This article is an outgrowth of work completed with Patricia H. Werhane and Edward M. Spencer at the University of Virginia.

¹ Kassirer, J. (November 19, 1998), “Doctor Discontent,” The New England Journal of Medicine 339(21): 1543–5. Editorial. Available at http://www.nejm.org/content/1998/0339/0021/1543.asp.

² Clancy, C. (1995), “Managed Care: Jekyll or Hyde?” Journal of American Medical Association, 273(4): 338–9.

³ Gray, B. (January/February 1997), “Trust and Trustworthy Care in the Managed Care Era,” Health Affairs, 16(1): 34–9.

⁴ The National Malcolm Baldridge Quality Award is an annual award given to U.S. companies to recognize these companies for their business excellence and quality achievement. Afraid that the work of Juran, Deming, and other quality leaders would be ignored by American business, Congress initiated the award as a way of making American business aware of the importance of quality and ensuring that American business understood the importance of concepts associated with TQM. That the techniques associated with TQM are effective is evident in the calculation made in 1998 by the Commerce Department’s National Institute of Standards and Technology that states that a hypothetical stock index made up of publicly traded U.S. companies that have received the Malcolm Baldridge National Quality Award has outperformed the Standard & Poor’s 500 by almost 3 to 1. For information on the award visit http://www.quality.nist.gov/ and see “Ten Years of Excellence for America” at http://www.nist.gov/public_affairs/baldrdist.pdf for the statistic mentioned above.

⁵ Blendon, R. et. al. (July/August, 1998), “Understanding the Managed Care Backlash,” Health Affairs, 17(1): 80–93. See also Kuttner, R., note 33.

⁶ Bodenheimer, T. and Sullivan, K. (April 2, 1998), “How Large Employers are Shaping the Healthcare Marketplace,” The New England Journal of Medicine, 338(15): 1084–7, available at http://www.nejm.org/content/1998/0338/0014/1003.asp.

⁷ The National Committee for Quality Assurance (NCQA) is a private, not-for-profit organization dedicated to assessing and reporting on the quality of managed care plans. The NCQA’s mission is to provide information that enables purchasers and consumers of managed health care to distinguish among plans based on quality, thereby allowing them to make more informed health care purchasing decisions. The NCQA’s efforts are organized around two activities, accreditation and performance measurement, which are complementary strategies for producing information to guide choice. Although the MCO accreditation program is voluntary and rigorous, it has been well received by the managed care industry, and almost half the HMOs in the nation, covering three quarters of all HMO enrollees, are currently involved in the NCQA Accreditation process. Visit www.ncqa.org for more information.

⁸ See Iglehart, J. K. (September 26, 1996), “The National Committee for Quality Assurance,” The New England Journal of Medicine, 335(13): 995–9, available at http://www.nejm.org/content/1996/0335/0013/0995.asp, for a discussion of why HMOs endorsed “quality” as a goal to pursue.

⁹ The American Association of Health Plans (AAHP) represents more than 1,000 HMOs, PPOs, UROs, and other network-based plans. The AAHP has endorsed a “Philosophy of Care” as their statement of quality in the health care delivery system. Member organizations are required to subscribe to this statement. The last declaration in the “Philosophy of Care” is: “We believe that access to affordable, comprehensive care gives consumers the value they expect and contributes to the peace of mind that is essential to good health.” See http://www.aahp.org/prncpls.htm for the AAHP’s entire philosophy of care.

¹⁰ Deming, W. E. (Winter 1981–1982), “Improvement of Quality and Productivity Through Action by Management,” National Productivity Review, 1(1): 12–22.

¹¹ See a listing of those companies that have been awarded the Malcolm Baldridge Quality Award. Companies in each category we have listed have won the award. See http://www.quality.nist.gov/winners/winlist.htm.

¹² Garrison, R. and Noreen, E. (1997), Managerial Accounting, 8th ed. (Boston, Mass.: Irwin McGraw-Hill), 200–202.

¹³ Blumenthal, D. and Kilo, C. M. (1998), “A Report Card on Continuous Quality Improvement,” Milbank Quarterly, 76: 625–648. See also Shortell, S. M., Bennett, C. L., and Byck, G. R., “Assessing the Impact of Continuous Quality Improvement on Clinical Practice: What It Will Take to Accelerate Progress,” in the same issue, pp. 593–624.

¹⁴ Ibid., 631.

¹⁵ Information on the Joint Commission is available at http://www.jcaho.org. In 1992, the Joint Commission for the Accreditation of Healthcare Organizations (JCAHO) added “Continuous Quality Improvement” to its regulations for health care accreditation. See the JCAHO’s 1992 Comprehensive Manual for Hospitals.

¹⁶ Michael Millenson, a long-time observer of the American Medical Association, writes that by 1986 the Journal of the American Medical Association (JAMA) had embraced quality measurement and management as a legitimate and important tool to improve outcomes in health care delivery. See Millenson, M. (May/June 1997), “Miracle and Wonder: The AMA Embraces Quality Measurement,” Health Affairs, 16(3): 183–194.

¹⁷ Westphal, J. D., Gulati, R., and Shortell, S. M. (1997), “Customization or Conformity? An Institutional and Network Perspective on the Content and Consequences of TQM adoption,” Administrative Science Quarterly, 42(2): 366–394.

¹⁸ Blumenthal, D. and Kilo, C. M.; see note 13.

¹⁹ See the website for NCQA, http://www.ncqa.org/. See especially http://www.ncqa.org/Pages/communications/news/excellentrel2.htm for statistics on the number of Americans in plans accredited by NCQA.

²⁰ Quality Management and Improvement is the first standards category of NCQA accreditation guidelines. See http://www.ncqa.org/Pages/programs/accreditation/mco/Mean4.htm for a discussion on this category by the NCQA.

²¹ Blumenthal, D. and Kilo, C. M.; see note 13, p. 634.

²² Blumenthal, D. and Kilo, C. M. (see note 13, p. 634) refer in their footnotes to Berwick and Nolan (1998), “Physician as Leaser in Improving Healthcare,” Annals of Internal Medicine, 128: 289–92. Shortell et al.; see note 13.

²³ Blumenthal, D. and Kilo, C. M.; see note 13, pp. 638–639.

²⁴ This anomaly of the health care system was noted in 1995 by E. Haavi Morreim who writes: “[I]n this sense the term purchaser is systematically ambiguous; we could be referring either to patients or to payers.” See Morreim, E. H. (1995), Balancing Act: The New Medical Ethics of Medicine’s New Economics (Washington D.C.: Georgetown Press), 22.

²⁵ Buchanan, A. (August 1998), “Managed Care: Rationing without Justice, but not Unjustly,” Journal of Health Politics, Policy and Law, 23(4): 617–34; see p. 619.

²⁶ Chassin, M. R. and Galvin, R. W. (September 16, 1998), “The Urgent Need to Improve Health Care Quality,” Journal of the American Medical Association, 280(11): 1000–5.

²⁷ Ibid.

²⁸ Enthoven, A. C. and Vorhaus, C. B. (May/June 1997), “A Vision Of Quality In Health Care Delivery,” Health Affairs, 16(3): 44–57.

²⁹ Laffel, G. and Blumenthal, D. (November 1989), “The Case for Using Industrial Quality Management Science in Health Care Organizations,” Journal of American Medical Association, 262(20): 2869–2873.

³⁰ Greco, P. J. and Eisenberg, J. M. (October 23, 1993), “Changing Physicians’ Practices,” New England Journal of Medicine, 329(17): 1271–4. Available at http://www.nejm.org/content/1993/0329/0017/1271.asp. Also note that in 1989 there were an estimated 700 sets of guidelines developed by thirty organizations. Today, 75 national organizations have produced some 1,800 sets of guidelines, while individual hospitals, managed care organizations, private researchers, and pharmaceutical manufacturers have developed thousands of other guidelines. See Gabel, J. (May/June), “Ten Ways HMOs Have Changed During the 1990s,” Health Affairs, 16(3): 134–145, especially p. 142. See also Morreim, E. H., “In such a mixed-up setting it is only natural that health plans are uncertain as to who they are accountable. And it is no mystery that, with the multiplicity of players and goals, the very idea of measuring QC is regarded with confusion and suspicion” (Summer 1999), “Assessing Quality of Care: New Twists from Managed Care,” Journal of Clinical Ethics, 10(2): 88–99.

³¹ Gazmararian, J. et. al. (May/June 1997), “Maternity Experiences in a Managed Care Organization,” Health Affairs, 16(3): 198–208.

³² Morreim, E. H. (March 1998), “Revenue Streams and Clinical Discretion,” Journal of American Geriatrics Society, 48(3): 331–337; see pp. 331–332.

³³ Kuttner R. (January 21, 1999), “The American Healthcare System—Employer Sponsored Health Coverage,” New England Journal of Medicine, 340(3): 248–52.

³⁴ Ibid.

³⁵ Isaacs, S. (Winter 1996), “Consumers Information Needs: Results of a National Survey,” Health Affairs, 15(4): 31–41.

³⁶ Kuttner R.; see note 33.

³⁷ Gabel, J. et al. (May/June 1999), “Class and Benefits at the Workplace.” Health Affairs, 18(3): 144–50.

³⁸ Kuttner R.; see note 33.

³⁹ Ullman, R., Hill, J. W., Scheye, E. C., and Spoeri, R. K. (1997), “Satisfaction and Choice: A View from the Plans,” Health Affairs, 16(3): 209–217.

⁴⁰ Collins, K. S. and Schoen, C. (August 1997), “Managed Care, Choice, and Patient Satisfaction,” The Commonwealth Fund available at http://www.cmwf.org/publist/publist.asp?CategoryID=3.

⁴¹ Kutter, R.; see note 33.

⁴² Collins, K. S. and Schoen, C.; see note 40.

⁴³ Bailit, M. (November/December 1997), “Ominous Signs and Portents: A Purchaser’s View of Health Care Market Trends,” Health Affairs, 16(6): 85–8.

⁴⁴ Ibid.; see note 39, p. 86.

⁴⁵ Bailit, M.; see note 43. See his note 4.

⁴⁶ Kleinke, J. D. (1998), Bleeding Edge—The Business of Health Care in the New Century (Gatthersburg, Md.: Aspen Publishers), 11. Also see a biography of J. D. Kleinke who Managed Care Magazine calls one of the 10 most important men in the history of managed care. See http://www.hs-net.com/JDKleinke_Biography.htm.

⁴⁷ Levit, K. et al. (January/February 2000), “Health Spending in 1998: Signals of Change,” Health Affairs, 19(1): 124–132.

⁴⁸ Bodenheimer, T. and Sullivan, K. (2 April 1998), “How Large Employers Are Shaping the Health Care Marketplace,” New England Journal of Medicine, 338(14): 1003–1007.

⁴⁹ Gold, M. R., Hurley, R., Lake, T., Ensor, T., and Berenson, R. (1995), “A National Survey of the Arrangements Managed-Care Plans Make With Physicians,” New England Journal of Medicine, 25: 1678–1683.

⁵⁰ Enthoven, A. C. and Vorhaus, C. B.; see note 28, pp. 50–51.

⁵¹ Blumenthal, D. (1996), “Effects of Market Reforms on Doctors and their Patients,” Health Affairs (Millwood), 15(2): 170–184.

⁵² Starr, P. (1982), The Social Transformation of American Medicine (New York, N.Y.: Basic Books Publishing).

⁵³ Goldman, A. (1980), The Moral Foundations of Professional Ethics (Totowa, N.J.: Rowman and Littlefield).

⁵⁴ See the National Institute of Health’s website for details on the requirements of Institutional Review Boards. It can be found at http://www.nih.gov. Also see The Belmont Report: Ethical Guidelines for the protection of Human Subjects (Washington, D.C.: DHEW Publication, 1978), (OS) pp. 78–0012.

⁵⁵ Fletcher, J., Lombardo, P. A., Marshall, M. F., and Miller, F. G. (eds.) (1995), Introduction to Clinical Ethics, 2nd ed. (Frederick Md.: University Publishing Group, Inc.).

⁵⁶ Kassirer, J. (July 6, 1995), “Managed Care and the Morality of the Marketplace,” New England Journal of Medicine, 333(1): available at http://www.nejm.org/content/1995/0333/0001/0050.asp.

⁵⁷ Goldsmith, M. (1997), “‘Doing What’s Best for Patients’: A Sesquicentennial Rededication,” Journal of the American Medical Association, 277(16): 1265–1268. See also Pellegrino, E. D. (1995), “Interests, Obligations, and Justice: Some Notes toward an Ethic of Managed Care,” Journal of Clinical Ethics, 6: 312–317. The editors of the New England Journal of Medicine and other physician commentators maintain the adequacy of the professional/individual model. See Kassirer, J. P. (August 6, 1998), “Managing Care: Should We Adopt a New Ethic?” New England Journal of Medicine, 339(6): 397–8; Angel, M., Kassirer, J. P. (1996), “Quality and the Medical Marketplace: Following Elephants,” New England Journal of Medicine, 35(12): 883–5.

⁵⁸ Kleinke, J. D.; see note 48, p. 13.

⁵⁹ See note 57, especially Angel and Kassirer.

⁶⁰ Kao, A. C. et al. (0ctober 13, 1998), “Patients’ Trust in Their Physicians: Effects of Choice, Continuity, and Payment Method,” Journal of General Internal Medicine, 10: 681–686.

⁶¹ The National Coalition on Health Care (NCHC) describes itself as “the nation’s largest and most broadly representative alliance working to improve America’s health care.” The Coalition, which was founded in 1990 and is non-profit and rigorously non-partisan, is comprised of almost 100 groups, employing or representing approximately 100 million Americans.

⁶² See http://www.nchc.org for more information and an executive summary of the report.

⁶³ Enthoven, A. C. and Singer, S. J. (July/August 1998), “The Managed Care Backlash and the Task Force in California,” Health Affairs, 17(4): 95–110. See especially p. 105 and their note 35.

⁶⁴ Spencer, E., Mills, A., Rorty, M., and Werhane, P. (2000), Organization Ethics in Healthcare (New York, N.Y.: Oxford University Press).

⁶⁵ Joint Commission for Accreditation of Healthcare Organizations (1996), “Patient Rights and Organizational Ethics: Standards for Organizational Ethics,” Comprehensive Manual for Hospitals; see especially pp. 95–97.

⁶⁶ Spencer E. (1997), “Recommendations for Guidelines on Procedures and Process to Address ‘Organization Ethics’ in Health Care Organizations (HCOs),” Virginia Healthcare Ethics Network, printed in Organization Ethics in Healthcare, Appendix 1. See Spencer, E., note 64.