The Origin Of Two Functions In The Regulation Of Healthcare
Since the beginning of mankind man has become increasingly aware of the surrounding environment and his body's relationship with it. Man has discovered that the body is fragile and is susceptible to illness, injury, harm and many other adverse sensations. Because of man's ability to recognize that the body is not invincible, man has had to get guidelines to repair or restore the body back to homeostasis. Centuries later these guidelines have developed into a vast and complex system that stretches far beyond the comprehension of society in the past to a system we refer to as healthcare. Healthcare involves much more than just rejuvenation of the body. Healthcare involves variables that did not exist in the beginning of mankind. These variables are the direct result of the rise and growth of economics, politics, and society's sense of morality. Morality stands alone because it is not governed or sanctioned like economics or politics. Morality is the ability to weigh what is right and wrong versus the cost and the politics of various situations.
Because of the incorporation of these variables the complex healthcare system has had to adapt. These adaptations involved having guidelines and rules because without regulation the unjust side of man would leak into and destroy the quality of healthcare and even affect certain individuals' quality of life. The healthcare industry has deemed these rules and guidelines "regulations." These regulations reach with many standards which adjust every waking moment in order to compete with the ever changing world of medicine. Over the past few decades regulation has switched from a system of analyzing outcomes to a system of analyzing the process in order to cure healthcare problems as opposed to constantly sanctioning the extinguish results. This was a system borrowed from the business industries which used the same opinion during the industrial revolution. This concept was a shift to quality. In light of the shift to quality healthcare regulators developed functions of healthcare regulations. Two of the most important additions to the primary functions of healthcare regulations are controlling elements of a monopoly of power and to provide consumers with adequate information so as to facilitate effective bargaining.
Regulating the number and operations of monopolies goes hand in hand with quality. There is an eternal battle going on within humans whether to be the most profitable and hold the most power or to provide the best quality of care. The issue that is at hand with monopolies is that on one side people believe that monopolies can be efficient and beneficial by providing a network of providers and facilities which in turn will help connect the line of care available to the patient. The other side suggests that monopolies can be inefficient in decision making and operation which in turn is detrimental to the quality of care (Brennan and Berwick 1996). Modern day issues with monopolies refer to hospital and physician mergers, virtual mergers and joint ventures; exclusive contracts and other medical staff exclusion issues; covenants not to compete; physician collective bargaining with, and exclusion from, managed care plans; antitrust defenses such as state action, nonprofit, learned profession, efficiencies, failing business, etc.; and federal and place health care antitrust regulatory efforts, including health care collaborative guidelines as stated by the Center for Law and Health.
The history of this function of health care regulation started this past century with the sudden rise in market forces being embedded into healthcare. The ragged way of looking a healthcare was that the doctor contained all the knowledge and the patient was supposed to blindly obey and trust the decisions made by the provider. However the rising costs and market forces have influenced the healthcare system to adapt and add on to this tradition. These adaptations are basically just added on in the general ideas of healthcare prior to the revolution which is still going on today. Meaning in addition to the focus of patient care the healthcare industry must now incorporate the idea of patients having consumer power which allows them to invent sound decisions. Another aspect the healthcare industry must chronicle for is the idea of cost containment. The movement into cost containment led to the development of review organizations and managed care structures in an attempt to control the amount of frivolous money spent on healthcare that was not truly needed. Although these moves created organizations that where perceived by many providers as menacing to the practice the underlying theme was improving the quality of care. Cost containment became a relevant bellow during the 1970's. This is when the shift to quality began. This shift simultaneously took place with the idea of creating a fair market place since a declination of competitors in the market place began.
Because of the shift and decline in competitor's government began to create an entrance into to regulating monopolies by forming what we know as antitrust laws. Traditionally government does not like to play an active role in the sanctioning and governing of healthcare but the cost containment issues forced them to intervene. Although still indirectly involved when government regulations are created organizations obey. They obey because of the financial implications that are involved. A complying organization will be rewarded with funding and a non-compliant organization will be forced to fund there acquire operations through other grants. Once the market forces changed the thought processes of healthcare regulators the antitrust laws government created protected the industry from monopolizing and supported competition. Robert Pitofsky of the federal trade commission states," A key function of the antitrust laws in the operation of health care markets is to keep those markets begin and competitive, so that new ways of delivering and financing health care services can compete for acceptance by purchasers." By this Pitofsky is implying that competition naturally promotes new ideas and innovative though processes by raising the bar. To analogize a track runner will only go as fast as the competition provided. With no one to compete for first place the runner will have no reason to put maximum effort into the urge. The difference in the race in competition of healthcare is that people's lives and comfort lie in the balance of a healthcare industry that can settle to be relaxed with no competition or competitive and developing new ways to improve quality. Pitofsky expresses this trouble when he states," antitrust enforcement remains critical to the ability of the marketplace to develop better methods of responding to the demand for high-quality and cost-effective health care services. "In the healthcare market when companies string together and approach to alliance this may be counterproductive to the quality of healthcare.
When evaluating the usefulness of monopolies regulators have found two opposing sides. A negative side that implies that monopolies can obstruct quality and a determined side that implies monopolies can connect networks. Pitofsky's example of a fair market region represents the negative side of monopolies. Like many other criticizers of the healthcare industry Pitofsky believes that antitrust laws were created not to say physicians and organizations to do what the government wants but rather to hinder them from making decisions based on personal/private desires (B Ross-Lee, LE Kiss, and MA Weiser 1995). Along with diverging providers and insurance companies from making agreements that could lead to a decrease in quality antitrust laws also saved the consumer/patient from unjust prices created by mergers. The positive side of monopolies is evident in the belief of managed care. Managed care ties into monopolies because managed care was instilled as a solution to cost containment. Managed care links organizations, professionals, and facilities together in an disaster to provide quality care but keeping costs own because everyone is in the network of providers. When these professionals are linked they are fulfilling one of the fundamental notions of recent healthcare. That notion is creating easy access to care for patients. When care is easily accessed the costs can be dropped phenomenally. A representative from the department of justice explains,
" Many types of pro-competitive activity are well recognized as highly unlikely to raise any significant antitrust pains. For example, neither the Department nor the FTC [federal trade commission] has ever challenged a joint venture among hospitals to purchase, operate and market high-technology or other expensive medical equipment."
While the purpose of antitrust laws is to sanction those mergers and promote competition at the same time they will not attack mergers in doing similar activities if it is for the befriend of the patients/consumers.
The sanctioning of organizations and mergers which violate the antitrust laws or indulge in," unwarranted antitrust uncertainty in the health care status" is done by the Federal Trade Commission and the Department of Justice however the incidents are usually reported by former employees, competitors, and purchasers. The entire tenure of government intervention in the antitrust campaign to promote efficient monopolies can be summed up through the passing of four acts. The first is the Sherman Act which prohibits contracts, combinations and conspiracies between two or more persons or companies that unreasonably restrain trade. Within this act there are provisions to reply that those who merge for the unfair advantage and/or to prevent other competition would be sanctioned but those who promote competition will be allowed to continue. The second act is the Clayton Act which prohibits exclusive dealing arrangements where the seller conditions the sale or lease of goods upon the buyers refusal to deal with a competing seller or upon entering into a tying arrangement, where the seller conditions the sale or lease of a desired product upon the buyer purchasing or leasing another product, where competition is likely to be lessened substantially. The same applies to this act in that there are statements within it to prevent or sanction those who lessen competition with mergers. The third act is the Robinson-Patman Act which prohibits certain price discrimination which favors one competitor over another competitor. This law refers to commodities, not services and should the company alive to be designated a non-profit organization then the purchases made would be exempt. The final act is the Federal Trade Commission Act which directly states that it prohibits unfair methods of competition and unfair or deceptive trade practices. The idea behind all of these laws is similar to how non-profit organizations are sanctioned. It is similar in that they examine all aspects of the situation/activity to determine whether it is a non-profit activity or for-profit activity and in the case of antitrust issues they examine to determine whether they actions are efficient to competition or non-efficient. Because the actions of the violations are similar to the actions of the promoters of competition the Federal Trade Commission and the Department of Justice get involved in what they refer to as "per se" violations. Unprejudiced as the power of money and the rise of business in healthcare have lead to sanctioning monopolies it has also led the patient to consumer revolution in healthcare.
Since the market forces have been embedded into healthcare patients have now become purchasers in the business of health. Therefore, to protect these newfound buyers a new function of regulation is to provide consumers with information as to facilitate effective bargaining. Since the beginning of healthcare the tradition has stood that the doctor/provider has the power within knowledge and the patient should trust them without the ability to comprehend why or what the provider is doing. Simultaneously in time the business industry has had the same consumers have the knowledge and effective bargaining skills to distinguish product from product and service from service. In the original revolution of healthcare these paths collide as the healthcare industry has become what some refer to as a "cash cow" because it is a multi billion dollar industry in the business world. Now that healthcare is a part of the business world it is required and supported that patients who are now consumers be offered insight into what type of care is being provided, who is providing it and choices to different organizations/providers. Because of the recent advocacy for knowledgeable patients there is a much diversified world of information readily available for patients via books, journals, and the internet more so than anything. Having access to and understanding how to navigate through the medical world via the internet is one of the biggest if not the biggest resources for consumer information.
The laws and regulations do not stand out in this function of healthcare regulation. The aspect about this function that stands out is the information itself. There was a time where a patient had know comprehension of what illnesses where and the implications of the illness itself. The patient simply went to the town doctor and was diagnosed even though the physician stated things in a medical terminology not comprehendible by the patient. That was decades ago. Now with the click of a mouse can travel to a site that can introduce them to any and every physician who is currently licensed in order to make a sound choice about who they want to tend to their illness. An example of this is on the website foe the American Medical Association which has a menu option to go to "doctor finder." Additionally to finding a doctor you can go to other professional organization's websites to come by information on any type of illness that exists and there subsequent treatment options. For an illness and example of a website to visit is the NIH also known as the National Institutes of Health. This website provides history of the disease, how it affects the body and how severe the condition is. This is just one of many examples of how readily information is available for the consumer but only if they are driven enough, knowledgeable enough, and inquisitive enough to look for the information.
Another element being incorporated into the world of consumer medicine is financial accountability. Because of recent provisions in social security and changes in medical budgets people are expected to begin taking responsibility for their own funding for certain medical expenses because no matter how good a patients insurance is there will always exist treatment options that are not covered. Examples of these financial ventures are found in Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), Flexible Spending Arrangements (FSAs), and Medical Savings Accounts (MSAs).
The idea behind creating an informed patient financially also stem from cost containment. It stems from cost containment because the patient will begin to realize when it is their own responsibility to keep up the funds that they will not spend it frivolously. Because of third party payers and what healthcare specialists refer to as "moral hazard" patients tend to enter the doctors office and destroy time and provider time on things which really could be treated outside of the clinic. This in turn waste valuable time which could be used on patients who really need the care and slash the waiting time of other patients. Originally this was controlled through what the health industry refers to as gate-keeping. This was a system in which the only way a patient could be directed to a specialist or used advanced treatment was with a prescription or referral by a physician. Now that the power of knowledge and responsibility rests in the hands of the consumer this takes pressure off the healthcare system, reduces cost, and solves the answer of how to properly inform the new consumer/patient. The process of changing the patient into the consumer is also beneficial to the doctor. Norman Vinn from the American Academy of Family Physicians writes," this power should translate into additional compensation for responsiveness, access, empathy and communication." All these attributes are traits that physicians pride themselves in and not to mention they parallel quality in healthcare. Much of the process of healthcare began with the baby boomers. They are strongest in numbers so whenever they originate a trend it has a enormous impact on the way the United States operates. Because they are in the peak age where they require the most healthcare these baby boomers have plenty of funds originating from savings and social security to spend. Having these funds has started making them realize the need to be an informed consumer in the healthcare industry. This transition was pretty easy because modern society is a society that thrives on consumerism and healthcare was just another industry added on.
The kill result of creating a healthcare industry which includes providers, patients, payers and those who sanction is a vast network which many say needs regulation. Regulation is done at all levels including federal, state, and local. In recent decades the advancement toward a quality focused healthcare system has forced regulators to near up with functions in healthcare which help quality. The function of controlling elements of monopolies is important because based on the kind of activities the organizations are involved in with monopolies they can improve the healthcare system by networking or be sanctioned for impeding the formation of other entities that provide competition. The other function discussed which is providing consumers with information to support effective bargaining is a blueprint to balance the responsibility of the providers and the patients. This in-turn cuts costs down and provides incentives to providers for their efforts. This leads to cost containment which is a trend that the all healthcare personnel and the government would like because it results in improved quality of care.
Related Posts
Filed under Hospital Equipment Leasing by on Dec 7th, 2011. 
Leave a Comment