720
THE ORGANIZATIONAL ENVIRONMENT AND ETHICAL CONDUCT IN OCCUPATIONAL MEDICINE* ALFRED C. NEAL, Ph.D. Committee for Economic Development Harrison, New York
SOME years ago a group of French industrialists and management advisors asked me to come and get acquainted with them. I spent about three hours listening to a very wonderful man-the late Dr. Andre Gros. Dr. Gros was practicing occupational medicine in a French factory town. A stream of people kept coming to him with accidental injuries and occupation-related diseases. The local factory was his source of clientele. Thinking about his practice one day, he concluded. "I can't cure these people. They're going right back into that factory and if they don't get injured again, somebody else will, because the occupational hazards have not been removed. The only way I can really practice medicine according to my ethics is to go into that factory and find out what's causing the trouble that is giving me.all these patients." From this experience there developed a group of consultants who were called Conseilliers de Synthese. "Synthese" is not a word in any language, but it described what they undertook. It was to be counselors or consultants who applied to industrial and business problems the whole world of knowledge. a synthesis of the world's knowledge. This is an interesting and useful introduction to what I want to say about the Authors Proposed Principles (APP) ethics proposals, particularly section 10, on which there is apparently no disagreement. Section 10 says that practitioners of occupational medicine should be interested in and participate in activities to improve both the health and well-being of the individual and the community. In other words, they share the philosophy of the Conseilliers de Synthese. Now, both Dr. Ackerman and lr. Martin have posed a challenge. *Presented at a Conference on Ethical Issues in Occupational Medicine cosponsored by the New York Academy of Medicine and the National Institute for Occupational Safety and Health and held at the Academy June 21 and 22, 1977.
Bull. N.Y. Acad. Med.
ORGANIZATIONAL ENVIRONMENT
721
However desirable the objective may be, what are the tradeoffs? Who pays the bill? How does one get businesses to behave in a socially responsible way? Some things done in the name of social responsibility are very profitable; one need not worry about them. One can go into the business of being socially responsible as one can go into the business of producing dog food or whatever. But that is not the issue they raised. They ask how far a company should go, say, to eliminate water pollution or occupational hazards and all the other occupational risks that we are talking about. How far should a company go when it costs money? On this issue I can give you a very clear answer which I think is virtually unassailable. If a company has a strong market position, it can afford to do the right thing. It can clean up water, clean up air emissions, take the safety precautions that are necessary, and so on. And its market position is such that it can add the cost to the price of the product, which the consumer pays. It can internalize the externalities, to use the expression used in industry-internalize into the cost and decision making of the firm the social damage and the human damage that the firm's activities cause. Now I know of one firm that, long before it was required by law to control pollution, so treated the effluent from its paper-manufacturing plant that every year it held a trout-fishing contest in the effluent pool. The water was so good that trout grew in it vigorously and the contest, of course, advertised that fact. That is one kind of situation, and it should not be underrated. A great many large companies have enough market power to be able to afford to clean up the messes they create. One of the troubles is that they often do not even know that they are creating them, and this is one reason why occupational medicine is obviously a very important and growing field. Now what about the other type of case-as exemplified by Dr. Martin's case-in which the very people one is trying to protect and help will be damaged because the firm becomes unprofitable and goes out of business, thereby destroying the jobs of the people one was trying to help. There is a clear, definite, and specific answer to that question also. It is: if it's bad for people and for society, one has an ethical obligation as a corporate leader to band together with other corporate leaders, with union leaders, and with other people, and go to the state capitol or to Washington or to wherever one must go and say, "This practice has got to be stopped in the Vol. 54, No. 8, September 1978
72272
NEAL A.C. A..NA
interests of all of us; we need legislation. We can't stop it without legislation or we'll go out of business." If a corporation internalizes the externalities of all its competitors, its competitive position is not deteriorated by its exercise of social responsibility. I think I have disposed of two of the great bugaboos as to why some companies do not do what they should while others do. The Committee for Economic Development, in the exercise of what we considered social responsibility, undertook to study the state of health care in the United States and the systems, modes, and practices under which it was delivered to the American people. The first time one learns something about this area it really shakes one up. Most people in this country are covered by some kind of health-care insurance, ranging from employerpaid health-insurance plans, union-and-employer-shared plans, to Medicare under Social Security and Medicaid for the people that cannot afford to pay. Most of the American people have coverage for health-care costs. That system just grew. It was not designed, although I think that the American Hospital Association had a lot to do with the shape it took. When the hospitals could not collect their bills in the 1930s they introduced prepayment for hospital bills through Blue Cross and Blue Shield. The shape of the American health-care system has been dominated by that great depression phenomenon. The important point is that health care in the United States is paid for predominantly on a fee-for-service basis. In business the analogy is the cost-plus system, and this system is probably the worst and most expensive way to pay for anything. It dominates the whole healthcare industry and has led the United States nearly to double the proportion of the gross national product put into health care in the last 10 to 15 years. The cost of medical care has risen at least 1 1/2 times the average rise in the consumer price index in recent years. Even the Nixon administration, when it tried to do something about inflation by direct controls, imposed price and wage controls on the health-care industry and continued them long after other controls were removed. Incidentally, CED had by then become aware of what was going on in the industry and supported the direct control of health-care charges. The Carter administration has proposed a ceiling on the increases in hospital charges of not more than 10% over last year. Inasmuch as the consumer price index is expected to go up only about 6% over last year, this proposal maintains that comfortable 150% of the consumer price Bull. N.Y. Acad. Med.
ORGANIZATIONAL ENVIRONMENT
723
index increase which has been characteristic of this industry for years. In the absence of a ceiling of 10%, it was expected that hospital charges would rise by 15%. The occupational physician has a large role to play in this beleaguered industry. He has a large role because he knows the area of medicine and health care on the one hand, and on the other his employer is some form of company or organization that is buying health care through insurance or some other form of prepayment for employees. Who is in a better position to advise management about how to obtain good health care at a reasonable cost than the occupational physician? This is a function clearly within the scope of the proposed ethical code, an area in which the occupational physician could support the alternate position: that of the person who says that the king has no clothes. We must get to the bottom of this very unsatisfactory method of buying health care by business, industry, and organizations. The people who know the most about this are the occupational physicians; they can team up with people who know how to drive hard bargains. I think they have a great mission. Ten percent of our annual production is involved. Let me comment further that health care is only part of a much larger sector of the economy, called the service sector. The service sector of the economy is far larger than the goods-producing sector. It consists of government, health care, education, and welfare and good works organizations that operate in the not-for-profit field. The service sector of the American economy has been letting us down. We have depended upon the improvement of productivity, not only to raise our standards of living but to keep prices down. And we have been having raging inflation in this country. We hope we have seen the last of the double digit increases, but by no means has inflation disappeared, and there is a real question whether it will. The reason that I may sound somewhat zealous in what I have said is that I am singling out health care as a part of a whole sector of the economy that has been letting the American people down. We know so much more about how not to do things that it is really amazing that we go on doing the wrong things as much as we do. People in health care have lots of company. I hope that occupational medicine becomes the bellwether of the new movement by professionally trained people to get health-care delivery working for the benefit of society in a highly productive manner, a manner in which productivity increases and costs go down. Vol. 54, No. 8, September 1978
THE ORGANIZATIONAL ENVIRONMENT AND ETHICAL CONDUCT IN OCCUPATIONAL MEDICINE* ALFRED C. NEAL, Ph.D. Committee for Economic Development Harrison, New York
SOME years ago a group of French industrialists and management advisors asked me to come and get acquainted with them. I spent about three hours listening to a very wonderful man-the late Dr. Andre Gros. Dr. Gros was practicing occupational medicine in a French factory town. A stream of people kept coming to him with accidental injuries and occupation-related diseases. The local factory was his source of clientele. Thinking about his practice one day, he concluded. "I can't cure these people. They're going right back into that factory and if they don't get injured again, somebody else will, because the occupational hazards have not been removed. The only way I can really practice medicine according to my ethics is to go into that factory and find out what's causing the trouble that is giving me.all these patients." From this experience there developed a group of consultants who were called Conseilliers de Synthese. "Synthese" is not a word in any language, but it described what they undertook. It was to be counselors or consultants who applied to industrial and business problems the whole world of knowledge. a synthesis of the world's knowledge. This is an interesting and useful introduction to what I want to say about the Authors Proposed Principles (APP) ethics proposals, particularly section 10, on which there is apparently no disagreement. Section 10 says that practitioners of occupational medicine should be interested in and participate in activities to improve both the health and well-being of the individual and the community. In other words, they share the philosophy of the Conseilliers de Synthese. Now, both Dr. Ackerman and lr. Martin have posed a challenge. *Presented at a Conference on Ethical Issues in Occupational Medicine cosponsored by the New York Academy of Medicine and the National Institute for Occupational Safety and Health and held at the Academy June 21 and 22, 1977.
Bull. N.Y. Acad. Med.
ORGANIZATIONAL ENVIRONMENT
721
However desirable the objective may be, what are the tradeoffs? Who pays the bill? How does one get businesses to behave in a socially responsible way? Some things done in the name of social responsibility are very profitable; one need not worry about them. One can go into the business of being socially responsible as one can go into the business of producing dog food or whatever. But that is not the issue they raised. They ask how far a company should go, say, to eliminate water pollution or occupational hazards and all the other occupational risks that we are talking about. How far should a company go when it costs money? On this issue I can give you a very clear answer which I think is virtually unassailable. If a company has a strong market position, it can afford to do the right thing. It can clean up water, clean up air emissions, take the safety precautions that are necessary, and so on. And its market position is such that it can add the cost to the price of the product, which the consumer pays. It can internalize the externalities, to use the expression used in industry-internalize into the cost and decision making of the firm the social damage and the human damage that the firm's activities cause. Now I know of one firm that, long before it was required by law to control pollution, so treated the effluent from its paper-manufacturing plant that every year it held a trout-fishing contest in the effluent pool. The water was so good that trout grew in it vigorously and the contest, of course, advertised that fact. That is one kind of situation, and it should not be underrated. A great many large companies have enough market power to be able to afford to clean up the messes they create. One of the troubles is that they often do not even know that they are creating them, and this is one reason why occupational medicine is obviously a very important and growing field. Now what about the other type of case-as exemplified by Dr. Martin's case-in which the very people one is trying to protect and help will be damaged because the firm becomes unprofitable and goes out of business, thereby destroying the jobs of the people one was trying to help. There is a clear, definite, and specific answer to that question also. It is: if it's bad for people and for society, one has an ethical obligation as a corporate leader to band together with other corporate leaders, with union leaders, and with other people, and go to the state capitol or to Washington or to wherever one must go and say, "This practice has got to be stopped in the Vol. 54, No. 8, September 1978
72272
NEAL A.C. A..NA
interests of all of us; we need legislation. We can't stop it without legislation or we'll go out of business." If a corporation internalizes the externalities of all its competitors, its competitive position is not deteriorated by its exercise of social responsibility. I think I have disposed of two of the great bugaboos as to why some companies do not do what they should while others do. The Committee for Economic Development, in the exercise of what we considered social responsibility, undertook to study the state of health care in the United States and the systems, modes, and practices under which it was delivered to the American people. The first time one learns something about this area it really shakes one up. Most people in this country are covered by some kind of health-care insurance, ranging from employerpaid health-insurance plans, union-and-employer-shared plans, to Medicare under Social Security and Medicaid for the people that cannot afford to pay. Most of the American people have coverage for health-care costs. That system just grew. It was not designed, although I think that the American Hospital Association had a lot to do with the shape it took. When the hospitals could not collect their bills in the 1930s they introduced prepayment for hospital bills through Blue Cross and Blue Shield. The shape of the American health-care system has been dominated by that great depression phenomenon. The important point is that health care in the United States is paid for predominantly on a fee-for-service basis. In business the analogy is the cost-plus system, and this system is probably the worst and most expensive way to pay for anything. It dominates the whole healthcare industry and has led the United States nearly to double the proportion of the gross national product put into health care in the last 10 to 15 years. The cost of medical care has risen at least 1 1/2 times the average rise in the consumer price index in recent years. Even the Nixon administration, when it tried to do something about inflation by direct controls, imposed price and wage controls on the health-care industry and continued them long after other controls were removed. Incidentally, CED had by then become aware of what was going on in the industry and supported the direct control of health-care charges. The Carter administration has proposed a ceiling on the increases in hospital charges of not more than 10% over last year. Inasmuch as the consumer price index is expected to go up only about 6% over last year, this proposal maintains that comfortable 150% of the consumer price Bull. N.Y. Acad. Med.
ORGANIZATIONAL ENVIRONMENT
723
index increase which has been characteristic of this industry for years. In the absence of a ceiling of 10%, it was expected that hospital charges would rise by 15%. The occupational physician has a large role to play in this beleaguered industry. He has a large role because he knows the area of medicine and health care on the one hand, and on the other his employer is some form of company or organization that is buying health care through insurance or some other form of prepayment for employees. Who is in a better position to advise management about how to obtain good health care at a reasonable cost than the occupational physician? This is a function clearly within the scope of the proposed ethical code, an area in which the occupational physician could support the alternate position: that of the person who says that the king has no clothes. We must get to the bottom of this very unsatisfactory method of buying health care by business, industry, and organizations. The people who know the most about this are the occupational physicians; they can team up with people who know how to drive hard bargains. I think they have a great mission. Ten percent of our annual production is involved. Let me comment further that health care is only part of a much larger sector of the economy, called the service sector. The service sector of the economy is far larger than the goods-producing sector. It consists of government, health care, education, and welfare and good works organizations that operate in the not-for-profit field. The service sector of the American economy has been letting us down. We have depended upon the improvement of productivity, not only to raise our standards of living but to keep prices down. And we have been having raging inflation in this country. We hope we have seen the last of the double digit increases, but by no means has inflation disappeared, and there is a real question whether it will. The reason that I may sound somewhat zealous in what I have said is that I am singling out health care as a part of a whole sector of the economy that has been letting the American people down. We know so much more about how not to do things that it is really amazing that we go on doing the wrong things as much as we do. People in health care have lots of company. I hope that occupational medicine becomes the bellwether of the new movement by professionally trained people to get health-care delivery working for the benefit of society in a highly productive manner, a manner in which productivity increases and costs go down. Vol. 54, No. 8, September 1978
