Medicine and business: an unhealthy mix?

Abstract

Health care expenditures now represent over 11% of GNP in the United States and are in excess of $600 billion, making health care one of the largest sectors of our economy. In this light, one might well wonder how the notion could even be seriously entertained of separating medicine and business, whether or not they represent an unhealthy mix. The worry that medicine and business may be an unhealthy mix has taken many forms and been an umbrella for a diverse group of concerns. In the mid-1980s concern that they were an unhealthy mix focused on the growth of for-profit hospitals and other health care institutions, and especially their concentration in large corporate enterprises controlling chains of for-profit hospitals. More recently, attention has turned to a variety of entrepreneurial ventures and investment arrangements in health care that have attracted increasing numbers of physicians. A focus of this attention has been a variety of what have been called self-referral arrangments in which physicians have an ownership or investment interest in laboratories and ancillary service providers to which they refer patients.1 These arrangments have been the subject of study by the Department of Health and Human Services' Inspector General's Office and the concern of Congress, especially of Representative Stark who has pressed for legislation essentially banning such arrangments.2 In the Omnibus Budget Reconciliation Act of 1989, signed into law in December 1989, a ban on self-referrals restricted to clinical laboratories was passed to take effect on January 1, 1992. This ban was a compromise between proponents of a broader ban which would have included diagnostic imaging centers led by Representative Stark and others who supported only limited new reporting requirements. The legislstion also provided for additional reporting requirements to take effect October 1, 1990 affecting every entity providing items or services