Reason, Rationalization, and Professionalism in the Era of Managed Care

In his opening sentence of The Social Transformation of American Medicine (1982), Paul Starr writes, "The dream of reason did not take power into account" (3). He might have added, "The dream of power did not take reason into account." The thrust of the book is to examine the interplay of power and reason in the rise of American medicine as a sovereign profession.

Starr portrays medicine's rise as a three-act drama. The first act opens in the mid-nineteenth century to find the profession in disarray. In book one, the first step in Starr's drama is the reestablishment of medical authority based on the creation of a new, science-based professional paradigm. In the second act, which straddles books one and two, medicine uses its newly restored authority to consolidate its political and economic power. It employs this power to reach a series of accommodations with hospitals and insurers that shapes systems of health care delivery and finance in the interest of the profession. These accommodations usher in a period of unprecedented prestige and prosperity. But they also contain contradictions (creating an essentially open-ended payment system), which ultimately usher in a health care spending "crisis." In the third, unfinished act, this crisis galvanizes powerful new external actors, government and private employers, into taking action, and their efforts to contain costs by "rationalizing" the organization of health care threaten to jeopardize medicine's authority and its viability as a profession.

Underpinning Starr's analysis is a three-way taxonomy of possible ways to organize the work of medicine: competitive markets, hierarchical systems of managerial control, and what may be termed professionalism (Freidson 2001)—broadly, the delegation of control over an area of work to an occupation. Reoccurring themes are (1) that professionalism may offer important advantages over other forms of organization from both a functional and a power perspective and (2) that market competition and systems of managerial control may pose threats to its viability from both perspectives (Starr 1982: 23-27, 143-144).

Notions of "reason" and "rationalization," the application of reason to identify appropriate means to realize goals, play a central role in Starr's drama in two major contexts. The first context, in book one, involves the creation of a new medical paradigm. The second, in book two, involves efforts to address problems with costs. Starr's use of the term reason in the first case is quite broad. He includes the application of reason both to the creation and utilization of medical knowledge and to the organization of relationships within medicine and externally between the profession and other actors. Thus, he refers to modern medicine as "one of those extraordinary works of reason: an elaborate system of specialized knowledge, technical procedures, and rules of behavior" (3).

Generically, this process could be described as the rationalization of medicine, including both clinical and managerial/corporate rationalization dimensions (Alford 1975). Starr, however, selects a more narrow definition. He reserves "rationalization" specifically to describe managerial efforts by government and private sector employers to contain costs by restructuring seemingly "irrational" systems of relationships betweenmedicine, hospitals, and insurers created by the accommodations described in the second step of his drama (27). That is, "rationalization" is equated with efforts to contain costs through structural reforms in medicine's relationships with external actors.

Writing in 1982, Starr notes a number of other possible forces that could impact medicine, including issues of patients' rights and a revival of therapeutic nihilism (388-393, 408-411). But he sees efforts to rationalize costs as the dominant driver of change for the foreseeable future. Looking ahead, he focuses on two questions: (1) How will these efforts unfold and (2) what will be their implications for medicine and its viability as a profession?

With respect to the first question, Starr is agnostic about the exact form that cost initiatives will take. He predicts, however, that they can be captured by a two-by-two framework in which there are two central types of actors (the public sector and private business interests) and two potential...