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Organizational governance ethics and health plans

SCENARIO: A major HMO in City X provides financial incentives for physician practices and to physicians whose referral rates to specialists are below a certain number annually. What is your analysis of the ethical issues raised by this practice? Should physicians have a specific ethical duty to disclose these incentives to all patients?

Argue both sides of the issue, explicitly basing your arguments on ethical theories and/or principles.

Please include:
-Gag clause vs. informed consent & patient autonomy
-Physician fiduciary responsibiilty vs. financial responsibility
-Physician autonomy vs. administrative control


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The HMOs provide a cheaper alternative to access health care to both the insured and his/her employer by offering lower premiums. These premiums can be offered because the HMOs have politics that contain cost related to health services and treatment options available under the plan as well as a low payment to providers with incentives for complying with certain norms such as avoiding patient care appeals, referrals to specialist, experimental procedures, expensive procedures, non-formulary drugs, resources outside the plan, or requests for uncovered care (Liang, 1998). The primary care physician became the gatekeeper of the insurance.

Binding the physician to this practice, are clauses in the contract commonly known as Gag Clause. The Gag Clause "prohibits discussion of procedures or providers not covered by the plan, and, to a lesser extent, one that requires physicians to consult with the plan before discussing treatment options with enrollees (General Accounting Office [GAO], 1997, p.2). These gag clauses also would bar physicians from disparaging the plan or advising the patient of ...

Solution Summary

The solution involves the discussion of the dilemmas that the physician faces when dealing with HMO restrictions including Gag clause, treatment preferences versus his fiduciary duty toward the patient, the patient's right to know, informed consent and autonomy.