Public Release: 

Medicine Becomes Monetized

Penn State

San Francisco, Calif. -- In the 1990s, the practice of medicine has become the cost-effective provision of health care services, rather than a matter of curing the sick, according to Penn State researchers.

"Medicine has become monetized, which is not necessarily all good or all bad," says Dr. Mark W. Dirsmith, professor of accounting in Penn State's Smeal College of Business Administration.

The old question asked of patients entering a hospital emergency room was, "Where does it hurt?" followed by "Are you insured?" Today's question is "What type of insurance do you have?"

"Doctors are being transformed from physical professionals to fiscal decision makers," says Dirsmith. "The field is also very crowded with shadow people -- insurance people, employee benefits people."

At for-profit hospitals, doctors no longer make decisions based on the diagnosed illness and the available medical knowledge, drugs and technology. They now must consider who is going to pay for whatever treatment is prescribed and make decisions in consultation with HMO personnel.

"One good is that cost containment has been achieved," Dirsmith told attendees today (Aug. 24) at the American Sociological Association meeting in San Francisco. "However, it is the progressive hospitals that benefit."

He notes that the poor, the underinsured, the old and the young are going to hospitals that are not profit-based, perhaps not as progressive or up-to-date, but are more willing to provide service.

On the other hand, consolidation and economy in medicine has led to the proliferation and availability of very expensive, high technology tools for treatment and diagnosis, such as CAT scans and MRIs.

The researchers, who include Dirsmith, Dr. Sajay Samuel, assistant professor of accounting at Bucknell University and Dr. Barbara McElroy, assistant professor of accounting at Berry College, suggest that the advent of HMOs is not the sole cause of this shift in medical care, and cutting out HMOs is not the answer. The advent of the speaking patient and the general acceptance that health can be maintained have helped to shift medical practice.

"No longer will a patient sit quietly while a doctor treats them," says Samuel. "The patients want to know what is wrong with them, what will be done to them, what the potential consequences are and what they can do to mitigate the situation."

The era of physician as god has ended. But the era of patients taking responsibility for controlling their blood pressure, cholesterol, weight and general well being is not necessarily a bad thing.

"Some companies are encouraging employees to jump on an illness sooner, rather than later," says Dirsmith. "Especially at firms where there is low turnover, there is a growing humanitarian concern for the employee."

But the monetization of medicine brings with it some negatives that the researchers view as dehumanizing. The hospital as factory is a new phenomenon.

"Some hospitals now specialize in cancer treatment, or in treating hernias," says Samuel. "The body is being divided into parts, subsystems upon which to work, rather than curing a person."

Part of the blame for this is placed on DRGs -- diagnosis related groups -- a set of procedures and practices that represent a predictable amount of costs. According to the researchers, DRGs were originally created at the request of physicians to help them evaluate what took place in hospitals. Today, there are currently 470 DRGs, and DRGs have spread around the world and place patients into categories like vaginal delivery without complications or simple pneumonia and pleurisy age greater than 17.

"DRGs convert the patient to an object and the body into a collection of organs and systems," says Dirsmith, the Penn State researcher.

This classification system converts medicine into a product that can be handled with all the tools of economics and standard business evaluations.

"Doctors, nurses, insurers and patients are all caught up within this new logic of medicine to function as providers and consumers of care, as sub-systems in a medico-economic system," says Dirsmith of Penn State

EDITORS: Dr. Dirsmith is at (814) 865-3904 or eu3@psu.edu by email; Dr. Samuel is at (814) 867-1638 or sxs26@psu.edu by email.

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