e-Ethics October 2003
It's a Business Decision
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Stark Medical Center's leadership
team faces a budgeting
quandary. Cardiac medicine is the
hospital's leading revenue source,
and Stark's cardiologists and cardiovascular
surgeons are calling for significant
(and expensive) technological
enhancements. The CEO has
now promised substantial improvements
in cardiovascular services.
In addition, the marketing director
advises that cardiac facilities, including
waiting areas and patient rooms,
urgently need refurbishing to make
them more inviting and increase
Stark's market share in cardiovascular
services. Coupled with enhanced
technology, a new "look" could solidify
Stark's status as the number one
cardiology provider in its area.
The financial picture, however, is
not conducive to capital-intensive
projects. To free up funds, senior
management has discussed reducing
or eliminating services. The prime
candidate this year is the hospital's
extensive array of behavioral health
services. Stark is justly known in its
community for mental health care,
and is the only local provider of inpatient
child and adolescent psychiatric
treatment. At best, however, such
resource intensive programs generate
marginal revenue. Is it finally time to
eliminate some of these "financially
draining" services so that Stark can
"move forward" in other areas? One
leader advocates a substantial reduction
in the scope of behavioral health
services. "In the end it's a business
decision," he concludes.
Discussion
This situation confronts Stark's
senior leadership with difficult, even
painful, choices. The trade-off is
between upgrading key medical services
that generate significant revenue
and maintaining unprofitable
services that meet an otherwise
unaddressed community need. If
other alternatives exist, the team
has evidently considered and dismissed
them.
The problem raises questions of
organizational ethics. How should
the leadership team arrive at an ethically
optimal allocation of Stark's
resources? What competing goods
or values (for example, meeting
community need vs. maintaining
competitive advantage) shape the
options under consideration? How
should Stark's leadership prioritize
these values? Moreover, does the
community that Stark serves have a
legitimate moral claim on the hospital's
use of its resources? What values
and principles should guide a
healthcare organization in deciding
which services to fund?
One leader contends that, finally,
"it's a business decision." Organizational
decisions are sometimes
described in such language, both in
the wider corporate world and in
health care. But what is its ethical
relevance? Without clarification,
the meaning of the expression is
unclear. One way to construe "business
decision" language is to see it
as a kind of shorthand. Then it is
possible to look for an underlying
meaning and tease out its ethical
significance.
What might the senior leader's
comment signify?
"It's a business decision" sometimes
functions as another way of
saying, "Let's get on with it": "We
have to act! Thinking too long about
too many factors only diverts us
from taking the decisive steps that
must be taken."
"It's a business decision" may
stand for "We wish we didn't have
to do this, but there's no other way."
Decision makers themselves may
regret actions they feel compelled to
take. In the Stark context: "No one
wants to curtail behavioral health
services, but a reduction just has to
be made." Not even those in organizational
authority control the economy
or the marketplace. Thus "business"
is both a compelling factor in
decisions and one that is finally
beyond decision makers' control.1
"It's a business decision" can
mean, simply, "We have to survive"
or "We must grow." More broadly:
"No margin, no mission."
Last, and not least, "It's a business
decision" sometimes means,
"'Business' is one thing, and 'ethics'
another." Perhaps ethical considerations,
though important, are viewed
as "softer" than business considerations
and must take a back seat to
higher-priority reasons for action.
One danger lurks in all these
possibilities. "It's a business decision"
may displace more careful
analysis and exploration of possible
reasons for a course of action. Worse
still, if business and ethics are treated as
"separate considerations,"2 ethics will
not be at the table when finances are
under consideration, and finances will
not be at the table when ethics is discussed.
Such compartmentalization does a disservice to both "ethics" and
"business." It polarizes them as seeming
antagonists. In the end, the administrative
decision-making process is itself impoverished.
Moreover, from an ethical perspective
it is usually inaccurate to characterize
"business decision" language as a rejection
of ethical considerations. Those
invoking the need for a "business decision"
normally assume that significant values
will be protected or promoted by making
the decision on "business" grounds.
However, important values worth articulating
may be hidden in the compressed,
even misleading, language of "business
decisions"—misleading when it wrongly
insinuates that the speaker sees the bottom
line as an end in itself.
Appeals to a "business" rationale
need not imply disregard for the values
of the healthcare mission. The leader
quoted above may foresee that sacrificing
an undoubted good—some portion
of Stark's behavioral health program
would help the cardiac medicine program
obtain what it needs to thrive,
generate revenue, and become an
engine of long-term benefit to Stark's
bottom line. Then Stark could meet
other community needs, perhaps consolidate
and ultimately preserve the
heart of its behavioral health program
all as an expression of its mission. Of
course, the leader in question may not
have such a comprehensive vision in
mind; even if he does, others might
question the vision or the proposed
means of its realization.
Such concerns deserve explicit discussion
as moral issues, with the business
dimension a key ingredient in the
ethical discussion. This discussion
might, however, require a change in
established habits of thought and
speech. The values and vision driving a
proposed course of action need more
than shorthand expression if they are to
be recognized, appreciated, and considered
fully. The choices facing Stark
Medical Center are more than "business
decisions"—even as they are nothing
less than business decisions. In health
care, "[t]here is a need to become more
skilled at including dollars in discussions
of ethics and more skilled at including
ethics in . . . discussions of dollars."3
"Business" and "ethics" need each other.
1. David B. McCurdy, "But Is It a Business?"
Business Ethics Quarterly 12, no. 3 (October
2002): 536.
2. Leonard J. Weber, Business Ethics in Healthcare:
Beyond Compliance (Bloomington: Indiana
University Press, 2001), 25.
3. Ibid.
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