Management challenges of private healthcare managers in ethical decision making

Ethical decision making is an ongoing subject that many people keep debating and researching about in the health sector. Managers in the healthcare setting always have to make important decisions every day, whether clinical or non-clinical in nature. In healthcare, these decisions could get complicated as many factors are linked to ethical decision making when patient care is involved. Private healthcare managers are presently under the pressure of making decisions that are not just ethical in terms of given to the patients, but also reasonable in terms of the operational and budgetary needs of the business. The quick evolution of profit-oriented healthcare delivery over the last few years poses serious questions for any person interested in the ethics of provision of health services. The growth of for-profit chains of hospitals, dialysis centers, and other health delivery framework that link health care to profit making raises critical legal, sociological, administrative, political, and economic issues. Aside from all these problems, it poses a challenge to some of the most significant ethical presumptions of both the healthcare and the business communities. Professional healthcare and business have always had an ambivalent relationship. In the United States, just like in many other parts of the world, there has never been any outright condemnation from organized medicine directed towards the profit-making context of the medical practice. Nonetheless, organized medicine has grown nervous over the years about the pestiferous stain of commercialization and its ability to restrain unscrupulous practitioners.

This section critically reviews the literature that was used to come up with the ideas that were used in this and other parts of the paper.
2.2 History of the Ethical Controversies
The Global Context
If one is to understand the new ethical issues that may result from the transformation of the for-profit healthcare enterprise, it might be necessary to examine the history of ethical controversies in the sector first. The history shows that those attempting to understand the relation of profit-oriented enterprises to medicine have long been troubled by ambiguity. In ancient China, Confucian medicine was “an art practiced within a family” (Gubler et al. 705). “Every family had at least one person with” medical skills who could provide care for his relatives acting out of the old values of filial piousness and compassion (Gubler et al. 707). The start of the fall of the lofty medical ideals is traced back to the time when medical professionalization began, and money became part of the art. The literature of the medicine of ancient Greece has many examples of situations where practitioners are said to have been motivated by things other than the virtue of humanness. A look into the Hippocratic Corpus for any proof that philanthropy is an essential trait in the medical practice proved futile. A majority of the physicians were inspired by glory, honor, and money other than philanthropy. It soon became a common practice for medical practitioners to carefully select the people who they took in as patients lest they tarnish their reputations for accepting a hopeless case (Gubler et al.713). The need to maintain status was also not out of upright principles but due to the fear of market jeopardy if they failed to treat the patient.
By the time that the contemporary “Anglo-American medical ethics” began, there was still not much attention being directed towards the ethics of the commercial aspects of professional healthcare. A look into the history of the “Code of Thomas Percival of 1797” reveals that the code was meant to act as a foundation for the American and British medical ethics (Bagdasarov 6). However, it was originally written as a response to a feud among surgeons, apothecaries, and physicians at the English Manchester Infirmary. “It was only in the 20th century that professional” documentation of the Anglo-American medical ethics only began to deal with the reality that medical practice was gradually taking the form of business (Bagdasarov 7). A recent document from the British Medical Association states that it is a general principle that doctors should not associate themselves with commerce in a manner likely to influence or seem to change their attitudes towards treating patients (Bagdasarov 11). Particular approvals and prohibitions follow this statement. For instance, medical practitioners were advised to steer clear of writing testimonials or having any financial interests in pharmaceutical sales. A similar principle exists in the code of ethics of the Australian Medical Association. The statement is followed by some sentences that try to make it difficult for medical practitioners to own pharmaceutical companies.
American Medical Association (AMA)
The ethical codes of the AMA have consistently displayed ambivalence throughout the years. To be certain, the positions that the AMA adopts do not always mirror the present opinions of the American physicians or the American public (Lehnert, Yung-hwal, and Nitish 195). These codes surely do not give a near accurate description of the actual behavior in many cases. However, they are the most significant consensus statements arrived at by organized medical professionals in the United States. Therefore, they do usually reflect the ideals of what most doctors, at least those that actively participate in the activities of the AMA, see as ethical conduct for medical practitioners. The original AMA codes, starting with the original forms that were adopted at the 1847 Philadelphia Convention prohibit particular deeds that almost everyone appeared to believe that made doctors look more like businesspeople and, therefore, prone to making ethical mistakes (Lehnert, Yung-hwal, and Nitish 199). These codes emphasized on prohibiting the holding of patents, dispensing “secret nostrums,” and advertising. It was considered unacceptable for a physician to carry himself out as a businessman in the health care sector. During this period, physicians practicing orthodox medicine were very keen on detaching themselves from the charlatans and quacks who often involved themselves in commercial campaigns.
Advertising
In 1847, the AMA stated that resorting to private cards and public advertisements to attract the attention of people suffering from a certain disease was derogatory to the profession’s dignity. The 1903 revision repeats the same declaration in verbatim (Lehnert, Yung-hwal, and Nitish 213). The 1912 revision incorporates a few modifications that make the language even stronger. The objection that these statements have is to the businesslike manner of advertising, irrespective of the content of the adverts. Calling on non-specialists to view operations, boasting of treatments, and making success public were seen as the regular practices of the quacks, and were highly condemnable traits in a regular physician. The prohibition was, however, reduced to only include the mandate that doctors should not look for patents. The interpretation of the statement started becoming elusive. The suit filed by the Federal Trade Commission (FTC) claiming that the restrictions on solicitation limited free trade is what spurred the subtleness in the interpretation of the statement. Because of that suit, the AMA started stressing that what it wanted to ban was deceptive practices. In other words, the AMA shifted its grounds to one that any good marketing executive would endorse. A process that started as a bid to distinguish the health care professionals from the quacks and mere businessmen and women ended up empowering these people to demand recognition as free-market competitors.
Patents
AMA’s statement on the doctors that hold patents saw a similar progression as the statement on advertising. In 1847, the position on this issue was blunt; it clearly stated that it was “derogatory to a professional character … for a physician to hold a patent for any surgical instrument or medicine….” (Lehnert, Yung-hwal, and Nitish 215). However, the practice became acceptable by 1971 although there was palpable nervousness in the warnings and qualifications. Following the significant 1981 revision, any signs of ethical uncertainty about patents had vanished (Rubens and Edward 11). During this period, the AMA adopted a clear stance again; it bluntly stated that it was not unethical for a medical practitioner to hold a patent to any diagnostic or surgical tool.
Getting Rebates by Dispensing Pharmaceuticals
The previous codes expressly condemned both the holding of patents and the “prescribing of secret nostrums” (Rubens and Edward 15). Initially, the issue had everything to do with privacy. It was more significant to differentiate the doctor from a charlatan than it was to distinguish the doctor from a businessperson. The same dimension of condemnation was present in the AMA’s documents until the 1970s when it was removed. The question on whether doctors could sell conventional pharmaceuticals was seen as far important. It has, for a long time, been noticed that doctors who sell their cures have a serious conflict of interest. The codes appear to talk about two concerns; that proper division of labor must exist between physicians and pharmacists and that fiscal pressures might mar the prescriptions. Physicians may supply or dispense appliances, remedies, or drugs provided that it is in the patients’ best interest. Due to the potential display of conflict of interest and also to avoid confrontations with pharmacists, the AMA advised physicians to avoid regular dispensing or sale of drugs to patients if ethical pharmacists can safely meet the medical needs of the patients. For the same reasons, the act of physicians accepting rebates on appliances and prescriptions has been condemned consistently and labeled unethical.
Splitting of Fees
This has a close relation to pharmaceutical dispensing and the rebates that emerge from the process are what cause the fee splitting concern. All the bodies and individuals concerned with professional medical ethics have, since, 1912 held that the act of splitting fees is not ethical. These entities say that the act degrades the medical profession and undermines the public good. The original law just had an issue with the secrecy surrounding the law of fee-splitting; however, since 1950, the act itself, whether conducted in secret, or in the open, has been reprobated. It is seen as an inducement that is unacceptable, and that goes against the trust that the patients have that the doctor will not use their dependence on him to exploit them. Mark Pauly, an economist, also recently presented a strong argument that undue inducements might also be generated by the unavailability of fee splitting (Rubens and Edward 17). The inducement, in this case, would come about when a generalist would prefer to try their hand at treating cases which ethically need to be referred. Mark Pauley then arrives at the conclusion that fee splitting ought to be legalized as it is a lesser evil than generalist trying to treat conditions which they are not specialized in. The latter can directly lead to the loss of lives of patients. Although his conclusion is quite debatable, it at least gives a significant hint to the idea that perhaps the condemnation of fee splitting might be for underlying reasons like maintaining the notion that a health practitioner slightly differs from a businessperson who has to solicit royalties, commissions, and finder’s fees etcetera.
Corporate Relations and Ownership of Health Institutions
The problems examined so far are what are to as “the classical issues of ethics of physician finances” (Martin 25). The answers to these problems had been simple for a very long time. It was considered unethical for a person to behave like a self-interested, rational business person. As time went by and the complexities of healthcare professionals practicing business in the field became apparent, the picture started getting clouded by issues of qualification. These issues are still simple if compared to the ethical challenges of “corporate for-profit delivery of health care” (Martin 31). The latter fully exposes the ambivalence of the relationship between physicians and business persons. The real ethical dilemmas in practicing for-profit medicine in the corporate scene stem from this context. This is the context within which the for-profit healthcare institutions start to have close analogs with the traditional medical ethics issues.
The first major category of ethical challenges is the physician ownership of health facilities. As per the present AMA regulations, it is acceptable for doctors to own medical institutions like hospitals, pharmacies, laboratories, and nursing homes. “However, it is also important to note that” despite allowing all these, the AMA still considers it unethical for a physician’s practice to be influenced by virtue of him owning any of these facilities (Bagdasarov 10). Prior to the 1980 amendment of the AMA code of ethics, physicians were strictly prohibited from, engaging in any dealings where the proportion of the jobs they referred to laboratories would result in an equal proportion of profits (Guttman 72). This policy meant that doctors could indeed draw some financial benefits from referrals to nursing homes, pharmacies, laboratories, and hospitals that they owned. However, the percentages of the money they got from that was restricted to the degree to “which they acted as if they would not” derive any benefits from the process (Guttman 73). In no case were they to get any returns on investment or any fee that was directly dependent on the business they forwarded. Even then, they were still allowed to share the profits of the companies they owned in the proportion of their company shares, even those that accrued from business that they knowingly referred to their organization. As a result, physicians could in essence, still profit from the referrals they made to hospitals, nursing homes, laboratories, and pharmacies that they possessed.
The association between corporate commercial interest in the delivery of healthcare services and the medical practice is not always as straightforward as ownership of a medical institution by a physician. If it were that straightforward, then AMA would have the option of at least appealing to the recognition that the healthcare professionals had influence over the corporation or institution with which the financial tie sin question existed. The corporate relations get more complex if the health professional is a member of a company but in a position of little influence. The late 1960s and early 1970s versions of the Judicial Council Opinions and Reports stress on the ethical issues of “physicians practicing within the context of lay-owned corporations or where lay groups profited directly from their service” (Pitesa and Stefan 636). The privilege to heal the ailing as a career is a right reserved only to those who have the right qualifications and are properly licensed by the state. It is a privilege that should only be enjoyed by medical professionals. The fact that this “exclusive right of medicine” is usually sold for personal gains is like sacrificing the dignity of the profession (Pitesa and Stefan 637). The numbers of healthcare practitioners that are selling their professional achievement to lay institutions under terms that allow a direct profit from the money paid for their services to accrue to the lay institutions in which they work are increasing. This kind of demeanor destroys the personal relationship and responsibility which is important for the patient’s best interest to be observed.
The judicial council provides three instances. The first instance is not clear-cut: fees that insurance companies pay a healthcare professional in compensation suits where the fees are allegedly under the legal level at which a premium should be based. The other two instances, on the other hand, “are more directly relevant to for-profit health care enterprise” (Pitesa and Stefan 637). “The second is hospitals collecting fees for professional services of staff physicians and absorbing them as hospital income, and universities employing full-time hospital workers and sharing such fees for the professional care of patients as to net the university no small profit” (Pitesa and Stefan 638). A number of factors are worth notice. To start with, the Judicial Council is worried that practices of lay institutions assault the dignity of the medical profession. Second, it holds the opinion that such lay engagements do not help in accomplishing the responsibilities of the job and are contrary to the patients’ best interests. Finally, a commitment to maintaining professional control is what underlies the much of the concern that the council has on the issue of ethics within for-profit organizations. In a nutshell, the Council advises that a physician should not dispose his or her professional achievements to any hospital or lay organization under conditions which allow these services of the doctor to be sold by any of these bodies at any cost.
The recent transformation of profit-oriented enterprises in the healthcare industry has the ability to involve a health professional in many capacities: as he owner of the for-profit entity, as a worker for the organization, and as a freelance practitioner those refers patients to the institution for a certain percentage of profits (Yu 576). The other forms in which a doctor can get involved with a profit oriented organization in the healthcare sector is present more complex issues as the physicians occupy lower positions, leaving the lead roles mostly to lay people. The AMA statements on the relationship between physicians and the lay bodies vanished. The statement was completely absent in the 1981 revision of the document (Valentine et al. 510). “As far as this study is concerned,” no formal policy reversal or change by any recognized AMA body prompted these changes (Valentine et al. 511). The policies that warned against the connection of physicians with lay bodies were just omitted, leaving the worried reader to speculate on whether AMA had accepted the relationship or whether they just thought it was no longer worthy of their attention.
2.3 The Ethical Dilemma Faced by Private Healthcare Managers
An ethical dilemma is a situation whereby one is confronted with tough choices on matters where each alternative has a very significant value to the decision maker. In management, such cases require a manager to be able to distinguish between the options and to take the values that influence their decisions in consideration. To make ethical decisions, the decisions of every healthcare professional should be affected by the right values. Three profiles characterize the categorization of ethical decision making; these are Morals, philosophies, and values. These three foundations regulate the ethical decision-making process of managers in both the private and public health sector (Valentine et al. 5116. Most of the scholars that have written about the topic do agree on the three values as being the most significant factors that influence the manner in which managers in any sector arrive at ethical decisions, especially in the healthcare sector as in the articles reviewed in the research.
Many healthcare institutions today have a lot of ethically controversial practices going on in them. The patients are at the center of these controversies. The available literature on how unethical decisions impact on the quality of healthcare offered to the patients provide a basis through which the article develops its own hypothesis on how unethical decisions by private managers in healthcare affect the quality of services rendered to the patients. However, most of these studies do not specify the various professions of the private managers and how they influence the ethical decision-making processes of these managers. This study fills that gap by giving several instances of specific professions like pharmacy and how these jobs affect the ethical decision-making processes of the private healthcare managers. Based on most of the articles that were reviewed, the most common factors that lead managers to moral decisions are evidence and knowledge (Valentine et al. 517). That is, managers that base their decisions on broad knowledge and evidence more often than not end up making ethical decisions. The papers reviewed also proposed a taxonomic model to explore the ethical decision-making processes that managers have to undertake every day. The one aspect of the research topic that was most commonly researched on in all the previous studies that were examined was the factors that shape the ethical dilemmas of private managers while making ethical decisions. However, most of these studies did not factor in the influence that the non-clinical staff in the healthcare sector have in influencing the ethical decisions that the managers in the various private healthcare institutions make. This is one area that the study believes should be satisfactorily explored if scholars are going to gain a full understanding of the ethical decision-making processes of private managers, where the challenges to ethical decision making arise from and how they can be minimized.
From most of the articles reviewed, the authors seemed to have a common belief that the ethical challenges that the managers in the private healthcare organizations faced were as a result of individual values and morals and not organizational values. This study, however, suggests that the values of an organization also have a significant role to play in the ethical decision-making process of private managers in the healthcare sector. The fact that they influence the ethical decision-making process of managers means that they are also highly likely to contribute to the challenges that mar the process. Most of the ideas presented by the authors in the works reviewed are backed with properly supported arguments as well as reliable methodologies to go with them. However, some of the arguments had weak spots in that their only base was the author’s points of view; they had no reliable solutions from thorough research. Some of the solutions offered by the articles were also quite debatable (Valentine et al. 526). Some of the tasks that the investigation attributed to healthcare managers in the private health sector seemed a bit too exaggerated. The bias could have originated from the number of institutions visited and the level of staff interviewed. If only managers and their close allies were interviewed, then they were likely to exaggerate the roles they play in ensuring that the organization is run on ethical decisions. They could also just lie about how they handle the challenges so as to look good in the eye of the people who will adopt and study the report of the survey. There are also individual elements that this study finds important that were excluded in most of the reviewed articles. One such element is the role that the culture of the part of the world that the healthcare manager comes from and works in. Issues like religious beliefs and cultural norms do have a significant role to play in determining whether a person is more likely to make ethical or unethical decisions.
Medical Ethics and Business Ethics
The most important ethical problem that rears its head when healthcare professionals attempt to confront the business world is whether medical ethics are compatible with the ethics of business. Some studies argue that the moral compulsions that describe the role of a doctor are gotten from the basic principles of morals that are shared among the laymen community and the community of professionals. Therefore, the ethics of health care and those of business should principally “share a common foundation” (Schrempf-Stirling, Guido, and Roberts 37). However, different individuals have different roles within the society. These actions may demand radically separate moral deeds despite the fact that the moral compulsions that define the roles might be products of universal principle sets. Police officers, teachers, and parents are expected to handle children differently when they commit an offense. However, they are all proponents of a similar set of ethical ideals. In the same light, business people and doctors or other healthcare professionals might be required to behave differently, even though they might be operating from a common set of principles.
The community holds a typical stereotype that doctors and other healthcare professionals are supposed to act primarily for the patients’ welfare. The same community also holds a stereotype that businesspeople are expected to look out for their self-interests even if this costs the welfare of the other members of the community. In the literature section that discusses the sociology of professions, a principle called “collectivity orientation” is used to distinguish between various occupations (Schrempf-Stirling, Guido, and Roberts 39). This law suggests that professions pursue interests common to their profession and just their individual interests. This principle is referred to as the principle of altruism in ethics. Business persons, by contrast, fight for self-interests; a principle is known as egoism in ethics. The community accepts this nature of businesspeople and does not expect them to give priority to any other interests other than those that benefit them and their businesses (Yu 582). This does not mean that business people are immoral or selfish. It is just deemed ethical for business people to go after self-interest when they are in their capacity of business people. Provided that key distinguishing element holds it will be exceedingly tough for people to embed the role of healthcare professionals in the business context. When health professionals are employed by for-profit organizations but pursue their professions as expected without any interference from the business ethics of the organization, then they face no ethical dilemmas as far as the topic of discussion is concerned. If the healthcare professionals own the for-profit organizations, then they would face a serious conflict of interests in their desire to fit perfectly in both roles (Schrempf-Stirling, Guido, and Roberts 43).
Conclusion
There is credible evidence that alludes to the idea that people, including scholars, do overstate the collectivity and self-orientation aspects of the business and the health profession. Studies have already pointed out that healthcare professionals increasingly recognize the validity of “muted self-interest in their ethics” (Valentine et al. 511). On the other side, it has always been clear that business ethics dictate that as long as self-interest is generously served, anything goes. Based on many studies, one can safely say that a huge majority of business people do not believe that businessmen or women should cheat, lie, harm others or steal. Just like in the professional world, not all individuals in the world of business people conform accurately to the norms of their trade. Business persons tend to believe that they have many common traits with professionals. These shared characteristics include the recognition of the fact that there are certain moral limits to their pursuit of self-interest. Healthcare professionals, like private healthcare managers, on the other hand, see themselves as having more and more common traits with the business persons as the days go by. With the rapidly changing world of healthcare and business, the degree to which the society anticipates the people that occupy these different roles to act is at stake. Business people nowadays take on philanthropic endeavors that do not generate any profits just to thank the society in which they operate for supporting them. Medical professionals are also increasingly becoming aware that the sacrifice of self-interests for the welfare of others also has its moral limits. At some point, they also have to look out for their own self-interests. This is why there are many healthcare professionals with hospitals and other health-related businesses like pharmacies. However, this development presents them with the challenge of having to balance between the ethics of their medical profession and the ethics of the business profession. There is almost no study that has conclusively researched on, and come up with facts and figures on the exact extents to which medical professionals are expected to sacrifice their self-interests for the interest of others. Therefore, most of these people use their own discretion. As a result, there arise the ethical challenges in making decisions that link both the business and professional aspects of the physicians’ lives. Perhaps a time has come when people have to explore ethical tensions that are bound to come up in this era of for –profit healthcare services in greater length to push the society and its professionals to a better place in time.
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