Future Direction In
Organizational Ethics
Ties to Healthcare Ethics
by Ana Smith Iltis
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Book Reviewed
Business Ethics in Healthcare:
Beyond Compliance.
Leonard J. Weber.
Bloomington: Indiana University Press,
2001. 264 pp. $35.00 (Hardcover).
Managing Ethically: An
Executive's Guide.
Paul B. Hofmann and William A. Nelson,
eds.
Chicago: Health Administration Press,
2001. 276 pp. $49.00 (Softcover).
Developing Organization Ethics in
Healthcare: A Case-Based
Approach to Policy, Practice, and
Compliance.
Ann E. Mills, Edward M. Spencer, and
Patricia H. Werhane, eds.
Hagerstown, Md.: University Publishing
Group, 2001. 224 pp. $24.95 (Softcover).
Organizational ethics in health care is
rooted in defense industry changes
during the early 1980s and in changes in
business ethics. During the former, concerns
over weapons procurement motivated
the development of compliance
programs, in which contractors were
required to develop codes of ethics,
mechanisms to report misconduct, and
the like. By 1991 the U.S. Sentencing
Commission was urging all companies to
implement ethics/compliance programs.1
The focus on compliance with government
regulations has become increasingly
important in health care, especially
because of the growth of governmentfunded
health programs and in light of
financing scandals and other mishandling
of government dollars.
Business ethics has also influenced
the development of organizational ethics
in health care, with its focus on corporate
moral agency and responsibility2 and on
particular aspects of business operations,
such as advertising and conflict of interest.
The Diagnostic Related Groups
(DRGs) of the early 1980s and the dominance
of managed care today make it
clear that money matters in health care
and that business decisions are made regularly
in the context of providing health
care. Moreover, it has become clear that
healthcare institutions, such as hospitals
and insurance companies, make decisions
about health care and, in many
cases, determine who receives care and
what level of care they receive. Thus it has
become necessary to examine the moral
responsibilities of healthcare institutions.
Initially, organizational ethics in
health care focused heavily on compliance,
on ensuring that healthcare
organizations abided by all relevant
government rules and regulations.
Today, two trends dominate organizational
ethics. First is the recognition
that it must look beyond compliance.3
Second is the recognition that many
issues in healthcare ethics once thought
to concern only patients and providers
do in fact have organizational components.
4 Despite this new focus, there is
still a quest to determine what, precisely,
should be the next step for organizational
ethics. Each of the three
books discussed here suggests a focus
for organizational ethics and contributes
to the development of this growing
field.
In Business Ethics in Healthcare:
Beyond Compliance, Leonard Weber
describes ethics as a discipline aimed at
"assisting persons to make better practical
judgments." In the first chapter he
outlines the nature, purpose, and goals of
healthcare organizations and advocates
a special healthcare business ethics. In
particular, he suggests that healthcare
organizations are or ought to be caregivers,
employers, and citizens. Weber
claims that these roles inherently lead to
a series of responsibilities, including the
basic obligation to ensure that "the
needs and interests of all relevant stakeholders
are balanced on the basis of a
consistent and explicit understanding
of priorities." In the second chapter,
Weber offers principles of business
ethics, which he applies to specific cases
in the remainder of the book.
The pattern of Weber's analyses
emerges clearly: balancing values. His
approach is, in short, to enumerate and
rank priorities—a quite common approach
to healthcare ethics. For example, Baruch
Brody's conflicting appeals model of decision-
making in healthcare ethics shows
an appreciation for the need to balance
values and value-claims. Brody recognizes
that many moral appeals make a
legitimate claim on us and these appeals
may conflict. Thus he argues in his discussion
of the patient-physician relationship
that an ethical theory must focus
on balancing those potentially conflicting
appeals. As a casuist, Brody holds that the
best way to determine how appropriately
to balance those appeals is to examine a
variety of cases concerning a particular
matter.5
In chapters three through sixteen,
Weber presents topics in healthcare
ethics—conflict of interest, managed care
coverage denials and appeals, labor
issues, advertising, and mergers and
acquisitions, to name a few. One important
reason to read this book is that the
author identifies areas that might initially
be overlooked when trying to
determine business ethics concerns in
health care, such as socially responsible
investing. For each topic, Weber discusses
the need to balance values and
goals of health care, provides case analyses
that demonstrate that balancing,
and offers principles that individuals
and committees can apply in addressing
concerns.
Chapters seventeen and eighteen
show how to promote business ethics in
health care and elucidate the relationship
between ethics and the business
management of healthcare organizations.
Weber concludes that organizational
ethics committees are essential in
increasing understanding of business
ethics in health care and in promoting
the ethical management of healthcare
organizations.
This book reveals the astounding
relevance of business ethics to health
care. Healthcare administrators will see
in this book many issues they face and
will, in particular, see routine business
decisions in a new light. Patients and
employees will see many of the struggles
healthcare managers face. They may
recognize that many issues that seem
clear and one-dimensional from certain
perspectives are actually multifaceted
and complex. Perhaps the most important
conclusions one can draw from this
book are that the focus on business and
organizational ethics in health care must
go beyond compliance, and that a clear
understanding of the nature and purpose
of health care is critical to understanding
and addressing ethical issues in
health care.
Two very important discussions are
missing from Weber's analysis. First, hedoes not indicate the source of the principles
he identifies as action-guiding. In
fact, the background assumptions underlying
his claims are not even mentioned.
Weber fails to recognize the fact that with
different assumptions we would have very
different balancing outcomes. Thus to
say that we ought to have principles and
balance priorities in itself is unhelpful. We
must know how to obtain the principles,
why they are the right principles to hold,
and what values and priorities ought to
guide the balancing of such principles.
Second, Weber's discussion does
not give sufficient attention to the many
different natures healthcare institutions
might have. The brief attention to religious
healthcare institutions is insufficient.
Weber concludes that religious
institutions can operate as they wish as
long as they ultimately balance values
just as he would. For example, Weber
presents a case in which a Catholic hospital
and a nonprofit secular community
hospital are considering a merger that
would result in only one hospital in the
community (Case 15.2). The Catholic
hospital insists that the new hospital
would have to continue to abide by the
Ethical and Religious Directives,6 a set of
guidelines issued by the Catholic bishops
of the United States that govern Catholic
healthcare institutions. According to these
guidelines, Catholic healthcare institutions
must not provide healthcare services—
such as abortions and elective
sterilizations—that are contrary to Roman
Catholic moral teaching. Weber claims
that "within limits, it is entirely appropriate
for healthcare organizations to
determine on the basis of their own ethical
principles which legally acceptable
practices are and are not permitted within
their facilities." However, he also claims
that there are limits to what healthcare
institutions may refuse to provide:
The healthcare organization is a community
service business. It is of the
nature of a service organization that
its responsibility is determined in large
part by the needs of the community.
Not every healthcare facility must offer
every type of service, of course, and
not every acute care hospital has a
responsibility to permit every service to
which the community has a reasonable
expectation of access. If there is
only one acute care facility in the community,
however, that facility has much
less flexibility. This is a situation that
would result from the proposed merger
in this case.7
Essentially, Weber argues that "the
basic responsibility of the organization to
serve the community takes priority" over
its particular moral commitments and
responsibilities. It is interesting that
despite the extensive discussion of the
moral obligations of healthcare organizations,
very little attention is given to
what we might call the moral rights of an
institution to adhere to its particular
moral commitments and virtually no consideration
is given to the idea that a
healthcare institution can, as a moral
agent, have moral obligations that it must
satisfy at the risk of offending an individual
or group of individuals. Weber's
discussion of this case reveals that he has
a limited appreciation of healthcare institutions
as bearers of particular moral
characters and responsibilities, and of
the importance of healthcare institutions
living up to their moral obligations and
maintaining their integrity. He sees
healthcare institutions as having moral
responsibilities and as having the potential
for integrity, but only within the limits
of his own conception of morality. He
fails to see that, although he does not recognize
certain services as morally objectionable,
it may in fact be morally wrong
for a particular healthcare institution to
provide them. He does not understand
that a Catholic institution seeking to
maintain its institutional integrity never
could balance values in the same way he
does.
Weber offers an interesting discussion
of some important areas of concern
to organizational ethics, and he shows
how, given certain assumptions, one
might attempt to resolve organizational
ethics issues. However, his approach is
too simplistic and narrow to be of service
to all healthcare organizations.
The starting point of Developing
Organizational Ethics in Healthcare: A
Case-Based Approach to Policy, Practice,
and Compliance is somewhat similar to
Weber's. The organization of the book
reflects that the editors—Ann Mills,
Edward Spencer, and Patricia Werhane—
are acutely aware of the influence of
organizational issues in different areas of
health care and the ways in which organizational
ethics permeates all in healthcare
ethics. It addresses organization
issues in four areas of healthcare
ethics—business ethics, clinical ethics,
professional ethics, and research ethics—
and provides cases in each area. The
appendices recommend ways to analyze
organizational ethics cases, show
how two healthcare organizations
address such cases, and provide the
codes of ethics of various professional
healthcare organizations.
This book, like Weber's, demonstrates
the salience of organizational
ethics in health care. Moreover it has
the virtue of making obvious the depth or
expanse of organizational ethics and thus
increases our understanding of the field.
The editors, in their introduction, note
that their goal is to show that organizational
ethics is eclectic and broad and
that it arises in all areas of healthcare
ethics. They include cases pointing to
numerous potential organizational issues,
and they show that issues we consider
strictly matters of, for example, clinical
ethics may be resolved by addressing
organizational issues. This is perhaps the
most important insight of the book. The
relationship between organizational
ethics and other areas of healthcare
ethics has been grossly underexamined.
Typically, organizational ethics is treated
as one more area of healthcare ethics. Yet
what the editors show us in their organization
and selection of cases is that organizational
ethics is integrated into other
areas of healthcare ethics; it cannot and
should not be isolated and treated as a
separate entity. The compartmentalization
of healthcare ethics is ill conceived.
Unlike Weber's book, this collection
does not include analyses and alleged
answers or solutions for cases. According
to the editors, their "concern is to include
cases that demonstrate the role of organization
ethics activities in the formation
and support of a positive ethical climate.
Commentary and questions are not necessary."
They prefer to let readers analyze
the cases themselves. This makes the
book a useful tool for generating discussion
without providing a roadmap that
might limit the examination of important
issues. The guidelines for case analysis
offered in Appendix B can be used as a
starting point for such discussions. Of
course, by raising issues and questions
and not providing concrete answers, the
book will leave readers looking for a set
of rules. Nevertheless, organizational
ethics is complex, and it would be irresponsible
to suggest that there are simple
answers to be had.
In their introduction, Mills, Spencer,
and Werhane point to the importance of
institutional values to organization ethics.
An organization's ethical climate, they
say, is grounded in its core values, which
inform its value and mission statements
and code of ethics. In Appendix B, which
offers guidelines for analyzing organizational
ethics issues, there is again mention
of an organization's mission. The importance
of institutional values, although
introduced, is not sufficiently developed
in the text. As noted in the discussion of
the Weber text above, an appreciation
for an organization's values is critical.
This book, like Weber's, fails to demonstrate
that a rich understanding of an
organization's values and goals is essential
for any fruitful discussion of organizational
ethics. It is from an organization's
values and goals that we can develop an
understanding of what it ought to do.
There is likely to be a sense among many
that there simply are some morally right
and wrong ways for organizations to act
and that organizational ethics is a fact of
the matter. While there may be some
basic rules of the game that are widely
recognized as obligations of healthcare
organizations, the more interesting and
difficult cases involve organizational values.
In a secular, pluralistic society there
is not sufficient agreement on the content
of morality to rely solely on the so-called
common morality. Ethics and ethical
analysis are grounded in an understanding
of the values agents hold. Thus the
obligations we might associate with a
Christian hospital may not be ones we
associate with a Jewish, public, or private
secular hospital. That does not mean that
we ignore those particular obligations.
On the contrary, we recognize that the
particular Christian hospital at stake must
in fact act in particular ways and should
address organizational ethics issues in
ways that are grounded in and reflect its
particular values. Developing Organization
Ethics in Healthcare would be richer
if there were more recognition of moral
controversy and its implications for organizational
ethics.
Managing Ethically: An Executive's
Guide, edited by Paul Hofmann and
William Nelson, is an anthology of
columns originally published in Healthcare
Executive that introduces the reader
to a wide variety of organizational
ethics issues from the perspective of individuals
in administrative and managerial
positions. This focus on administrators
and managers certainly is not meant to
suggest it is only the responsibility of
those in management to address ethical
issues or that only they are in a position
to identify such issues. On the contrary, it
is meant to promote dialogue among all
parties. The entries, organized topically,
cover issues of leadership, community
relations, managed care, mergers and
integrations, use of information, human
resources, clinical ethics, organizational
ethics, and institutional resources (i.e.,
programs within an institution that can
help promote ethical management). Each
section is short and focused and references
the American College of Healthcare
Executives Code of Ethics to suggest
professional norms and thus how a
healthcare administrator ought to
approach an issue. Even for those who
are not healthcare administrators and
thus do not fall into the narrow scope of
this text, the entries provide insight into
the broad range of ethical issues that
arise in health care and the issues healthcare
administrators face. The volume
should dispel any notion that administrators
do not struggle with ethical dilemmas
when making unpopular choices,
such as laying off employees, as the primary
focus is on the examination of organizational
ethics issues through the lens
of healthcare executives.
The columns concerning leadership
(Part I) attend exclusively to what
we might consider personal ethical issues
that healthcare executives might face,
such as how appropriately to maintain
their personal integrity in the workplace
and how to handle potentially conflicting
loyalties. Thus in Part I the focus is on
the individual manager as moral agent.
Part II of the collection shifts focus to
community relations; the moral agent of
concern is the healthcare organization
itself, with its the obligations and responsibilities.
In much of the remainder of
the text we see greater discussion of the
moral obligations of both individuals
and organizations.
This collection introduces important
issues in organizational ethics and
business ethics in health care. Unfortunately,
because of the nature of the
genre, the columns lack sustained analysis.
Though the text has the virtue of
diversity, it should not be relied upon for
a careful discussion of the variety of
issues introduced.
All three volumes considered here
show that organizational ethics is a growing
area of interest with an increasingly
demanding and widening set of concerns.
The original focus of organizational
ethics on compliance is outdated.
What is necessary now is a vision for
organizational ethics. Patricia Werhane
notes that "even though business ethics
contributes to our thinking about the
ethics of healthcare organizations, these
organizations have distinguishing characteristics
that make them worth considering
apart from other business or
charitable enterprises."8 Organizational
ethics may be the special business of
healthcare ethics we need. It must
account for the nature and purpose of
healthcare organizations, including the
fact that not all healthcare organizations
are created with the same set of commitments,
values, and obligations. Some
healthcare organizations, for example,
may have religious commitments others
lack. Any clear understanding of organizational
ethics must attend to the particular
moral characters of healthcare
organizations, not merely to general
claims about the obligations of such institutions.
This will require an understanding
of institutional integrity, of what it
means for healthcare institutions to have
moral commitments and to fulfill them.
Understanding healthcare institutions as
moral agents, identifying institutional
moral commitments, and exploring the
implications of the moral obligations of
healthcare organizations is or ought to be
the focus of the next generation of organizational
ethics literature.
NOTES
1. Marie J. Giblin and Mark E. Meaney, "Corporate
Compliance is Not Enough," Health
Progress (September-October 1998): 1.
2. For a summary of this literature, see Geoff
Moore, "Corporate Moral Agency: Review
and Implications," Journal of Business
Ethics, 21 (1999): 329–34.
3. George Khushf, "Administrative and Organizational
Ethics," HEC Forum 9, no.
4(1997): 299–309; Weber, Business Ethics.
4. Dennis F. Thompson, "Hospital Ethics,"
Cambridge Quarterly of Healthcare Ethics
3(1992): 203–210; Spencer, Mills, and
Werhane, Developing Organization Ethics.
5. Baruch Brody, Life and Death Decision
Making (New York: Oxford University
Press, New York, 1988).
6. National Conference of Catholic Bishops,
Ethical and Religious Directives for
Catholic Healthcare Services (Washington,
D.C.: United States Catholic Conference,
1995, 2001).
7. Weber, Business Ethics, 146–147.
8. Patricia Werhane, "Business Ethics, Stakeholder
Theory, and the Ethics of Healthcare
Organizations," Cambridge Quarterly
of Healthcare Ethics 9(2000): 169–181.
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Second Opinion #11
Publisher: Park Ridge Center, Chicago
Date: April, 2005.
ISSN: 0890-1570
105 pages.
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