Volume 11  Number 4  November 20, 2014
Second Opinions

How and When Medicine Was Sold Out

Of the making of reforms, there is no end.


That's the kind of ad I like, facts, facts, facts.

Samuel Goldwyn

What is a Profession?

The IRS defines a trade or business as "...generally including any activity carried on for the production of income from selling goods or performing services... " But if traders are performing services, what separates this from a profession where services are also performed? Let me explain.

The definition of a profession omits "services" as well as the key words "selling goods." Rather it focuses on embracing a set of agreed-upon principles, i.e., a strict, if self-defined and self-enforced code of ethical behavior and moral obligations. Moreover, members of a profession typically share specialized knowledge and expertise established by agreed-upon standards of education and training. These standards are maintained through widely recognized professional associations. Professionals, such as lawyers, and especially physicians, enjoy an unusual magnitude of trust by serving society and the public interest. This is primarily because they represent a trusted safe haven of respect, unlimited privacy, and intimacy. Equally important, doctors are not expected to sell anything. (If you're interested in a list of professions, including policemen, clergymen, as well as stock brokers, and their surprising public rankings, see here.)

Historical Background

In the early and mid 19th Century, no group emulated the ways of the market as actively as did health fraud popularizers, root and herb practitioners, alternative healers, and quacks. So it is no surprise that doctors in America grew up with a revulsion for useless, if not dangerous tonics like snake oil, calomel, questionable one time procedures, and "patent" medicines (no chemical patents were issued in the U.S. until 1925). To distinguish themselves from the archipelago of fraudulent health care providers, physicians not only instituted higher educational standards and licensure but also demanded that their members refrain from advertising to the public. Not unexpectedly, members of the medical profession framed their rejection of advertising as an ethical objection, based on their very self-definition. According to the first AMA code of Ethics (1847), it was "derogatory to the dignity of the profession to resort of public advertisements." Thus, the early divorce of professional medicine and advertisement may have been as much about community safety and public relations as about ethics. The American Bar Association had also prohibited advertising in the early 20th Century.

When Medicine Became a Business?

For over a century following the AMA Code of Ethics, up to the early 1970's physicians exercised rights to establish their own professional boundaries, especially prohibitions of advertisements or promotions in any venue. These prohibitions included promising cures, publishing testimonials, pushing pills, and selling medical services or devices by any means. These unchallenged commandments, helped define the American physicians as "professionals" who were relatively free from outside interference. To violate these rules resulted in censure and ostracism. An unforgettable example was related to me a few years before I opened my own practice. It involved a physician whose announcement of arrival and a brief biography in a local newspaper resulted in his ultimate excommunication from the local medical society!

As to changing the rules about professionals advertising, the legal profession first got the axe when it fell in 1975. The Federal Appeals Court had held that publication of a fee schedule (for of all things, title insurance for home buyers) by the Fairfax County Bar Association was immune from liability for price fixing because the practice of law was a "learned profession not trade or commerce.. under the Sherman Antitrust Act." "Not so," said the (Burger) Supreme Court, (8 to 0), stating that the Virginia State Bar enforcement mechanism ...through the prospect of professional discipline, "constituted price-fixing" and indeed was a violation of the Sherman Act. See Goldfarb v Virginia State Bar. Two years after the successful suit the Federal Trade Commission (FTC) (regarded earlier with some contempt by Judge Brandeis) confirmed the commission's perception of health care as a "commercial marketplace in which goods and services are bought and sold," and accused the profession of "restraint of trade." At that point the AMA in a final "phase transition" removed all prohibitions to advertising, retaining only a weak restriction against false or misleading advertising. (Opinion 5.02, issued in 1975 amending the 1847 Code of Ethics almost completely.)

Some Unanticipated Results of Medical Advertising

Advertising is the foundation of commerce in capitalistic economies; it is widely acknowledged as a crucial investment in maintaining trade, employment, and profitability. Equally important, advertising, keeps customers informed about the availability, differences, and comparative costs among goods for sale. It is crucial to the survival of business and trade by enabling consumers to make informed, or at least, reasonable judgments, about purchasing most of the goods and services they require.

Then what could possibly be wrong with conflating commerce and its undeniable need for advertising, with medicine and health care? The profound implications of this marriage becomes obvious since physicians, like any people in business, are in constant search of new customers, they are free to market their services as goods in order to sell health and longevity.

The public, obviously, has no choice in the matter but is compelled to seek medical care when ill or for preserving life, by preventing and alleviating sickness. What is true for health (read "disease") does not hold for bananas, smart phones, and deodorants, the purchase of which is optional. It is the very genius of promotion and marketing of health care that ignores these questions by turning them on their head. In this manner, advertising health in America becomes a powerful cultural influence, by creating a public preoccupation with health and longevity. Privatization of healthcare has always been part of the American Experience, but commercialization is only forty years old, thanks to the Supreme Court and the FTC. Promotional exuberance encouraged by competing health care entities soon edged into a financial arms race to the bottom line. We now enjoy lives crammed full of advertising doctors, hospitals, ER's, nursing homes, insurers, and other health businesses and life services: food fads and phobias (carbs, gluten, anyone?) "alternative" medicine, exercise centers, health food stores, etc. all competing for business, making such goods and services into some of our most impressive growth industries. Increasingly, the entire health care universe begins to mirror Big Pharma, as I described in my last newsletter. Solicitation in effect becomes compensation.

At the very moment our health costs are becoming unsustainable, politicians and State Governments are trying to obliterate the Affordable Care Act while economists argue over how to structure insurance mandates and how to define "overutilization.". Increasing demand for health care services fueled by advertising is responsible in large part for making U.S. health care, according to the 2014 Commonwealth Fund report, the most expensive in the world. yet (it) "...consistently underperforms other countries in most dimensions of performance." Currently, according to the report, the U.S. ranks last among 11 major industrialized nations in efficiency, equity, and health outcomes attributable to medical care.

Martin F. Sturman, MD, FACP

Copyright 2014, Mathemedics, Inc.

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