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Administrative ethics in health care resource allocation.

Can a model or measure be developed that can assist health care administrators and trustees in dealing with the ethics involved in health care resource allocation? I believe that such a model can be developed and customized to the mission and charge of each health care provider. What follows is a suggested approach to developing a "resource need allocation-ethical hierarchy" model.

Before we begin, we must establish some working definitions.

Ethics: the moral quality of a course of action;

Ethical:in accordance with principles of right or good conduct; moral, principles, proper, right, righteous, right-minded;

Administration:authoritative control over the affairs of others through direction or management;

Allocate:to designate for a specific purpose; to set apart; to distribute according to a plan;

Resource:an available asset that can be drawn upon when needed; means that can be used to advantage.

Resources come in many forms. There are people, who may be operational or in-house; esoteric or consultative; or contacts. If the latter, then they may be regulatory, political, community or reference contacts. The money resource refers to what an organization has plus what it can receive through grants, donations, entitlements, credit financing or long term borrowing. The equipment resource can vary from a basic computer to an MRI; it enables the organization to perform certain tasks. In addition, the organization also needs methods or policy and procedures, which are its "how-to" systems. The organization must also take account of time, the question being whether we have time on our side or whether the task must be performed now. Time, of course, is the one resource that can never be recaptured. Finally, the organization must take account of space; this involves the location decision which is sometimes referred to as site control, and concerns the physical geography or environment that is needed to perform or provide services.

In these times of scarce resources, health care administrators are often called on to make decisions with an ethical content. That is, a decision may be either ethical in nature, meaning that it demands a choice between competing and usually unrelated requests, or it may be perceived to be ethical by a sponsor. Here, the important question is whether decisions can be non-ethical. Legislative and regulatory decisions are not non-ethical by their nature, but it should be remembered that immunity as to criminal prosecution, civil liability or professional disciplinary action does not relieve individuals or organizations of their ethical responsibility.

Our Approach

We will do three things here. First, develop priorities. This will involve expressing the mission statement; taking account of human issues as well as any applicable regulations, statutes and standards; and considering finances. Second, we will compare the request for resources against the defined criteria. Third, we will disclose the ethical implications of any decisions to whomever requested resources or to the sponsor.

Ethics or ethical conduct involves not only one's own mores but also one's professional responsibilities. These professional duties involve upholding common values, and conducting activities with honesty, integrity and good faith. A professional acting ethically will naturally comply with all laws; will maintain technical competence and proficiency; will avoid exploitation or conflicts of interest; and will preserve a commitment to the organization, its patients and the community it serves.

When developing a workable ethical needs hierarchy, we should take a moment to see what potential ethical problems could arise in connection with each identified resource.
Resource Problem
People * selection
 * deployment
 * conflict of interest
 --undue pressure
Money * opportunity cost
 --hierarchy of need
 * conflict of interest
 --personal gain
Equipment * revenue increase vs. service enhancement
 * people elimination
Methods * intrinsically sound and ethical
Time * misappropriation
 * inadequate
Space * dichotomy of competing programs
 * inadequate

This resource inventory model can be shown pictorially. Chart 1 shows each of the resources available and assigns them an equal weight. Chart 2 shows how our resources would be impacted by a project that had to be completed within a limited time period. In this case, we would have to increase the people resource to offset the limitation of time. A good example of this situation would be the need to formulate a prompt response to a regulatory body's request for a proposal.

Now that we have defined the ethical terms that we will be using, and explained the components of our "resource inventory," we can develop working definitions which will assist us in ranking our needs (determining priorities). Essential means that without which activity would cease; required means that without which activity would be altered; needed means that without which activity would be adequate; and desired means that without which activity would be unaffected. The needs we will encounter will fall into one of three general categories: medical, social or financial. Applying the need ranking definitions described above will give the following "ethical hierarchy" model:

Resource Need Allocation: Ethical Hierarchy Model Ranking of Need:

* Essential * Required * Needed * Desired
Type of Need
Medical: Life Threatening Essential
 Life Improving Required
 Life Maintaining Needed
 Regulatory Desired
Social: Mass Benefit Essential
 Special Benefit Required
 Good of the Order Needed
 Regulatory Desired
Financial: Sufficiency Essential
 Maintenance Required
 Enhancement Needed
 Regulatory Desired
Examples: Medical * New Operating Room
 * New CAT Scanner
 * New Patient Monitoring System
 Social * New HIV Clinic
 * New Patient TV
 * New Outreach Program
 Financial * Social Security Increase
 * Pension Plan
 * Data Processing

The next task is to apply weights or values to each distinct need. When I did this, I structured these values in such a way that "competing needs" will default to the highest perceived category or good. Therefore, as can be seen in the overall ranking, medical needs will always outweigh social or financial needs in the same category (e.g. in the "Essential" category).
Ranking of Needs with Weights
Need Weight
* Essential 65
* Required 55
* Needed 45
* Desired 35
* Essential 54
* Required 44
* Needed 34
* Desired 24
* Essential 46
* Required 36
* Needed 26
* Desired 16
Overall Ranking
Medical - Essential 65
Medical - Required 55
Social - Essential 54
Financial - Essential 46
Medical - Needed 45
Social - Required 44
Financial - Required 36
Medical - Desired 35
Social - Needed 34
Financial - Needed 26
Social - Desired 24
Financial - Desired 16

The results of this effort are shown in Chart 3. I would recommend that health care organizations attempt to put such a program into effect by coordinating its development with its Board, Administration, Medical Staff and Ethics Committee. Time should be taken to iron out problems and give a test run before full implementation. Finally, it should be remembered that this model works best when resources are considered scarce or inadequate.

Charles J. Pendola is President and Chief Executive Officer, Preferred Health Network, Inc., Brooklyn, New York.
COPYRIGHT 1992 St. John's University, College of Business Administration
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Symposium: Health Care
Author:Pendola, Charles J.
Publication:Review of Business
Date:Dec 22, 1992
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