IntroductIon

T
wo themes underlie Ethics in Health Services Management: the au-
tonomy, primacy, and protection of the patient* and the health
services manager as moral agent and leader of the health services
organization. These themes have been a constant through six editions.
This book is intended to assist health services managers develop
a personal ethic and gain an understanding of administrative and bio-
medical ethical issues, and it suggests a methodology for solving the
problems these issues raise. The emphasis is on normative ethics (what
should be done). Some attention is paid to descriptive ethics (what is ac-
tually done) and metaethics (study of ethical systems) because they assist
in understanding normative ethics. The theories of ethical relativism
and ethical nihilism are not considered. Ethical relativism holds that
there are no absolutes, and all answers to ethical questions are morally
correct, depending on circumstances and culture. Nihilists consider no
choice correct. Neither theory helps managers meet the needs of pa-
tients, staff, and their organizations, nor does either theory help manag-
ers resolve ethical problems or formulate, monitor, and reconsider their
personal ethic.
For the health services managers, a personal ethic is a moral frame-
work for relationships with patients, staff members, their organization,
and their community. In these relationships, the manager morally affects
and is morally affected by what is done or not done. This gives special
meaning to misfeasance, malfeasance, and nonfeasance. Management’s de-
cisions are not value-free; in a moral sense, they affect the organization’s
environment, and that environment affects future decisions.

*To ease reading, patient is used to describe anyone served by a health services
organization.
1
2    Introduction

The patient relies on the health services organization and its staff to
perform services unique in society. Managers’ responsibilities to patients
take precedence over their fiduciary duty to their organizations. Protecting
the patient is more than providing safe surroundings and competent staff.
It is more than licensure, accreditation, and compliance in all its manifes-
tations. It is more than a surplus at the end of the fiscal year. The manager
is the organization’s conscience. This responsibility is exemplified by the
organization’s willingness, prompted and led by management, to recognize
the inherent human dignity of the patient and to do so through efforts
that make it a reality in the organization. It means using effective consent
forms and procedures and ascertaining that all who have contact with pa-
tients are qualified and working for the patients’ good. It means not see-
ing patients as adversaries and not deserting them should something go
amiss in the care process. An organization that has done its best can face
the consequences of an error honestly, mitigate the injury, and find a fair
solution. The loop is closed when management determines the cause of
the problem, prevents or minimizes the probability of its recurrence, and
strives to continuously improve quality. At times, justice requires a deci-
sion process that prospectively includes the criteria of cost–benefit analysis
and utilitarianism (the greatest good for the greatest number). Even here, the
organization recognizes the dignity and worth of people as yet unserved or
only partially served.
How does the health services organization develop and implement
“just” policies? How does the organization through its staff treat patients
with respect and work to serve their interests? Implementation of a just
policy begins with the organization’s values system—its philosophy,*
which should explicitly state the nature of the relationship between the
patient and the organization. This values system should reflect the view
that the patient is autonomous and is entitled to be treated with respect
and dignity. In a palpable sense, there is a contract—an implicit, but veri-
fiable, understanding between patient and provider, grounded in mutual
trust and respect. It recognizes that, to the greatest extent possible, pa-
tients control their lives.
Once enunciated, the organization’s value system must be reflected in
derivative mission and vision statements, policies, procedures, and rules,
but especially in relationships with its patients and community. If not

*Values system is used as a generic concept to include organizational philosophy, values,

core values, shared values, ministry, healing ministry, philosophy, or similar terms used to
convey the philosophical framework in which services are delivered.
 Introduction    3

operationalized, the organization and its managers will be judged cynical

about themselves and those they serve. This cynicism is easily recognized
by staff and, in turn, will be reflected in the staff’s relationship with pa-
tients. Staff may not succumb to the negative implications of this inconsis-
tency, but it will be an underlying, festering incongruity, nonetheless.
A major participant in developing, maintaining, and furthering the
appropriate values-driven relationship with patients is the physician,* nec-
essarily a primary actor. Physicians must respect decisions made by a pa-
tient or proxy, as appropriate. The roles of physician and organization are
complementary, but the organization remains morally (ethically) account-
able for the physician’s activities performed in the organization.

CONCERN ABOUT ETHICS

Ethics is a word common to healthcare. Questions are asked daily about
making the ethically right choice. Seemingly straightforward and value-
free management decisions have ethical implications for patients, staff,
organization, community, and society. Many situations that cause ethical
problems result from the continuing revolution in clinical practice, biol-
ogy, and technology. Fiscal constraints, competition, and new means of
delivering services exacerbate existing ethical problems and raise new
ones. Beyond these causes is an enhanced level of awareness resulting from
the research and writing of ethicists and the baseline work of government
commissions on experimentation and bioethics.
Ethical dilemmas occur when decision makers are drawn in two direc-
tions by competing courses of action that are based on differing moral
frameworks, varying or inconsistent elements of the organization’s value
system, conflicting duties or moral principles, or an ill-defined sense of
right and wrong. For example, staff members may be asked to follow rules
they consider inappropriate or unjust, or two moral principles may conflict
with each other. A nurse’s duty to respect a patient’s wishes clashes with
the patient’s family’s wishes to keep the patient alive. Another source of
ethical dilemmas is the existence of two compelling, ethically defensible
positions on an issue, such as the possible conception of a genetically de-
fective infant. Requiring genetic screening and counseling for people at
risk conflicts with individual autonomy for those who wish not to know.

*To ease reading, physician includes medical doctors and other practitioners of the medi-
cal and healing arts licensed to independently treat patients (e.g., dentists, nurse midwives,
clinical psychologists, podiatrists, chiropractors). Such persons are also known as licensed
independent practitioners (LIPs).
4    Introduction

Conclusions vary when decision makers put different weight on ethical

principles, such as personal liberty or privacy competing with societal in-
terests and economic considerations. Politics, laws, and regulations also
affect ethical decisions.
Reasonable persons could differ as to the ethically “right” answer on an
issue. With few exceptions, however, one answer emerges as morally supe-
rior. Ethical problems are often characterized as dilemmas because that word
emphasizes the difficulty of finding the morally best solution. Solving ethi-
cal problems may be demanding, but few are correctly labeled dilemmas.
Are laws and regulations the problem or the solution? Some perceive
that ethical problems arise because laws or regulations fail to guide actions.
Others perceive that laws force organizations and managers to act in ways
that contravene their moral frameworks. Depending on the issue and facts,
both views have merit. Even when there are external rules, decision makers
in organizations must decide when the rules apply, how they are interpreted,
and, finally, whether to obey them. In fact, implementing and clarifying rules
diminishes the middle ground and, thus, the range of choices. Ethical prob-
lems are stark; solving them is more difficult. Some may ignore rules and
apply their personal ethic. Others will apply rules dogmatically, choosing
not to think about the underlying moral framework or ethics. Conversely,
some ethical problems arise because no external rules assist decision makers.
Often, there is no consensus as to what the rules should be. A further com-
plication is that some ethical problems develop more quickly than the ability
of the health services field or society to solve them.

ETHICS DEFINED
Defining ethics is difficult because the word can have several meanings. For
philosophers, ethics is the formal study of morality. Sociologists see ethics as
the mores, customs, and behavior of a culture. For physicians, ethics means
meeting the expectations of profession and society and interacting with pa-
tients in certain ways. Health services managers should consider ethics a
special charge and a responsibility to patients, staff, and organization, to
themselves and their profession, and, ultimately but less directly, to society.
Managers must answer the normative question, What ought I to do?
Distinctions often blur, but ethical problems may be regarded as being
either biomedical or administrative. Biomedical ethical problems involve
individual patients or groups of patients in their relationships with one
another or with providers and organizations. Depending on the issue, the
manager is less directly involved in biomedical ethical problems. Beyond
biomedical ethical problems, some of which become ethical dilemmas that
 Introduction    5

receive great media attention, is the need to identify and solve manage-
ment problems with ethical dimensions. Administrative ethical problems
involve manager and profession, organization, patients, and, to a lesser ex-
tent, society. Administrative ethical issues are less likely to involve compet-
ing, ethically defensible choices. Solving these problems is usually a matter
of recognition and resolve—doing what is morally right.

SOURCES OF LAW
The relationship between law and ethics (morality) is dynamic. Thus it is
useful to begin a book about ethics by briefly reviewing development of
law. Organized societies have a code or system of rules that distinguishes
acceptable behavior from unacceptable behavior and prescribes penalties
for transgressors. Law may be defined as a system of principles and rules of
human conduct recognized or prescribed by an authority. This definition
includes criminal and civil law. In contrast, ethics is the study of standards
of moral judgment and conduct. For individuals, this is the personal ethic.
Professions have a guiding system or code of ethics.
The moral underpinnings in criminal law clearly reflect society’s sense
of right and wrong, or its ethics (morality). In democratic society, crimi-
nal law derives from and reflects the views of justice and fairness held by
the majority. This is less true in civil law, which governs relations among
individuals and includes torts and contracts. The common law tradition of
the United States means that a great deal of law is based on the precedents
established by court decisions. Civil law emphasizes predictability, stabil-
ity, and property rights.
If laws in a democracy reflect the moral values of the majority, sig-
nificant minorities may hold contrary views. They may consider a law or
government action so unjust that they risk the penalties for breaking it.
A historical example is the 18th Amendment to the U.S. Constitution.
Adopted in 1919, it prohibited the manufacture, sale, or transportation
of intoxicating liquors. Violation was widespread until the amendment’s
repeal in 1933. More recent examples include draft resistance during the
Vietnam War, common disregard of roadway speed limits, and widespread
use of illegal drugs.
Some cultures regarded law as a gift from the gods. Plato’s Republic
postulated the ideal state as one based on rational order and ruled by
philosopher-kings. Plato considered written law a regrettable oversimpli-
fication that could not account for differences and conditions in parties
and situations in legal disputes. He believed it was best if a philosopher ap-
plied an unwritten law. His own experience proved this theory impossible,
6    Introduction

and he accepted a written law administered without regard to the circum-

stances of the individuals involved.1 This concept of a rule of law, not of
men, became established in Anglo-American legal tradition. Because ab-
surd results can occur when civil law is applied without considering the
situations of the parties, the concept of unwritten law preferred by Plato
was continued, but in a limited manner. Plato’s concept of unwritten law
is found in the few states that have separate courts of equity. These courts
seek a just solution for the parties. Most states have combined law and
equity into one system; plaintiffs may bring their action either in law or in
equity in the same court system.
Because of the link between societal views of right and wrong and the
law, morality is reflected in all types of law, whether that law is formal or
nonformal. A leading jurisprudent, Edgar Bodenheimer,2 identified formal
sources of law as constitutions, statutes, executive orders, administrative
regulations, ordinances, charters and bylaws of autonomous or semiau-
tonomous bodies, treaties, and judicial precedents. Nonformal sources of
law have not received an authoritative, or at least articulated, formulation
and embodiment in a formalized legal document. Sources of nonformal
law include standards of justice, principles of reason and consideration of
the nature of things (natura rerum), equity for individuals, public policies,
moral convictions, social trends, and customary law.
Bodenheimer’s inclusion of the charters and bylaws of autonomous
and semiautonomous bodies in the list of formal sources of law has sig-
nificance for health services management. These documents include the
articles of incorporation and bylaws of the health services organization.
General references to the organizational values system (philosophy) and
mission may be included in both but are usually expanded in other docu-
ments. These are key. Medical staff bylaws and rules and regulations are
formal sources of law for the medical staff in a health services organization.
They should reflect the organization’s value system (philosophy) and mis-
sion and must be consistent with them.
In addition to their importance in reflecting values and mission, the
corporate charter and its bylaws are an organization’s basic law. Persons
affected by the organization—staff members, physicians, patients—look to
them to guide development of the organization’s derivative policies, pro-
cedures, and rules. Formal sources of law, such as the medical staff bylaws,
detail the rights and duties of physicians. Should a legal controversy de-
velop, courts and other reviewing bodies are guided by these documents.
Bodenheimer’s definition of formal law is broad enough to include
professional codes of ethics. A code can be effectively implemented only
when interpreted and enforced. Such activities guide a code’s application
 Introduction    7

and related decision making, give it life and dynamism, and help ensure
the important qualities of consistency and predictability.

RELATIONSHIP BETWEEN ETHICS AND LAW

The relationship between law and ethics might seem one-to-one: anything
lawful is ethical and vice versa. This is not necessarily true. Among the
most important distinctions is that law states the minimum standard of
morality set by society to guide interactions among individuals (including
corporations), and between them and government. Law concentrates on
prohibitions—the “thou shalt nots.” It has few positive duties.
For professions, ethics is much more than obeying the law. Professions
expect members to comply with the law, but they add to this minimum by
including positive duties to patients, society, and one another. The result
is a professional code of ethics that requires action when the law does not.
For the professional, then, taking (or not taking) an action may be legal,
but unethical.
Positive duties are not exclusive to the professions. Individuals may
hold themselves to a standard that obligates them to aid others or work
on their behalf. In many respects, this positive duty means practicing the
Golden Rule: “Do unto others as you would have them do unto you.”
This duty is more demanding than merely refraining from interfering with
someone or enacting a law that protects one person from another.
As noted, it is paradoxical that law both prevents and causes ethi-
cal problems. Choices must be made regardless of the law as defined by
Bodenheimer. Absent public law, managers rely on the formal law of the
organization, such as statements about the organizational system of values
(philosophy) and mission. Also important in guiding decision making is the
informal law of the manager’s personal ethic. Public law may not be deter-
minative in solving a problem. Even when it is clear, ethical problems often
remain. An example is the U.S. Supreme Court decision that a nonminor
woman has a constitutional right to an abortion during the first trimester of
pregnancy.3 The controversy over the morality (ethics) of abortion continues.
Statutes, court decisions, and professional codes of ethics are formal
sources of law, but the latter affect only members of a specific group, usu-
ally one of voluntary association. Belonging to an association may not be
completely voluntary, however, because colleagues have expectations and
demands, employers may consider memberships important in judging
qualifications, and better-informed consumers ask questions and express
views about a professional’s memberships. At root, however, participating
in professional groups is voluntary.
8    Introduction

Licensure is ubiquitous for clinical personnel. Of health services man-

agers, only nursing facility managers must be licensed. Including ethical
standards in licensing statutes gives those standards the force of law. This
does not relieve the professional association of the need to regulate mem-
bers’ behavior by adopting more stringent guidelines. Groups whose codes
are not reflected in statutes or regulations bear a heavier burden. Their codes
are only private statements (albeit formal law) of acceptable behavior; the
groups themselves must do the monitoring. The obligation to protect and
serve society is the hallmark of a profession and necessitates self-regulation.
In disciplinary proceedings pursuant to a licensing statute, the actions
of public regulatory bodies are distinct from those of private associations.
Expulsion from the professional group usually occurs only after a separate,
private hearing and review process. If a license is necessary for member-
ship in a professional group, its loss means automatic expulsion.
The relationship between law and ethics is shown in Figure 1, a model
developed by Henderson. It shows a succession of events leading to cor-
porate decisions being scrutinized by the public and a determination that
Introduction 9

Codification

Manifestation

Corporate
decisions

Decisions
exposed to
public scrutiny

Decisions determined
to be legal/illegal
and ethical/unethical

Figure 1. The relationship between law and ethics. (Reprinted from “The Ethical Side of Enterprise”
The relationship
by V.E.1.Henderson,
Figure between
MIT Sloan law and ethics.
Management (Reprinted
Review, 23, 1982,from
pp. “The Ethical
37–43, Side of Enterprise”
by permission by
of the pub-
V.E. Henderson,
lisher. CopyrightMIT
© 1982
SloanbyManagement Review, 23, 1982,
MIT Sloan Management pp. 37–43, by permission
Review/Massachusetts Instituteofof
the publisher.
Technology.
Copyright © 1982 by
All rights reserved. Massachusetts
Distributed Institute
by Tribune of Technology.
Content All rights reserved.)
Agency, LLC.)

justifiable to break the law to prevent greater harm or injury. Someone

who engages in civil disobedience or breaks other laws must be prepared
to suffer the penalties imposed.
 Introduction    9

they are legal and/or ethical. This judgment is necessarily after the fact,
despite management’s efforts to predict consequences of a decision. The
model suggests that for many corporate actions it cannot be known with
certainty if those who finally judge the decision will consider it legal (as
determined by law enforcement officials) or ethical (as determined by
the profession or the public). This adds a high degree of uncertainty to
decision making inside and outside health services. It is usually easier to
predict that an action will be legal than to predict that it will be perceived
as ethical.
Figure 2 is a matrix developed by Henderson. It shows the combina-
tions of legal, illegal, ethical, and unethical. In Quadrant I, managers act
legally and ethically.
Quadrant II includes decisions that are ethical, but illegal. The Amer-
ican College of Healthcare Executives’ Code of Ethics requires affiliates
to comply with laws and regulations. This suggests the impossibility that
health services managers can justify an act that is illegal as ethical. There
10 Introduction
are exceptions, however. For example, it is morally justifiable to break the

Ethical

Quadrant II Quadrant I
Ethical Ethical
and illegal and legal
Codification

Manifestation

Corporate
Illegal decisions Legal

Quadrant V Quadrant III

Unethical Unethical
and illegal and legal

Unethical

Figure 2.
Figure 2. AA matrix
matrix of of possible
possible outcomes
outcomes concerning
concerningthethe ethics
ethics and
and legality
legalityof
of corporate
corporatedecisions.
decisions.
(Reprintedfrom
(Reprinted from “The
“The Ethical
EthicalSide
Sideof
of Enterprise”
Enterprise”by
byV.E.
V.E. Henderson, MIT Sloan
Henderson, MIT Sloan Management
Management Review,
Review,
23, 1982,
23, 1982, pp.
pp. 37–43,
37–43, by by permission of the
permission of the publisher. Copyright ©
publisher. Copyright © 1982
1982 by
by Massachusetts Instituteofof
Massachusetts Institute
Technology. All
Technology. All rights
rightsreserved.)
reserved.)

and ethics. In this regard, the law leads some subsets of society but fol-
lows others.
10    Introduction

law to prevent greater harm or injury. Someone who engages in civil dis-
obedience or breaks other laws must be prepared, however, to suffer the
penalties imposed.
Quadrant III includes decisions that are unethical but legal. It incor-
porates the concept that ethical standards, especially those of a profession,
hold the member to a higher standard than does the law. Examples include
failing to take reasonable steps to protect the patient from incompetent
medical care and preventing manager self-aggrandizement at the expense
of patients.
Quadrant IV includes activities that are illegal and unethical.
Embezzlement falls into this quadrant, as does ignoring local fire safety
requirements or filing false Medicare or Medicaid reports.
It is important to stress the dynamic between law and ethics: each
affects and is affected by the other. A profession’s codes and members’ con-
duct reflect society’s perceptions of a profession, as well as the profession’s
self-image. To the extent that law codifies society’s need to protect itself
and regulate conduct, licensure laws clarify what is expected of a profes-
sion. Morality reflected in the law evolves but often lags private morality
and ethics. In this regard, the law leads some subsets of society but follows
others.

CONCLUSION
Mahatma Gandhi, the father of modern India, said, “Noncooperation with
evil is as much a duty as cooperation with good.”4 An aphorism attributed
to the philosopher Edmund Burke is: “The only thing necessary for the
triumph of evil is for good men to do nothing.” These complementary
philosophies are germane to health services, especially its managers. It is
essential that managers understand and meet their ethical obligations.
Contemporary demands on health services organizations and manag-
ers may seem inconsistent with the often-idealized statements found in
codes of ethics. Managers must recognize their responsibility, however,
and strive to transform the ideal into reality. Managers must see them-
selves as others see them: moral agents with a critical role in the organiza-
tion and its efforts to serve, protect, and further the interests of patient and
community.
There is ample evidence of ethical and legal problems in the world
of business. Dare mention be made of the world of politics? Despite oc-
curring less often and having less impact on the economy and society,
there have been enough ethical and legal misadventures in health services
 Introduction    11

management to know it faces important challenges. A number of these in-

cidents are described in the chapters that follow. There is much of concern
beyond the moral lapses and illegality, however. What about the manager’s
relationships with persons served by the organization or its staff? Manag-
ing health services organizations will always be among the most demand-
ing work in society. No one said it would be easy; few in the field expect
kudos for their work. But we raise the pride of profession and self and meet
our responsibilities when we act as moral agents whose primary duty is to
protect patients’ interests and further their care. This is the continuing
challenge of health services management.

NOTES
1. A useful discussion of Plato’s political philosophy is found in Jeremy Waldron.
(1995). What Plato would allow. In Ian Shapiro & Judith Wagner DeCew
(Eds.), Theory and practice: Nomos XXXVII (pp. 138–178). New York: New York
University Press.
2. Edgar Bodenheimer. (1974). Jurisprudence: The philosophy and method of the law
(p. 6). Cambridge, MA: Harvard University Press
3. Alex McBride. (2006). Casey v. Planned Parenthood (1992). Retrieved June 24,
2017, from http://www.pbs.org/wnet/supremecourt/rights/landmark_casey.html
4. William Safire. (2004). Lend me your ears: Great speeches in history (p. 368).
New York: W.W. Norton & Company.