For the past several years, the medical profession has been undergoing a disturbing transformation. The process was begun by the Centers for Medicare and Medicaid Services (CMS) in an effort to control exploding Medicare costs, and was accelerated by the passage of the Patient Protection and Affordable Care Act of 2010. As a surgeon in practice for over 30 years, I have witnessed this transformation firsthand. I fear that my profession will soon abandon its traditional code of ethics and adopt one more suited to veterinarians.

For centuries, my predecessors and I have been inculcated with what has come to be called the "Hippocratic Ethic." This tradition holds that I am ethically required to use the best of my knowledge to recommend to my patient what I consider to be in my patient's best interests—without regard to the interests of the third-party payer, or the government, or anyone else.

But gradually the medical profession has been forced to give up this approach for what I like to call a "veterinary ethic," one that places the interests of the payer (or owner) ahead of the patient. For example, when a pet owner is told by a veterinarian that the pet has a very serious medical condition requiring extremely costly surgery or other therapy, the veterinarian presents the pet's owner with one or more options—from attempt at cure, to palliation, to euthanasia—with the associated costs, and then follows the wishes of the owner.

Several factors in combination are bringing this ethical approach to my profession.

Since the mid-1980s, Medicare has imposed price controls on health care providers. Over the years, in order to accommodate increasing Medicare utilization, physician payments have steadily dropped.

Meanwhile, the regulatory burden on physicians has increased. In the last few years, CMS required all providers to adopt electronic health records or face economic sanctions from Medicare. It is the ultimate goal that every health care provider, including pharmacies, will have electronic databases that will be accessible to the U.S. Department of Health and Human Services (HHS).

In 2009, as part of the so-called stimulus bill, the Federal Commission for the Coordination of Comparative Effectiveness Research (FCCCER) was created. Its mission is to collect the data culled from all electronic health records and make recommendations regarding the comparative effectiveness of drugs, procedures, and therapies. In rendering advice, the FCCCER will essentially answer the following question: What is the most cost-effective way of allocating a fixed amount of resources among a population of roughly 310 million people?

With this same question in mind, the U.S. Preventive Services Task Force, a committee that reports to HHS, concluded in 2009 that mammogram screenings should not be recommended to women under age 50. This caused an uproar among both private health care providers and breast cancer advocacy groups, and the task force soon backed down. Similarly, in the fall of 2011, the task force recommended the abandonment of certain routine prostate cancer screenings. Once again, health care providers and cancer advocacy groups protested, and the task force rescinded its recommendation.

In 2010 the Patient Protection and Affordable Care Act established an Independent Payment Advisory Board (IPAB). Beginning in 2014, the 15 presidential appointees on this board will determine what therapies, procedures, tests, and medications will be covered by Medicare, using advice provided by the FCCCER. Such determinations will then be used to design the coverage packages for the non-Medicare insurance offered through the government–run exchanges. The decisions of the IPAB are not subject to Congressional oversight or judicial review.

Meanwhile, in an effort to control costs now, CMS has developed practice guidelines and protocols for physicians to follow. Committees of health care academics and statisticians developed these guidelines, using data from large population samples.

These protocols govern the therapeutic decisions made by the health care practitioner—right down to the pre-operative antibiotics a surgeon may order. Despite the fact that several recent peer-reviewed studies concluded that the protocols have had no positive effect—in fact, one study showed post-op skin infections increased since the protocols were instituted—CMS imposes financial penalties on hospitals that fail to get protocol compliance from their medical staff.

Medical students and residents are now being trained to follow federally-derived protocols and guidelines as a normal part of medical practice. As a result, this new generation of doctors will be less inclined to challenge the recommendations of federal task forces and agencies. Some academics also worry that "teaching to the protocol" might discourage independent thinking and the use of intuitive knowledge, two traits essential to the practice of good medicine.

In addition, decreased reimbursements and increased regulatory demands on physicians have led many to sell their practices to hospitals. The New England Journal of Medicine* estimates that 50 percent of the nation's doctors are now hospital employees. As private medical practice becomes more economically untenable, look for the overwhelming majority of doctors to become salaried hospital employees—many working in shifts—in the next few years. Virtually every doctor now graduating a residency program is taking a position as a salaried hospital employee.

Ten thousand people will turn 65 every day for the next 19 years, placing an even greater fiscal burden on the Medicare program.

One way CMS is trying to deal with this is by penalizing hospitals and doctors who treat patients with resistant problems. Effective this year, any patient readmitted to a hospital within 30 days of discharge for the same or a related problem will be treated by the hospital without compensation. The plan is to implement the same policy with respect to the original treating physician in the near future.

To help deal with this more definitively, an old concept with a new name is being promoted and encouraged by the Affordable Care Act: the Accountable Care Organization (ACO). The ACO harkens back to the infamous HMO capitation system of the early 1990s over which the population rebelled.

In a nutshell, hospitals, clinics, and health care providers have been given incentives to organize into teams that will get assigned groups of 5,000 or more Medicare patients. They will be expected to follow practice guidelines and protocols approved by Medicare. If they achieve certain goals established by Medicare with respect to cost, length of hospital stay, re-admissions, or other "core measures," they will get to share a portion of Medicare's savings. If the reverse happens, they will face economic penalties.

Private insurance companies are currently setting up the non-Medicare version of the ACO. These will be sold in the federally subsidized exchanges mandated by the Affordable Care Act. In this model, there are no fee-for-service payments to providers. Instead, an ACO is given a lump sum, or "bundled" payment for the entire care for a large group of insurance beneficiaries. The ACOs are expected to follow the same Medicare-approved practice protocols, but all of the financial risks are assumed by the ACOs. If the ACOs keep costs down, the team of providers and hospitals reap the financial reward: a surplus from the lump sum payment. If they lose money, the providers and hospitals eat the loss.

In both the Medicare and non-Medicare varieties of the ACO, cost control and compliance with centrally-planned practice guidelines are the primary goal. The hospital and provider networks will live or die by these objectives.

When almost all health care providers are salaried employees of hospitals, hospitals might then be able to get ACOs to work better than their ancestor HMOs. The hospital administrators will have more control over their medical staff. If doctors don't follow the protocols and guidelines, and desired outcomes are not reached, hospitals can replace the "problem" doctors.

So where does all this place the medical profession with respect to its ethical credo? In a few years, almost all doctors will be employees of hospitals and will be ordered to practice medicine according to federally prescribed guidelines—guidelines that put the best interests of the state ahead of the interests of individual patients.

When the physician's primary obligation is to satisfy the wishes of the payer—ultimately the wishes of the state—how can patients be truly confident in their doctors' decisions?

I submit that it all boils down to a question of professional ethics.

The medical profession must decide—and soon—which ethical doctrine to follow: Are doctors to be agents of their patients or agents of the state? All of us should dread the latter choice—because we will all be patients some day.

Jeffrey Singer practices general surgery in Phoenix, Arizona, writes for Arizona Medicine, the journal of the Arizona Medical Association, and is treasurer of the U.S. Health Freedom Coalition.

Editor's Note: This article originally misattributed an estimate on the number of employed physicians to the American Medical Association. The estimate came from The New England Journal of Medicine.