ORGANIZATIONAL ETHICS IN HEALTHCARE

Organizational ethics in healthcare, which sometimes is referred to as institutional ethics, can be defined as the ethical analysis of decisions and actions taken by healthcare organizations, that is, institutional boards or committees and individuals acting as agents of those organizations. This entry begins with background observations about organizational ethics as a subfield and then addresses the history of concern about this topic, the major issues in the field, ethical perspectives and strategies for addressing those issues, the relationship of organizational ethics to clinical ethics committees, institutional review boards and compliance programs, the development of organizational ethics programs in healthcare institutions, and some of the current issues in the field.

Background

There has been much discussion of whether organizational ethics should be considered a subcategory of the clinical issues that normally are addressed by institutional ethics committees or is more closely related to business ethics. This issue is significant inasmuch as it affects the scope of the problems involved in the field, the perspective adopted to address those issues, and the question of who should have responsibility for dealing with these matters (for example, clinical medical ethics committees or administrative units). Organizational ethics clearly is related both to clinical medical ethics in that institutional policies and actions affect patient care and to business ethics in that many institutional issues are primarily business concerns involving financial matters, strategic planning, and compliance with legal regulations—issues that do not affect patient care directly. Healthcare organizations, of course, also have business relations with patients with respect to the payment of bills and insurance matters.

As in the field of business ethics generally, there has been some discussion in the published literature on healthcare organizational ethics of whether institutions and organizations can be considered moral agents in a meaningful sense in light of the fact that they are not individuals with moral sensitivities, motives, or consciences. Organizations do, however, set goals and take actions in pursuit of those goals, although their actions often result from collective rather than individual decisions. Also, organizations normally are evaluated and judged as to whether their goals and actions are morally acceptable, and they often are held accountable for harm done or are praised for morally worthy policies and actions. Although organizations may be thought to have a moral status slightly different from that of individuals, it cannot be doubted that they are responsible agents in an ethically meaningful sense.

History

In the United States ethical problems in relation to organizations have been recognized since bioethics as a field began to take shape. The issue of research involving human subjects was raised in the 1960s and came to public attention in the 1970s with the revelation of the disregard of informed consent and the misinformation given to African-American males in the Tuskegee Study. Although this was an issue with clear organizational implications, research ethics came to be treated as a special concern.

This led to the establishment of the institutional review board system rather than to consideration of other issues in organizational ethics. The distribution of scarce medical equipment for renal dialysis (as a matter of triage) was debated in the 1970s, raising procedural issues concerning who was to make such decisions on behalf of healthcare organizations and on what basis. The ethical propriety of for-profit healthcare institutions was the subject of conferences held by the National Institute of Medicine in the early 1980s and editorials in the New England Journal of Medicine.

It was not until the 1990s that healthcare organizational ethics began to be identified as a separate field. The American Hospital Association issued a management advisory in 1992 and later instituted its Organizational Ethics Initiative, an ethics education program for hospital administrators. The Woodstock Theological Center convened a seminar on organizational ethics in healthcare in 1994, although the framework that was adopted for consideration of the topics addressed was one of "professional" ethics. Almost simultaneously with the publication of the Woodstock report in 1995, the American College of Healthcare Executives issued a major revision of its 1970 Code of Ethics for healthcare management professionals, a document with lasting merit that spells out definite standards of conduct.

A major step in the development of the field came in 1995 when the Joint Commission for Accreditation of Healthcare Organizations unexpectedly added requirements for "Organization Ethics" to its accreditation standards for all healthcare organizations. Those standards required that hospitals have a code of ethical behavior addressing marketing, admissions, transfer, discharge and billing practices (issues related to patients), and "the relationship of the hospital and its staff members to other healthcare providers, educational institutions and payers." The required hospital code also must protect "the integrity of clinical decision making, regardless of how the hospital compensates or shares financial risk with its leaders, managers, clinical staff, and licensed independent practitioners" (Joint Commission on Accreditation of Healthcare Organizations). Although the full implications of these standards have not yet been determined, this action effectively established the field as an area of administrative responsibility and a discipline worthy of separate attention.

Organizational ethics in healthcare has been recognized as a concern in other countries, although these issues are more likely to be considered matters of health regulation and planning in public health systems. Numerous publications on the subject have appeared since the mid-1990s in Europe, and the Comisión Nacional de Bioética of Mexico held its first conference on organizational ethics in healthcare institutions in 2002.

Major Issues in Organizational Ethics

Concerns normally associated with organizational ethics in the United States include a wide variety of issues. Among the most common are the following.

Charity and uncompensated care pose financial problems for most institutions. From an ethical perspective, however, healthcare institutions must consider ways to provide a level of care consistent with their mission and the needs of the community. Not-for-profit institutions have an obligation to provide public benefits in return for their tax-exempt status; some states in the United States have begun to require community assessments to determine the nature and level of the services needed.

Ethical issues in managed care have been discussed widely under the heading of organizational ethics. These issues include conflict of interest problems, reasonable benefit and exclusion regulations, and the provision of fair hearings of appeals if treatment is denied.

After the promulgation of government regulations in 1999, confidentiality of patient information became more of an organizational issue than a matter of professional responsibility. This is appropriate in light of the multiplicity of providers involved in patient care and the maintenance and transfer of patient records electronically.

Consideration of employee wages and benefits involves judgments about a "living" or "just" wage at the lower end of the scale and merit at the higher end. The fairness of wages for employees relative to other employees, or the "comparable worth" of positions and responsibilities, is another factor. Hiring and promotion practices along with downsizing raise ethical issues for healthcare organizations, as do relations with labor unions.

Organizations that provide human services also face problems of discrimination either by employees or by clients on the basis of race, ethnicity, gender, disability, and religion. Diversity training that is based on a firm institutional commitment to equal and sensitive treatment often is considered necessary.

Advertising and marketing concerns require special attention to the needs of vulnerable populations as well as the common standards of fairness in advertising. Pharmaceutical companies, some of whose practices have been criticized for decades, should be considered healthcare providers. Professional associations and healthcare institutions can have a significant influence on the practices of pharmaceutical companies and other suppliers.

Environmental concerns of healthcare organizations constitute a serious issue. These concerns include not only proper disposal of medical and toxic waste but comprehensive plans for the reduction of waste and solid waste management.

Other ethical issues for healthcare organizations that have been discussed include governmental relations (including lobbying) and community relations, externally, and socially responsible investing and professional relations, internally.

Perspectives and Strategies

Traditional Western ethical perspectives have been applied to organizational ethics issues. Those perspectives include utilitarianism (which has a certain affinity with the stake-holder strategy noted below), rationalism (which has provided support for organizational policy development and codes of ethical behavior), virtues theory and idealism (which has been supportive of mission statement analysis), and various contextual theories, including feminist ethics (which have drawn attention to historical institutional responsibilities and relations). Leonard Weber has proposed a priority list of principles for decision making that takes into account patients' interests along with organizational interests and community benefit. In addition to the application of normative ethical perspectives to institutional ethics issues, the following organizational strategies have been proposed.

PROFESSIONAL APPROACHES. The American Medical Association has addressed organizational ethics issues from the perspective of the historical responsibilities and obligations of healthcare professionals. This approach has been expanded to include the obligations of professionals other than physicians: The Code of Ethics of the American College of Healthcare Executives (2000) established standards for healthcare administrators. The professional codes of lawyers, accountants, and engineers, along with those of clergypersons and social workers, also should be included in this approach inasmuch as professionals from those fields work in healthcare institutions.

Professional approaches to organizational ethics have been especially successful in addressing conflict of interest problems. Conflicts of interest occur whenever a decision maker has an interest in making a particular decision on the basis of factors other than the interest of the patient (if it is a professional decision) or the interest of the organization (if it is a decision made as an agent of an institution). The conflict can be a matter of personal gain from the decision in question or can be a conflict between responsibility to a patient and responsibility to an institution. Conflicts of interest also can occur when there is institutional pressure on an individual to depart from the spirit or letter of a professional code. Professional codes of accountants, social workers, clergypersons, lawyers, and administrators must be considered along with those of physicians and nurses.

THE STAKEHOLDER STRATEGY. This perspective, which has been borrowed from business ethics, focuses on the consequences of institutional decisions for the many stakeholders and stakeholder groups that are affected (Evans and Freeman). Stakeholders in healthcare organizations include professionals, employees, business partners, and the community, in addition to patients. Spencer et al. (2000) have proposed the adaptation of a stakeholder strategy that involves a specific priority list of stakeholder interests for healthcare institutions: patient populations, professional excellence, organizational viability, community access, and public health.

THE MISSION STATEMENT STRATEGY. This perspective derives a critical examination of organizational decisions and actions directly from the mission and goals adopted by an institution. Those goals can be subjected to ethical evaluation (Hall) and often have to be elaborated and applied through high-level institutional decision making.

CORPORATE CULTURE ANALYSIS. This approach represents an application of the organizational theory common in business ethics to the analysis of healthcare institutions (Boyle et al.). As collective entities, healthcare organizations generate patterns of behavior, both formal and informal, that can be analyzed with respect to their ethical dimensions and implications.

Although specific strategies may differ, there is general agreement among commentators that organizational ethics issues involve many dimensions besides ethical considerations and that a multidisciplinary approach is needed. The purpose of the organizational ethics perspectives and strategies described in this entry is to highlight the ethical dimension of institutional decision making at all levels.

Relationships with Clinical Ethics Committees, Institutional Review Boards, and Compliance Programs

Organizational ethics is closely related to clinical medical ethics in that many clinical ethical problems have organizational implications. Difficulties with nursing, pharmacy, and other professional services may result from staffing decisions. The availability, adequacy, and confidentiality of medical records are organizational matters. Institutional policies often govern clinical issues such as orders not to resuscitate and palliative care. The organization and availability of social services, including ethics consultation, also is an organizational responsibility. Healthcare organizations also have direct relations with patients with respect to admissions, discharge, and transfer as well as billing and other financial matters. Inasmuch as any of these issues involve organizational decisions and actions, they may move out of the jurisdiction of clinical ethics committees and into the wider realm of organizational ethics.

The relationship of organizational ethics to institutional review boards for the protection of human subjects in medical research involves less of an overlap of responsibilities. Healthcare organizations need to provide resources and staff for institutional review boards, but the activities of those boards is subject to specific federal guidelines. It is appropriate, however, for healthcare organizations to decide whether research projects are consistent with the mission of the institution and/or interfere with other staff responsibilities.

Organizational ethics also is closely related to compliance programs. Although organizational compliance programs have a responsibility for bringing institutional activities into conformity with federal and state regulations, such programs also may be considered to have responsibility for the conformity of activities to institutional mission statements or ethical goals. Although this responsibility is mentioned specifically in the Federal Sentencing Guidelines under which compliance programs are established, those programs have tended to focus on legal compliance and ignore ethical goals and objectives that go beyond the law.

Some authors have suggested that organizational ethics should be conceived of as a comprehensive perspective or program that would include clinical ethics, compliance, and institutional review board functions in a single organizational unit or division. These activities, however, are generally well-established institutional programs, and it may make little sense to attempt to include them organizationally under a new unit that has its own problems and issues to address.

Organizational Ethics Programs in Healthcare Institutions

Healthcare institutions have considered various methods for addressing organizational ethical issues and bringing ethical perspectives into organizational cultures. Because concern for these issues has been raised in discussions of clinical ethics, some commentators think that the mandate of clinical ethics committees could be expanded to include institutional issues. It generally is recognized, however, that organizational issues can be quite different from clinical matters and that clinical ethics committees normally do not include the administrators who have responsibility for these issues or individuals with relevant administrative competencies and experience. If organizational ethics concerns are to be addressed within the scope of a clinical ethics program, therefore, a separate track or process may be necessary.

A few healthcare organizations have formed separate organizational ethics committees, but considerable time probably will be needed for those new units to acquire the perspective, the sense of role, and the credibility within the organization necessary to be effective. Other suggestions for organizational ethics programs in healthcare institutions involve the use of consultants and governing board subcommittees and the assignment of the function to compliance programs. Although there has been general agreement that as a result of the nature of the issues involved, organizational ethics programs must involve top administrative and governing board representatives, the issue of the involvement of employees and professionals from all levels within the organization and outside community members is more problematic.

Current and Future Issues in Healthcare Organizational Ethics

Although the organizational ethics issues mentioned above are areas of organizational activity that will require attention well into the future, it is worth mentioning three issues that have not been addressed adequately to date.

First, providing access to basic healthcare for all people remains the foremost challenge for healthcare organizations. In countries with national health systems the challenge takes the form of finding adequate funding, educating skilled personnel and professionals, and eliminating bureaucratic problems. In countries with largely privatized healthcare systems, such as the United States, the problem entails providing care for those who, because they are unemployed, underemployed, or working poor, lack access to care for financial reasons. This may be considered a social or political issue with a scope wider than that of any individual healthcare organization, but in countries where healthcare is provided by nonprofit corporations it is an organizational problem as well.

Nonprofit organizations generally are thought to have a public obligation to provide healthcare to people who cannot afford to pay. Competitive pressures on organizations, however, in many cases have moved this mission off the corporate agenda. Many nonprofit healthcare organizations view charity care as a business loss rather than an essential organizational goal, and many investor-owned healthcare corporations refuse to accept the provision of charity care as either a mission goal or a public obligation. Serious attention to this problem would require community needs assessments and regular social audits of institutional performance.

Second, there is the question of how healthcare institutions can develop and promote ethical perspectives within the organization. Ethical concern for the issues mentioned above is still for the most part a matter of informal discussion among administrators, members of clinical ethics committees, and academic and social commentators. Including top administrators and governing board members in organizational processes for addressing ethical issues is essential but often difficult. Few organizations have formal mechanisms for an ethical consideration of organizational issues, and even fewer involve top administrators or governing board members in that process. Many administrators seem to believe that compliance programs can take care of ethical concerns adequately or that ethical concerns are a matter of community perspectives that should be left to the governing board.

Third, the excessively aggressive practices of pharmaceutical companies must be addressed. This issue has become more than just a matter of professional marketing practices. It is a social issue in that society is becoming increasingly dependent on prescription drugs. Healthcare organizations have a significant role to play in educating the public about the dangers of overmedication and in curbing the aggressive advertising practices of pharmaceutical companies.

robert t. hall

SEE ALSO: Corporate Compliance; Healthcare Management Ethics; Just Wages and Salaries; Managed Care

BIBLIOGRAPHY

Boyle, Philip; Dubose, Edwin R.; Ellingson, Stephen J.; et al. 2001. Organizational Ethics in Health Care: Principles, Cases, and Practical Solutions. San Francisco: Jossey-Bass.

Evans, William M., and Freeman, R. Edward. 1996. "A Stake-holder Theory of the Modern Corporation: Kantian Capitalism." In Ethical Issues in Business: A Philosophical Approach, 5th edition, ed. Thomas Donaldson and Patricia Werhane. Upper Saddle Ridge, NJ: Prentice-Hall.

Hall, Robert T. 2000. An Introduction to Healthcare Organizational Ethics. Oxford, Eng.: Oxford University Press.

Joint Commission on Accreditation of Healthcare Organizations. 1988. HAS: 1998 Hospital Accreditation Standards. Oakbrook Terrace, IL: Joint Commission on Accreditation of Healthcare Organizations.

Khushf, George. 1997. "Administrative and Organizational Ethics." HealthCare Ethics Committee Forum 9(4): 299–309.

Spencer, Edward M.; Mills, Ann E.; Rorty, Mary V.; and Werhane, Patricia H. 2000. Organization Ethics in Health Care. Oxford, Eng.: Oxford University Press.

Weber, Leonard J. 2001. Business Ethics in Healthcare: Beyond Compliance. Bloomington: Indiana University Press.

Woodstock Theological Center. 1995. Ethical Considerations in the Business Aspects of Health Care. Washington, D.C.: Georgetown University Press.

INTERNET RESOURCE

"American College of Healthcare Executives Code of Ethics: As Amended by the Council of Regents at its Annual Meeting on March 25, 2000." <http://www.ache.org/abt_ache/code.cfm>.