The Intersection of Health Care and Organizational Ethics
Ethics Resource Center 2002
The Gulf Centre for Excellence in Ethics (GCEE), located in Abu Dhabi, the United Arab Emirates, recently co-produced "The UAE International Conference on Health Care Ethics: A Cross Cultural Dialogue on Ethical Challenges in Healthcare." The agenda featured a remarkable array of some of the leading figures in the field representing every region of the world covering a broad array of topics and issues on all aspects of healthcare and bio-ethics.
The Ethics Resource Center, which founded the GCEE in 1997, has focused on the subject of business, or organizational, ethics since 1977. Our work with healthcare organizations has made it quite clear to us that, in such a setting, there is a significant overlap between what is considered organizational ethics and that which is considered to be healthcare ethics.
Indeed, the intersection between these two areas seems to be growing. As the field of healthcare becomes ever more complex; the relationships between and among the various actors are becoming increasingly complicated; the amount of money spent on healthcare grows daily; and the pace of change seems to accelerate constantly.
The majority of bioethics decisions are made by or within organizations or institutions of one sort or another. It is both worthwhile and important to examine the organizational environment within which these decisions are made, and the impact that organizational climate must surely have on them. It is also important to consider a broad range of ethical issues and challenges, which, while not bio-ethical or healthcare specific, nonetheless have a dramatic impact on the provision of healthcare services.
Healthcare Institutions as Business Organizations
Let us consider the kinds of institutions which provide healthcare services, products, policies and the like. A hospital, for example, might be a state-owned institution, a non-profit organization or a for-profit company. But in every case, it looks and operates very much like a business. It purchases materials, provides services, collects revenue for those services and pays its employees. It has a management structure, usually a board of directors, and a full complement of external stakeholders, including investors, employees, customers (patients), suppliers, vendors and partners, just like any business organization.
Pharmacies/Dispensaries are in the business of distributing and dispensing (selling) drugs, medications and supplies to the end user. This is a retail business. Insurance companies, sick funds or funding schemes are in the business of paying for healthcare. To be effective they need to be operated like any insurer, calculating risks, projecting payouts, controlling costs and bringing in enough income to turn a profit or at least break even. The manufacturers of pharmaceuticals and medical equipment and consumables are businesses and include in their ranks large and powerful multi-nationals as well as smaller domestic companies.
Universities and research institutions face general business pressures and the realities of organizational culture in addition to the specific challenges unique to their field of endeavor. Regulatory agencies, while often operated less like businesses, have financial pressure not to mention political pressures and individuals are in unique positions of power. Like other governmental agencies they are often plagued by a wide array of unethical behavior, if not outright corruption.
The private practices of physicians, nurse practitioners, and other independently employed providers are small businesses. Even a business of one has to consider the ethical standards according to which s/he will manage her/his practice. Larger organizations can motivate employees to act on behalf of the common good. Individual practitioners have only themselves to answer to. Business decisions and ethical dilemmas in this context become true tests of character.
General Organizational Ethics Issues Faced by Healthcare Organizations
All healthcare organizations face the full range of organizational ethics challenges, which confront businesses around the world. These include bottom-line pressures, competitive pressures, and non-healthcare organizational and social goals. The very culture of the organization has a great impact on the type and quality of decisions that are made by its staff and management. Stories being told about the organizational culture at Enron illustrate the extent to which culture can undermine ethical conduct or decision-making, especially at the top. In a healthcare organization the effect of culture is not limited to its impact on organizational ethics issues or even business decision. A culture of individual greed, hubris and power, for example, would surely make it impossible to uphold high bioethics standards. Conversely, a thoughtful organizational culture that encourages active consideration of organizational ethics issues will foster sound bioethical, not to mention business, decision-making.
Let us look at some of the specific business or organizational ethical challenges faced by a hospital. Hospitals consume millions of dollars of drugs, supplies, services, etc. The system for purchasing these items is vulnerable to bribes and kickbacks, favoritism and nepotism, fraud and theft. The relationships between hospitals and doctors are often complex, and the compensation structures even more complicated. This can easily lead to perverse incentives on both sides. As an employer of hundreds, if not thousands of individuals of diverse races, creeds, genders, sexual orientations, national origins, the hospital faces the full myriad of ethical challenges relating to the management of the human resource function, including conflicts of interest, romantic or familial relationships between staff members, equal treatment in hiring, promoting and firing employees, sexual harassment, prejudice and discrimination.
Hospitals always face pressures to contain costs and to free up beds. While the pressure to free beds can be driven by the desire to increase access to care, it can also be driven by the need to get paying patients into beds currently occupied by those with more limited resources. Hospitals face other organizational ethical issues as well. They can also have a negative impact on the environment, as they seek cheaper ways to dispose of waste, particularly bio-hazardous waste. For example, in the summer of 2000 syringes began to wash up on the beaches in New Jersey in the US. A subsequent investigation revealed that a nearby hospital had chosen a creative and particularly cost-effective disposal strategy, although one that was neither legal nor ethical!
Patient confidentiality is an issue which is frequently debated from the health perspective. Increasingly, it is now being debated as a business issue as well. There are a number of companies that offer to pay hospitals for patient data to be used for a variety of purposes. Resource utilization is another source of unethical business practice. Once a hospital has justified the purchase of a million dollar piece of equipment, it is under tremendous pressure to utilize it to its fullest capacity, even if this means prescribing its use in cases in which it is completely unwarranted!
We have all heard stories of the group of physicians who are invited with their spouses to a week-long holiday in some tropical resort. These study trips typically include a 2-hour seminar on the latest drug or product being promoted by the host, and several rounds of golf, but very little other studying. There are other less blatant but nonetheless equally unethical behaviors practiced by doctors and hospitals. The setting of prices and fees are obviously business issues. But costs are too often driven up to cover mortgages, car payments and malpractice insurance, with little concern for the patient. Fraudulent diagnosis has become routine under many insurance schemes. Doctors are often incentives to report misleading diagnoses in order to secure payment for medically necessary treatments for the patient. Fees can also by driven by the differential in compensation due to the provider. Some hospitals seek out doctors who are known to "code" well. This can mean simply that they are efficient at paperwork, but is also used as a euphemism for those who manage to defraud the insurers more effectively than their colleagues.
The situation of the dispensing physician is an interesting one. In many underserved areas, this arrangement is both necessary and justifiable. But in areas where it is not necessary, the conflict of interest inherent in prescribing drugs and then selling them to the patient for a profit is too blatant to be acceptable.
Pharmaceutical and Medical Equipment Manufacturers
I have already referred to study trips to exotic resorts. Companies offering such inducements are quick to explain and justify them as necessary, even socially responsible, doctor education. Some companies have become strict about tipping the balance between vacation and work, not paying for spouses and making the trips much more informative. A good rule of thumb for these trips is to compare the marketing policies of these companies with the policy that concerns the accepting of gifts by their employees. Where would the company draw the line, if for example, the IT manager of one of these companies told her boss that she and her husband were going to Aruba for a week as a guest of a software developer to learn about a new database?
Many companies actively try to establish personal relationships with government officials, or seek to hire individuals who already have such relationships. While this can simply be networking, the competitive practices of some of these companies can stray far beyond the bounds of proprietary. While it is necessary to spend time with customers and such stakeholders learning about their needs and educating them about your product, extravagant entertainment can come to be perceived as a quid pro quo arrangement. One pharmaceutical manager in Asia makes ethical decisions about marketing in practices based on the type of entertainment involved. During the day he allows golf but not tennis as one cannot have a substantive conversation from across the net. More bluntly, in the evening he allows his sales reps to take officials to dinner, but not to brothels.
Patent infringement is another ethical issue common in some areas, where local companies simply violate existing patents and produce generic versions of another company's product. There are times when national medical emergencies might warrant the lifting of patent protection. In most instances however this is not only unethical and illegal in most places, it can be dangerous. Few small drug manufacturers can afford the safety and quality control that is in some instances part of what makes patented drugs expensive. Taken to the extreme patent infringement can lead to outright fraud. For example, not long ago generic drugs distributed cheaply in the developing world to treat malaria were discovered, after many patients died, to have been little more than sugar pills.
Insurance Companies and Funding Schemes
Healthcare is big business. Paying for it is also big business. Healthcare insurers operate just like any insurer, betting on the spread between the premiums and payouts, based upon pooled risks. They are under tremendous pressure to control ever spiraling healthcare costs. They regularly offer individual practitioners, hospitals and clinics a variety of incentives to encourage them to keep claims down. Thus, the economic health of the insurer is one of the drivers in the decision-making process of the doctor. This obviously tends to result in restricting access, or at least, creating administrative barriers to access to needed treatments.
Another result of funding schemes in many countries is that classes of patients emerge: those with good coverage or deep pockets, those with poor (or government) insurance, and those without any insurance at all. Despite good intentions, in practice these different classes of patients receive different classes of care. This phenomenon is not at all limited to developing or transition economies. While some Americans are afforded some of the best and most high-tech healthcare in the world due to private insurance, others are covered by Medicare, which severely limits coverage for prescription drugs. Thirty-five million US citizens do not have any health insurance coverage and are consequently extremely limited in their access to even basic care.
The Regulatory System
The Public Health Department or Ministry of Health has oversight responsibility over the enormous healthcare industry in its jurisdiction. In many countries, it also has the responsibility for the delivery of these services as well. Unfortunately, in many countries, it is a bureaucracy riddled with corruption.
While such corruption can be observed in any aspect of the ministry, it is perhaps most notorious in the various approval processes which determine what drugs or devices are approved for use in the country. Approval processes are completely subjective at worst, and in few cases fair, competitive and transparent. In too many countries decisions are based more on envelopes of cash, strategically passed under the table than on scientific evidence.
This is why so many shrewd drug and device manufacturers find it necessary to cultivate close personal relationships with regulators, or hire consultants who already have these intimate connections. And high ranking officials have been know to have a financial interest, sometimes a significant one, in the very companies who are seeking approval from their offices. The conflict of interest here is blatant. But even if there were legitimate, preexisting relationship which predated the business relationship the situation creates a conflict of interest and is nonetheless unethical and corrupt.
What Can Be Done?
The Ethics Resource Center, along with its sister organizations, the Gulf Centre for Excellence in Abu Dhabi, the Ethics Institute of South Africa and the Turkish Ethical Values Foundation (Türkiye Etik Deerler Merkezi/TEDMER),(
) has significant experience working with healthcare organizations committed to addressing challenges of these sorts. Our experience clearly points to the need for a comprehensive and integrated approach to organizational ethics. To be effective, such an effort must have the following characteristics:
Consistent and visible executive involvement is fundamental. We often repeat the mantra "Ethics is a Leaderhsip issue." Ethics starts at the top. For example, the president of Johnson and Johnson responded to allegations that Tylenol had been tampered with in the 1980s by pulling the product off of all store shelves everywhere until he could be completely sure that his product was safe. That decision sent a message through the entire company which continues to be repeated today.
The organization must dedicate resources, both human and financial to this important effort. It is very difficult to argue for the deviation of already scarce resources from direct care to dedicate them to ethics. But this is necessary to stop the hemorrhaging of resources to corruption. It is also a prerequisite for creating a culture that supports high quality, ethical patient care.
Codes of Ethics, Vision and Values
People sometimes bristle at the mention of Codes of Ethics, rightly arguing that we learn right and wrong at our parents' knees and that employees do not need their boss or their company telling us about ethics. But unfortunately our bosses and our companies spend an awful lot of time telling us to cut costs, increase revenue and show results. If you really do want employees to meet their goals ethically, managers need to tell them that as well. When done well Codes, Vision and Values provide employees at all levels with more comprehensive guidance as to what the company believes in and what type of behavior is expected or even allowed.
Just as a company must possess a finance function, an HR infrastructure, and a communications system, so too must it possess an ethics infrastructure to promote and support ethical decision making, not only at the bedside, but also in the purchasing office and in the board room.
Communications and training
A code of conduct, found on page 75 of a policy handbook, and kept in the bottom drawer will never have any impact whatsoever on your organization. Clear and frequent communication, top down and bottom up, is a necessary vehicle for implementation. And training, for all levels of decisions makers, not just healthcare staff, is the only way to create the awareness, insight and ethical decision-making skills needed to raise the level of conduct.
Measures and rewards
There is an old adage in business that "What gets measured gets done." That, together with the lessons from Pavlov's dog, should be enough to convince management to develop ways to evaluate the conduct of their staff and of their institution, and to design reward systems that provide the right incentives, rather then the perverse ones described above.
Let me conclude by reiterating that bioethics decisions are made in the context of, and are significantly impacted by organizations. The ethics of your organization and the bioethics of practitioners tends to be consistent and mutually reinforcing - for good or for bad. The most ethical and conscientious practitioner will find it difficult to make good healthcare ethics decisions in a corrupt or unethical organization. If you care about bioethics, then I urge you to look long and hard at the ethics of your institution.
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