Managed Care and Ethics

Managed care plans come in various forms, and these differences are becoming more pronounced with time. As one writer puts it, "if you have seen one managed care plan, you have seen one managed care plan." Due to this enormous heterogeneity, it is challenging to evaluate the economics of managed care, theoretically and practically. Though these mechanisms have evolved through time, it makes more sense to think of managed care plans incorporating diverse processes. Different mechanisms may produce various results in theory and practice, and certain combinations may be more effective than others.

History of Managed Care

The history of managed care is extensive. Since 1849, agreements have been documented in which one person contracts with several doctors to offer treatments to a specific demographic for a predetermined sum. The 1930s saw the beginning of sizable prepaid group practices like the Kaiser health plan. However, until very recently, these ideas expanded slowly. Beginning in the 1920s, several physicians and medical groups attempted informal and regulatory measures to outlaw the practice of contract medicine because they disapproved of these "contract medicine" arrangements.

For instance, in several areas, doctors who took part in prepaid programs were banned from medical associations and denied admission to hospitals. At one point, 17 states mandated physician freedom of choice, outlawing consumer-controlled medical plans in over half of the states, thereby ending most managed care models. Initiatives to stop the spread of consumer-controlled, prepaid group practice plans have sparked the creation of different managed care arrangements. These "foundation plans" were the forerunners of today's thriving independent practice associations and were made up of doctors who ran their own private, independent practices.

Ethics in managed care

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Maintaining patients' faith in their doctors should be the main objective of role-based medical ethics. Trust is significant not just for its inherent theoretical value but also for its therapeutic function. Therefore, rather than just focusing on whether an ethical compromise tends to raise public discomfort or undermine the basis for trust, it is important to consider whether it undermines patients' willingness to seek therapy, provide the required information, and follow treatment recommendations.

Patient Loyalty under Financial Incentives

The traditional belief that every patient should receive every treatment that might be beneficial regardless of cost is incompatible with the role that physicians are expected to play under current insurance policies and managed care plans. Many payers, customers, and clinicians consider deviations from this ideal to be both desired and acceptable. However, the profession can keep all types of patient loyalty due to this reality check. Through more moderate principles like maximization of the health of the group of patients under a physician's care, the impartiality of care among group members, role separation and patient advocacy, and honesty about conflicts of interest, doctors can still demonstrate a strong commitment to the interests of their patients. If these guidelines are followed, doctors can honestly state that they provide the best care possible for every patient within their insurance's financial restrictions.

Impartiality among Patients

Each doctor should adjust their clinical judgment to create a practice style that considers the unique financial incentives and resource limitations that their practice environment and patient group present. This guideline does not mandate that all doctors behave consistently in all practice settings. Instead, a vow of impartiality within a setting requires doctors to apply the same clinical standards to every patient, regardless of the patient's insurance. Practically speaking, impartiality entails using reasonable criteria for resource allocation that are clinically pertinent and do not vary based on patients' financial, social, racial, or insurance status. Even though physicians incorporate cost-containing influences into their practice styles and even though different physicians may have different practice styles, maintaining an objective of impartial treatment of each patient allows physicians to maintain a commitment of fidelity to each patient's medical welfare.


When doctors work under a hidden or widely unknown financial conflict of interest, as is the case today with capitation and physician ownership interests, fidelity to patients necessitates a significant degree of transparency. Very few HMOs openly discuss these payment options and how they affect customers' incentives. One investigation into HMO marketing concluded that they "tend to generate a perception that services are supplied in a liberal and unrestricted form, belying the economic principles of prepaid HMO practice."

The benefit of Managed Care

The fact that light has been thrown on patient/physician relationships, illuminating the dark corners and flaws, has been an unexpected benefit of managed care. Patients are now being forced to embrace the truth that delegating decision-making to even a reputable and trustworthy physician does not always ensure that one's best interests will be promoted. Therefore, managed care has benefited patients, at least in this regard. Moreover, at least in this regard, the autonomy of doctors has been severely hampered; in other words, they no longer have nearly as much influence over the clinical environment as they formerly had. They now have to account for patients and financial managers, who are more aware of the elements involved in medical decision-making and more eager to exercise their autonomy.

National Mental Health Programme

The National Mental Health Programme was established in 1982 to ensure the provision of mental health care services for everybody, particularly vulnerable populations and the underprivileged. The national mental health program aims to: a) prevent and treat mental and neurological disorders and their associated disabilities; b) use mental health technology to improve general services; c) apply mental health principles in total national development to improve quality of life; d) streamline/modernize mental hospitals; and e) improve psychiatric department research and development.


Some managed care models put patients and the public's trust in danger. Trust is having faith in and relying on others to behave morally, generally, and in specific situations. Control undermines trust to a greater or lesser level. When we are powerless over another person's actions, we either trust them or do not. Without control (or with only a small amount of control), we are exposed, put our trust in others, and risk being let down. They involve either trust or mistrust. In most circumstances, there is a mix of control and suspicion.