For any business to grow, expand and survive in the current world, the stability of a society plays a very critical role. There are several stakeholders in most companies, and trust is one major issue they all require from the companies. Stakeholder management is needed to oversee the mutual relationship between the company and the organization (Werhane, 2000). The healthcare business has often been insulated from clinical issues for several reasons. In the beginning, hospitals were mainly operated by charitable and equitable premises. It meant that healthcare services would be provided without any relationship to the financial support provided. The clinical ethics were then compartmentalized from the business part of the organization (Werhane, 2000). However, this changed over the last few decades when the healthcare facilities got reimbursement from other sources. It has made it challenging to examine the effects of the stakeholders in the business on clinical professionalism. The ethical issues in the running of the healthcare facilities are related to finances and professionalism; thus, they affect each other mutually (Werhane, 2000). This paper examines the factors affecting ethics and professionalism in the healthcare sector.
Looking at Friedman conclusion, which is mainly based on the neoclassical economic model of rational choice, humans are presumed to act primarily to their interests and not any other person or entity (Werhane, 2000). From this view, it can be said that the management of many of the healthcare organizations is mainly focused on the self-interest of commercial competition. According to this theory, it is assumed that most of these health facilities will provide better services, reduce the cost of operation and improve their efficiency. However, there is no evidence since most profitable companies do not use Friedman’s theory.
Healthcare facilities are mainly created to take care of patients. Hence, their top priority should always be to maximize their patients’ treatment and well-being. The healthcare facilities must be economically stable to pay their employees and pay off any debts. Even if an organization is constrained to charity or government funds, it must do so. According to Friedman’s theory, if a hospital does not put their patients first but profitability, it would be immoral and irrational (Werhane, 2000). The approach fails to recognize the roles of stakeholders in an organization and the organization’s obligation to the stakeholders. Stakeholders perform several functions in an organization. The first is to define the organization, purpose, mission and vision. They are also essential in the survival and success of the company, and lastly, they are the most affected by the organization’s activities. Stakeholders are thus critical in any organization, be it a healthcare facility or otherwise.
Stakeholders’ theory describes their association with the organization in outlining its role both externally and internally (Werhane, 2000). Looking deeper into the view, the stakeholders can influence the organization. Employees of a healthcare facility have obligations to the organization that employs them, their patients and their profession. They are morally obligated to serve the community since they exist in it. It is thus challenging to figure out how a healthcare facility can prioritize profitability while offering quality services to the population. Stakeholders are often prioritized since they virtually control the organization. However, the patients in a hospital can be considered significant stakeholders of a healthcare facility since their primary role is to provide excellent healthcare services.
Several factors influence the priority of a healthcare organization. Their missions and patient preference are some of these factors. Additionally, the professionals in a healthcare facility, that is: doctors, physicians, nurses and other members, are very vital in the capacity of a heal organization. They are often responsible for delivering the care to the patients and not the management; thus, they cannot trade off professional commitments over patients’ health which is immoral.
The chain in the healthcare system is a selective distribution where there are only a few intermediates in the supply chain (Elms et al., 2002), but there are several parties who can provide the same care. Every hospital strategy is to reduce the cost of operation whilst offering a quality health care service for their patients in a suitable environment. These strategies can range from operational excellence, customer intimacy and product leadership. It is challenging to achieve all of the strategies at once. Therefore, the hospitals must compromise and eliminate one of the strategies. They might provide excellent quality for their patients, but the cost will be high. It may only cater to those who can pay for health services that are immoral since the main aim of a healthcare organization is to cater to every patient equally. On the other hand, providing cheaper services for every patient lowers the health organization’s profits, more so if charities and state funds do not back it (Elms et al., 2002). This may lead to the organization’s bankruptcy, thus its eventual downfall. Health care organizations have to compromise one of the strategies to achieve their desired goals.
Joyce Ching, a 34-year-old, gave testimony on her ailment of persistent abdominal and pelvic pain when she visited her doctor. The doctor failed to appreciate the potential and gave her a pelvic exam. The pain continued for months until she saw a specialist where it was found that she had a cancerous tumour. The situation must have resulted from capitated payments, which are always guaranteed whether the patient gets treated or not (Elms et al., 2002). It entices the health organizations to admit very many patients and, in doing so, maximize their profits through capitated payments with reduced quality of healthcare service offered to the patients. From the above case study, the day Joyce visited the doctor, he had already seen 39 other patients who could be argued to be why he failed to recognize the cancerous tumour (Elms et al., 2002). The physicians did not provide quality health care to Joyce Ching due to potential financial gain.
Insurance is another factor that hugely affects the ethics of the healthcare sector. Patients are limited as stakeholders since they are not the direct payers but the insurance company (Elms et al., 2002). Most of these insurance contracts are based on their work. Thus, they are stuck with the company that their employers provide. It makes it difficult to exit from the relationship with their insurance company unless they lose their jobs. Employers are tasked with negotiating insurance policies for their employees with various companies, which leads to limited insurance choices for the employees. Those who have chronic diseases often tend to stick with their insurance policy even if it may be costly on their end (Elms et al., 2002).
Employers often team up to increase the number of employees covered by an insurance policy, allowing them to get premium concessions from the insurance companies. Insurers also take advantage of many employees to reduce capitation payments from healthcare facilities. The health care organizations are limited since some have fewer resources to fight back, and the contract signed by their employers restrict the patients. Employers and insurers have teamed up to reap the benefits that are not aligned with the ethic that orders patients. These factors have moved the stakeholder power from the patients to their employers and insurers, which is against the healthcare core mandates.
Stakeholder management is always used to control the stakeholders’ impact on an organization. It manages several stakeholders’ expectations for the reasons of public health where there are several stakeholders with diversified goals. The management team needs to understand the stakeholder’s interests and balance them evenly without bias. It can be achieved by cooperation between specialized and primary health care that ensures the commitment of strategic management. Additionally, competitive principles also apply to the health care facilities to improve the care provided to the patients. The main focus for the organization should be to enhance the value of patients meaning the quality of care received per cent paid. The model follows the Porters model, which focuses on providing value-based competition (Elms et al., 2002).
In conclusion, Friedman’s theory about social responsibility helps define the primary focus of health care organizations. The stakeholder’s theory shows the relationships between the organization and its stakeholders, which are sometimes oversimplified. Business ethics are crucial in running a healthcare organization since they have to efficiently provide the best patient care while still being productive. Since the mission of the medical organization is not profit, they should not put profitability as their top priority. Medical care facilities should first develop a clear prioritization of their stakeholders before designing concordant solutions. Managers can use the stakeholder’s theory to prioritize the needs of their stakeholders. The managers should talk with the stakeholders to agree on the organization’s core values. In doing so, there needs to be addressing the differential impact of ethics and incentives on behaviour. When both ethics and motivations support a behavior, it is challenging to identify the outcome of the action. Some factors in the medical care sector promote professionalism based on rationality and morals. Other factors are against the ethics of the medical industry, such as profitability over the quality of the healthcare provided. Stakeholders, whether the patients or external, have a massive impact on the ethics and professionalism in the sector and thus need to be considered carefully. The health care facilities can acquire more in-depth insight into the consequences and possibilities of the strategic development process they have in place, helping them make better decisions. The strategies must involve the size of the facility, competition, other health care provider in the chain and their financial status.
Elms, H., Berman, S., & Wicks, A. C. (2002). Ethics and Incentives: An Evaluation and Development of Stakeholder Theory in the Health Care Industry. Business Ethics Quarterly, 12(4), 413–432. https://doi.org/10.2307/3857993
Werhane, P. H. (2000). Business Ethics, Stakeholder Theory, and the Ethics of Healthcare Organizations. Cambridge Quarterly of Healthcare Ethics, 9(02). https://doi.org/10.1017/s0963180100902044