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Applying Fiduciary Responsibilities in the Managed Care Context

The cost containment innovations offered by managed care have been needed corrections to the excesses of the fee-for-service health care system. Yet, implementing these innovations raises inevitable questions about conflicts of interest regarding the allocation of resources under managed care. The inherent conflict faced by physicians and health plan administrators between the health care needs of individual patients and the need to preserve scarce resources for patient populations is at issue in the managed care era. The sources of the conflict are the economic incentives that underlie the managed care revolution, such as capitated funding arrangements, limitations on referrals to specialists, bonuses and withholds. In making individual clinical decisions, physicians and administrators potentially infuse their own economic interests into the process.