Managed Care and the Ethics of Regulation

The dramatic appearance of managed care organizations (MCOs) on the U.S. health scene has generated tremendous anxiety among health care providers and patients. These fears are based on the belief that managed care techniques pose greater risks of under treatment than do fee-for-service modes of payment. In addition, many physicians and patients resent the limits placed on clinical autonomy by the MCO model and the stresses that it places on the traditional physician-patient relationship. These misgivings have been exac-erbated by the mostly negative response to MCOs in the media and academia. Legisla-tures have responded to these claims and public fears with a wave of regulatory initia-tives. Some of these regulations are attempts to protect patients. Others, however, are motivated primarily by antipathy toward the concept of managed care itself. This essay is an attempt to develop a social ethic of regulation and argues that the sole reason that private enterprise may be justifiably limited is when it presents a risk of harm to others or society. While some regulation and proposed regulation of MCOs meet this standard, much legislation represents an unjustified attempt to limit or handicap otherwise legal behavior merely because a segment of the population and medical profession find it aesthetically unpleasing and oppose its approach to the delivery of health services. Key words: liberty, managed care, private enterprise, regulation I