The Ethics of Profit and Conflict of Interest

The modern health care environment encourages a commodification of medical services. E/M codes encourage us to partition our care into types and units of service, our conceptualization of treatment fragmented according to reimbursement codes and “documented elements.” Those of us in private practice are both clinicians and business owners, mindful of the bottom line. Those in clinics or hospitals are clinicians and employees, conscious of being evaluated according to productivity. Researchers or administrators think in terms of FTEs (full-time equivalents) and proportions of time according to funding source. Our work is hard, stressful, not always appreciated, sometimes unreimbursed. It is understandable that some look for less traditional strategies to boost their income. Two such strategies were recently presented to me and prompted this consideration of their ethical implications.

The first was a phone call offering to help me set up phlebotomy services in my office. Rather than sending my patients to a commercial lab or a primary care provider’s office to get their blood drawn, this company was offering to provide me with a phlebotomist to manage blood draws and send specimens to the company’s laboratory. Patients would appreciate the convenience of phlebotomy right in the office, providers would know the labs would be done, and the practice owner would get a second income stream from the lab work performed.

The second offer was a fax inviting me to learn about how easy and profitable it is to dispense medications from my office. Instead of sending patients to a pharmacy, imagine the benefits of filling prescriptions during the appointment. The patient enjoys the convenience, and the prescriber/dispenser has eliminated one obstacle to adherence. The prescriber gets to pocket the mark-up on the medication. According to the fax, “Point of care dispensing is a win-win model.”

Despite the touted benefits of convenience and enhanced adherence, these business opportunities introduce potential harms to the patient and to the doctor-patient relationship. A physician has a fiduciary relationship with patients, which means that society expects physicians to always place patients’ interests above our own. If a physician owns an interest in a laboratory or pharmacy and funnels patients through those entities, the physician has created a conflict of interest. This conflict of interest threatens to undermine the fiduciary duty of the physician in both obvious and subtle ways.

Perhaps the most obvious problem with these business models is the risk that the physician will order more labs or sell more medication than absolutely necessary, either intentionally or unconsciously. Currently, if I’m on the fence about whether a particular lab test is really necessary, I discuss the potential benefits versus the expense with my patient. Might I neglect such a deliberation if I know I’ll make more money by ordering the test? Similarly, if I overstocked one medication from a drug class and understocked another, might I be tempted to prescribe and dispense the one for which I have a surplus, especially if that stock is approaching its expiration date? In doing so, I have abandoned my fiduciary duty, placing my own interests above those of the patient.

In addition to those very apparent conflicts of interest, these business opportunities undermine the doctor-patient relationship in more subtle ways. Currently, some patients to whom I give a lab slip may fail to go to a lab despite assurances that they intend to go. Eventually, the meaning behind this passive refusal comes to the surface and often illuminates a pattern of similar behavior with other authority figures. If the lab is right there in my office, I deprive patients of this potential insight into their behavior. Having the lab or pharmacy right there may also feel coercive, because it makes it much harder for patients to exercise their autonomous decision about whether to comply with my treatment plan.

The entirety of Section 8 of APA’s Principles of Medical Ethics with Annotations Especially Applicable to Psychiatry addresses conflicts of interest. Where there are ethical problems, there are often also regulatory problems. Health care providers who refer patients to their own laboratory or imaging facility have been investigated by licensing boards and insurers. Although finding a way to improve profitability of practice may seem like a sound business approach, it may have unwanted consequences to patient care, the provider-patient relationship, and the provider’s reputation. The flip side of win-win could be lose-lose. ■