Don't overreact to Enron: greed isn't a good choice, but is altruism any better? (Ethics).

Enron is now a well-known euphemism for greed and corruption in high places. Suddenly the biggest issue in organized health care (and other American businesses) is not money; it is trust, because lack of trust freezes money in its tracks.

Highly paid executives eager to appear purer than Caesar's wife are in danger of overreacting to this scenario because today's approach to ethical principles is a lot different than yesterday's approach.

Gone are the pompous pontificating philosophical ethicists who gazed over our heads while they explained the deontological vs. utilitarian significance of air conditioning. Equally gone are the days when altruism was the only alternative to greed.

Today's buzz phrase is ethical reasoning. In today's practical ethics, (1) there are firm rules but very few absolutes. The 21st century neo-ethics urges justice for stakeholders and the virtue of sustainability, but insists that we blend into our thinking considerations of political reality, historical perspective, social science (psychology, sociology) and economic feasibility. Properly understood, this is all very good news for executives, coming at just exactly the right time.

Here is a six-point Practical Ethics Primer for busy physician executives, with emphasis on applications of today's practical ethical principles to organized health care. (2,3)

1. Ethics and morals are no longer synonyms.

Another name for ethics was once moral philosophy. But today, militant moralists view the world in terms of absolutely unbendable rules while modern-day ethicists submit firmly stated rules to the test of reason in specific situations. (This approach is a far cry from no rules at all, which is called subjectivism and in the long run can lead to total chaos).

For example, should a nation's health care policy include profit-taking opportunities? A moralist might immediately answer, "Absolutely not," believing that there is no choice but to run a health care business altruistically. But a practical ethicist might argue that the answer is "yes or no depending on a health care company's definition of profit.

2. Legal compliance and ethical behavior are not synonyms.

Some generally accepted societal rules are codified in laws. But the correlation between legal principles and ethical principles is not absolute. For example, civil disobedience is about which laws are truly ethical and which ones aren't. Furthermore, new laws and regulations incite some to find ways of doing what's legal without doing what's right.

Enron sparked a spate of political posturing about corporate responsibility. But ethical business practices cannot truly be legislated or imposed by decree. We are good at complying with laws, regulations and industry standards without allowing compliance to affect how we really do business. (4)

3. Ethical reasoning is not natural. It is a skill that must be learned and practiced.

Telling someone how we feel about an issue comes much more naturally than telling someone what we think about an issue.

Argument and quarrel are not synonyms. A logical argument is two or more facts or assumptions related by stating a conclusion. This is a computer and computers are machines, therefore this is a machine.

Ethical arguments involve assumptions and conclusions that are almost always debatable. Physician executives participate in arguments about organizational ethics all the time. (5) All we have to do is be aware of that fact.

For example, an executive wanting to cut the losers is promoting the utilitarian ethic. That is, he or she believes that maintaining financial integrity of the organization for the good of the many takes precedence over the interests of a single patient who might need the health care service that gets cut because it's not self-supporting financially.

Traditionally, physicians adamantly defended the opposite view: "I've got to do what it takes for my patient." Today, physician executives help everyone appreciate the need to balance these two viewpoints.

Also, we have finally learned that when "cut the losers" becomes a distortion of the utilitarian view actually used to increase investor profit, the operational ethic of the organization (exploitative profit-taking, greed) is clearly recognizable even to the most casual observer.

4. Reasonable self-interest is good; greed is eventually self-destructive.

Absolute altruism is the moral principle that requires total sacrifice of one's self-interests in order to serve the interests of others. Only super-moralists are absolutely altruistic. The modern ethicist believes that reasonable self-interest is good.

"Self-interest," reasoned Aristotle, "is a feeling implanted by nature." But he went on to warn, "Selfishness is rightly censured, (because) selfishness is not the mere love of self but the love of self in excess, like the miser's love of money." (6)

Adam Smith, a father of modern economic theory, felt the same way. "It is not from the benevolence of the brewer, the butcher or the baker that we expect our dinner but from their regard to their own interests." (7)

Does this mean greed is good?

No. Smith was a professor of moral philosophy before he was an economist. His writings presume integrity and respect in business dealings, within human limits. In addition, Smith stated that the expected result of his economic theories is "a general plenty that diffuses itself through all the different ranks of society." (7)

5. Using these principles, reasonable profit can be defined.

Usually, attempts to define reasonable profit are purely statistical and arbitrary, such as some percentage of revenue or a dollar amount. Using the principles outlined in this article, criteria for reasonable profit can become more useful benchmarks of ethical executive behavior. Here is a demonstration example, offered to help focus discussion: Reasonable profit is the amount of legitimately obtained revenue left over in a well-managed company after providing a dependable product or service, meeting the needs (but not all the wants) of staff and employees, putting money aside for research, development, contingencies and replacement, and meeting obligations such as paying taxes, maintaining pension funds and paying off debt.

6. The health care business is unique.

Ethical executive behavior is not all about money. It is also about whether we are as interested in providing people medical care (care necessitated by illness and injury) as we are in providing health care (wellness opportunities).

People want us to be interested in both. Because medical care is a universal commodity eventually needed by everyone except people who die suddenly without ever being sick or injured.

The role of physician executives is unique, too. Who better to lead the executive staff to awareness that "Health care institutions are, in fact, business organizations with most of the problems faced by corporate management in other fields. (But) health care holds a special place among human needs." (8)

References

(1.) Baker, EV. and Richardson, M. L., eds, Ethics Applied. Pearson Education Press. New York, 2000.

(2.) Hall, RT. An Introduction to Healthcare Organizational Ethics. Oxford University Press. New York and Oxford, 2000.

(3.) Worthley, JA. The Ethics of the Ordinary in Health Care: Concepts and Cases. Health Administration Press. Chicago, 1997.

(4.) Thompson, RE., MD. On Beyond Compliance: Thinking Inside a Brand New Box. ACPE. Tampa, Fla., 2001.

(5.) Thompson, RE., MD (Interviewed). "Ethical Reasoning in the Boardroom. Boardroom Press. The Governance Institute. La Jolla, caLif., June 2001, p,4.

(6.) Aristotle, cited in Peter Singer. How Are We To Live? Prometheus Books. Amherst, N.Y., 1995. p. 57.

(7.) Smith, Adam. Wealth of Nations. Prometheus Books. Amherst, N.Y., 1991. (Originally published in 1776). p. 20.

(8.) Hall, RT. An Introduction to Healthcare Organizational Ethics. Oxford University Press. New York and Oxford., 2000, p. ii.

Richard E. Thompson, MD, is president of Thompson, Mohr and Associates in Springfield, Mo. Previously, he was an adjunct instructor of ethics at the Ethics Institute, St. Petersburg College, St. Petersburg, Fla. He can he reached by phone at [phone] or by e-mail at [e-mail]