Just What the Patient Ordered: The Case for Result-Based Compensation Arrangements

Abstract

For more than twenty years, Opinion 6.01 of the American Medical Association's (AMA) Code of Medical Ethics has specified that “a physician's fee for medical services should be based on the value of the service provided by the physician to the patient.” In 1994, the AMA amended Opinion 6.01, adding a new statement that “a physician's fee should not be made contingent on the successful outcome of medical treatment.”We believe that the amendment is wholly indefensible. Therefore, in this essay, we argue that the AMA should lift this prohibition and encourage the use of result-based compensation for medical services in appropriate circumstances.The 1994 amendment dramatically changed the significance and scope of Opinion 6.01. Result-based compensation arrangements clearly satisfy the original version of Opinion 6.01 because they base compensation on the “value of the services provided … to the patient.” Yet, it is equally clear that result-based compensation arrangements violate the amended version of Opinion 6.01 because they necessarily make compensation “contingent on the successful outcome of medical treatment.”