BY: REV. GERARD MAGILL, PhD, and LAWRENCE D. PRYBIL, PhD, LFACHE
Fr. Magill is director, Center for Health Care Ethics, and chairperson, Department of Health Care Ethics, Saint Louis University, St. Louis; Dr. Prybil is associate dean, College of Public Health, University of Iowa, Iowa City, IA.
The Goal Should Be "Virtuous
Organizations" with a "Community Covenant"
In recent years, health care organizations have worked so hard to achieve
fiscal responsibility that they have sometimes constrained services and reduced
access. The result has been a backlash of public distrust. However, a more ethical
approach to the delivery of care can help such organizations regain the respect
of skeptical patients and disheartened communities. To further that end for
Catholic health care, this article will suggest a practical approach to organizational
We realize, of course, that the principles and practices of organizational
ethics already influence daily behavior in health care to some degree. Unfortunately,
however, health care leaders have many fewer resources in organizational ethics
than they have in, for example, biomedical ethics. In this article, we hope
to focus on organizational ethics in a way that will provide guidelines for
organizations committed to high standards of ethical conduct, patient care,
and community service.
Toward a Virtuous Organization
Organizational ethics and biomedical ethics are related, though distinct, fields
in health care ethics. Biomedical ethics deals with ethical issues concerning
biomedicine, clinical services, and patient care. Organizational ethics,
by contrast, deals with value-related issues concerning an organization
in the broadest sense: mission, vision, sponsorship, governance, and leadership.
(The term, as we use it, encompasses what some writers allude to as "business
ethics" and "corporate ethics.") Organizational ethics is related to, but broader
than, compliance programs, which typically try to ensure that organizations
abide by legal and regulatory requirements. At its best, organizational ethics
seeks to foster a virtuous organization, in which ethical principles
inspire appropriate decision making and moral behavior among all its personnel.
We believe that an approach to organizational ethics aimed at fostering a
virtuous organization will influence behavior among personnel more effectively
through general guidelines than through explicit rules; when it comes to nurturing
responsible and ethical conduct, persuasion works better than prescription.
A virtuous organization respects the resources entrusted to it by its community.1
Sound stewardship requires a Catholic health care organization to treasure the
heritage it has received from its community as the necessary context for the
prudent use of its limited resources. It encourages the organization's sponsors,
faithful to their Catholic identity and mission, to conduct operations in an
ethical manner. Stewardship enhances the organization's commitment to the community,
on one hand, and the community's trust in the organization, on the other. This
reciprocity could be described as Catholic health care's community covenant.
By nurturing this community covenant, the ministry can rebuild and strengthen
the community's trust in health care in general.
Indeed, a Catholic health care system or hospital that is considering an initiative
in organizational ethics should, first, aim at creating a virtuous organization,
and, second, do this by fostering among personnel a sense of stewardship that
respects the community covenant. Such a foundation in stewardship cannot help
but positively influence decision-making processes and standards of conduct
for personnel throughout the organization.
Basic Competencies for Organizational Ethics
Any initiative in organizational ethics will require basic organizational competencies.
A Sense of the Reciprocity between Sound Stewardship and the Community
Covenant This competency is at the very foundation of organizational ethics.
Perhaps the most basic meaning of stewardship in Catholic health care is the
passing on from one grateful generation to another of Christ's healing ministry.
The notion of stewardship highlights the church's traditio, a Latin word
for "the act of handing over." Of course, this obligation also implies fiscal
responsibility. Yet one of the greatest dangers the ministry faces today — especially
as it struggles in the most competitive market it has ever seen — is a tendency
to focus so strongly on fiscal propriety that it compromises its basic mission
of healing care. One could rephrase a well-known biblical warning by asking:
What purpose is accomplished if the ministry gains all the fiscal stability
in the business world, but loses its soul in the process?
The primary meaning of stewardship requires Catholic health care to act as
an ecclesial ministry, serving and nurturing its communities as sacramental
expressions of God's biblical covenant with humankind, as revealed in Scripture
and honored in church tradition.2 The great biblical covenant fundamentally
entails a relationship of trust. Hence the community covenant is a basic
relationship of trust between Catholic health care organizations and the communities
they serve. Building such trust is a serious challenge these days, as public
opinion surveys increasingly show. The work must be ýone, nevertheless. Stewardship
calls on the ministry to enhance trust in the communities it serves. Trust is
the necessary condition for fostering the community covenant required by an
ecclesial ministry. Resource management and fiscal responsibility are critical
elements of stewardship. But trust provides the foundation for organizational
ethics in health care.
A ministry that seeks to enhance the community covenant will readily try to
shape its hospitals and health care systems as virtuous organizations. They
will develop principles and processes that inspire good behavior. To be truly
virtuous, such organizations must adopt a practical perspective that integrates
what they are (their missions), how they function (especially their decision-making
processes), and how they behave (their ethical conduct).
Mission office personnel typically nurture this integration in Catholic health
care institutions; most do it well. However, to be fully effective such personnel
must possess the appropriate authority (with support from sponsors, boards of
trustees, and executive management) and the relevant skills (including training
in organizational development). Above all, such personnel must be guided by
a strategic plan to integrate mission, decision-making processes, and ethical
conduct. Without such a plan, the virtuous organization is unlikely to come
An Ethical Decision-Making Process To conduct an initiative in organizational
ethics, the organization in question must also possess a reliable method for
making decisions involving ethics — what might be called an ethical resolution
process. The goal here is to apply ethical principles to everyday behavior
and decision making. For the process to work effectively, of course, the organization
must foster an environment in which personnel are encouraged to perceive problems
and analyze their components. The process works in the following manner.
Identifying the Problem. This stage of the process involves three steps:
- Recognition of the problem's relevant aspects. Those
involved, including the organization's stakeholders, gather the necessary
data and consider the ethical dilemma in light of the relevant organizational
- Designation of the root problem. Those involved clarify
both their goals, on one hand, and the obstacles to those goals, on the other.
Having done that, they define the basic ethical conflict, distinguishing it
from lesser ones.
- Estimation of the problem's cause. Those involved explain
why the problem has occurred, distinguishing the basic cause from related
Resolving the Problem. This stage also has three steps:
- Clarification of feasible options. Those involved create
an environment in which the process can unfold, researching and refining various
options and identifying the ethical implications of each option.
- Determination of the best option. Those involved evaluate
the options, eliminating those that do not fit the process's goals.
- Implementation of the decision. Those involved test the
option to ascertain whether it truly is the best in terms of ethics and other
considerations (e.g., costs, benefits, risks, practicality). Assuming that
the option passes the test, those involved coimunicate its adoption throughout
the organization and arrange for appropriate follow-up and assessment.
Standards of Conduct Finally, the organization must
have standards of conduct that encourage improvement in all its operations.
These standards — which should be integrated with the organization's stewardship
guidelines and decision-making processes — will enable leaders to use resources
in a manner that enhances the community covenant.
Organizational Ethics in Action
Organizational ethics can provide guidance for leaders in any dimension of health
care. Here are two examples.
Governance Boards of health care organizations are today undergoing
significant changes, all of which have far-reaching ethical implications. Boards
of all types are shifting from a largely advisory role to one in which they
are strong advocates for stakeholders; in the not-for-profit sector, in particular,
many boards today involve representatives of the community in their organizations'
In these cases, as well as many others, the proper use of organizational ethics
will encourage boards to integrate stewardship guidelines, decision-making processes,
and standards of conduct in their work. This integrative matrix can make three
- It helps clarify the board's role as steward of the organization's
mission and values as they apply to the community covenant.
- It promotes effective communication and problem solving
through participatory decision-making processes that honor the organization's
strategic vision, all the while respecting appropriate confidentiality.
- It seeks to inspire strategic change while avoiding micromanagement,
on one hand, and board isolation, on the other.
Partnership with Physicians So far, no reliably successful
model for a partnership between health care systems and physicians has emerged.
The pressures generated by cost containment, declining reimbursements, and changing
consumer needs continue to frustrate such arrangements.4
Some partnerships have had disastrous financial performances.5
However, organizational ethics can help both sides to move toward effective
partnerships through an integrative matrix. The matrix encourages prospective
physician-system partnerships to discover and embrace a common mission that
enhances the community covenant by improving the delivery of high-quality patient
care. This sense of stewardship helps the partners avoid the zero-sum game of
economic self-interest that so often dooms such arrangements.
Stewardship and Community
Many areas in health care cry out today for guidance from organizational ethics.
And the number of specific areas needing it most — for example, capitated contracts,
information management, and technical acquisitions — is rapidly growing.6
In this article, however, our main emphasis has been on improving relationships
between Catholic health care organizations and their communities. Specifically,
we have tried to offer guidelines to aid the integration of stewardship with
decision-making processes and ethical behavior. By focusing on stewardship and
the community covenant, Catholic health care can ensure for itself a bright
- See S. W. Goodspeed, Community Stewardship,
American Hospital Association Press, Chicago, 1998.
- For a recent discussion of healing as essential for the
church's evangelical mission, see Edmund D. Pellegrino and David C. Thomasma,
Helping and Healing: Religious Commitment in Health Care, Georgetown
University Press, Washington, DC, 1997, pp. 157-159.
- Eric D. Lister, "From Advocacy to Ambassadorship: Physician
Participation in Healthcare Governance," Journal of Healthcare Management,
March-April 2000, pp. 108-118.
- Julie T. Chyna, "Physician-Health System Partnerships:
Strategies for Finding Common Ground," Healthcare Executive, March-April
2000, pp. 13-17.
- Craig E. Holm, "Restructuring Employment Relationships
between Healthcare Organizations and Primary Care Physicians," Journal
of Healthcare Management, July-August 2000, pp. 218-221.
- See Gloria J. Bazzoli and Lawrence R. Burns, "Capitated
Contracting Roles and Relationships in Healthcare," Journal of Healthcare
Management, May-June 2000, pp. 170-187.
Copyright © 2001 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.