32 Organizational ethics
A hospital has faced significant resource constraints over the last five years. After making significant cuts in administrative costs, the hospital senior management team is exploring revenue-generating options to help fund its clinical programs. One option under consideration involves renting cafeteria space to a popular fast-food restaurant. In the past, hospital cardiologists and endocrinologists have opposed similar proposals on the grounds that offering fast food is inconsistent with the hospital’s patient care mission and its national reputation in the treatment of cardiac disease and non-insulin-dependent diabetes. The Clinical Operations Committee, which includes clinical and administrative leaders from across the organization, considers whether it should support or oppose the current proposal.
Mr. A is a 62-year-old male, who presents at the emergency department with severe chest pain. Mr. A is stabilized and diagnostic tests indicate triple vessel coronary artery disease. Bypass surgery is recommended. Prior to admission, it is discovered that Mr. A is a non-resident on a short visit to his son, who immigrated four years ago. As a non-resident, Mr. A is not covered by the national public health insurance plan and he did not purchase medical insurance for his trip. Neither he nor his son has the financial resources to pay for the bypass surgery. Although Mr. A is sufficiently stable to survive a flight home, he would not have access to the necessary medical treatment in his home country. The treating clinician wonders if the hospital should cover the cost of the surgery.
What is organizational ethics?
Organizational ethics is concerned with the ethical issues faced by managers and governors in healthcare organizations and the ethical implications of organizational decisions and practices on patients, staff, and the community. Organizational ethics can be defined as “the organization’s efforts to define its core values and mission, identify areas in which important values come into conflict, seek the best possible resolution of these conflicts, and manage its own performance to ensure that it acts in accord with espoused values” (Pearson et al., 2003, p. 32). Organizational mission and value statements describe how the organization proposes to conduct its activities and outline a set of standards according to which the organization’s actions and decisions are to be judged (Spencer et al., 2000; Boyle et al., 2001). Thus, the mission and values are sometimes described as the “moral compass” of the organization (Pearson et al., 2003).
Organizational ethics has been described as the next step in the evolution of bioethics, which has focused primarily on ethical issues in direct patient care (Potter, 1996; Bishop et al., 1999). Organizational ethics focuses on the business aspects of healthcare, the multiple stakeholder interests (e.g., patients, staff, suppliers, other providers, the community) affected by organizational decisions and actions, and the organization’s “total mission,” which includes the goal of patient care as well as other important goals such as financial sustainability, staff well-being, and public accountability (Hall, 2000; Spencer et al., 2000). There are three main categories of organizational ethics issues: (i) ethical issues emerging in clinical care as a result of decisions taken elsewhere in the organization, (ii) ethical issues in clinical care with wide-reaching organizational implications, and (iii) ethical issues related specifically to the business aspects of healthcare organizations. The goals of organizational ethics are to achieve a strong alignment between the organization’s stated mission, vision, and values and the decisions and actions by individuals on behalf of the organization (Silverman, 2000) and to create an organizational climate where organizational ethics issues can be constructively addressed (Spencer et al., 2000).
Why is organizational ethics important?
Ethics
Organizational ethics involves “the intentional use of values in [organizational] decision-making” (Potter, 1996, p. 4). Winkler et al. (2005) proposed four substantive principles of organizational ethics to guide decision making based on values inherent to the organization’s relationships with key stakeholders (Table 38.1.1). Other values have also been argued to be important for creating an ethical organization: humaneness, reciprocal benefit, trust, gratitude, dignity, service, and stewardship (Reiser, 1994). Trust has been emphasized by several authors as a key to organizational ethics effectiveness in healthcare organizations (Buchanan, 2000; Goold, 2001; Pearson et al., 2003). These and other values are often articulated in an organization’s mission/vision/value statements, code of ethics, policies, and staff orientation and performance evaluation processes. Ethical decision-making processes are also essential to organizational ethics. Organizational decision making is often fraught with moral uncertainty about what ought to be done in the context of competing stakeholder interests, conflicting values, and limited information. Ethical decision-making processes help to establish the ethical legitimacy of organizational decisions by facilitating agreement around how decisions ought to be made. Key procedural values include openness, transparency, inclusiveness, empowerment, and reciprocal accountability (Buchanan, 2000; Emanuel, 2000; Silverman, 2000; Spencer et al., 2000; Boyle et al., 2001; Gibson, et al., 2005a). Ethical processes are important for establishing institutional trust and promoting constructive stakeholder engagement around organizational decisions (Goold, 2001; Gibson et al., 2005b). Although an organizational decision may not favor a stakeholder’s interests, the stakeholder may nevertheless be able to accept the decision if the decision-making process is (and is perceived to be) ethical. One prominent process model is Daniels and Sabin’s (2002) accountability for reasonableness framework which is described in detail in ch. 33. described. When integrated into organizational mechanisms and structures, these substantive and procedural values can contribute to the establishment of a strong ethical climate and culture in the organization (Emanuel, 2000; Silverman, 2000; Spencer et al., 2000; Boyle, et al., 2001).
The field of business ethics offers additional concepts and tools to address the business aspects of healthcare, the importance of collective responsibility for mission fulfillment, and the unique value-creating activity of organizations as compared with individuals (Spencer et al., 2000; Ells and MacDonald, 2002). For example, “stakeholder impact analysis” involves identifying all stakeholder groups and interests, ranking and weighting the stakeholders and their interests, and assessing the impact of a proposed action on each stakeholder group (Brooks, 2004). Several bioethicists have proposed stakeholder impact analysis as a tool to facilitate organizational ethics decision making in healthcare organizations (Hall, 2000; Spencer et al., 2000; Werhane, 2000; Boyle et al., 2001; Ells and MacDonald, 2002).
Law
Healthcare organizations are legal entities with corresponding rights and responsibilities defined by a range of common and civil law provisions. Although the specific legal responsibilities of healthcare organizations may differ from one jurisdiction to the next, common domains of legal responsibility include employment standards (e.g., occupational health and safety standards, human rights provisions), consumer protections, corporate governance requirements, tax regulations, privacy legislation, and so on. Faith-based healthcare organizations may have additional responsibilities defined by canon law related to the religious mission of the sponsoring organization (National Conference of Catholic Bishops, 1995; Catholic Health Corporation of Ontario, 2000).
Healthcare organizations can be held legally liable for decisions made on their behalf. For example, in Darling v. Charleston Community Memorial Hospital (1965), the US court ruled that hospitals and their governing bodies have a direct duty of care for patients and can be held liable for injury resulting from negligent supervision of medical staff. The doctrine of corporate negligence holds that “a hospital has a direct and independent responsibility to its patients over and above that of the physicians and surgeons participating therein” ( Johnson v. Misericordia Community Hospital, 1981). The common law finding defines clinicians and administrators (including Board members) as legal cofiduciaries of patient care.
The law recognizes that an organization cannot control every action taken by an individual associated with it. However, the law expects healthcare organizations to act in good faith and to make reasonable efforts to create a workplace environment where illegal action is prohibited (Seay, 2004). Many healthcare organizations have instituted corporate compliance programs, which are designed to mitigate organizational culpability through the implementation of strategies to prevent and detect illegal behavior, take corrective action in the case of a legal violation, and enforce compliance with legal standards among staff (Boyle et al., 2001; Pearson et al., 2003). However, recent corporate governance scandals (e.g., Enron) suggest that corporate compliance programs may not be sufficient alone to mitigate organizational culpability or to ensure corporate ethical conduct. As a result, some healthcare associations have developed education programs and policy guidance to clarify the legal and ethical obligations of corporate governance in healthcare organizations (Corbett and MacKay, 2005.)
Policy
With the advent of managed care in the USA and fiscal constraints elsewhere, concerns have been raised about the encroachment of financial considerations in patient care (Silverman, 2000; Pearson et al., 2003). In 1994, the US Joint Commission for Accreditation of Healthcare Organizations incorporated organizational ethics into its accreditation standards (Joint Commission on Accreditation of Healthcare Organizations, 2006). Other accreditation bodies have followed suit (Canadian Council for Health Services Accreditation, 2004). In addition to requiring ethics in the delivery of direct patient care, accredited healthcare organizations are expected to include ethical considerations in decision making (e.g., resource allocation, risk management, human resource management), to develop mechanisms to address ethical issues as they emerge, and to align organizational decisions with the organization’s mission and values (Joint Commission for International Accreditation, 2002; Canadian Council for Health Services Accreditation, 2004; Joint Commission on Accreditation of Healthcare Organizations, 2006).
Professional codes of ethics specify the ethical obligations of health services managers to patients, the organization, and the community (American College of Health Executives, 2003; Veteran’s Health Administration, 2003; Canadian College of Health Service Executives, 2005; General Medical Council, 2006). In Canada, for example, an ethical healthcare executive “services the public interest in an ethical fashion, strives to provide quality services, communicates truthfully and avoids misleading or raising unreasonable expectations in others, uses sound management practices and ethical use of resources, promotes public understanding of health and health services, and conducts inter-organisational activities in a cooperative way that improves community health” (Canadian Council for Health Services Accreditation, 2004). There is an emerging consensus within the health sector that clinicians and managers are both accountable for the care and safety of patients (Bishop et al., 1999; Chervenak and McCullough, 2003). The Australian Medical Association’s Code of Conduct for Corporations Involved in the Provision of Management and Administrative Services in Medical Centers in Australia offers a concrete attempt to clarify this shared accountability (Australian Medical Association, 2001).
Clinician–managers may experience unique ethical challenges in situations where their ethical obligations as clinicians may conflict with their ethical obligations as managers, for example, providing high-quality care to individual patients versus ensuring high-quality care within available resources for the populations of patients served by the organization. In recent years, a number of professional organizations have developed specific policies in an effort to guide clinician–managers (Ozar et al., 2000; Canadian Nursing Association, 2002; General Medical Council, 2006).
Empirical studies
Empirical studies of organizational ethics are limited. The vast majority of empirical research has focused on a single organizational ethics issue: resource allocation. Studies of institution-level resource allocation in hospitals and health authorities have highlighted the importance of fair decision-making processes to resolve these challenges (Hope et al., 1998; Ham, 1999; Daniels and Sabin, 2002; Martin, et al., 2003; Peacock et al., 2006). Failure to resolve the tension between managing economic constraints and providing high-quality service was identified by nurses as the most pressing organizational ethics issue in their workplace (Cooper, et al., 2002, 2004).
Recent studies of organizational ethics in healthcare organizations highlight a number of other key organizational ethics issues. Pearson et al. (2003) identified six domains of organizational ethics issues in managed care organizations based on interviews with senior executives and physicians: confidentiality, community benefits, vulnerable populations, medical necessity and appropriateness, end of life care, and consumer empowerment. A Canadian study found that clinician–managers faced ethical issues related to resource allocation, workplace safety, intraprofessional and interprofessional conflict, conflict of interest, and balancing the competing needs of the patient, the community, and the organization (Lemieux-Charles et al., 1993; see also Sibbald and Lazar, 2005).
The ethical climate of the organization has been shown to be a significant factor in nurses’ decisions to leave their positions or the nursing profession (Hart, 2005) and in nurses’ self-reports of moral distress and burnout (Corley, 1995; Severinsson, 2003; Corley et al., 2005). Perceived organizational fairness is associated with increased quality of care ratings, job satisfaction, and trust of management as well as decreased emotional exhaustion among nurses (Aiken et al., 2001; Laschinger, 2004), while perceptions of unfairness are correlated with increased psychological distress among physicians (Sutinen et al., 2002) and increased absenteeism among hospital staff generally (Kivimaki et al., 2003).
How should I approach organizational ethics in practice?
Organizational ethics effectiveness depends on, firstly, knowing what ethical issues your organization is facing, and secondly, ensuring there are effective mechanisms in place to address these issues. In 2005, we interviewed 150 Board members, senior executives, clinical and administrative managers, and senior clinical leaders in 13 publicly funded healthcare organizations in Toronto, Canada to find out what ethical issues their organizations were facing and what strategies were being used to address them. The key ethical issues and strategies are summarized in Table 32.2 and these serve as a good “roadmap” for approaching organizational ethics in practice.
Organizational ethics effectiveness is reflected in the degree to which an organization’s stated mission and values are expressed in the choices and actions of the organization’s agents, including staff, managers, and board members. Ethical guidelines, policies, and decision-making frameworks are important mechanisms for realizing the organization’s mission and values, guiding ethical conduct, and resolving value conflicts. However, experience shows that ethical leadership from the board and senior management, including senior clinical leaders, is important for setting the ethical tone of an organization (Spencer et al., 2000; MacRae et al., 2005). Each of the 13 organizations we surveyed had at least one full-time ethicist, who provided expert leadership in ethics. The ethicist can play a key role in helping to resolve organizational ethics issues as well as building ethics capacity across the organization through staff education and policy development (Godkin et al., 2005). Given the complexity of many organizational ethics issues, consultation with affected stakeholders is a key strategy for clarifying the impact of alternative organizational decisions. Finally, the effectiveness of organizational ethics requires evaluation of these strategies to ensure that organizational decisions reflect the organization’s stated mission and values, individual actions of staff embody these values, organizational ethics issues are identified and resolved constructively, and together these actions contribute to a positive ethical climate.
The cases
The Clinical Operations Committee is faced with determining whether or not the proposed business opportunity is consistent with the mission and values of the organization. The financial benefits of the commercial partnership would certainly generate revenue to support clinical programs. However, these benefits may undermine the patient care mission, particularly in the eyes of stakeholders. The Clinical Operations Committee should engage in a candid and cooperative discussion with the senior management team about alternative solutions to address the funding gap. Funding alternatives should be assessed on the basis of the organization’s mission and values, their impact on key stakeholder groups, and other relevant factors (e.g., clinical data, legal considerations, professional obligations). If the organization does not already have a policy guiding business development decision making, a key recommendation of the Clinical Operations Committee should be that the organization should develop such a policy, based on broad range of stakeholder input, which outlines explicit criteria and processes for making business-development decisions and includes an evaluation component.
Healthcare professionals have an ethical obligation to advocate for their patients. However, they should also be good stewards of societal resources. A physician’s professional autonomy allows for the physician to donate his or her services, but it does not necessarily give the physician the authority to donate hospital resources such as medical devices and costly medication. These dual obligations may create a conflict for the healthcare professional involved in the care of Mr. A. The healthcare professional can fulfill both obligations by bringing Mr. A’s case forward to the decision makers within the organization who are directly responsible for allocating hospital resources. Decision makers should consider (i) the gravity of Mr. A’s clinical and financial need, (ii) the impact on other stakeholder groups (e.g., access to care), (iii) the professional obligations of the healthcare professional, and (iv) the mission and values of the healthcare organization. Consultation with an ethicist may facilitate decision making in this case. Although availability of resources may be a limiting factor on the ability of an organization to provide the surgery to treat Mr. A, it may be possible to fulfill the hospital’s patient care mission and the healthcare professional’s obligations in other ways, for example by securing access to care for Mr. A through another provider or by seeking alternative funding sources. As in the previous case, an organizational policy would be helpful to guide decision making in future cases.