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25 Creighton L. Rev. 1537 (1991-1992)
Ethical and Legal Remedies to Over-Utilization of Health Care Resources

handle is hein.journals/creigh25 and id is 1559 raw text is: 1537 ETHICAL AND LEGAL REMEDIES TO OVER- UTILIZATION OF HEALTH CARE RESOURCES INTRODUCTION As physicians began to invest in health care facilities for which they also generated referrals, public examination of the potential for conflict of interest began to take shape.' Critics argued that self-re- ferral arrangements necessarily create over-utilization of medical services resulting in increased costs.2 Although few physicians pur- posely refer patients to poor quality facilities, if a physician has an ownership interest in a facility, then that interest may have a subtle influence on the physician's decision regarding further treatment of the patient.3 Critics also argued that a physician has a conflict of in- terest between the legitimate medical needs of a patient and the po- tential for the financial gain of the physician.4 Advocates of physician ownership of health care entities argued that such business arrangements encourage competition, provide services to rural areas, and give much-needed quality control of medical service to physicians.5 The controversy is now focused on the potential for over-utiliza- tion and the conflict of interest of physicians.6 Federal and state gov- ernments responded to the potential for over-utilization by changing the Medicare and Medicaid programs.7 Legal responses ranged from advocating a complete ban on some types of investments for health care providers to accepting self-referral businesses within certain limited guidelines.8 Medical responses varied over the past decade, and are reflected in the ethical code of the American Medical Associ- ation (AMA).9 The response of the AMA has been to adjust the ethical guidelines regarding its previous position on physician self-re- ferrals.10 The AMA recently recommended a near complete ban on self-referral for members of the medical community and sanctioned self-referral only when a community need exists and when the entity 1. Brammer, Dubious Practice? Radiation Care Is at the Center of the Storm Over Se-Referrals, Barrons, Mar. 30, 1992, at 10; Iglehart, The Debate Over Physician Ownership of Health Care Facilities, 321 NEw ENG. J. MED. 198, 198-99 (1989). 2. See infra notes 140-210 and accompanying text. 3. See infra notes 335-38 and accompanying text. 4. See infra notes 373-83 and accompanying text. 5. See infra notes 336-37 and accompanying text. 6. See infra notes 41-50 and accompanying text. 7. See infra notes 51-79 and accompanying text. 8. See infra notes 211-48 and accompanying text. 9. See infra notes 249-79 and accompanying text. 10. See infra notes 265-76 and accompanying text.

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