Book Review

Medicine, Money, and Morals: Physicians' Conflicts of Interest

N Engl J Med 1993; 329:892-893September 16, 1993

Article

Medicine, Money, and Morals: Physicians' Conflicts of Interest
By Marc A. Rodwin. 411 pp., illustrated. New York, Oxford University Press, 1993. $25. ISBN: 0-19-508096-3

When Hillary Rodham Clinton brought hundreds of prominent academics to Washington to help develop a comprehensive health care reform bill, virtually the first full day involved working through a complex maze of ethical standards for federal government employees. These standards were concerned principally with conflicts of interest, including any investment or management stake in health care enterprises. The reasons for these ethical rules were clear and indisputable. Those dedicated to designing a new health care system should not be compromised by any potential financial gain that might accrue from the reforms.

The same can be said of practicing physicians, whose decisions should be guided solely according to the benefit afforded their patients and not by any possible financial gain or loss to themselves. Marc Rodwin's first observation in Medicine, Money, and Morals is that guidelines and regulations governing conflict of interest are self-evident and well established in ethical codes of government and many professional groups. Yet conflicts of interest have received relatively little attention from the medical profession, in bioethics or in health law.

Conflicts of interest are beginning to capture center stage in the health care reform debate, with Mrs. Clinton recently attacking “price gouging, cost shifting and unconscionable profiteering. . . . Too many people have made too much money providing health care” (New York Times, May 27, 1993:A1). The health care reform task force rejected the involvement of “interest groups,” principally the organized medical profession. Professor Rodwin reserves many of his most stinging observations for the American Medical Association and other professional medical groups because of their failure to take financial conflicts seriously in their ethical codes.

The current attention given to financial conflicts of interest in the health care reform debate should reflect well on Rodwin's excellent book. Medicine, Money, and Morals is probably the first systematic examination of financial conflicts of interest in the medical profession. The connection of these conflicts to the dual evils of the current health care system (escalating costs and the resulting burdensome oversight of physicians' clinical decisions) could not be more obvious. In today's commercialized medical environment, physicians are often entangled in a web of financial arrangements that provide incentives to offer more expensive services.

Rodwin argues that physicians have a conflict of interest “when their interests or commitments compromise their independent judgment or their loyalty to patients.” In a rigorous examination, he identifies six modern conflicts of interest in medicine: kickbacks for referrals; physician investment and self-referral; dispensing drugs, selling medical products, and performing ancillary medical services; hospital purchase of physicians' practices; hospital payments to recruit and bond physicians; and gifts from medical suppliers.

Ethical and legal restrictions on conflicts of interest are sporadic and inadequate. They usually focus on the two most obvious conflicts -- kickbacks and self-referrals. Yet Rodwin cogently argues that, although the financial, organizational, and legal structures of these six practices differ, the conflicts are similar. “All offer physicians self-serving incentives to generate services and channel referrals. When providers cannot indulge in one practice, they often can use another.” Indeed, much of the burden of this work is in showing how persistent and harmful conflicts of interest have been throughout this century. The forms may have changed from fee splitting and other commissions to limited partnerships and joint ventures. However, the unity of conflicts of interest and the common risk to patients and to society are apparent. Rodwin concludes that “to protect patients from physicians' conflicts of interest requires policies that focus on the general problem, not simply the specific organizational form.”

In characterizing the inherent dangers, Rodwin quotes a medical-laboratory salesman, Jim Codo, on the conflicts of interest that occur when a high percentage of physicians invest in laboratory-ownership arrangements in an area where many Medicare recipients reside: “The government in allowing such [practices] . . . might as well issue the physician owners their own money press. The physician controls the demand for the services, owns the supply of the services, and is guaranteed payment for the service by the government.”

Rodwin argues with force that the social benefits of certain conflicts are negligible, whereas the detriments are many. Conflicts encourage physicians to choose a health care facility, health care service, medical device, or pharmaceutical on the basis of their own remuneration rather than patients' interests. To be sure, most physicians would not make a referral that they did not believe served the interests of patients. But as medicine has become more commercialized, the increasing perception of patients and society is that physicians' judgments are compromised by conflicts of interest. This does not serve medicine well. At the very least, it is bound to lead to greater legal regulation and litigation, a trend that most doctors decry.

Despite the groundbreaking territory covered by this book and the fearlessness of its approach, it would have done better to limit its concern to the six traditional conflicts described above. Instead, the author periodically categorizes many diverse financial incentives or methods of remuneration as conflicts. He sees conflicts in fee-for-service arrangements, third-party payments, and Medicare and Medicaid policies that often provide incentives to perform too many services, as well as in health maintenance organizations and other managed-care providers that provide incentives to perform too few services. At times, the reader is led to ask what kind of remuneration in medicine the author would not regard as a conflict.

Rodwin's proposals for reform deserve very serious consideration. He astutely observes that disclosure requirements can help address conflicts of interest, but only as part of a coordinated policy that “sets high standards of ethical conduct, clearly delineates the permissible from the unacceptable, develops institutions to monitor behavior, and imposes meaningful sanctions to ensure compliance.”

If health care reform is to achieve the worthy goals of better ensuring the practice of cost-effective medicine and increasing public confidence in the health care system, it will have to come to terms with the persistent and ingrained conflicts of interest so splendidly articulated by Professor Rodwin.

Lawrence O. Gostin, J.D.
American Society of Law, Medicine, and Ethics, Boston, MA 02215