions should be clear and made available to those persons with special language or communication needs. 6. Open grievance process. The grievance process should be well-known and readily available. It should include outside members and some means to make external assessments, to insure independent attention to member and provider complaints. The process by which plans handle complaints and their resolutions should be standardized. The results should be published and available for consumer assessment of a plan's performance. 7. Ethical guidelines and practice. All health plans should implement ethical guidelines, and should develop health care organization ethics committees, modeled after the ethics committees in the hospital setting. Committees should be comprised of interdisciplinary professionals, plan members and community representatives who would be charged with addressing the ethical quandaries and conflicts arising from decisions and actions within health care organizations. Such committees would review plan strategies and operations; develop policies, resolve conflicts, address ethical transgressions, and educate staff, members, and the public on ethical issues related to the activities of the plan. Typical roles and functions of health care organization ethics committees include: Education -- of itself, staff, consumers, community; Administrative oversight -- assist in development organizational policies and oversee operations that have ethical implications; Policy formation -- in areas of clinical activity, especially areas addressing novel situations; Consultation -- addressing specific cases of ethical complaints and violations; Conflict resolution -- as necessary for situations which arise as related to organizational activity. There are many lessons from other organizational committees in health care to validate the value of the committee process for guidance and resolution of ethical issues. Some general observations include: Ethical conflicts in health care arise when differing desires, interests and principles influence perspectives, understanding, decision-making of the involved parties; By their nature, these conflicts present other emotional, psychological and communicative challenges, often making them difficult to unravel and understand; Ethical theories are necessary to clarify, deepen and strengthen the understanding of such conflicts, but should never dominate the decision- making process; The most elemental work of the ethical process is to protect patients and families from harm; In the health organization setting, ethics is a group activity, requiring contributions from all disciplines (nursing, medicine, law, theology, philosophy, social and behavioral sciences, community members, administrative personnel, etc.) as well as representatives of consumers and patients. In this context, there cannot be an "ethicist" as such, for ethics is the rightful activity of everyone concerned with the welfare of consumers and patients. No single domain of knowledge is adequate alone. "Ethics" is an activity that arises from the necessary and cumulative contributions of all parties to the issues; Such a committee functions as a social/ethical safeguard in areas fraught with complexity, confusion, and possibly added suffering and potential for harm; Committees should work diligently to avoid relativism, fundamentalism, authoritarianism, and legalism as obstacles or substitutes to ethical deliberation; Committees should be aware of the general values that are under constant tension in health care situations: sanctity of life issues, autonomy of patients; various and often conflicting professional responsibilities; rationality of resource allocation, etc.; the rapidly changing nature of health care delivery systems from increasing financial and technological forces creates novel situations in which there is little guidance upon which to rely; these are highly individualized decisions and dilemmas which must be worked out in human relationship, not in board rooms and business strategies. VI. CONCLUSION I contend that managed care, as it has become, can exist only through serious ethical transgressions against individuals and society. Furthermore, I contend that a health plan's resistance to ethical correctives is proportionate to its reliance on ethical transgressions for its "success." Disclosure and exposure would present serious disadvantages in competition for cost-cutting and profit making. In summary, it is a fair assessment to claim that managed care's "success" depends upon the following: Use of non-medical agendas to drive medical policies and practice; Collapsing of the rights of individuals for purported greater collectivist goals; Supersession of the care of the individual by the care of the collective; Creation of ill relations between professional ambitions and the absence of moral inhibitions; Reliance upon righteous ideologies about reform and societal benefits coupled with cost-cutting policies; Disparagement of the "weaker" (i.e. costly) groups within society; Linkage of economic imperatives and professional self-interest; Direction of medical professionals by parameters set by health care and financial administrators; Establishment of quotas and internal processes for control with little regard for the physical and psychological cost of their effects; Selection of professionals who are ideological converts and "good" practitioners of its goals; Enticement of physicians as agents of an organization, such that organizational goals are supplied with medical validation; Facilitation of unethical professional practice by financial rewards and bonuses, as well as job security and advancement; Generation of moral void by use of propaganda; Degradation of moral expressions of compassion and sympathy for persons who have been designated costly or needy; Induction of guilt into those who are made to feel a drain on resources or a threat to the collectivist goals. The list could go on, however, there is enough here to suggest drastic needs for change. Of course, each of these would be vehemently contested by the managed care industry. If they are inaccurate, then it seems that the industry should have no reservations about supporting transparent and publicly accountable activities. We know, though, they do object to this. Why? Because control of patients and doctors depends upon unethical practices. To this, at least, we should object. Manipulation and exploitation for any reason, even beneficence, is unethical and destructive of social good. We have enough experiences from history to demonstrate the consequences of secretive, unregulated systems which go awry. The list above is not new. In fact, it comes from a book detailing the characteristics of a dire period of recent history. The last time this combination of forces worked in concert, over 200,000 individuals lost their lives in Nazi Germany (even before the Final Solution). Most of these persons were German citizens sacrificed for medical reasons set by economic and social agendas. I find the parallels chilling. One can only wonder: how much pain, suffering and death will we have before we have the courage to change our course? Personally, I have decided even one death is too much for me.

NOTES 1 Peter Boland, Making Managed Healthcare Work: A Practical Guide to Strategies and Solutions (Gaithersburg, Maryland: Aspen Publishers, 1993). 2 Boland, p. 585. 3 Michael Burleigh, Death and Deliverance: "Euthanasia" in German 1900-1945 (Cambridge, UK: Cambridge University Press, 1994).

NOTE: The preceding text is from public testimony given by Dr. Linda Peeno to the U.S. House of Representatives concerning the lack of ethics in the Managed Healthcare Industry (which increasingly dominates U.S. health care systems).