The practice of medicine requires high moral standards and ethical behavior. Patients put their trust in medical providers and with this trust comes much responsibility. Over the past decade, health care reform in the US has emphasized cost containment.1 The dichotomy of providing health care and containing costs poses ethical dilemmas.

Treating medicine as a business is now commonplace. Large hospitals have purchased small practices creating huge for-profit health organizations, with for-profit systems increasing five-fold from 1981 to 1997. The large influx of for-profit health care in the US has put more emphasis on the bottom line.2 As hospitals pressure clinicians to increase profits by seeing more patients and performing specific procedures, they must decide the best situations to provide care versus contain costs. 

Health Care Provider’s Role in Cost Decisions

Accounting in health care differs from other industries. Typically, a customer can see the price of a product or service and decide on purchasing based on their budget. Health care accounting systems are complex relations of payors that are often confusing for the end consumer.

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Findings from a study by Sloan et al indicate that US physicians have difficulty estimating the out-of-pocket cost of medications.3 Patients do not find out the cost of prescribed medications until they pick up the medication from the pharmacy. The complex cost-sharing mechanisms, such as deductibles, copays, coinsurance, and out-of-pocket maximums, make it difficult for health care providers to communicate costs accurately to patients.3  

Weighing Financial Risk vs Health Benefits

Health care comes with a significant price for some families and can put them at financial risk; this is of specific concern for lower-income families. They must decide whether to treat a single family member who requires an expensive treatment or risk the finances of the whole family.4 Although alternatives might be available, even the most cost-effective therapies can burden the underprivileged.

Some people believe that life is more valuable than any financial cost and that everyone should have equal access to the same treatments.5 Advancements in medicine have created many life-saving treatments, such as organ transplants. However, clinicians must decide who warrants these oftentimes expensive treatments. This is also true for many new cancer treatments that might add a few months to a patient’s life but who decides which patients should be given these treatments and at what cost?

From an accounting standpoint, profits determine the success of a business. With a fee-for-service payment type, payors incentivize health care organizations to create more services; more services equal more revenue for the business.6 If a clinic decreases the duration of office visits from 30 to 15 minutes, clinicians can see double the number of patients daily. The decision to reduce appointment times questions the organization’s motives as the individual patient is no longer the priority; instead, the emphasis is on seeing more patients. 

Ethics of Medicine as Business

Before a Supreme Court decision in 1975, the American Medical Association (AMA) condemned the use of advertising in medicine.7 The AMA viewed advertising as persuasion, believing patients should go to the doctor based on need and not because of manipulation. Advertising is an essential part of any business and is an integral part of a budget. However, in medicine, advertising increases the overall cost of providing care. In an era encouraging cost containment, organizations are spending more on the business of medicine in aspects such as advertising. Hospitals and other health care organizations aggressively market their services to get more patients in their doors.7

Lessons Learned: Practical Application in Ethics

The situations mentioned above question ethics in accounting and medicine. What is more important in medicine, providing equal care to all or providing affordable care to all? Also, who handles cost decisions in health care? Do clinicians have a moral obligation to disclose the costs of treatments before prescribing medications?

Many players are involved in health care accounting; patients, clinicians, insurance, pharmacies, and hospital management, to name a few. Patients don’t always know the exact cost of the services, and clinicians have difficulty estimating out-of-pocket expenses, as the complexity of insurance coverage makes this problematic. One option would be for a health care organization to provide personal accountants who can counsel patients on costs before receiving care. Although, this would come with additional charges, raising the overall cost of health care. The inability of physicians to estimate costs shows the importance of including general business and accounting education in medical education programs.

Accounting in medicine raises many questions about what is ethical and moral. People view health care as a right to all, but once you charge for these services, the ethics of what it should cost and who pays for it comes into question. Many questions are difficult to answer, but society needs to ask them; continuing to provide ethics education for future business and medical leaders is essential to answering some of these questions.


Leaders must have ethical behavior in both medicine and business. Ethics comes into question when looking at costs and accounting in health care. Successful companies look to increase profits; however, some believe the practice of medicine is not a typical business, and health care organizations should take in all who need care. Unfortunately, health care costs money, so organizations must decide which is the priority: financial well-being or the burden of illness.

Further study should focus on the ethics of disclosing costs to patients and families. New approaches should examine ways to disclose more information. Organizations must stop shifting the responsibility onto others. Instead, they must work together to provide solutions to increase the transparency of costs to patients and their families. 

Disclosure: T.J. Matsumoto, MPA, PA-C, is a patient diagnosis liaison for neurology rare diseases at Ultragenyx Pharmaceutical in Eugene, Oregon.

T.J. Matsumoto, MPA, PA-C, is a certified PA currently working in medical affairs. He has previously worked as a PA in general surgery and physiatry/pain management. He blogs on PA personal finance issues at


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3. Sloan CE, Millo L, Gutterman S, Ubel PA. Accuracy of physician estimates of out-of-pocket costs for medication filling. JAMA Netw Open. 2021;4(11):e2133188. doi:10.1001/jamanetworkopen.2021.33188

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7. Gale A. Advertising increases health care costs and undermines medical ethics. Mo Med. 2019;116(5):344-346.