The Market for Medical Care: Why You Don't Know the Price; Why ...

The Market for Medical Care 25“Some states prohibit corporationsfrom employingdoctors.”a physician. However, some societies of physicians want to limit their independenceby requiring the strict supervision — and even the physical presence— of a physician. A 2006 Florida law limits the number of retail clinics,staffed by nurse practitioners, a single physician may supervise to four. 88 Thiswill effectively slow the growth of these efficient clinics. Georgia legislatorsattempted to limit the number of clinics a physician could supervise to threeand the Missouri Legislature considered banning clinics inside pharmaciesstaffed only by nurse practitioners. 89Restrictions on the Employment of Doctors. About one-third of stateshave enacted laws banning the “corporate practice of medicine,” which preventscorporations from hiring physicians to practice on their behalf. 90 Theimplication is that a corporate employer might exert undue pressure to skimpon quality in order to increase or preserve profits. These laws ostensibly aimto ensure quality of medical care, but in practice they inhibit innovative servicearrangements. 91 In some cases, this means a retailer, such as Wal-Mart,cannot open a health kiosk inside a store and hire practitioners to staff theclinic. However, corporations are generally free to lease space to companiesthat provide medical services by independent contractors. Subcontractorsoften have the same problem because they also cannot be controlled by a corporation.One-third of the states have passed laws allowing some firms (suchas hospitals and health plans) to hire physicians directly to practice on theirbehalf. In the rest of the states, the laws are either unclear or appear to supportor restrict the practice to varying degrees.Restrictions on Internet Medical Practices. While some restrictions onthe practice of medicine have been removed in recent years, many still exist.For example, it is generally illegal for a physician in one state to consultwith a patient online in another state without an initial face-to-face meeting.It is also illegal in most states for a physician who has examined a patientfrom another state to continue to treat the patient via the Internet. Unless thephysician is licensed in the state where the patient resides, it is consideredpracticing medicine without a license. It may even be illegal in some statesto consult with a patient online who resides in the same state as the physician;however, regardless of its legal status, many medical societies consider itunethical. 92Restrictions on Collaboration between Health Care Providers. Thefederal “Stark laws” make “self-referral” illegal for a physician who has afinancial interest in any clinics to which a patient is referred for treatment. Itis also illegal for a physician to reward providers who refer patients to them orto a hospital in which he has a financial interest. Unfortunately, laws meantto prevent self-dealing and kickbacks also inhibit beneficial activities betweendoctors and hospitals. 93 For instance, the Stark laws could prevent a walk-inclinic from referring a patient with a chronic condition to an affiliated full-