The Bigger Picture: Real World Ethics

July 15, 2007

What are you supposed to do when you’re losing money on procedures and services? Must you simply eat the cost in order to serve the patient’s interest?


These days, physicians of all kinds make clinical decisions based on financial realities. To wit: After stabilizing an uninsured emergency-department patient in need of a gallbladder removal, a general surgeon suggested that the patient find another doctor to perform the procedure.

Another physician I know suggested a cheaper - but more invasive - surgery to one of her uninsured patients.

An internist closed his in-office lab because it wasn’t making any money, even though the lab made life a lot easier for his patients.

And a pediatrician stopped doing vaccinations because payers barely reimbursed her for the supplies, let alone all the associated administrative work.

What are you supposed to do when you’re losing money on procedures and services? The AMA’s ethical guidelines state that physicians must regard the patient’s interest as “paramount,” but does that mean you must eat the cost of unprofitable care? How is it in patients’ interest if physicians go bankrupt?

Medical ethics guru David Maltzer, MD, has some common-sense suggestions.

First, remember the difference between “costs that are borne by the patient and those borne by the physicians,” he says. “When the costs are borne by the patient it should be part of good medical care for the doctor to discuss the financial impact with patients.” So if an uninsured patient or one with a high deductible needs a procedure, the physician’s job is to lay out all the options. You should no more make financial decisions for patients without their involvement than you would clinical decisions. “I think it’s wrong for a doctor to assume that a patient would want a more expensive or less expensive treatment strictly on the basis of costs,” Maltzer argues.

What if you decide not to offer a service - like a vaccination or lab test - for your own financial reasons? Be upfront about that, too. Let patients know that you think the treatment is valuable to their health and why. Explain that the only reason you aren’t doing it yourself is because of finances.

You might be surprised by the response. That uninsured patient may have a ready fund of cash or relatives willing to pitch in. She might be able to make monthly payments. Look for solutions that benefit everyone by being upfront about the issues.

And look for ways to avoid the ethical quandaries to begin with. Have a written policy in place for offering discounts to cash patients. Study your lab offerings, processes, and staffing. Can you shave costs by being more efficient? And are you sure that discontinuing an unprofitable service is the right business decision? Many businesses offer “loss leaders” - products or services that don’t make money but please customers, who buy other things, too.

Maltzer, an internist and professor at the University of Chicago’s departments of medicine and economics, agrees that “there is a limit to how much money you can lose in a certain context,” but argues that refusing to do anything except that for which you are specifically paid is “bad business.” Not returning patients’ phone calls, for example, is a great way to lose customers.

The best business decision may be to lose money in some places in order to make more elsewhere. Of course, other times, physicians are forced to make uncomfortable choices. My best advice: Don’t get so wrapped up in your sense of injustice (warranted though it may be) that you fail to think creatively about solutions to ethical quandaries.

Pamela L. Moore, PhD, is senior editor, practice management, for Physicians Practice. She can be reached at pmoore@physicianspractice.com.

This article originally appeared in the July/August 2007 issue of Physicians Practice.