Abstract

It is often claimed that managed care organizations involve physicians in conflicts of interest by creating financial incentives for physicians to refrain from ordering treatments or making referrals. Such incentives, the argument goes, force the physician to balance the patient's health interests against the MCO's interests and the physician's own financial interest. I assume, for the sake of argument, that such arrangements at least provide reason to believe that physicians in MCOs are involved in conflicts of interest. Two approaches have evolved for dealing with these conflicts. On one approach, MCOs disclose the financial arrangements under which their physicians work so that patients can consent to the managed care plan and thereby to the plan's limitations. The chief proponent of this approach is Mark Hall, whose recent book Making Medical Spending Decisions applies prior consent to a variety of decisions regarding medical financing and allocation. The other approach is simply to forbid conflicts of interest through regulations.