Practical applications of healthcare marketing ethics.

ETHICS Many healthcare professionals believe that the healthcare industry is different from other businesses, that healthcare marketing efforts, unlike those of other industries, must reflect the highest ethical standards because healthcare customers lack the knowledge needed to make truly educated

A strong healthcare marketing ethics model must meet two criteria. The model must fit the realities of hospital management and must be easy to understand and follow.

For the model to have practical application, however, both consumers and providers must have balanced rights. Hospitals must be able to aggressively market their services if they are to stay in business. Consumers must have rights, too. They must be able to rely on the accuracy of a hospital's marketing claims. If consumers are forced to follow the doctrine of "Let the buyer beware," they may hesitate before obtaining qualified medical care and seek care from providers who may not take their ethical obligations as seriously.

The four ethical principles that follow can be applied to hospital marketing efforts with a minimum of expense or complicated operating procedures.

1. Put the patient's welfare first. This is the principle with which providers are most familiar. Patients must come before profits if the hospital is to profit. Patients have the right to expect care of the highest standard of quality consistent with technological and physical limitations. We accept the principle that a patient will receive all necessary care regardless of ability to pay. But, as prospective payment and forced discounts to managed care organizations cut into revenue, equivocal situations develop.

A hospital's obligation to its patients can be met while the hospital makes a profit as long the obligation is consistent with the best interests of patients as individuals and as members of a community. For example, a hospital that develops a fertility clinic as a center of excellence has an obligation to notify prospective clients of noninsured costs of $4,000 or more per treatment when multiple treatments are usually necessary.

2. Avoid unnecessary services. Marketing should not induce a patient to accept excessive, unneeded, or nonmedically indicated healthcare services, regardless of cost, risk, or source of payment. It is unethical to build demand for unneeded services. Promoting cosmetic surgery with claims of complete safety comes close to violating this principle. While much surgery in this field is justified, many patients seek cosmetic procedures with little or no knowledge of the risks involved.

3. Maintain high standards of honesty and accuracy. Healthcare marketers must do more than merely avoid false or misleading advertising. While marketing legitimately seeks to influence behavior, marketers have an obligation to provide fair and accurate information when they promote their services.

4. Be accountable to the public. Marketers should develop marketing plans believing that these plans will likely be revealed to the public in the future. Marketing professionals should avoid activities that they would not want their families to read about in the newspaper.

Marketers also should refuse to hide behind their duty to support their CEOs. Justifying unethical conduct by saying "I was just following orders" is obviously incorrect.

Case studies

The following true case studies illustrate some difficult ethical issues hospital marketers face on the job. When deciding on the best way to confront these "gray" ethical areas, hospitals marketers should use these questions as a guide:

* What are the hospital's objectives in implementing this plan?

* Will this marketing activity contribute to the public good, or is it merely self-serving?

* Are promotional efforts truthful in all aspects?

* Are marketing efforts not only legal but fair to the public?

* Do the means justify the end? That is, can results be supported based on the ethical correctness of the process?

Case 1 -- Marketing a new procedure. The administrator of a successful hospital is approached by an attending physician who has recently attended a seminar on a new out patient procedure that is stated to be quick and profitable.

However, the procedure is still considered experimental, and some conservative authorities regard it to be of questionable value. The physician would like to offer this new procedure and promote it with an extensive media campaign. A majority of the medical staff sees no problem. The administrator has doubts. While the administrator is not a physician and would not attempt to evaluate a clinical procedure, she is concerned about promoting a procedure such as this one. What should the administrator do?

Answer: The hospital administrator is faced with a potential violation of Principle 2: Avoid unnecessary services. In this instance, the hospital deferred action while the physician pressed for a promotional budget. In the meantime, a free-standing surgical center approached the physician and offered to promote the procedure. The promotion was very successful.

This outcome is typical. Because of the ethical issue, the hospital lost a new revenue source and the physician's goodwill. It is up to individual hospital marketers to decide if the price is worth it. Some may fault the decision-making technique of doing nothing in the hope that the situation will go away or solve itself.

Case 2 -- Selecting a provider. The contract administrator for an urban medical center has several managed care contracts, including some that include capitation. The administrator now finds that a specialty gap exists in the area of cardiac surgery.

There are two groups that could be contracted with, and both have indicated that they would be willing to enter into an agreement on the medical center's terms. Group A is affiliated with Community Hospital while Group B is affiliated with Memorial Hospital.

The hospital's president has strongly urged the administrator to select Group A and Community Hospital. The president says that this choice will improve a provider network that is being developed to capture market share. Several large employers have indicated that the new organization is very attractive to them. They especially like Group A because of its excellent regional reputation.

One of the medical center's best internists has approached the administrator with reliable data that shows that Group A has a significantly higher mortality rate than Group B. What should the contract administrator do?

Answer: This is a potential violation of Principle 1: Put the patient's welfare first. In this instance, the contract manager discussed the situation with several key physicians and then with Group B, explaining to the hospital president that the difference in quality was significant. Despite the potential harm to the development of the network, the president agreed with the contract manager and approved the decision to contract with Group B and Memorial Hospital. Shortly thereafter, the president left the medical center for reasons that had nothing to do with this decision. The contract administrator completed the negotiation process and the new contract is in place.

Case 3 -- Marketing in a new community. A hospital, located in a large urban area, has developed its own home health agency. The agency has been very profitable. It expects to continue operations for the next several years. In fact, the agency is considering expanding services into a new geographic area.

The new area is a nearby suburban community. While the community is an excellent target since it will protect the agency from a competing hospital's agency, there is a nonprofit agency currently providing services to the community and just breaking even because of its high percentage of Medicaid patients.

The hospital's agency does not intend to accept Medicaid patients. However, it will capture enough of the market to cause financial trouble for the nonprofit agency. The hospital's agency has determined that it will not acquire the nonprofit agency because of its reputation and management. No other agency will accept these Medicaid patients. Should the hospital's agency move forward?

Answer: The potential conflict involves Principle 4: Be accountable to the public. By entering the market, some patients will suffer (a violation of Principle 1: Put the patient's welfare first). Some hospital executives believed in moving into the market based on the need to compete successfully. However, the hospital could lose favor with the community.

In this instance, the hospital did enter the market, with some negative publicity, resulting in a compromise under which the hospital's agency agreed to buy out the local nonprofit agency and accept Medicaid patients.

Case 4 -- A promotional claim. A hospital marketer has decided to develop a regional promotional campaign that includes full-page advertisements in news magazines and newspapers. The marketer also has chosen to advertise on radio as part of an effort to establish the hospital as the best in the area. While the marketer feels that the hospital's physicians and employees have superior training, talent, and experience, he has no proof that can be cited in advertisements. But he thinks he has found a hook. It can definitely be stated that patients admitted to the hospital have a shorter stay than the national average. While other hospitals in the region also have a shorter stay, the absolute truth is being told. What should the hospital marketer do?

Answer: This scenario involves Principle 3: Maintain high standards of honesty and accuracy. The hospital is well known, but there is no proof that it offers services of a higher quality than any of its competitors. In this instance, the hospital went ahead with the advertising campaign. While the campaign did not seem to have a short-term effect -- either positive or negative -- on admissions or revenue, it could have a negative long-term effect on the hospital's credibility.

An organization's reputation for honesty is its most valuable asset. To risk damaging it is unconscionable. The hospital was later criticized in a national ethics journal for its advertising campaign. The campaign was discontinued at the end of the contract.

Conclusion

Whether a healthcare marketer is considering developing a new center of excellence, contracting with a new health plan, or promoting the hospital, he or she will face difficult ethical issues. The four ethical marketing principals presented in this article can help decision makers make the best choices.

Robert L. Goldman, PhD, is senior associate, Healthcare Management Consortium, Inc., San Francisco, Calif.