1. When you utilize the mechanic/contractor there is a contract and there are no surprises that included in their cost will be a profit. More service implies more profit. The point being there is disclosure of the inducement.
2. With the physician there is no financial disclosure of any profit from ordering. The patient is highly unlikely to even consider the possibility of inducement or that the physician may receive $X reimbursement from service provider A and $Y reimbursement from service provider B.
3. The customer always has a choice with a mechanic/contractor.
4. A patient may have no choice of a physician. Many reasons: emergency situation, HMO with limited provider list, no one taking new patients, rare specialty, etc.
5. I would suspect that if disclosed that the physician charged $X in the office and retained a percentage of $X and the patient could go to another service provider and be charged $Y, where Y is significantly less than X, that they would go to the other provider. I would think the payers would be very concerned as well.

Bottom line here is that there needs to be disclosure of the financial inducements that are neither apparent to the patient nor to the third party payers (governmental and non-governmental). I think the type of business activities discussed in the article are going to land these participants in a world of hurt. When we consider how drug benefits are going to be covered, how the boomers are going to be covered, and how we can cover 45 million disenfranchised from healthcare (either under- or un-insured) — then the silver lining the pockets of those that have exclusive control over particular utilizations of healthcare dollars become low enough hanging fruits to be plucked.

Similar themes here and here.

I acknowledge that medicine is different, but your mechanic does the same thing. If he doesn’t have a machine to turn your rotor, he send them down the road, pays that guy, marks up the charge and get his money from you. Building contractors do the same thing. Your contractor charges you more for the roofer than he pays the roofer, even though you are paying him a contractor fee.

The inducements seem even stronger when you consider the practice where the physician is charged a flat rate of service (in the article, scan time), e.g., X patients per day, where the physician pays whether or not X patients per day are referred. This seems almost like an HMO, the physician is capped for service expenses at a rate of X patients per day. As potent is the inducement for an HMO to control cost when working under a cap, there is a not dissimilar potency inducing the physician to exceed the “cap” under which he/she loses if not exceeded.

I think there is a very real potential ethical problem any time there is a linkage between physician reimbursement and what a physician has exclusive control over in ordering. “Medical necessity” comes under the pale of inducement.

<ol>
<li>When you utilize the mechanic/contractor there is a contract and there are no surprises that included in their cost will be a profit. More service implies more profit. The point being there is disclosure of the inducement.</li>
<li>With the physician there is no financial disclosure of any profit from ordering. The patient is highly unlikely to even consider the possibility of inducement or that the physician may receive $X reimbursement from service provider A and $Y reimbursement from service provider B.</li>
<li>The customer always has a choice with a mechanic/contractor.</li>
<li>A patient may have no choice of a physician. Many reasons: emergency situation, HMO with limited provider list, no one taking new patients, rare specialty, etc.</li>
<li>I would suspect that if disclosed that the physician charged $X in the office and retained a percentage of $X and the patient could go to another service provider and be charged $Y, where Y is significantly less than X, that they would go to the other provider. I would think the payers would be very concerned as well.</li>
</ol>

Bottom line here is that there needs to be disclosure of the financial inducements that are neither apparent to the patient nor to the third party payers (governmental and non-governmental). I think the type of business activities discussed in the article are going to land these participants in a world of hurt. When we consider how drug benefits are going to be covered, how the boomers are going to be covered, and how we can cover 45 million disenfranchised from healthcare (either under- or un-insured) — then the silver lining the pockets of those that have exclusive control over particular utilizations of healthcare dollars become low enough hanging fruits to be plucked.

Similar themes here and here.

A CBC might cost the practice $40 but they will bill $80.

I acknowledge that medicine is different, but your mechanic does the same thing. If he doesn't have a machine to turn your rotor, he send them down the road, pays that guy, marks up the charge and get his money from you. Building contractors do the same thing. Your contractor charges you more for the roofer than he pays the roofer, even though you are paying him a contractor fee.

The inducements seem even stronger when you consider the practice where the physician is charged a flat rate of service (in the article, scan time), e.g., X patients per day, where the physician pays whether or not X patients per day are referred. This seems almost like an HMO, the physician is capped for service expenses at a rate of X patients per day. As potent is the inducement for an HMO to control cost when working under a cap, there is a not dissimilar potency inducing the physician to exceed the “cap” under which he/she loses if not exceeded.

I think there is a very real potential ethical problem any time there is a linkage between physician reimbursement and what a physician has exclusive control over in ordering. “Medical necessity” comes under the pale of inducement.

A CBC might cost the practice $40 but they will bill $80.