The ethical aspects of gain sharing with physicians.

Gain sharing aligns the economic interests of company executives and employees. Hoped for results include:

* Increased profit

* Consistently dependable workmanship (quality)

* Better communication

* Support of the company's executive leadership

All these goals also relate to working with doctors. Physicians determine the variable costs of treating patients by writing orders and deciding to do complex diagnostic and surgical procedures. Through the order sheet in each patient's medical record, doctors determine the daily activities of many hospital employees, including nurses, therapists and technicians.

The doctor decides when a patient is ready for discharge from the hospital, and so determines average length of stay. Physicians are involved in most clinical systems used in caring for individual patients, so it is difficult or impossible to make needed improvements in clinical systems without physician participation or leadership.

So gain sharing with physicians makes a lot of sense. There is just one catch.

The powerful Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) does not like the idea.

In 1999, the OIG issued a special advisory bulletin essentially outlawing gain sharing with physicians. (1) In particular, the bulletin called attention to the civil monetary penalties (CMP) of the Social Security Act. The penalties can be imposed on hospitals that pay individual physicians as an inducement to reduce or limit services medically necessary to Medicare or Medicaid beneficiaries.

Thus, it seems that the OIG assumed that all gain sharing with physicians would involve cutting needed services. That is not the case. The OIG has recanted somewhat and now agrees to consider specific gain sharing plans for approval, but remains skeptical. (2)

Why? What could possibly be unethical about gain sharing, an idea that potentially aligns and simultaneously serves the best interests of patients, doctors and hospitals?

The answer is, "Nothing."

The idea of gain sharing with physicians reflects good business ethics such as concern for all stakeholders and avoidance of conflicts of interest. However, the specific characteristics of a gain sharing plan might be unethical.

* Is lip service to quality a cover up for attempts to cut costs, with more attention to corporate profit than to patient safety?

* Are gain sharing payments to physicians actually disguised efforts to buy physician loyalty?

* Are practitioners truly partners in deciding which efficient practices are safe for patients and which are not?

* Do selected data methods actually isolate the physician's contribution to observed findings, a necessity since the physician is the one paid for desirable results?

The OIG's concern is prophylactic. So far there is a paucity of actual experience with physician gain sharing, unless it is sub rosa, partly because of the OIG's wet blanket effect. So the OIG seems to be reacting to our track record.

Unfortunately, that is justifiable. Extremely close scrutiny of physician gain sharing plans is probably one legacy of the embarrassing gag order era early in managed care. Gag orders were alleged attempts to make physicians withhold from patients the knowledge that expensive diagnostic procedures and treatments were needed. No wonder the OIG wants to know exactly how we intend to implement gain sharing with physicians.

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Details of physician gain sharing plans reflect the hospital's operational code of ethics. A written code of ethics is the highly prized and flowery statement of absolute altruism prominently posted in many locations and shared liberally with the public in advertising copy. But the operational code of ethics is what happens after the boardroom door closes.

Every organization's operational code of ethics reflects a conscious or subconscious choice of where to stand on the continuum between ethical, legal, unethical and illegal actions.

The operational code of ethics cannot be kept secret, because it is revealed to the public by the nature of an organization's decisions and activities.

Gain-sharing scenarios

Here are two physician gainsharing scenarios. Without knowing more details, it would be unfair either to brand these plans unethical or praise them as good examples. But at least a comparison of these two contrasting stories illustrates the diversity that exists in physician gain sharing plans and activities.

1. This first scenario is a mixture of fact and fiction. In Hospital A, a cardiac surgery group agrees to 19 consultant recommendations about changes in surgical procedure in return for cash payments from the hospital to the surgical group. One change is that the disposable components of the cell saver unit, an autologous blood recovery system used in the case of rapid bleeding or high volume blood loss, are not opened until after the patient has already started to experience excessive bleeding. The criteria for "excessive bleeding" are not specifically stated. According to the efficiency experts recommending these changes, significant cost savings will result and the only difference is that the cell saver will be ready two to five minutes later than it is now. The other recommendation is to discontinue routine pre-operative administration of a drug currently used to try to prevent hemorrhaging during the operation.

The OIG's opinion about this plan states, among other things, that the delay in cell saver readiness and withholding the drug meet OIG criteria for invoking civil monetary penalties. However, OIG agrees not to invoke sanctions because they are convinced that the plan includes adequate safeguards. For example, patients will receive written disclosure of the gain sharing arrangement. It is unclear whether disclosing the arrangement includes disclosing details of the plan.

In addition, OIG approves the plan because of a technicality. That is, payments are to be made to the surgical group, not to individual surgeons. The language of civil monetary penalties suggests that they apply when payments are made to individual doctors. Assured of the legality of the plan, the hospital proceeds.

2. In Hospital B, treatment of acute asthma in children is one focus of a physician gain sharing plan. (3) Significant results of the plan include decreased average length of stay and increased use of steroid drugs. It is not proven beyond a doubt that the gain sharing plan is the proximate cause of these two findings, but the gain sharing plan is a new factor in the midst of several constants. Neither is it proven that these two findings are causally related. However, it is reasonable to assume a cause and effect relationship because of information in the pediatric literature. Proofs beyond a doubt are the realm of medical researchers. Arguably, reasonable assumptions from reliable data responsibly interpreted are adequate when using performance information and outcomes data in the context of organizational management.

"Use of steroids" is an inadequate endpoint in the database in this scenario, because other factors such as route of administration of the steroids and duration of steroid use are important. But this is just a beginning. The data system used here will accommodate making needed improvements in data collection and interpretation as the need for them becomes apparent through experience.

The overriding conclusions are that this is an honest attempt to use data to support gain sharing activities, and that initial findings suggest positive impact on both quality performance and efficiency.

In the end, gain sharing plans should be carefully examined to be sure they reflect the organization's intended operational code of ethics. Ethical principles involved in gain sharing include informed consent and conflict of interest.

But the ethical issue most relevant to gain sharing is a common good widely accepted across cultural boundaries and throughout time: Honesty. Indeed, honesty is arguably the most important ethical principle of all. Because without honesty there can be no trust. And without trust there can be neither faith, nor hope, nor love, nor sustainable profit.

References

1. Special Advisory Bulletin (SAB) of the Office of the Inspector General (OIG) of the Department of Health and Human Servifces (HHS). www.oig.hhs.gov/fraud/docs/alertsandbulletins/gainsh.htm. July, 1999.

2. Thallner, KA, Jr., Esq. "OIG approves hospital-physician gainsharing." Physician's News Digest. July, 2001. www.physiciansnews.com/law/701.html

3. Reynolds, J and Roble, D. "Improving clinical quality and sharing the profits with your physicians." The Physician Executive, May/June 2004, 30(3):10-17.

RELATED ARTICLE: IN THIS ARTICLE ...

Gain sharing arrangements involving physicians can be a model combination of ethical business practices and maximizing profits. Or, gain sharing can be as unethical as fee-splitting was at the turn of the century, and as corrupt as any conflict of interest. The devil is--or is not--in the details.

By Richard E. Thompson, MD

Richard E. Thompson, MD, is adjunct instructor of ethics at Drury University, Springfield, Mo. and president of Thompson, Mohr and Associates. Previously, he was an adjunct instructor of ethics at the Ethics Institute, St. Petersburg College, St. Petersburg, Fla. He can be reached by phone at [phone] or by e-mail at [e-mail]

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