30 Organizational Ethics Spring 2005

Business Practices, Ethical Principles, and Professionalism

Ann E. Mills and Mary V. Rorty

INTRODUCTION tices did not require constant ethical reexami- nation because of the relative autonomy of the Whether in single practice, research orga- physician as professional, the radical restruc- nizations, government facilities, or complex turing of the healthcare system and the way hospitals or clinics, physicians practice in healthcare has come to be reimbursed in the organizations. They are influenced by, and last two decades has brought into greater sa- influence, the internal business practices of lience the impact of systemic business prac- the organizations with which they are affili- tices on professional practice. ated, as well as the business practices of other The Accreditation Council on Graduate organizations that are part of the delivery sys- Medical Education (ACGME) acknowledges in tem. It has always been true that the way in its standards the interrelation of profession- which care is delivered involves business alism and business practices.1 In the fifth and practices. Healthcare delivery, whatever the sixth competencies listed in the ACGME Out- model, is a business that involves costs and comes Project, ethical professional practice is reimbursement issues. If there was earlier placed in the context of the larger system some hope that professional business prac- within which the physician practices. If ethi- cal professional standards are reflected in ap- Ann E. Mills, Msc (Econ), MBA, is an Assistant Profes- propriate business practices, then the out- sor and Director of Outreach Programs in the Center for comes of the healthcare system as a whole may Biomedical Ethics at the University of Virginia in also be professionally responsible. But pro- Charlottesville, [email protected]. fessional goals and the business practices de- Mary Varney Rorty, PhD, is a Clinical Associate Profes- signed to achieve them are not necessarily sor in the Stanford Center for Biomedical Ethics in Stanford, correlated throughout a healthcare system. California, [email protected]. © 2005, University Pub- Individual professionals may not have enough lishing Group. control, either of the institutions in which they Volume 2, Number 1 Organizational Ethics 31 practice or in the healthcare system as a goals and outcomes, and how they are de- whole, to assure ethically appropriate results. signed in order to understand how threats to Furthermore, in any business practice, there professionalism may arise through them. are design characteristics that must be con- While business practices are a necessary con- sidered. If we want physicians to commit to dition for professional activity, they may be a standards that have been associated with pro- source of problems as well. The problems fessionalism, then the systems within which faced by an ethical individual within an un- they work, and the business practices that are ethical system are not new or unique to medi- designed to achieve the goals of those systems, cine, but they do call attention to the impro- must support their activities as professionals. priety of holding individuals responsible for This can be achieved only if we design sys- systemic failings. We conclude that enlarging tems that are responsive to professional val- the concept of professionalism to include ues and are characterized by some degree of greater consideration of cost will not be flexibility. Business practices are not static, enough for physicians and the organizations and the healthcare delivery system is frag- with which they are affiliated to achieve the mented. Each component, on each level—in- goals of the sixth competency. For this, we dividual physicians, healthcare organizations, may need to require that the system as a whole the payers and managed-care organizations to commit to the same goals. that interact with them—has a plurality of values and goals that are supported by their THE ACGME COMPETENCIES own business practices. The more responsi- bility that is entrusted to professionals, the The fifth competency provided by the ACGME greater the temptation may be for other com- invites this reexamination. It states: ponents of the delivery system to design in- Residents must demonstrate a commit- tersecting practices that may corrupt or be ment to carrying out professional respon- perceived as corrupting professionalism. sibilities, adherence to ethical principles, In this essay, we look at the fifth and sixth and sensitivity to a diverse patient popu- competencies of the ACGME, consider the lation. Residents are expected to: goals and values that they presuppose and the •demonstrate respect, compassion, and practices associated with them: the means by integrity; a responsiveness to the needs which organizations or individuals achieve of patients and society that supersedes their corporate or individual ends. We con- self-interest; accountability to patients, centrate on business practices, defined society, and the profession; and a com- broadly as relationships, processes, or proce- mitment to excellence and on-going dures designed to meet some goal or produce professional development some outcome. We demonstrate that each •demonstrate a commitment to ethical component of a business practice—its goal, principles pertaining to provision or the relationships or interactions which it en- withholding of clinical care, confiden- compasses, as well as the outcomes it pro- tiality of patient information, informed duces—should be scrutinized for the ethical consent, and business practices [au- principles on which it relies as well as its ef- thors’ italics] fects on the other components. We focus our •demonstrate sensitivity and respon- remarks at the organizational level of the de- siveness to patients’ culture, age, gen- livery system, but they can apply to the mi- der, and disabilities.2 cro-level of the individual practitioner, and to the macro-level of the objectives of the sys- The requirement of the ACGME that phy- tem as a whole. We address questions of what sicians “demonstrate a commitment to ethi- business practices are, how they are linked to cal principles pertaining to . . . business prac- 32 Organizational Ethics Spring 2005 tices” as a condition for professionalism is a nizes that physicians practice at every level demand that physicians run their practices or of the delivery system and that physicians are operate their clinics or perform research in a constrained to act as patients’ advocate within way that is consonant with their professional that system. Differences in requirements, pro- ethics, and that they resist practices that pre- cedures, regulations, or business practices in vent or distort their professional judgment. the organizations with which practitioners This competency calls for residents and other interact affect their ability to exercise their physicians to make a commitment to the ethi- professional judgment on behalf of their pa- cal principles that pertain to medical ethics, tients. clinical ethics, and “business practices.” It is In the sixth competency, the ACGME reit- a three-pronged approach that acknowledges erates the overarching professional goal and business practices are related to professional- desired outcome for physicians and whatever ism, and so may influence the way in which system within which they practice: to deliver care is delivered.3 care of optimal value. The fifth competency The sixth ACGME competency states: requires that professionalism include a com- Residents must demonstrate an awareness mitment to the ethical principles of business of and responsiveness to the larger con- practices, and the sixth competency supplies text and system of healthcare and the abil- the goal toward which those business prac- ity to effectively call on system resources tices are coordinated. to provide care that is of optimal value. Residents are expected to: WHAT ARE BUSINESS PRACTICES? •understand how their patient care and other professional practices affect Business practices are the way in which other healthcare professionals, the people, resources, and technology are brought healthcare organization, and the larger together to try and fulfill the values and goals society and how these elements of the of an organization. Interactions—relationships system affect their own practice or procedures, processes or systems, policies •know how types of medical practice or activities—can be examined as “business and delivery systems differ from one practices,” depending upon the context in another, including methods of control- which they occur and the role they play in ling healthcare costs and allocating the operations of an organization or physician resources practice.4 Business practices may be formal •practice cost-effective healthcare and or informal, simple or complex, but they ex- resource allocation that does not com- ist only to fulfill the organization’s goals. (An promise quality of care organization leader would be hard pressed to •advocate for quality patient care and justify any business practice that does not in assist patients in dealing with system some way fulfill a goal associated with the complexities organization.) They are designed and imple- •know how to partner with healthcare mented to produce desirable organizational managers and healthcare providers to outcomes by affecting the behavior and deci- assess, coordinate, and improve sion making of internal or external stakehold- healthcare and know how these activi- ers, either individuals or other organizations. ties can affect system performance. ETHICAL PRINCIPLES AND The sixth competency complements the fifth BUSINESS PRACTICES by emphasizing the integration and intercon- nections between different levels of the health- Business practices are linked to organiza- care system and various sites of care. It recog- tional goals and have normative content. Most Volume 2, Number 1 Organizational Ethics 33 organizations produce either a product or a should be used to achieve customers’ satis- service for an identified customer or popula- faction; for instance, clients are not allowed tion of customers. Even government agencies to dictate their wishes to auditors, regardless can be so described, if the customer is seen as of the desirable effect on customers’ satisfac- society as a whole. Many organizations want tion, when the practices they recommend are to keep their existing customers and add new illegal or improper.8 In the healthcare context, customers, which they can only do if their we question the conditions under which some products or services meet the standards ex- professionals have been known to work,9 we pected by their customers. As a matter of believe it is unethical for professionals to course, they expect to be reimbursed for their claim knowledge or skills they do not pos- efforts. sess,10 or for healthcare organizations to use In the process of producing goods and ser- unsafe practices, such as reusing needles.11 vices, maintaining and adding to their cus- Further, medical professionals are obligated tomer base, and collecting the revenue asso- not to harm their patients—whatever patients ciated with the delivery of goods and services, may wish. organizations accrue costs, which, if not con- Just as goals and business practices may trolled, may threaten their viability. From this not be correlated with ethical principles, goals perspective, the business practices employed and outcomes may not be correlated with ethi- by any organization that wants to remain vi- cal principles. This will depend on the de- able over the long term can be said to support sign of the business practice in question and three important organizational goals: product on the appropriateness of its use. For instance, or service excellence, customers’ satisfaction, a rigidly designed business practice that is and cost control. These goals are appropriate employed in the manufacturing sector may be for healthcare organizations. Costs must be unethical if it employed in a professional set- controlled, professional excellence must be ting. A tightly controlled quality initiative that maintained, and care must be delivered that employs detailed rules to govern every aspect is adequate or at least in some way satisfies of behavior and decision making may be in- the needs and expectations of patients and the appropriate and reduce the quality of out- community served by the healthcare organi- comes when it is implemented in an emer- zation.5 These goals are all associated either gency room setting, which requires a great deal directly or indirectly with the long-term fi- of individual discretion and professional judg- nancial viability of the organization, as are the ment for success. business practices that support them. We have said that the goals of an organi- Each of these goals reflects ethical prin- zation may not reflect ethical principles when ciples, insofar as they are associated with val- they are not associated with values endorsed ues that are endorsed by society. But the busi- by society. This very much depends on the ness practices associated with them may not form and function of the organization and reflect commonly accepted ethical principles, society’s expectations of it. For instance, al- or may result in unethical outcomes. We be- though both for-profit and nonprofit health- lieve it is unethical to produce goods under care organizations must remain viable, we “sweat shop” conditions in order to control have different expectations of the two types costs, but sweatshops do exist.6 We do not of organizations, and are disconcerted if we believe it is ethical to allow known safety haz- encounter behaviors accepted in the one in ards in the production and supply of goods the other. We do not expect nonprofits to en- and services, but unsafe products have been dorse the goals that are more commonly asso- known to be used or marketed.7 Nor do we ciated with for-profits, such as excessive prof- believe that unethical business practices itability or market dominance.12 The collapse 34 Organizational Ethics Spring 2005 of the Allegheny Health, Education, and Re- women of a potentially important diagnosis search Foundation (AHERF) is a case in point. option. So when we think about business prac- Not only did it highlight the need for atten- tices, we have to think about the organiza- tion to roles and responsibilities of the vari- tional goals they are designed to support, the ous actors involved in the collapse, it raised way the business practices are designed and questions about the appropriateness of those implemented, and the outcomes they produce responsible for a community asset that em- and whether they are in alignment with com- barked on an aggressive strategy of horizontal munity expectations. This leads to a matrix and vertical integration.13 of possibilities in terms of the ethical prin- But ethically questionable goals that are ciples associated with goals, business prac- endorsed by an organization may be associ- tices, and outcomes (see figure 1). ated with ethical business practices and ethi- For physicians, the extent to which the cal outcomes. A nonprofit healthcare organi- goals, practices, or outcomes of the organiza- zation that seeks market dominance may em- tions with which they are affiliated support ploy ethically appropriate business practices or contradict their professional values is cru- that deliver ethically appropriate outcomes. cial. Any of the three may constitute a pos- For instance, market pressures have forced sible threat to practitioners’ professionalism many nonprofit religiously affiliated health- and must be scrutinized by physicians regard- care organizations to merge or consolidate ing their influence on physicians’ decision with secular organizations to maintain their making. Physicians understand the need to financial viability, or vice versa. Such combi- maintain the financial solvency of their prac- nations provide challenges for institutions that have been historically unwilling to provide services offered by their new partners. But Matrix of Possibilities while there has been controversy over the pro- vision or discontinuation of specific services, Ethically acceptable = A centering on abortion and birth control, there Ethically unacceptable = U is wide recognition that many mergers that involve Roman Catholic institutions have suc- Goals Practice Outcomes ceeded in improving the quality of care for the communities they serve.14 AAA Equally, ethically questionable business practices and ethically questionable outcomes AAU may be associated with ethically questionable goals. For instance, some question the ethical AUA principles associated with the goal of Myriad Genetics, which is to obtain a worldwide AUU monopoly on information pertaining to the BRCA1 breast cancer gene.15 Just as question- UAA able are Myriad’s business practices and the outcomes associated with this goal. Myriad UAU can command monopoly prices associated with tests for this breast cancer gene. This has UUA resulted in the province of British Columbia discontinuing the use of the test because its UUU healthcare system can not afford the $3,850 (Canadian dollars) price tag, which deprives Figure 1. Volume 2, Number 1 Organizational Ethics 35 tices, or of the hospitals to which they admit. But it very well may be the case that two ethi- But physicians, with respect for their excel- cally acceptable goals, when reprioritized, lence of practice, may hesitate to associate produce ethically unacceptable business prac- their personal reputations with a healthcare tices or outcomes. Or, it may be that the goals organization that blatantly ignores the qual- themselves, when reprioritized, are perceived ity of care it provides in favor of high profits as unethical, depending upon the wider so- or one that consistently ignores patients’ dis- cial expectations of the business in question. satisfaction. For instance, we do not expect healthcare or- ganizations to prioritize cost-control over ad- ADDITIONAL COMPLICATIONS equate care, and when they do, we perceive it as unethical. There are further complications in trying An additional complication is associated to disentangle the ethical principles that are with the source of a business practice that associated with organizational goals, the busi- might cause it, or its goals and outcomes, to ness practices that are meant to support them, be perceived as ethical or unethical. For in- and the outcomes they produce. Organiza- stance, utilization review that is instigated by tions, like individuals, typically have a plu- third-party insurers and used to control phy- ralism of values and goals. Further, some prac- sicians’ decision making is widely perceived tices that are appropriate to an agent at one as unethical.17 But if the utilization review is level of a healthcare system may be perceived instituted by a hospital with its residents and as inappropriate if exercised by other agents. physicians, it may be viewed as a nuisance or Most organizations or individual practices irritant, but may not be perceived as unethi- are committed to more than one goal. But these cal by physicians. If it is done by peers, phy- goals can conflict. Business practices that are sicians might perceive it as an attempt to edu- designed to maximize potentially competing cate them concerning new evidence about objectives require ongoing balance and specific diagnosis and treatment options. This prioritization to achieve their objectives. For is the case, even when utilization review pur- instance, most organizations, including ports to support the quality and cost goals of healthcare organizations, endorse both qual- organizations. So, the exact same mechanism, ity (meeting customers’ expectations through used for exactly the same purpose, may be product or service excellence to maximize perceived as ethical or not depending on its customers’ satisfaction) and cost-constraint as source. goals to be achieved. The potential for con- Business practices may also be subtle, with flict between quality and cost is well known. outcomes that are not tightly linked in time Improved quality is often, although not al- to the practice or the organizational goal they ways, associated with increased costs. Simi- support. For instance, one well-known prac- larly, lower costs are often, although not al- tice is the intrusion of drug company repre- ways, associated with decreased quality. Many sentatives who may attempt to endear them- organizations assign priorities to the achieve- selves to residents or other physicians with ment of their goals. For instance, many orga- invitations, goods, or services of various nizations will place customer service or prod- sorts.18 A midnight pizza party may be harm- uct excellence before cost, in the belief that less, but its intended outcome may not be so profits depend more on these factors than on harmless, if the object is to capture the atten- cost-control.16 (Many organizations, including tion (and the gratitude) of the recipient, to be healthcare organizations, codify their priori- reciprocated by prescribing from the ties and the values they represent in mission representative’s company. So what may be statements, ethical codes, or value statements.) perceived as a harmless business practice may 36 Organizational Ethics Spring 2005 not be so harmless, but rather subtle and in- action to prevent recurrence (replacing the vidious. fuse). Another example is a tightly controlled quality control technique that requires exact DESIGNING BUSINESS PRACTICES measurements or very specific interactions among its components. These components Business practices, even when they are may or may not be human beings. aligned with organizational goals that reflect It might well be the case that tightly con- generally accepted ethical principles, may be trolled business practices do not have to be themselves unethical or may produce unethi- closely monitored for the production of po- cal outcomes. This will depend on how the tentially unethical outcomes. If the practice practice is designed and whether or not its is ethically designed and it produces ethical design is appropriate for the context in which outcomes, then it will, barring unforeseen it is implemented. Some tasks demand a great events, always produce ethical outcomes. For deal of precision, with little scope for varia- instance, a tightly controlled and ethical bill- tion. Others can be specified best in terms of ing process will always produce the same their goals and some behavioral parameters, outcomes, and if it is designed to produce ethi- leaving the processes for their accomplish- cal outcomes, it will always produce ethically ment up to the particular agent. An organiza- acceptable outcomes. But the context in which tion of any size that is designed to deliver it is used may vary, and it is not always ap- healthcare must coordinate the actions and propriate to use tightly controlled practices. services of a number of different skilled and Other business practices must have more less-skilled workers, so the business practices flexibility in their design. For instance, most that are associated with various organizational healthcare organizations employ teams of per- tasks must be appropriate to the demands of sonnel to evaluate, treat, and monitor indi- those tasks. So there is an important charac- vidual patients. These teams are composed of teristic when considering the design of busi- administrators, case managers, doctors, ness practices: the amount of rigidity or flex- nurses, social workers, chaplains, and others ibility they possess.19 who work within the business practice of An important distinction in the design of “case management” to produce one or more any business practice is whether or not it is goal. Persons who are associated with the team largely mechanical (rigid) or naturally flexible. must have some flexibility in how to best This distinction is fundamental and describes achieve the goals of case management, because how a business practice is designed and how each patient and her or his circumstances are it responds to external or internal stimuli. In unique, and it would be inappropriate (and mechanical systems, we can predict in great probably disastrous) to try and rigidly govern detail the interaction of each of the parts in the interactions of the team. Thus, we can response to a given stimulus, since, in a purely think of business practices as falling some- mechanical system, pre-specified responses where on a continuum between the poles of are always correct and a correct response is extreme rigidity and extreme flexibility. This always expected. For instance, an organiza- characteristic is important, not only because tion might use mechanical assembly lines as it is central to the design of a business prac- part of its business practices. If all parts are tice, but also because the degree of flexibility working correctly, when it is turned on, the of a business practice may determine the pro- line begins to function as it was designed. priety of the business practice itself and its When deviation occurs (for example, the line outcomes. For instance, when physicians set does not turn on) it is unexpected and gener- up practice, they must allow enough flexibil- ally provokes study (is a fuse blown?) and ity in time and other resources to accommo- Volume 2, Number 1 Organizational Ethics 37 date patients with varying needs. When a hos- which the professional is associated, and also pital requires the use of evidence-based medi- society as a whole. Engineers are expected to cine in clinical decision making, rigid adher- prioritize safety in the design of new prod- ence to guidelines may itself be unethical, and ucts so that we, as members of society, can may also produce unethical outcomes, de- purchase and use these new products with- pending on the values and preferences of the out undue fear. Physicians, lawyers, and individual patient.20 priests are expected to have relationships with Flexible business practices are needed their patients, clients, and penitents that are when human judgment is required. But it based on trust, so that we, as a society, can should be noted that the flexibility of a busi- believe that the sick, the legally challenged, ness practice may allow its components, in- and the sinner can find a safe haven where cluding human beings, through their interac- the individual’s interests are ascertained, re- tions, to change either the practice itself or spected, and advocated through the judgment the goals it is intended to achieve.21 Because and the activities of the professional. either the goals or the practice can change To practice the profession for which they through the interactions of its components, the have been trained, physicians will constitute ethicality of the practice or its outcomes can- themselves as, or associate themselves with, not be guaranteed. an organization that is in the business of de- The characteristic of rigidity or flexibility livering healthcare. Such an organization can will also determine whether or not additional be a sole practice, a partnership, or a clinic of business practices, such as incentives, are several physicians; a healthcare organization; perceived to be needed to influence decision a research organization; a multi-practice making. In our earlier example, if all parts of clinic; or other entity, including government an assembly line are working correctly, as they service or research institutions.23 That orga- are expected to do, desirable organizational nization will have goals, practices, and out- outcomes will be produced. There is little comes. Organizations that are constituted to need to provide additional incentives to pro- facilitate the practice of medicine are not iden- duce these outcomes. But if an application tical with the person of the practitioner. Prac- requires more flexibility in the design of a titioners are bound by the codes of the profes- business practice—if it requires the exercise sion, but the organizations that physicians of judgment, of skill, of intuition, of the inter- constitute or join as the context and the me- actions of varying individuals or groups— dium of their practice are the means through positive or negative incentives might be which physicians exercise their professional needed to align decision making with desir- expertise in the service of patients. Organiza- able organization outcomes. And, of course, tions are “medical providers” or professional incentives themselves can be flexible or not, agents, but they are so in a secondary or de- depending on how closely linked they are to rivative way, by association with profession- expected outcomes and how rigorously they als. are enforced. Healthcare organizations themselves do not have a “professional ethic,” but, since they PROFESSIONALISM are organizations of and for professional prac- tice, they should be structured in a way that Professionals are expected to exercise their facilitates rather than impedes professional judgment on behalf of individuals or organi- practice. Thus, practitioners must be con- zations. Their judgment, based on rigorous, scious of, and scrutinize, the extent to which esoteric study, and experience,22 is expected their sites of practice, healthcare organiza- to benefit the individual or organization with tions, will be appropriate means for the exer- 38 Organizational Ethics Spring 2005 cise of their profession—an efficient and ef- judgment is constrained, inhibited, or influ- fective means—one that facilitates the exer- enced, these business practices can be seen cise of their professional obligations without as a threat to professionalism. In the above presenting obstacles to ethical practice. example, a tightly controlled quality tech- nique, when applied in an emergency room WHY AND HOW DO setting, might be a threat to professionalism THREATS TO INDIVIDUAL if rules are substituted when professional PROFESSIONALISM EMERGE? judgment is required. Other threats to profes- sionalism can emerge through the use of in- In this context, threats to the professional centives. judgment of an individual emerge because the All incentives appeal to individuals’ self- outcomes that are associated with professional interest, and many incentives are quite judgment are deemed undesirable from the straightforward. Individuals are rewarded by perspective of some individual or organiza- enhancing their performance within pre- tion who is affected by it. Either they are un- scribed parameters. Enhancing individuals’ desirable in themselves or they may conflict performance is linked with enhancing an with other desirable outcomes or organiza- organization’s performance. So there is a di- tional goals. Threats can emerge from both the rect relationship between individuals’ goals internal and external environment, and they and the organization’s goals. But because of can take the form of either a business practice some anomalies of healthcare (particularly the or an incentive (which has, as we have said, fact that the consumer of healthcare goods and is another form of a business practice.) Either services is not generally the payer),25 excel- or both can be associated with either the ex- lent professional judgment may produce un- ternal or internal environment. desirable organizational outcomes: costs that The larger society has been conflicted are associated with preserving professional about the rising costs of healthcare in the judgment may be perceived as excessive. United States, while it has been generally sat- Moreover, because healthcare systems include isfied with the level of care available. In the these kinds of anomalies, more than one stake- late 1990s, a period now being called the “era holder generally has a stake in the outcomes of managed care,” various business practices of professional judgment. Therefore, incen- that were associated with reimbursement were tives in healthcare that are designed to affect introduced by payer organizations, on the as- professional judgment are more complex than sumption that the costs of care could be con- they might be otherwise. Supporting profes- trolled without reducing the quality of care. sional judgment might mean increasing the Various restrictions and incentives were in- likelihood of additional organizational costs. troduced in hopes of altering physicians’ be- Thus, incentives may be designed that pose a havior. Some produced undesirable results conflict of interest or commitment for the pro- because they attempted to externally constrain fessional—who is perceived to be the gateway physicians’ judgment.24 to the costs incurred by the healthcare sys- But professional judgment is perhaps the tem and its components, and also the gate- most important service offered by healthcare way to the profits to be made. organizations. Because professional judgment A conflict of interest refers to situations depends on a number of different factors, some in which one’s professional judgment or pro- of which may be outside the organization’s fessional code is in conflict with other de- control, supporting it requires flexible busi- mands or influences that, if acted upon, would ness practices. If business practices are inap- compromise professional judgment. An orga- propriately rigid, such that professionals’ nizational demand that questions one’s pro- Volume 2, Number 1 Organizational Ethics 39 fessional judgment or conflicts with a profes- ability of professionals to ignore the conflict sional code creates the potential for one such and base decisions purely on professional type of conflict. judgment depends on the amount of flexibil- Conflicts of interest occur in every part of ity and the strength of incentives built into life, as various roles conflict with other roles, these practices.26 But if outcomes are not ex- when professional integrity is at question, pected to be affected by the conflicts raised— when there are professional biases concern- and if enough flexibility allows professionals ing judgment, or when demands for financial to ignore them and if incentives are diluted rewards, cost-cutting, or greater efficiency so that they are ineffective—why go to the time challenge one’s professional decision making. and trouble of creating them? Having a conflict of interest itself, however, Organizations too face conflicts of inter- is not necessarily unethical. It is only when est and conflicts of commitment. One of the one acts on a conflict in ways that break ac- criticisms most frequently made of for-profit ceptable rules for sound professional deci- managed care is that the obligation to serve sions, that jeopardize professional judgment, the patient, constitutive, and definitory of the or that cause harm, that the conflict raises ethi- social institution of healthcare, is in possible cal issues. conflict with the need to make profits for Conflicts of interest are usually distin- shareholders. As the conversion of previously guished from conflicts of commitment, al- philanthropic foundations to for-profit health- though they often overlap. According to care institutions in the U.S. accelerates, the Werhane and Doering, “Conflicts of commit- discussion grows more heated. What is not ment are those sets of role expectations where questioned is the requirement of fiscal respon- competing obligations prevent honoring both sibility: any healthcare institution must re- commitments or honoring them both ad- main economically viable to fulfill its mission equately.” of delivering healthcare to the individuals and All physicians face the possibility that the population for which it undertakes responsi- demands of care of one patient will threaten bility. The strategies, systems, or processes it the care of the other patients for whom they uses to maintain that viability—in changing are responsible. The profession of medicine circumstances—present a shifting array of itself incorporates care of the patient and ad- moral questions to committed practitioners. vancement of medical science as possibly competing commitments. As a professional EVALUATING BUSINESS PRACTICES, with limited time and resources and a variety GOALS, AND OUTCOMES of professional demands, physicians are of- ten faced with conflicting demands of their Before individual physicians can commit profession that are impossible to honor simul- to the ethical principles that pertain to busi- taneously. Conflicts of commitment also arise ness practices, they should evaluate the suit- as role conflicts. In a complex society, each of ability of those principles for their practices, us has a number of roles, and inevitably they from the perspective of the goals of their or- clash. One simply cannot honor all one’s com- ganization, the priority of these goals, the de- mitments as a parent, spouse, citizen, profes- sign of their practice, and whether or not the sional, manager, and employee satisfactorily, design of the practice produces ethically ac- all of the time. Unlike conflicts of internet, ceptable outcomes. Therefore, physicians one can neither avoid the existence of con- must have standards that can be used for pur- flicts of commitment nor avoid acting on those poses of evaluation. For this, physicians have conflicts unless one simply abrogates all one’s traditionally looked to the standards that are duties altogether. In all cases, however, the associated with professionalism. 40 Organizational Ethics Spring 2005

The traditional professional ethics of torted? How do we align business practices medicine has defined the duties of its practi- with outcomes so they reflect ethically desir- tioners in relation to activities that advance able characteristics? Will expanding the obli- the best interest of the individual patient, gations of physicians to consider cost-effec- within the context of a relationship based on tive care be enough to ensure that they are mutual respect and trust. If we assume that able to deliver quality care at optimal value? the best interests of patients lies in the ability of physicians to exercise their professional A SYSTEMS ETHIC? judgment to deliver adequate care to patients, then business practices that prevent the exer- The ACGME’s fifth competency empha- cise of professional judgment or inhibit it can sizes the individual physician’s responsibil- be perceived as a threat to the professional- ity for professional practice, and the sixth ism of physicians—which we cannot ask phy- competency contextualizes this responsibil- sicians to support. But if the goal of physi- ity to the various organizations and practice cians is to deliver care that is cost-effective, options that constitute the larger healthcare then we have added a new dimension to the system. Since most, if not all, medical prac- concept of professionalism and to the profes- tice occurs within some organizational con- sional obligations of physicians and hence to text, individuals must be alert to possible con- the evaluation of a business practice, its goals, flicts of interest and commitment that can and outcomes. It may be that when the provi- arise because of the plurality of goals that any sion of cost-effective care conflicts with the organization must have in order to survive. traditional obligations of physicians some But because of the fragmentation of the health- decisions should be made on the basis of cost- care system as currently constituted, it is pos- effectiveness. sible that individual responsibility alone will Quality care (or at least adequate care) and be inadequate to prevent or avoid profession- cost-effectiveness are goals endorsed by soci- ally undesirable outcomes. ety as ethically appropriate—with one caveat. Elsewhere we have advocated the forma- Society deems the quality of care, which must tion of an organization ethics program that, at include some aspects of professionalism, as least at the mid-level of the system—the orga- more important then the cost of care. It views nizational level—might be helpful as a mecha- a reprioritization of these goals as ethically nism of intervention when a practitioner per- unacceptable. ceives the threat of inappropriate reprioriti- But we know from our discussion of busi- zation or distortion of the goal of care of opti- ness practices that goals, the business prac- mal value.27 We have suggested that it is im- tices that support them, and the outcomes they portant that any healthcare organization’s produce, may not reflect ethically desirable business practices should be aligned with its characteristics. We know from our discussion essential values and goals, and that conflict of the design of business practices that accom- be resolved by appeal to those goals and val- modating professionalism will require some ues. The healthcare organization exists to pro- degree of flexibility, and we know that flex- vide care, and since care of high quality must ibility cannot guarantee the achievement of reflect some degree of professionalism, there specific goals. We also know that flexibility is no necessary or intrinsic conflict between may invite interactions (business practices) the professional responsibilities of the indi- from other components of the system that may vidual physician and the organizations within not share the same goals or may prioritize which he or she practices. However, we also them differently. How do we prevent these know that the business practices of the vari- goals from becoming reprioritized or dis- ous components of the system interact to- Volume 2, Number 1 Organizational Ethics 41 gether in ways that might reprioritize or dis- of care of optimal value, but it does not guar- tort these goals. If we want to achieve the goal antee the preservation of professionalism as of quality care of optimal value, if we want it has been traditionally understood. It may business practices to support professionalism, put residents in an untenable position rela- and if we want to achieve appropriate out- tive to their patients. It may also further un- comes, then we must start at the system level. dermine the trust and respect that we as a so- This will require that the system, as a whole, ciety have for our physicians. commits to the same goal, as well as to prin- Quality in healthcare requires the provi- ciples that govern the way in which business sion of professional care, and this requires the practices interact and the outcomes they pro- ability of a system’s professionals to exercise duce. Even then, this might not be enough to their judgment. Compromising that judgment ensure the system achieves the results we through badly designed business practices or want. inappropriate financial incentives will not Supporting professionalism requires flex- produce the results we want, if they compro- ibility in business practices. The system as a mise the patient-centered ethos that is cen- whole must have the ability to react to un- tral to good medical practice. The challenge foreseen events, to negotiate when appropri- to professionals, to the organizations with ate, and to problem solve in a creative way. which they are associated, and to industry But flexibility in business practices, although leaders, is to design business practices that a precondition for professionalism, cannot are capable of achieving cost-control goals guarantee appropriate outcomes, nor can it while still standing the test of being evalu- guarantee that the practices themselves will ated against professional standards. This will not change. Therefore, even when the deliv- require an integrated perspective that recog- ery system and all of its components commit nizes the legitimacy of organizational cost- to the same goal and to the same principles, control goals while it simultaneously gives its outcomes and its practices must be con- priority to the quality goals of the practice or tinuously reevaluated. the healthcare organization. A persuasive argument could be made that The development of an integrated ethics implementing a code that governs the goals, for a healthcare system, as a whole, is a daunt- interactions, and outcomes of a system, and a ing task. In the short-term we can ask profes- mechanism that monitors its implementation sionals to be aware of and to scrutinize an in delivery of healthcare services, system is institution’s goals, business practices, and desirable both because it opens the door to outcomes for their effect on professionalism. increased efficiency and effectiveness and We can endeavor to teach residents the im- because it is the right thing to do. However, portance of personal and professional integ- this is unlikely in the short-term. In the short- rity and can call their attention to the intrica- term, systems will remain fragmented and cies of the wider delivery system. We can urge open to abuses. attention to organization ethics for help in resolving issues that healthcare organization CONCLUSION can control. These are the first steps toward the development of a successful delivery sys- The fifth and sixth competencies of the tem. This, however, will not be enough for the ACGME Outcomes Project combine to enlarge future, unless the system as a whole is explic- the professional obligations of residents (and itly committed to these same principles. The by extension, all physicians) to greater con- alignment of values of individual and organi- sideration of costs in the delivery of care. That zational agents, at all levels of a system, is the obligation may be enough to deliver some kind task to which leaders in medicine are com- 42 Organizational Ethics Spring 2005 mitted. The ACGME competency standards on ing recent cases. professionalism that require individual phy- 5. See http://cc.msnscache.com/cache. sicians to commit to the principles of medi- aspx?q=81476974579&lang=en-US&FORM- cal ethics while they simultaneously commit =CVRE7 for the infamous Ford Pinto memo to the ethical principles of business practices, in which costs to repair the back end of the represents a step toward developing such an Pinto were compared against anticipated integrated perspective among physicians. deaths. See also G.T. Schwartz, “The Myth of the Ford Pinto Case,” Rutgers Law Review 43 NOTES (1991): 1013. 6. Arthur Andersen’s role in the collapse 1. See http://www.acgme.org/Outcome/ of Enron is especially notorious. For example and retrieve the competencies under “Project see J.D. Glater, “Last Task at Andersen: Turn- Outcomes.” ing Out the Lights,” New York Times, 30 Au- 2. Most business practices can be investi- gust 2002 . gated as systems. A “system” has been defined 7. H.S. Berliner and E. Ginzberg, “Why as “a complex of interacting components to- This Hospital Nursing Shortage Is Different,” gether with the relationships among them that Journal of the American Medical Association permit the identification of a boundary-main- 288 (2002): 2742-4. See also S. Veasey et al., taining entity or process.” See A. Laszlo and “Sleep Loss and Fatigue in Residency Train- S. Krippner, “Systems Theories: Their Origins, ing: A Reappraisal,” Journal of the American Foundations and Development,” in Systems Medical Association, 288 (2002): 1116-24. Theories and a Priori Aspects of Perception, 8. S. Rosenbaum, “The Impact of United ed. J. Scott (Amsterdam, the Netherlands: States Law on Medicine as a Profession,” Jour- Elsevier, 1988), 51. nal of the American Medical Association 289 Systems are connected in ways that en- (2003): 1546-56. hance the fulfillment of one or more goals or 9. R. Voelker, “Eradication Efforts Need purposes. Systems may be micro (small, self- Needle-Free Deliver,” Journal of the Ameri- contained, with few interconnections) or can Medical Association 281 (1999):1879-81. macro (large, complex, consisting of a large 10. L.E. Singer, “The Conversion Conun- number of interconnections and purposes). A drum: The State and Federal Response to Hos- system may be rigid and function mechani- pitals’ Changes in Charitable Status,” 23 cally, or it may be what Paul Plsek calls an American Journal of Law and Medicine 23 “adaptive system,” because it consists of in- (1997): 221. dividuals and organizations that have the lib- 11. L.R. Burns et al., “Business of Health erty to interact with, respond to, and change Care; The Fall of the House of AHERF: The the system. See P. Plsek, “Redesigning Health Allegheny Bankruptcy; A chronicle of the Care with Insights from the Science of Com- hows and whys of the nation’s largest non- plex Adaptive Systems,” in Crossing the Qual- profit health care failure,” Health Affairs ity Chasm: A New Health System for the 21st (January -February, 2000). Century, (Washington D.C.: National Academy 12. J.M. Kellhofer, “American Pluralistic Press, 2001), 310-33. System: Mergers between Catholic and Non- 3. E.M. Spencer et al., Organization Eth- Catholic Healthcare Systems,” 16 Journal of ics in Healthcare (New York: Oxford Univer- Law and Health 103 (2001/2002), available at sity Press, 2000) chap. 12, pp. 200-10. LexisNexis. 4. See http://www.corpwatch.org/ 13. L.B. Andrews, Biotechnology Sympo- article.php?list=type&type=108 for a defini- sium: The Gene Patent Dilemma: Balancing tion of sweatshops and a list of articles detail- Commercial Incentives with Health Needs,” Volume 2, Number 1 Organizational Ethics 43

Houston Journal of Health Law & Policy 65 sity Press, 2000). See chapter 5 for a discus- (2002). See also J. Paradise, “European Oppo- sion of professionalism, pp. 69-91. sition to Exclusive Control Over Predictive 21. J.C. Robinson, The Corporate Practice Breast Cancer Testing and the Inherent Impli- of Medicine (Berkeley, Calif.: University of cation for U.S. Patent Law and Public Policy: California Press, 1999). A Case Study of the Myriad Genetics’ BRCA 22. J.C. Robinson “The End of Managed Patent Controversy,” Food and Drug Law Jour- Care,” Journal of American Medical Associa- nal 59 133 (2004): 133. See also S. Gad et al., tion 285 (2001) ): 2622-8. “Identification of a Large Rearrangement of the 23. This anomaly of the healthcare system BRCA1 Gene Using Colour Bar Code on Com- was noted in 1995 by E. Haavi Morreim, who bined DNA in an American Breast/Ovarian writes, “in this sense the term purchaser is Cancer Family Previously Studied by Direct systematically ambiguous; we could be refer- Sequencing,” Journal of Medicine and Genet- ring either to patients or to payers.” See E.H. ics (2001): 3888. Morreim, Balancing Act: The New Medical 14. The idea that quality in the produc- Ethics of Medicine’s New Economics (Wash- tion of goods and services is paramount is the ington DC: Georgetown Press, 1995), 22. basis for the whole “quality” movement. The 24. P. Werhane and J. Doering, “Conflicts central idea is that if producers consistently of Interest and Conflicts of Commitment,” Pro- examined their processes then costs would fall fessional Ethics 4 (1005): 47-82. as quality rose. See W.E. Deming, “Improve- 25. Spencer et al., see note 20 above, pp. ment of Quality and Productivity Through 73-8. Action by Management,” National Productiv- 26. Ibid. ity Review 1, no. 1 (Winter 1981-1982): 12-22. 27. Ibid. Also see R.W. Grant, R. Shani, and R. Krishnan, “TQM’s Challenge to Management Theory and Practice,” Sloan Management Review 35, no. 2 (1994): 25-35. 15. M.K. Wynia et al., “Physician Manipu- lation of Reimbursement Rules for Patients: Between a Rock and a Hard Place,” Journal of the American Medical Association 238 (April 2000); 1858-65. 16. See Jerome P. Kassirer, On the Take: How Medicine’s Complicity with Big Business Can endanger your Health (New York: Oxford University Press, 2005), for a description of this and many other business practices that are designed to influence physicians’ judge- ment. 17. Plesk, see note 3 above, pp. 310-33. 18. A.E. Mills and E.M. Spencer, “Evi- dence Based Medicine: Why Clinical Ethicists Should be Concerned,” HEC Forum 15, no. 3 (Fall 2003): 231-44. 19. Plesk, see note 3 above. 20. E.M. Spencer et al., Organization Eth- ics in Healthcare (New York: Oxford Univer-