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The difficult plight of self-employed physicians.

THE CHANGING ECONOMICS of medical practice and patient care is creating many new problems for self-employed physicians, most of whom see and treat their patients on a fee-for-service basis. When fees for service were simply a matter between physician and patient the problems were few. The fee charged related both to the skill and reputation of the physician and a patient's ability to pay. There were occasional problems with excessive charges by physicians and some inequities. However, by and large the system worked well, and provided for a wide variation in the ability of patients to pay for physicians' servicesand most physicians never became wealthy. The advent of health insurance introduced a third party into the fiscal relationship between doctor and patient. When a patient had health insurance coverage, a third party, the health insurance carrier, paid all or part of the bill and the amount and appropriateness of the physician's fee became a concern of others, that is, the insurance carrier when the money came from the private sector, or the government when it was paying the bill in a public program. As this happened it became necessary to find a way to provide the third party payors with some guidance as to what might be an appropriate fee and what might not. The solutions to this were the relative value studies and the concept of usual, customary and reasonable (UCR) fees. Both were based on the actual going rates for physicians' fees in various specialties and differing geographic areas. Provision was made for peer review and for payment of fees outside the norm by documentation of special circumstances. This worked well for a number of years, and met the needs of third party payors for guidance regarding payments, while preserving the individual self-employed physician's right to determine his or her own fees and to adjust them as necessary to rising costs or changing circumstances. More recently the pressures on this system have been growing. Certain inequities have developed within it, and there has been some misuse, particularly when excessively high fees are charged for some of the newer procedures. Also, both government and industry are focusing more attention on physicians' fees because they pay most of them. As costs rise both are beginning to seek new means of negotiating or controlling physicians' fees as well as other costs of patient care. Self-employed physicians now find themselves in a difficult plight. In a sense they are surrounded on all sides with no obvious way out. On the left flank, if you will, are government programs which involve fixed-fee schedules (which are apt to be inadequate) or other means to control or contain physicians' fees. On the right flank, employers in the private sector are similarly trying to develop contractual arrangements for the purchase of health care services that will control costs including physicians' fees. To the rear, the basic support of the relative value studies has been weakened if not destroyed by actions of the Federal Trade Commission, and the UCR concept is no longer working as well as it did. And the road ahead seems blocked because the labor laws are not designed to serve workers who are not in an employer-employee relationship, and any effort to act collectively outside of the protection of these labor laws is restrained by antitrust laws. The plight seems real enough. Those who fi-