Chapter 1: The Occupational Health Care System

Occupational health services are those health care services primarily concerned with maintaining the health of people at work or those who were at one time injured or exposed to a hazard while on the job. Occupational health services are increasingly attractive as a means of diversifying practice opportunities and of maintaining relative stability in uncertain times. For this reason, the field has gained attention recently after many years of relative neglect.

This book has been prepared with one overriding goal: to turn this newly-won attention into a positive force. Physicians, medical groups, hospitals, and other health professionals and institutions considering occupational health services as an option need to know that there is a structure to the field and rules to be learned. Those presently active in the field have gained a wealth of experience to share and it is the intention of the authors to make this book a resource for the development of sound programs offering services of an assured level of quality.

To understand the place of occupational health services in the context of health care in general, it is first necessary to understand the differences between the occupational health care system and the general health care system. Most physicians and other clinical health professionals have a working knowledge of the general health care system based on - and to some degree biased by - personal experience. The standard element of the system (health providers, financing, institutions, legal structures, and organizational relationships) are known. It is also generally understood that the system is undergoing rapid and fundamental change in the United States. By comparison, the occupational health care system is less well known.

The occupational health care system exists in parallel with the larger general health care system in North America. Because it is separately financed and organized around different principles than general health care, it is not accurate to speak of occupational health care as a subset of the health care system in general. Although the two systems share access to practitioners and facilities, they function very differently and often interact poorly. This is not necessarily true outside of the United States and Canada. In many developing countries, occupational health services are the basis for providing general health care in newly urbanized or settled areas of industrial development, as was true in North America in times past. In central and Eastern Europe, it is common for occupational health services to be provided as part of a centralized health care system based on clinics serving specific neighborhoods or plants. In North America, however, the decentralized and individualized approach to providing medical care has led to the creation of a diffuse and sometimes incomplete network of practitioners primarily serving a centralized workers' compensation system and coexisting with medical services sponsored by larger employers. Large parts of the system, such as the appeals process in workers' compensation and the occupational health and safety management effort within the plant, are invisible to the average practitioner.

An Introduction to the System

In part because it is less familiar but mostly because it is largely driven by workers' compensation, the occupational health care system often appears more stable than it is. In fact, it has undergone profound changes in recent years. To appreciate these changes, however, it is first necessary to examine the elements of the system.

Occupational health care as provided by the physician is part of a much larger complex system. To provide occupational services effectively, the practitioner must know the system, its players, the role of the primary care practitioner, and the services which are provided in occupational health.

The occupational health care system is built on different assumptions than the general or personal health care system. In a traditional fee-for-service setting, the primary relationship is that between physician and patient, with the insurance carrier or other third-party payers now playing an increasingly active role. (Figure 1.1) In occupational

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        *    Figure 1.1        NOT  READY  YET    *
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Figure 1.1 Relationship between the patient and the physician in the general health care system is modified by the insurance carrier or third-party payer but remains primary.

health care, the number of players is much greater and includes, at a minimum, the physician, the patient, the employer, a government regulatory agency (such as the Occupational Safety and Health Administration), and the workers' compensation carrier. (Figure 1.2) The physician's relationship to the patient is fundamentally the same but modified by other relationships and is governed by very explicit rules and procedures within the system which are designed to protect the legitimate interests of the employer and the carrier and by government regulation. The physician is often acting as an agent reporting to the employer or to the carrier rather than on behalf of the individual patient. Among these agencies, information circulates subject to accepted rules of confidentiality and authority for decisions and responsibility for compensation is shared according to the roles of each player. In the vast majority of cases, the system works more or less automatically but in a tiny fraction of disputed or unclear cases the system tends to jam.

Another basic difference between the occupational and the general health care systems is the level of utilization considered appropriate. Here again, the occupational health care system operates quite differently. In a traditional, fee-for-service setting, incentives built into the system tend to favor over-utilization of services because the profit margin increases (or the losses are diminished) when more services bring in more revenue. This has led some third-party carriers to institute utilization review procedures. In a prepaid plan, in which a fixed amount of money is paid for services to each patient regardless of the services actually performed, the intrinsic incentives tend to favor under-utilization because the profit margin increases (or the losses are diminished) when a patient does not require full expenditure of the funds provided. Many health maintenance organizations have introduced quality assurance reviews to ensure that needed care is not inadvertently withheld. In the setting of workers' compensation or employer contract services, the physician is compensated on a fee-for-service basis according to a state-determined or contractural fixed fee schedule. The interests of the employer, insurance carrier and the patient usually favor a speedy return to work. Thus, frequent return visits and heavy use of rehabilitative services

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        *    Figure 1.2        NOT  READY  YET    *
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Figure 1.2 In the occupational health care system, the physician is one element in a network in which information, responsibility, and authority is shared with others.

such as physical therapy to a degree that would seem over-utilization in general health care may be quite appropriate as long as they contribute to returning the patient to work as soon as the patient is able. An important motivating factor in the system is also to reduce the number of appeals and expensive litigation. The intensity of care is intended to further the interests of all parties: to return the patient to work promptly, to reduce losses to the employer from absence, to promote prompt settlement of claims, and to reduce long-term expense on the part of the carrier.

Where Are Occupational Health Services Provided?

Occupational health services can be divided into "in-plant" and "off-site" facilities and services.

Until recently, in-plant services dominated the delivery of occupational health care. In-plant services are provided within the employer's facilities and almost always by a practitioner employed by the employer. A plant dispensary or infirmary may employ a "plant physician," a nurse, or a nurse practitioner whose responsibility may range from simple triage and first aid to fairly comprehensive primary care, but never includes setting corporate policy. On the other hand, a "corporate medical director" and his or her staff is usually based at the headquarters of the organization and has only a limited role in providing patient care but participates in decision making and setting policy on health-related matters within the company. In-plant services are practical only for large firms. In-plant and corporate services are discussed in detail in Chapter 5.

Within the last two decades, "off-site" or community-based health care facilities have displaced in-plant services as the principal form of organization for providing occupational health services. Many practitioners, especially family physicians, provide such services in the course of their practice out of their own office. The major facility of this type, however, is the free-standing "industrial medical clinic", a medical group or practice more or less devoted to providing occupational health services on a contract or fee-for-service basis with local industry. Large multispecialty group practices, particularly in the East and Southwest, have been developing occupational medicine services as a major new thrust. Hospital-based occupational health services are becoming more prominent but are still not widespread. Only a handful of union-sponsored occupational health clinics exist, principally in New York and Canada. Government agencies may have medical clinics for their own employees; the military maintains occupational health clinics for both active duty and civilian personnel. The major types of off-site services are discussed in detail in Chapter 4.

A small number of full-time private consultants in occupational medicine, who are usually located in major cities, specialize in performing disability evaluations, assessing causation and work-relationship, and in reviewing cases under appeal or litigation. Consulting practice is usually limited to those who have extensive experience and have either won a personal reputation in the field or have special or unusual expertise to offer.

A large proportion of occupational health services are provided outside this framework. Individual practitioners and hospital emergency rooms deal with innumerable occupationally-related cases as a matter of routine, usually providing only acute or episodic care.

Who Are the Occupational Health Professionals?

The physician in isolation cannot be truly effective in managing an occupationally-related case. At a minimum, effective management requires communication with the workers' compensation carrier and usually the employer. A complex case, on the other hand, absolutely requires the participation of professional experts. The capabilities, preparation, and limitations of these professional experts are noted below.

The occupational physician is a medical doctor practicing occupational medicine predominantly or exclusively and trained in the specialty. Board certification in occupational medicine by the American Board of Preventive Medicine in the U.S. or by either the Royal College of Physicians and Surgeons or the Canadian Board of Occupational Medicine in Canada is evidence of such training, but the majority of practicing occupational physicians lack board-certification in the specialty. In the past, most physicians entering the specialty did so in mid-career and were reluctant to return to training to meet the board requirements. Many physicians practicing occupational medicine but lacking formal training in the field prefer to call themselves "industrial medicine physicians." ("Industrial medicine" was an old name for the specialty and does not imply specialist preparation.) Most occupational physicians are engaged in private practice or in-plant services. The specialty organizations for occupational physicians are the American Occupational Medical Association and the Occupational Medical Association of Canada. The American Academy of Occupational Medicine and the American College of Preventive Medicine are also important organizations representing the specialty.

The occupational health nurse is a nurse specializing in occupational health services, usually in an in-plant setting. Since 1972, the American Board for Occupational Health Nurses has provided board certification, emphasizing skills in health education, occupational health and disease recognition, rehabilitation, and administration. The specialty is small and not well known but is highly attractive within nursing for its relative autonomy and level of responsibility. Occupational health nurse practitioners perform mid-level practitioner duties within the workplace, as do a much smaller group, physician's assistants in occupational health. The principal organization for nurses involved in the field is the Association of Occupational Health Nurses.

The industrial hygienist is an engineer specialized in the recognition, evaluation, and control of occupational health hazards. Training in occupational hygiene includes extensive study in ventilation, analytical chemistry, mathematics, and toxicology and the profession is in high demand in industry. Board certification by the American Board of Industrial Hygiene is the standard credential in the field. The principal organization for industrial hygienists is the American Industrial Hygiene Association.

The safety engineer is a professional with training in the recognition and control of safety hazards. Safety education is usually not at the graduate level; many safety professionals have obtained their training in short-term, intensive institutes or seminars. The American Society of Safety Engineers and the National Safety Council are the principal organizations in the U.S.; in Canada the counterparts are the Canadian Society of Safety Engineers and the Canada Safety Council.

The work evaluation or rehabilitation counselor is trained at the bachelor's or master's level to assess the work skills, physical tolerances, specialized training, and motivation of the worker. This assessment is used in judging disability in workers' compensation cases.

The audiologists are engaged in the evaluation of hearing disorders. Within audiology is a professional category devoted to the identification of noise-induced hearing loss in the workplace, the occupational hearing conservationist whose workers possess certification from the Council on Accreditation in Occupational Hearing Conservation which attests to skill in performing audiometric evaluations of workers exposed to noise.

The risk, loss, or liability control officer is usually found in a large corporation or public agency and is responsible for keeping to a minimum the likelihood of litigation, the amount of the workers' compensation assessment paid by the company, and the exposure of the company to uncontrolled employee health care costs. Many of these business professionals entered their positions from personnel management or from the insurance industry. The insurance industry itself has established an elaborate system of professional education designed to assure uniformity and equity in claims processing. The Insurance Institute of America maintains nation-wide system of classes, self-study courses, and examinations leading to the degree of Associate in Loss Control Management, which includes an introduction to safety, industrial hygiene, and occupational medicine, and which may lead to the standard advanced credential in the insurance industry, Chartered Property Casualty Underwriter. These individuals investigate insurance claims and evaluate employers for workers' compensation coverage.

The physician is unlikely to encounter other occupational health professionals in the usual course of practice, but should be aware of the existence of many others behind the scenes: toxicologists, epidemiologists, acoustical engineers, ergonomists (specialists in physical factors and safety in the design of tools, equipment or work practices), analytical laboratory technicians, health physicists (radiation hazard control experts) and many others. These occupational health professionals often work as consultants to many industries on a project-by-project or an as-needed basis.

What Are Occupational Health Services?

Occupational health services may be divided into two categories, ameliorative and preventive. Ameliorative services are intended to cure or limit disease or to manage on existing problems. Preventive services seek to avoid exposure of the water to hazards, detect disorders at an early and potentially curable stage, and to limit disability. Table 1.1 categorizes the principal occupational health services in this way.

Acute care of the injured or diseased worker is the most common role performed by the primary care physician. Although most occupational injuries are straightforward to manage, occupational illnesses are often overlooked or their occupational association unrecognized. Proper provision of acute care for occupational disorders requires reporting of the case (a legal requirement of the Occupational Health and Safety Administration) and prompt communication with the carrier and the employer if the injured worker will need time off work. Follow-up and referral for rehabilitation and physical therapy is a particularly important aspect of the management of occupational accidents. The correct management is usually worked out in consultation with a physical therapist and the physician is expected to file "supplemental" reports on the patient's progress with the workers' compensation carrier, concluding with a final report when the patient either is fit to return to work or has recovered as much function as is to be expected given the nature of the injury.

Fitness-to-work evaluations are a major responsibility of the occupational physician; these include preplacement, periodic health, "return-to-work", and disability evaluations, among other types.

Preplacement evaluations are the medical evaluations of newly hired employees to determine suitability for the position to be held. In the past, the term "preemployment examinations"

            Table 1.1  Types of Occupational Health Services.

Subsets of Services	Ameliorative		     Preventive

"Industrial Medicine"*	Acute and chronic care	     Fitness to work 
			  disability evaluation	       evaluations
Industrial Hygiene	Health hazard evaluation     Consultation 
(teamwork required)	  evaluation                 Worker education
                        Compliance with government   Biological monitoring
                          regulations and            Compliance with standards
                          correction of infractions
Personal Health   	Employee assistance          Health promotion
(individual health)       programs
* Industrial medicine" is an obsolete term for occupational medicine,
  now used to indicate a routine level of services.

was used but the newer term is now preferred to avoid misunderstandings related to equal employment opportunity. A knowledge of the precise work to be performed and the physical requirements imposed by the work is essential to a well-conducted preplacement evaluation.

Periodic health evaluations are usually given to employees at risk because of exposure to a known health hazard for early detection of the outcome in question; this is called "surveillance" and when required by law is referred to as "mandated surveillance." Mandated surveillance is required by OSHA for workers exposed to a number of hazards, including lead, asbestos, and noise. Observance of a population without reference to an expected outcome is called "monitoring." The most common use of monitoring in industry is the "executive physical," a routine comprehensive medical evaluation for executives and key personnel whose health is thought essential to the company's future. "Multiphasic health screening" is a general screening program for employees and involving a battery of selected tests given on a group basis periodically usually automated.

Preplacement evaluations, periodic health evaluations, "return-to-work evaluations" (following an injury or illness) and medical "certification" of absence due to illness are all examples of fitness-to-work evaluations, discussed in detail in Chapter 18.

In disability evaluation, the physician's role is to delineate the physical capacity of the patient. The physical assessment is only one part of the evaluation. The suitability of the workers' skills, motivation, and aptitude for employment is evaluated by a work evaluation or rehabilitation counselor. The labor market for the workers' skills is also a critical factor in determining whether an award is made by workers' compensation.

The above services are usually what is meant when the term "industrial medicine" is used. The term "occupational medicine," which was introduced in the 1950's when board certification was established, implies a wider range of services and more direct services oriented toward prevention.

Performance of a health hazard evaluation (HHE) follows the recognition of a potential or actual health problem in the workplace. An HHE is usually conducted by a "walk-through" inspection of the workplace and an interview with managers, production supervisors, and workers in the specific workplace in question. An HHE is seldom conducted by a physician alone; other occupational health professionals, particularly industrial hygienists, safety engineers, and occupational health nurses typically play an equal or greater role in the HHE team. Chapter 25 provides an introduction to occupational health hazards but a thorough familiarity requires special training and experience.

Absenteeism control involves identifying employees who are absent more often than appears justified on the basis of health or who are given more time off work than appears reasonable after recovery from an illness or injury. Absence from work is usually categorized as sickness absence (due to personal illness unrelated to workplace hazards), work-related injury and illness (often called "time-lost accidents"), and personal absence. The role of the physician is to identify causes for repeated or unauthorized absence, to assist the worker if possible, and to advise the personnel officer if absence will continue. The physician must not act as policemen for the workforce.

Employee assistance programs (EAP) are organized within companies to identify employees with personal problems, refer them for treatment, support and motivate them to complete treatment, and to assist in their rehabilitation. Most EAPs are focused on alcohol and drug abuse and mental illness, but other include family and adjustment problems, financial mismanagement (particularly credit card overruns), and stress. A typical EAP operates primarily by self-referral of patients who are then triaged to local health care or counseling facilities. The employer monitors the progress of the employee and guarantees return to the same or similar work; EAPs usually do not provide direct treatment except for initial counseling. EAPs are discussed in detail in Chapter 23.

Providing Occupational Health Care

Although clinical aspects of occupational health care are similar to practice in general health, administration and communications are more obviously part of day-to-day practice in occupational medicine. A real opportunity exists to prevent injury and disease and to promote good health. Aside from these differences, the medical treatment of injuries and illnesses is the same but the overall management of the case is subject to different influences. The physician never acts alone in an occupationally related case. Each action is reviewed and discussed behind the scenes and often generates multiple decisions and communications in the form of telephone authorizations, claims, chart reviews, and requests for clarification. Thus, an essential aspect of occupational health care is communication. Maintaining confidentiality is particularly tricky, as some parties to the case are entitled to full information and other may not be.

Many physicians who do not understand the logic and structure of the process balk at the amount of paperwork involved in workers' compensation cases in particular. The forms are usually simple and straightforward and require little more effort than a dictated progress note or a brief hospital discharge summary. Refusal to complete them, delay in filing them or lack of attention to their contnet may severely harm the patient, distort health care costs, mislead regulatory activities, and result in health services not being covered by the carrier. To assist in the process and expedite billing, it is important to assemble a clerical staff experienced in workers' compensation. A brief telephone call by the physician or nurse to the employer to report on the patient's fitness for work should be considered a routine part of most patient visits.

Another aspect of delivering occupational health care is the importance of correct handling of medical records. These records are subject to review not only by the patient, but also by the insurance carrier, the employer, or outside consultants when a claim is appealed, and may be subpoenaed in some circumstances. Records are discussed in more detail in Chapter 15.

For the physician, a clear understanding of the state or provincial occupational health and workers' compensation systems will avoid unnecessary administrative burdens, protect the interests of the patient, increase the value of the physician's efforts, and expedite the protection of others.

Change in the Health Care System

The American health care system is in a state of rapid change, brought about in equal measure by economic trends and by federal policy initiatives reflecting the recent shift in political philosophy toward deregulation, decentralization of authority, individualism, and a free-market approach to economic incentives. This transition is most obvious in the cities of those part of the U.S. undergoing the most rapid demographic, industrial, and economic changes. As recently as ten years ago in the U.S., primary medical care was a "cottage industry", provided by individual physicians caring for individual patients and mostly paid for by private insurance supplied as a benefit of employment. Increasingly, primary medical care in the U.S. is provided by groups of physicians and other health care professionals organized into corporate entities, often for-profit, for groups of patients defined by residence, employer, or other common characteristics and paid for by a capitation allowance with the financial risk accepted by the provider rather than the third-party payer. This new system, combined with a surplus of medical school graduates in most specialties, has resulted in two major outcomes that directly affect the parallel but distinct occupational health care system in the United States:

  1. At the level of practice in the community, occupational medicine has become mixed with personal health care. Increasingly, directors of occupational health services in industry are called upon to review both individual cases and the employer's total experience with the health costs of employees, regardless of whether the classification of the reasons for care is work-related or not.
  2. Because of intensifying competition and increasingly risky financial situation in which medical practitioners and health providers such as clinics and hospitals find themselves, occupational medical services are being used as a way to attract and "lock-in" large groups of employees and their dependents as a patient base for financial stability.

These outcomes profoundly affect -- some might evey say distort -- the development of occupational health services in the U.S. An example of current trends can be seen in San Diego.

San Diego is well suited to an examination of recent trends in occupational health services in the United States. Basically conservative in character, San Diego is experiencing accelerated change in its health care institutions and financing. Because it is affluent and a highly desireable place to live, San Diego is experiencing early many of the changes common to other parts of the United States: a surplus of physicians, centralization of medical care, changes in financial reimbursements, and empty hospitals. The responses to these changes have produced major realignments of the health care system in general and occupational health services in particular. San Diego County is also a relatively isolated population for the purposes of health services research. Local trends between 1974 and 1984 in the supply of health services as reflected by facilities, manpower, and other indicators were examined in a recent study. (Table 1.2) Corporate medical departments did not keep up with the rapid growth of industry over the decade. Corporate medical departments appear to be on the decline as a means of providing health services to employees. By contrast, the rise of "industrial medicine clinics" and, to a much lesser degree, institution-based clinics has been swift and dramatic. In terms of the number of facilities, industrial medicine clinics have become the dominant form of non-government occupational health care organization in San Diego. Freestanding "industrial medicine clinics" began with a single facility and proliferated to 13. From 1981 to 1984, freestanding "urgent care centers" entered the health care market in force and now outnumber industrial medicine clinics. Despite a massive overall increase in the number of physicians in the area, occupational physicians with specialty credentials or eligibility remained few and primarily based in academic or military institutions, while the number of uncertified physicians and of medical groups accepting occupational medicine referrals increased considerably. University- and HMO-based clinics appear to play only a limited role. Occupational health services in San Diego are obviously in a state of rapid change.

     Table 1.2.  Occupational Health Resources in San Diego County,
			 1974 and 1984

Occupational health facilities			1974		1984
In-plant services                                 4		  5
University hospital-based clinic		  0		  1

Hospital-based clinics				  0		  6

Multispecialty group-associated clinic		  1		  1
"Industrial medicine clinics"			  0		 13
"Urgent care clinics" or "medicenters"		  0		 15*


* Estimated

Indeed, it would appear that occupational health is in a free-for-all battle with the off-site private health care facilities making great inroads. It is disturbing, however, to realize that most of these facilities lack the specialty expertise and resources required to provide a high level of service. Occupational health services are in danger of becoming "despecialized" as they become more competitive.

Further studies of occupational health services are urgently needed to assess the significance of these findings. The prominent role of the private practice sector in providing medical care and consulting services has been neglected as have important changes in the relationships between important institutions that affect occupational health care. In particular, the rise of the "industrial medicine clinic" over the last two decades has been almost entirely overlooked until recently. Now the dominant occupational health care provider in many communities, the industrial medicine clinic is coming under pressure itself from competitors, particularly the freestanding urgent care centers. "Industrial medicine clinics" (freestanding ambulatory facilities not associated with a multispecialty group or hospital) now constitute almost half of the facilities providing occupational health care. In San Diego, six of these clinics are managed by a single corporate entity; the other organizations have only one location.

Part of the reason for this trend is that most routine occupational health services are simple in their execution however sophisticated they may be in design. Employers are not always aware of differences in quality among potential providers of occupational health services and often do not see any reason to pay a premium for quality when adequate will do insofar as acute care for simple injuries is concerned. This presents a challenge to occupational health professionals and underscores yet another difference between the occupational and the general health care systems.

Physician Enterprise In Health Care

The changing health care system in the United States presents grave challenges to private practitioners. The option of joining the trend toward a corporate approach to medicine is attractive but also has its disadvantages. Among them is the loss of individual style and independence in medical practice, as some freedom is inevitably lost in a large organization, especially when there is pressure to meet a common goal or to contain costs. The group-oriented corporate culture places higher value on teamwork than on the individuality typical of medical practitioners. This may lead to conflicts that spill over into patient care, especially in controversial issues where the administration may--at times subtly--influence the out-of-step physician to conform to group norms of treatment, especially when these are less costly. Also, while a group or organized form of institutional medical practice may provide greater financial security to the physician the earnings potential of a physician in such organizations is usually less than could potentially be achieved in solo practice, assuming that conditions are favorable and one would be willing to make the sacrifices in lifestyle necessary to attain maximum earnings. Private practice is therefore a much greater risk, in general, but has much greater rewards if the outcome is success. Increasingly, however, the odds are turning against a successful outcome and physicians are opting for the greater security of the corporate approach to medicine.

One way out of this trade-off is to become part of the financial backing of a health care facility. Occupational health services are very often part of this decision, since such services can support a facility or extend its profitability. The physician becomes an investor-participant in the enterprise and therefore benefits both by individual effort and by the success of the organization as a whole. This is the standard practice among group practices and physician-owned hospitals. Even so, the concept has become intensely controversial in the last few years. Dr. Arnold Relman, editor of the New England Journal of Medicine and a leading voice in medical affairs, has suggested that it is in the profession's best interest to avoid financial interest in the health care industry in order to avoid real or perceived conflicts of interest. Indeed, he has proposed that the medical profession should "publicly and clearly separate itself from the health care industry" including control of health facilities, the manufacture and marketing of drugs and medical devices, and the ownership of agencies providing medical services.

This presents a problem for physicians interested in developing occupational health facilities. Fortunately, this problem is more theoretical rather than practical as there is no law against physicians investing in the health care industry, nor is there likely to be in the United States. Although a tiny handful of physicians support themselves by providing occupational health services in solo private practice, this is the rare exception rather than the rule. Outside of corporations and sponsored clinics, the major providers of occupational health care are "industrial" medical clinics, urgent care centers, walk-in clinics, group practices, and hospitals, many of which are owned by for-profit investor-owned corporations.

The countervailing argument in favor of physician investment in health care enterprises needs to be understood as background to a discussion of the various models possible. The physician is placed in a structural conflict of interest, being both a provider and a demand-producer for medical care. This conflict is most obvious in private fee-for-service medicine, but it achieves larger dimensions of financial responsibility when hospital care is involved. When a physician owns a share of an entity operating a hospital or other clinical facility, the potential exists for overutilization of that facility's services, inappropriate utilization when the facilities of another institution may be preferable, or misrepresentation of the institution's experience. The point cannot be stressed too strongly that these are potential conflicts of interest, not descriptions of physicians' actual behavior in such situations. This issue involves incentives and perceptions, not predictions.

Since private, solo, fee-for-service practice (for convenience "private practice") is the public's nostalgic standard for comparison, it is useful to compare the implications for perceived conflict of interest between private practice and physicians' entrepreneurial role. In private practice, the patient observes the clinician performing the service and promptly submitting a bill to the payer. While hospital cost escalation has far exceeded the rise in physician fees, patients still speak of "doctor bills" and are subjected to messages by payers and employers that imply, for the most part correctly, that physicians are not managing costs effectively.

In the entrepreneurial role, the physician is one step removed from the revenue-producing activity. Profit in such a setting is much less dependent on individual physician decisions than on group behavior and sound financial management. Institutions are likely to be more receptive and responsive than a comparably large aggregation of private practices to contract negotiation, utilization review and financial audits, and cost-containment practices. The public has tacitly accepted partnerships in medical group practices, pathologist-owned clinical laboratories, and physician ownership and control of hospitals for years. The public accepts physician entrepreneurship in health care. What the public objects to are uncontrolled costs and unresponsive behavior.

As corporate health care expands and concentrates, physicians may lose their institutional authority within hospitals and clinics unless they are in control of their own facilities. More and more physicians are likely to become employed on a salaried basis, and both hospital-based and community-based medical staffs may find their role limited to medical affairs. Management decisions that may affect health care could become business propositions first, with medical considerations second. Without a financial investment, physicians will have only moral persuasion and the threat of liability to influence an institution's management.

Physician investment in health care enterprises may halt some of the erosion of physician influence. Physicians will be able to initiate ventures, influence decisions, and negotiate from a position of strength. The physician-investor will be able to reassert some degree of personal responsibility for quality of care. Acceptance of this responsibility will also expose the physician-investor to the health care financing facts of life. No longer will physicians be tempted to pass the buck in cost containment, nor will they be able to blame anonymous managers for patient complaints, payer dissatisfaction, or poor facilities. The physician-investor will assume part of the risk and a personal interest in the future and reputation of the institution. The experience will educate a new group of physicians in health care financing and responsibility on the corporate level.

The future of health care in the United States is being decided on the level of large institutions and interest groups. If physicians deal themselves out of the game at this turning point by following an ill-advised proscription on investment in health care enterprises, they will abdicate their role in shaping the coming health care system. The greater evil is removing medicine's voice altogether from the councils where decisions are being made and that will affect the patient in countless ways through the next generation.

Further Reading

Council on Long Range Planning and Development. The Environment of Medicine. Chicago, American Medical Association, 1985.

Council on Medical Service (American Medical Association). Effects of competition in medicine. Journal of the American Medical Association 1983; 249:1864-1868.

Enthoven AC. Consumer-choice health plan. New England Journal of Medicine 1978; 298:650-656, 709-720.

Frist TF. A cottage industry no more. The Internist 1983; 23(10):8-9.

Guidotti TL. Limiting MD investment in health field ill-advised. American Medical News (Chicago, American Medical Association) 14 September 1984, p. 49.

Guidotti TL. Occupational medicine at a crossroads. ACP Observer (American College of Physicians) January 1984, p. 5.

Guidotti TL, Kuetzing BH. Competition and despecialization: An analytical study of occupational health services in San Diego, 1974-1984. American Journal of Industrial Medicine 1985; 8:155-165.

Guidotti TL. What constitutes an ideal health care system? The Pharos (Alpha Omega Alpha) Summar 1981; 44:20-23.

Lee JA. The New Nurse in Industry. Washington DC, Government Printing Office, National Institute of Occupational Safety and Health, DHEW (NIOSH) Publication No. 78-143, 1979.

Muller S. Thoughts on the health care revolution: The Andrew Pattullo Lecture. J Health Admin Ed 1986; 4:645-653.

Pear R. High costs determine who controls medicine. New York Times, 18 October 1987, p. E-G.

Relman AS. The future of medical practice. Health Affairs 1983; 2:5-19.

Starr P. The Social Transformation of American Medicine. New York, Basic Books/Harper-Colophon, 1982.