The politics of federal health spending in the 1990s lends further force to the logic of the crackdown on fraud and abuse. Driven largely by insurance-supported technological innovation [2], annual per capita Medicare spending has increased much more rapidly than the rate of inflation. New coverage for home health care and skilled nursing facilities has added to the Medicare cost burden. Expansions of Medicaid to cover more children have accelerated the program's growth. Meanwhile, popular resistance to higher taxes has pushed politicians from both parties to search for cutbacks and culprits in order to curb Medicare and Medicaid spending. In this climate, provider fraud and abuse has become an appealing target.

For physicians, the logic of the fraud and abuse crackdown is disquieting. Beyond the threat of liability, it signals that U.S. society has lost confidence in the working of the ethic of professional self-restraint in relation to self-interest. The notion of medicine as a sovereign profession [3] rests above all on the premise that medicine can control itself in the face of temptation. The campaign against fraud and abuse challenges this premise and the profession's autonomy. In this sense, the campaign is of a piece with the coming of the managed care revolution and the more general recasting of physician judgment from something to rely on into something in need of external control, whether by government or by market mechanisms.

The profession has not yet fully come to terms with this loss of social confidence in physician self-restraint. Thirty-five years ago, Nobel prize-winning economist Kenneth Arrow analyzed the Hippocratic ethic of fidelity to patients and resistance to financial temptation as a rational response to lay uncertainty about the efficacy of medical interventions and the consequent risk for consumer mistrust [4]. In the ensuing years, such prominent voices as those of Arnold Relman [5] and Edmund Pellegrino have warned against physician involvement in business activities that tie patient care to entrepreneurial reward. Nonetheless, physicians have ventured into the entrepreneurial realm with increasing boldness over the past 20 years, developing all manner of economic relationships with clinics, hospitals, insurers, drug and equipment suppliers, and home care agencies. Rather than organizing a pragmatic retreat from trust-eroding entrepreneurship, some professional groups are now trying to weaken new laws that expand the concepts of fraud and abuse to cover myriad conflicts of interest.

These new laws and the larger context of federal fraud and abuse regulation are nicely summarized for clinical practitioners in the article in this issue from the American College of Physicians [6]. Although frustratingly complex, these laws deliver, for the most part, a morally simple message: Do not lie, deceive, or try to be too clever by half when caring for patients at government expense. As the College's article notes, the anti-kickback statutes and the Federal False Claims Act impose civil and criminal penalties on persons who knowingly trade remuneration for referrals (broadly defined) or make inaccurate statements to the government to obtain money. Keeping Hippocratic faith with patients and being truthful with the government about finances are the simplest guides to compliance. Honest physicians risk running afoul of these statutes primarily through careless documentation and trying to be too clever. Illustrations of the latter include diagnostic "upcoding" and "unbundling" of clinical interventions for billing purposes.

The Stark I and Stark II scheme of prohibitions against so-called self-referral are a morally more complicated matter. Their animating precept-that a clinician should not refer patients to an entity in which he or she has a financial interest-reflects the risk, real and perceived, that financial incentives can influence clinical judgment even without conscious, avaricious intent. Thus, protests that the Stark laws punish behavior even when bad motives are absent are ethically beside the point [7]. Indeed, abundant evidence shows that use of medical services increases when the physicians who order them reap financial rewards for doing so [8]. More generally, there is growing appreciation that clinical practice patterns are shaped by myriad social cues, including economic influences, that are beyond practitioners' conscious awareness.

Even if physicians' financial interests did not actually influence their clinical judgment, the problem of perceived conflict would remain as a reason for restrictions on self-referral. To the extent that the perception of conflict erodes people's confidence in their physicians, it not only undermines therapeutic efficacy by making medical advice less credible [9] but also denies sick persons the reassuring, even inspiring, experience of caretakers who keep faith.

The Stark self-referral prohibitions are extraordinarily ambitious in their reach. They aspire toward the comprehensive regulation of incentives that might affect use of medical services. But comprehensive governance of any complex, dynamic sphere is a task that law performs poorly. Put simply, law cannot keep pace with entrepreneurship. Regulators cannot anticipate all contingencies [10]; thus, even the most detailed proscriptions leave gaps for economic inventiveness.

In trying to fill such gaps, regulators can worsen the problem by creating rules so complex and convoluted that they generate confusion and unpredictability. The voluminous regulations published by the Health Care Financing Administration last January to clarify the Stark laws' prohibitions and exceptions [11] are a painful illustration. In trying to plan for endless contingencies, the regulations prescribe office floor plans; hospital architecture; and a bewildering, mind-numbing array of other details on which legal liability can turn.

The self-referral and anti-kickback laws also reflect a central tension in federal policy toward financial incentives tied to referrals and treatment plans. They send the message that such incentives are wrong because they tempt physicians to break faith with patients and misuse taxpayers' funds. At the same time, they present these incentives as desirable tools for managed health plans to use to control costs. Safe harbors protect myriad compensation arrangements designed to discourage clinical spending.

The oft-stated rationale for this seeming contradiction is that the incentives offered by managed health plans are designed to achieve efficiency and are therefore beyond the proper reach of federal fraud and abuse law, which targets wasteful spending. But the line between efficiency and undertreatment is murky at best, and the managed care safe harbors do not even contemplate the need to draw it. One might respond that the risk for undertreatment is beyond the scope of laws intended to reduce waste. However, this argument fits poorly with the general belief that laws against fraud and abuse should protect patients.

That society should see a need for such laws to protect patients from their physicians is disheartening to the average, well-meaning practitioner. Yet rather than railing against these confusing laws or, even worse, campaigning to broaden their exceptions, physicians should heed the sobering message the laws send-that Americans have lost faith in their physicians' ability to restrain themselves when tempted by money.

This, I suspect, endangers the profession's autonomy more than the power of managed health plans does. Indeed, this loss of faith may have cleared the way for the use of economic incentives by plans as management tools. To the extent that the public sees physicians as driven by money, it may be less likely to treat the managerial use of financial incentives as untoward.

Restoration of people's confidence in the medical profession's willingness to keep faith at the bedside should be a higher priority for physicians than criticism of the fraud and abuse laws. Recommitment to Hippocratic fidelity is not only right for patients but also represents the profession's best chance for a place of high regard in the new, vertically integrated medical marketplace.