Commercialism And Healthcare Research Paper

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A good health system aims to deliver the best possible care to the individual patient while at the same time being responsive to the health needs of the entire population it serves. For many health systems worldwide, resources are an important limitation. Whereas for some more emphasis on market mechanisms and entrepreneurial elements helps improve efficiency and contain cost, others argue that commercialism and profit orientation in medicine are an important cost driver. Similar controversies exist with regard to improvements in quality and fairness of healthcare delivery.

This entry reflects on some historical developments – in particular a move toward embracing medicine as a business at least in some healthcare systems. It proceeds to clarify concepts at the interface of medicine and economics and distinguishes the notions of “commercialism,” “consumerism,” and “economism.” In a next step it takes stock of key points in the ethical debate on commercialism.

A keen awareness of potential pitfalls – deprofessionalization, conflicts of interest, and compromises in quality and equity of care and loss of patient orientation and patient trust – can help us harness market forces in a way and to a degree that is appropriate for the respective culture and context.


The task of health systems is to provide “quality services to all people, when and where they need them” (WHO 2015). This means that a good system aims to deliver the best possible care to the individual patient while at the same time being responsive to the health needs of the entire population it serves.

With the broadening range of diagnostic and therapeutic options and demographic changes, health systems worldwide are struggling with this task. Increasing costs threaten affordability and sustainability. Among the OECD countries, the average health expenditures amount to 9.3 % of the gross domestic product, having almost doubled since 1970. In the USA, which has the most expensive system, spending accrues to over 16 % of the national GDP.

In this situation, where the limitation of public resources becomes apparent, causes for the high costs and possible remedies are prominently debated. Whereas for some more emphasis on market mechanisms and entrepreneurial elements helps improve efficiency and contain cost, others argue that commercialism and profit orientation in medicine are an important cost driver. Similar controversies exist with regard to improvements in quality and fairness of healthcare delivery.

Health systems are increasingly understood as learning systems. If we want to continuously improve them, we need to go beyond the individual performance of physicians and healthcare managers and look at the bigger picture: The question to what degree and in what sense medicine is to be understood as a business has important implications for what we consider an improvement. Also, effective change is impossible without acknowledging and addressing underlying economic and political premises.

Before reaching any conclusions regarding commercialism and its role in healthcare, it is worthwhile to reflect on some historical developments, to clarify concepts at the interface of medicine and economics, and to take stock of the ethical arguments that have been brought forward.

History And Development

As long as physicians and other healthcare professionals have made their living of providing care to sick, medicine has always also been a business. Dr Knock, the character in Jules Romains’ satire of 1923, provides a caricature of the eager physician-entrepreneur using medicalization strategies to generate patients for his practice.

Traditionally, professional standards have reigned in commercial interest, by defining rules on advertisement, honoraria, and kickbacks. The German Model Professional Code for Physicians, for instance, explicitly states: “Physicians serve the health of the individual and of the population. The medical profession is not a trade. It is by its nature a liberal profession” (Art. 1) (German Medical Association 2015).

Over the past decades, however, the tenet that medicine is not a trade or business has been challenged, in some countries more than in others. The US healthcare system is described as one in which market elements and for-profit motives have gained particular traction, not only concerning physicians but also insurance plans, hospitals, diagnostic labs, and the pharmaceutical industry (Guseva 2014). Most countries seem to be unconvinced that an exclusive reliance on market mechanisms can safeguard equity, efficiency, and quality of services; government regulations and interventions are usually employed – albeit to varying degrees and in different forms – to balance out deficiencies of a pure market approach (Callahan and Wasunna 2006).

It has been argued that the strong emphasis on patient autonomy that has characterized many Western countries since the 1960s may have played in the hands of commercialized healthcare (Moreno 2007). Patients striving to exert their self-determination as consumers easily fall prey to corporate strategies aimed to increase market shares. More recently, members of the medical and public health community have tried to empower patients to make wise decisions regarding their healthcare by raising awareness of the risks of over diagnosis and overtreatment (Brawley 2012).

Conceptual Clarifications

Commercialism in healthcare can be defined as “an application of the operating and managing principles typically found in business and commerce (financial incentivizing, profit-making, competition, marketing/advertising, and focus on the bottom line) to health care delivery” (Guseva 2014, p. 1). This stands in tension with the basic principles of medicine, which demand “first do no harm” and – in the words of the World Medical Association’s Declaration of Geneva – proclaim “the health of my patient will be my first consideration.”

It is not surprising, therefore, that the term “commercialism” is frequently used with a negative connotation, at least in the context of healthcare. The point is not that medicine should have nothing to do with economic considerations but that priorities are being reversed. When “price tags are being applied to every aspect of a doctor’s day” (Hartzband and Groopman 2009, p. 101), clinical thinking is in danger of getting obfuscated by financial concerns. Whereas increasing shareholder value is the primary goal of a business, putting patients’ well-being over profitability and personal gain, it is one of the hallmarks of the medical profession (Relman 2007).

Commercialism is not confined to the for-profit health sector. Insofar as private and public not-for profit healthcare institutions need to compete with for-profit healthcare providers, they are likely to adopt at least some of the same strategies (Guseva 2014).

Consumerism is another term that is frequently invoked when a business model of healthcare is criticized. It emphasizes the role of patients as consumers, ideally of wise healthcare shoppers that are involved in the diagnostic and therapeutic choices concerning their own health. However, consumerism has also been called an “extreme version of commercialism” (Moreno 2007, p. 415). Given the asymmetry of knowledge regarding a substantial part of the patient population and the malleability of patient demand for certain products or interventions, patients can quite easily be (ab)used for marketing purposes and commercial interests. Sometimes the target group is not even obviously sick, a strategy that has been termed disease mongering. The newly promoted “Viagra for women,” for example, promises to cure women of a lack of (sexual) desire. So women desiring a desire they do not have will be able to remedy this state by taking a drug (with considerable side effects). Some women’s organizations have been part of the lobbying campaign.

Commercialism in healthcare does not occur in isolation but is supported by corresponding societal attitudes. The underlying beliefs and assumptions have been summarized under the term economism, which assumes that “‘the economy’ is the most important component of a society, that people are best understood fundamentally as economic beings (homo economicus), that economic calculation is the best way to both understand and manage all aspects of human life, and that the economy must be managed according to its own internal laws by technical experts, without interference from politicians or moralists” (Brody 2014, p. 502). It has been argued that any attempt to effectively address commercialism and its potential negative consequences needs to take the bigger picture, i.e., economism, into account.

If we assume that markets do and should play a role in our societies, the relevant question concerns the proper place, role, and limits of market. What goods, services, and privileges should be for sale and which should not? Surrogacy, participation in research, and organ donation are examples for contested areas in that regard (Biller-Andorno and Capron 2011). The Council of Europe’s

Convention on Human Rights and Biomedicine (1997), for instance, states explicitly: “The human body and its parts shall not, as such, give rise to financial gain” (Art. 21). Setting limits is important: if we allow market values to crowd out other norms and if we allow the market to pervade almost every aspect of our lives, we will be moving from having a market economy to being a market society that neglects important moral and civic goods (Sandel 2012). However, in liberal, democratic societies, these limits have to be constantly negotiated and supported by well-founded ethical arguments.

Much is at stake in the discussions on commercialism, healthcare, and ethics. Whereas some believe that only a free market can bring about good quality care at a reasonable price, others are concerned that commercialism will eventually ruin provider commitment and patient trust – the very basis of medicine. With market driven over and underuse, health systems might find it impossible to fulfill their task to provide “quality services to all people, when and where they need them” (WHO 2015). A closer look at the ethical considerations of commercialism is therefore highly warranted.

Ethical Dimension

Medicine And Economics

It is clear that there is an economic dimension to medicine and healthcare. Economic and management expertise is needed to set up and run health systems in a way that can provide the best possible quality at a reasonable price that reflects good stewardship of scarce public and private resources. Affordability, sustainability, and fairness all require an economically sound system. Under the right conditions, competition can stimulate efficiency and quality. Shaping incentives such that they work toward the shared purpose can facilitate the task as well (Biller-Andorno and Lee 2013).

However, commercialism insofar as it puts the bottom line first and above the primary goals of medicine stands in obvious contradiction to medical professionalism that takes pride in self-regulation and a strong commitment toward patients.

Commercialism And Professionalism

It is generally assumed that physicians are motivated by a desire to help their patients and that financial gain is a secondary motive. Having an occupation that is perceived as meaningful by oneself and others can be hugely satisfying and a powerful motivational force to perform well. Paying a little extra – like a tip – for providing good patient care can therefore be perceived as degrading. This is one of the reasons why pay-for performance (P4P) programs that have been implemented in countries such as the USA and the UK have been viewed critically. Another issue is that these programs can only target easily quantifiable parameters, such as certain lab results. These parameters do not necessarily capture what constitutes good patient care. If physicians do play along, they may be treating performance indicators rather than patients, or they might simply be gaming the system. The most problematic aspect of pay-for-performance and other incentive schemes is that they may crowd out intrinsic motivation, the desire to do well at a job that is considered as highly meaningful and important (Brody 2014).

A related area of concern are conflicts of interest that can be caused by financial incentives but also other rewards such as reputational gain or increase in status or power. The issue has become so prominent that the Institute of Medicine, a division of the US National Academies of Sciences, Engineering, and Medicine, has dedicated a report to it, investigating conflicts of interest in medical research, education, and practice (Lo and Field 2009).

It is one thing if incentives go wrong that have been set up to promote the goals of medicine, such as providing better quality care. It is yet another matter if stakeholders come into play and have their own, frequently profit-oriented agenda. Over the past two decades, the pharmaceutical industry has received considerable attention in that regard. It has been argued that the focus on (exclusively) marketing certain products has led to a distortion of the medical research agenda – biasing it in favor of lucrative conditions and products – and to inadequately reported data that downplay lacking benefits or negative effects (Angell 2004). When profit-making drives the agenda, it is also clear that conditions of poor, uninsured populations are of much less interest – a phenomenon that has been termed the “10–90 gap”: less than 10 % of public and private resources for health research are devoted to diseases or conditions that account for 90 % of the global disease burden.

Continuing medical education is another avenue through which physicians can be influenced to act in accordance with companies’ interest (Kassirer 2005). A lot has been done over the past years to mitigate influences of the industry on physicians through free lunches, small gifts, or not so small honoraria. Grants for scientific meetings are usually unrestricted, and transparency regarding sponsorship and each contributor’s role is required. Nevertheless, medical conferences still depend much on industry sponsorship, and collaborations with the industry, even if a study is just aimed at better marketing, are still seen fairly uncritically by many physicians. Although the idea of a “partnership” that is of mutual benefit holds obvious appeal, it is important that the patient’s or population’s best interest does not fade into the background.

It is important, however, not only to focus on individuals who experience conflicts of interest. There are also institutional relationships between academia and industry that might compromise an institution’s ability to fulfill its tasks (Lo and Field 2009). If a hospital or a pharmacy belongs to a profit-oriented chain, there is a clear institutional conflict of interest: improving the institution’s economic welfare, and possibly stakeholder value, on the one hand, and taking best possible care of the patient population and public resources (that are likely to be involved at least to some degree) on the other. Whereas representatives of a market-oriented approach would argue that a maximization of benefits in a competitive environment is possible only if the institution provides at least good care at a reasonable price, skeptics would argue that this may hold true only in a context where competition really works and where consumers can make well-informed choices. Given the lack of transparency on quality and cost in many healthcare systems, this can, however, certainly not be assumed for all settings.

Impact On Quality And Equity Of Care

A primary concern with “the bottom line” is likely to negatively affect quality and equity of care. There is an important distinction to be made between acting as a good steward for scarce resources (be they public or private), trying to be efficient by avoiding waste, on the one hand, and cutting expenses in order to increase one’s margin. This can be done by making compromises in quality and by cherry-picking lucrative services or patients.

Another, complementary strategy is to drive up volume in areas where profit can be made. For example, it is not uncommon for hospital physicians to have part of their salary depend on their “productivity,” by the number of procedures they perform. If they do not reach a set number, they will not receive the negotiated bonus. This is one example for a mechanism that can be expected to lead to selective overtreatment – where it pays off – while other conditions or patient populations may be undertreated. The hope is that professionalism will counteract such mechanisms. And indeed, initiatives such as “Choosing Wisely,” which has been founded by the American Board of Internal Medicine, actively work against the overuse of interventions that waste resources and may even harm the patient.

At times, well-meant reforms – such as switching from a system of fee-for-service and daily rates for inpatients to Diagnosis-Related Groups in an effort to increase transparency and efficiency – can have unintended perverse effects by conveying the message to physicians they should first and foremost care about their balance sheets rather than being preoccupied with providing the best possible care for the population they are supposed to serve. The result can be a significant distortion of priorities in healthcare, with health systems that are out of touch with the health needs of their population.

In a globalized world, medical tourism is another facet of commercialized healthcare.

Profit-driven healthcare providers preferably acquire rich patients from around the globe, whereas global healthcare consumers will shop for all that money can buy. Those with few resources may find themselves with only very limited options of inferior quality.

Patient Orientation And Trust

Unfettered commercialism in healthcare that views patients primarily as consumers and as sources of revenue will likely confine genuine patient orientation – caring about what really matters to the patient – to the luxury segment. Mainstream medicine is more likely to focus on packages that can be sold well. Medical services and products are thus reduced into “small marketable units” (Churchill and Churchill 2013, p. 91). Frequently, however, patients’ health needs cannot be fully addressed this way. A more comprehensive perspective that includes psychosocial or environmental factors is much more difficult to sell as a compact, scalable bundle.

Neglecting socioeconomic conditions is likely to reinforce health inequities, which professional physicians strive to counteract. The principles of the Physician Charter jointly authored by the American Board of Internal Medicine with the American College of Physicians Foundation and the European Federation of Internal Medicine make a fairly strong statement in that respect: “The medical profession must promote justice in the health care system, including the fair distribution of health care resources. Physicians should work actively to eliminate discrimination in health care, whether based on race, gender, socioeconomic status, ethnicity, religion, or any other social category” (Social Justice Principle (ABIM 2002/2015)).

A view that sees patients primarily as consumers is incompatible with such an understanding of a physician’s social responsibilities. If ability or willingness to pay define the services a patient – or client – gets (or not), there is not much room for a social dimension of medical practice. This issue gets even more acute at a global scale: Countries attract rich patients from abroad, and rich patients shop for the best service around the globe. This form of “medical tourism,” however, may mean that services are diluted for the local patients whom the health system is supposed to serve.

Putting the matter in Kantian terms, looking for patients as means of making money means instrumental zing them. Rather than the healthcare institution serving the patient, the patient serves the healthcare institution’s purpose of making profit. It is obvious that such an extreme form of commercialism would lead to an ethically unacceptable perversion of the healthcare system. It would also lead to the loss of another precious asset that is hard to restore: patient trust. Once patients sense that their physicians do not genuinely care about what matters to them but are really focused on something else – in particular something as mundane as personal profit – they will hesitate to put themselves into their hands. This will render the work of health system much more difficult.


Delivering quality care at reasonable cost to all those who need it is a task that requires a well-organized interplay of clinical and public health expertise, ethics, management skills, and economic thinking. In order not to be carried away by perspectives the individual fields might promote, it is important to always remember the shared purpose. This shared purpose might be framed as promoting the so-called triple aim that has been formulated by the Triple Aim Initiative of the Institute for Healthcare Improvement: better care for individuals, better health for populations, and lower per capita costs. Although countries might differ slightly in how they would phase the aim, the three dimensions individual patient experience, population health and cost can be expected to be salient to all.

For the reasons explained above, commercialism in the sense of “looking primarily at the bottom line” is very likely to stand in the way of achieving the triple aim. This is not to say that a market-oriented approach or at least certain features of it cannot be functional. It is important, however, to acknowledge that competition and incentives are just tools and not ends in themselves, tools that have to work within well-defined limits. Profits that drive up the healthcare costs in an unsustainable way, conflicts of interest that undermine quality or equity of patient care, and competition that makes no sense but ruins a collaborative spirit are all potential perverse effects of an overstated “business approach” to healthcare.

Ethics has an important role to play in creating and fostering a critical but nuanced awareness of how market forces may affect the design and delivery of healthcare. Make the market play in the interest of better health for all but limit it where it leads astray is a task that ethics can and should contribute to. Beyond academic and political discourse, there are multiple ways how ethicists can engage. One area is the education of healthcare professionals, demonstrating how many seemingly micro level clinical ethics conflicts are in fact shaped by the economic environment in which they occur. Another opportunity is to work toward patient empowerment, helping patients understand to ask the right questions to their providers so they have the information they need to make wise choices for their care.

A keen awareness of the pitfalls of commercialism – deprofessionalization, conflicts of interest, and compromises in quality and equity of care and loss of patient orientation and patient trust – can help us harness market forces in a way and to a degree that is appropriate for the respective culture and context.

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