Key Stakeholders
R.E. Freeman in his book “A Stakeholder Approach”, defines a stakeholder as” a group engaged varied interests and participants, each of them may contribute and attain rewards as a result of activities of a company or business.” It is to be noted there is an interrelationship that is existing between the stakeholders and companies and can be explained as a source of competitive advantage and opportunities instead of a drain or threat on corporate resources. (Svendsen, 1998, p50).
For a company or a business, the following are the important stakeholders:
- Shareholders
The shareholders of the company have to be provided the profitability and financial statements of the company periodically and important events that have impacted the business.
- Customers
Customers should feel happy over the prolonged enhancement in overall satisfaction footed on items like low cost, reliable service, and flexible service.
- Employees
Employees should feel comfortable relating to work satisfaction, safety, and wellness.
- Community
The business should see that the community should receive support from the business where it operates. (Svendsen, 1998, p.112).
A relationship–structuring initiative group has to be established to supervise the development of a relationship –structuring initiatives. This group should consist of senior heads from various departments of the organization to interact with the stakeholder group which includes community relations, human resources, operations, product development, finance, and marketing. (Svendsen, 1998, p124).
Impact of 4 Different Operational/Ethical Issues
Unethical behavior can impact the financials of the companies by way of heavy fines, eroded trust, and a discolored public image in stakeholder relationships.
U.S Federal sentencing norms were transformed so that companies without proper safeguards to thwart and to detect ethical infringements would be accorded heavy fines than those companies that did have. (Svendsen,1998, p.81)
- Columbia / HCA was involved in “patient dumping” activity by discharging emergency-room occupied patients or mobilizing them to other hospitals when they were yet to recover incomplete.
- Columbia / HCA was also involved in the exploitation of public policy to the disadvantage of public health as alleged by INFACT a corporate watchdog that included it in the “Hall of Shame” for its unethical activities.
- Columbia / HCA was involved in overcharging for Medicare and other allied federal health programs. It indulged in unethical activities such as billing the federal government for non-reimbursable interest expenses.
- Columbia / HCA was charged that it is involved in illegal incentive payments to physicians and probable overutilization of home-health services. Thus, Columbia /HCA was charged with the unethical activity of systematically defrauding the government health care programs. (Thomas, 2008, p416)
Ethical Analysis -Summary of 4 Key Ethical Issues
Columbia / HCA was charged for “patient dumping “. This is unethical behavior on part of a hospital to maximize its profits at the expense of the life of the patients. By resorting to this, Columbia/ HCA was careless for the life of the patients but maximise its revenues.
It engaged lobbyists for influencing the federal policies on health care. This is also an unethical practice to maximize its profits.
It also abused Medicare and other allied federal health care programs mainly to maximize its revenues at the cost of taxpayers’ money. No doubt, this unethical behavior has added more financial vigor to the corporate profit & loss account by dubious means.
It also involved unethical behaviors like payments of incentives to physicians and overutilization of home-health care services.
Ethical Perspectives
Ethics can be illustrated as the codes or morals of a profession, individual, group, or business. It concerns the methodical securitization of the principles and methods for distinguishing evil from good. Ethics may be explicated as respect, honesty, and fairness. Humans are conferred with calculative, creative, and capable of betraying others. (Boyle, 1990, p21).
According to Jeremy Bentham and John Stuart Mill, a utilitarianism theory is concerned with moral decision or action which ends in the farthest good for the utmost. Philosophical ethics or normative ethics is narrow. Normative ethics look for standards with the authoritative norms of what ought to be. (Singer, 1993, p242). Normative Ethics is having two branches namely deontological and teleological ethics. Teleological ethics illustrates that the reliability of an action is exclusively determined by its outcomes whereas deontological ethics is concerned with the probity of an action which exclusively relied on its intrinsic or its motives or it being in synchronization with some rule or principle and either not solely or wholly on some outcomes. (Singer, 1993, p62).
Examples of Ethically Sound Behavior
- Beneficence is the “first cryptogram “of ethics and refers to performing well and shun evil”. For example, when a victim of an accident raced to a hospital with brutal injuries, a physician will immediately begin treatment in the utmost interest of the patient without confabulating or even overturning the patient’s wishes. Thus, the code of beneficence is accorded more priority over the patient’s autonomy. (Singer, 1993, p179).
- Nonmaleficence connotes doing no damage. (Munson, 2004, p.772). It is just the opposite of beneficence. This is more applicable to the medical profession. For example, to decide whether to offer chemotherapy constantly to a patient to have long life despite the fatiguing process of radiation, to decide as to withdraw or withhold life supporting machines including an artificial respiratory system for a patient under comma stage. (Butts & Rich., 2004, p13).
Examples of Unethical Behavior
Physicians who are under the payroll of the pharmaceutical companies by accepting favors, gifts, and other monetary incentives by prescribing drugs that need not necessarily be in the best interest of their patients. (Bernat, 2008, P59).
Columbia / HCA has been involved in illegal incentive payments to physicians and probable overutilization of home-health services. Thus, Columbia /HCA was charged with the unethical activity of systematically defrauding the government health care programs.
Cost/Benefit Analysis -·Summary of Costs
Due to federal investigation, the confidence reposed by doctors, consumers, and the general public on Columbia / HCA was lost and its stock price tumbled more than half of its all-time high. (Thomas, 2008, p418).
In the year 1997-1998, Columbia / HCA made a compromise with IRS for $71 million in a settlement against the complaints of excessive compensation and ‘golden parachute ‘compensation payments to its executives.
In 2000, Columbia / HCA paid $ 840 million by way of civil penalties and criminal fines. In June 2003, Columbia / HCA paid $631 million as a fine for filing false Medicare claims, overcharging the wound-care centers, and for payment of kickbacks to doctors.
Thus, Columbia/ HCA paid an aggregate of $1.7 billion by refunds, fines, and lawsuit settlements for the infringement of ant kickback laws and falsification of records for making false claims from the Medicare schemes. Columbia/ HCA was subject to intense security by federal agencies till 2009. (Thomas, 2008, p419).
After a federal investigation, Columbia/ HCA closed more than 100 of its hospitals across the nation.
Summary of Benefits
As a process of developing ethical culture, Columbia / HCA desisted from lobbying activities and hence it was removed from “Hall of Shames” by INFACT. (Thomas, 2008, p418).
As the result of the investigation, Frist who was appointed as CEO of Columbia/ HCA introduced a 100-day strategy to transform the hospital’s troubled corporate culture.
The training was conducted to inculcate a code of conduct, to educate the corporate’s overall compliance and ethics program. (Thomas, 2008, p417).
The new vision statement issued by Frist focused on a commitment to enhance the quality of medical care and to maintain honesty in business activities. (Thomas, 2008, p417).
The company’s new compliance officer Alan Yuspeh introduced various ethical measures like refining supervising strategies, introducing strategies to enhance employees’ ethics, and offering compliance training, fostering a code of conduct for workers, and establishing an internal tool for employees to report any frauds through whistleblowing process. (Thomas, 2008, p418).
Having understood the significance of ethics in business, HCA presently is expending about $4 million per annum on its ethics programs. (Thomas, 2008, p420).
References
Bernat James L. (2008) Ethical Issues in Neurology. New York: Lippincott Williams & Wilkins.
Boyle, P. (1990). Business Ethics in Ethics Committees? The Hastings Center Report, 20(5), 37.
Butts Janie B & Rich Karen. (2005). Nursing Ethics across the Curriculum and into Practice. New York: Jones &Bartlett Publishers.
Singer Peter. (1993) A Companion to Ethics. London: Wiley –Blackwell.
Svendsen Ann. (1998). The Stakeholder Strategy: Profiting From Collaborative Business Relationships. Hong Kong: Berrett –Koehler Publishers.
Thomas Mike. (2008). The Health Care Company: Learning From Past Mistakes.