Ethics are the basic concepts and principles of human conduct that relate to morals. Ethical decisions, or unethical decisions, play a highly influence the culture of a society or organisation. In a business environment, ethical behaviour is highly important because not following ethics can lead to negative effects on businesses overall and its stakeholders. The importance of ethics can be observed through an incident that occurred regarding HealthSouth, a healthcare provider in the United States. From 1992-2003, HealthSouth was involved in the embezzlement of financial reports to portray their financial position as better than it was. The founder, Richard M. Scrushy, the executive team, and many employees were involved in this process, all …show more content…
of whom disregarded the ethical issues related to their actions. HealthSouth’s actions and the end results confirm the importance of ethical behaviour within businesses. HealthSouth was founded in 1984 by Richard M.
Scrushy, and it is now one of the largest healthcare providers in the United States. HealthSouth offers many services across 35 states and Puerto Rico through its inpatient rehabilitation hospitals, home health agencies and hospice agencies. The company went public in 1986 after Scrushy, who was the CEO at the time, and Aaron Beam who was the chairman, had sufficient investment. By 1996, HealthSouth had a market value of over $12 billion and around 1800 facilities across the United States. HealthSouth had consistently reported high profits and revenue; hence they were highly reputed and people were encouraged to buy shares in HealthSouth. However, in 2003, it was discovered they were creating inaccurate financial statements which overstated their revenue. Their revenue was overstated by between $3.8-$4.6 billion throughout 1992 to 2003. Forensic audits conducted by PricewaterhouseCoopers revealed this information, thus HealthSouth’s business declined for the next few years, many staff members lost their jobs and investors could not recover their …show more content…
money. Since the establishment of HealthSouth, the executive team and employees were involved in creating inaccurate financial statements and reports to make the company’s financial position look more attractive for investors and to the public. Ethical considerations were disregarded as the company’s sole purpose had become to expand. The executive team should have been more attentive to the ethics they violated. Their decision to overstate revenue was mainly driven by the need for more capital investment. In the 1990s, investors were more focused on overall revenue than business profits and this became a reason in favour for HealthSouth to make false accounting reports. For HealthSouth, the long-term benefits of obtaining more capital outweighed the severity of their actions. One of the employees, Michael Vines, was a bookkeeper at HealthSouth not directly involved in the process of making false entries. He had eventually realised the company was fraudulently overstating the value of assets. He too, had to decide based on ethics, whether he would inform anyone or continue as is. Vines chose to warn members of management and he took further action by eventually quitting since this activity continued and he informed auditors of this fraud. Vines did make an ethically correct decision, however, at that time HealthSouth was able to close the audit file and Vines’s decision was not effective. Not only Vines, but many other employees were aware of the fraud because it was widespread in the business, however, no one acted against it, thus ethics were further compromised. HealthSouth’s actions impacted their stakeholders to a large extent. Their employees, shareholders and investors, and their customers were affected by these events. Many employees were helping HealthSouth overstate revenue and these employees had the knowledge their jobs were at risk. When the fraud was revealed, these employees had lost their jobs and Scrushy, along with other members of the executive team were at risk of going to jail. During the time when this fraud was occurring, many employees had also chosen to quit their jobs to avoid being affected later. As discussed earlier, HealthSouth’s main reason to do this was to increase capital investment, hence their investors and shareholders were directly impacted. They experienced major losses because of HealthSouth’s theft and inability to provide returns on their investments. Due to this knowledge, customers who were with HealthSouth were discouraged to continue using their services. The extent of the fraud caused HealthSouth to lose many of their customers. Despite the fraud, they were at the time one of the best providers of healthcare and because of this many customers found they had no other options like HealthSouth to rely on which affected their personal lives more than what HealthSouth would have anticipated. HealthSouth did not consider the effects of their actions in regard to their stakeholders. HealthSouth failed to make ethical decisions, even upon the final audit report that uncovered the fraud, they still denied the information.
When Vines had caused auditors to investigate further, HealthSouth could have made an easier recovery and experienced less of a downfall if they did not cover up the matter then. HealthSouth did have opportunities to own up to the fraud, had they have taken those opportunities they would have put some ethics into practice. However, the constant denial and the spreading of the knowledge and involvement in this fraud had made it clear there was no ethical framework. They did experience major losses because of this. Customers were not using their services because of their damaged reputation, and HealthSouth also had to cover many legal
costs. Initially, business ethics seemed to be highly important to apply to all business decisions. After further research, my perspective remained the same, however, it did broaden because of the vast amount of new information learnt. Business ethics are more complex than I anticipated because several factors and ways of thinking about what is ethical can contradict each other, so ethical behaviour is not as straightforward. Researching HealthSouth’s incident furthered my opinion that ethics are highly important because they not only affect the business but its stakeholders and the external environment. Ethically correct behaviour is respected by society and it creates a positive work environment. Through HealthSouth’s case study, it is evident that there is no benefit in the long-term of disregarding ethics. Ethically and morally incorrect behaviour has many negative impacts on more than just one party, hence it should always be necessary to consider ethics.
The process of choosing a health insurance provider should have been more consumer friendly. People
Problems at HealthSouth were being uncovered in 2002. In early 2002, Scrushy sold over $75 million dollars worth of stock and an additional $25 million back to HealthSouth. It was also disclosed in August of 2002 that a new Medicare payment policy would greatly lower reimbursements and consequently the stock would lose more than half of its value. Shareholder lawsuits were filed alleging that Scrushy acted on insider information when selling his shares of stock earlier in the year.
Blue Cross Blue Shield of Florida (BCBSFL) Operating Services is Florida’s largest insurer, serving more than 6 million residents in total. Three trends that redefine how Blue Cross Blue Shield of Florida brings value to its members are through consumer empowerment, E-business, and financial services modernization. BCBSFL holds approximately 30% of the HMO market share in Florida, which is twice the share of its nearest competitor. BCBSFL offers a BlueComplements program filled with discounts and services that allow members to stay healthy. Theses advantages include Healthy Alternatives, Vision One, TruVision, Hearx, GlobalFit, SafeTech, and Walgreens Mail Order Pharmacy.
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
In the United States, healthcare fraud and abuse are significant factor associated with increasing health care costs. It is estimated that federal government spends billions of dollars on the health care cost (Edwards & DeHaven, 2009). Despite the seriousness of fraud and abuse offenses, increasing numbers of healthcare providers are seeking new and more profitable ways to build business relationships. These relationships include hospital mergers, hospital-physician joint ventures, and different types of hospital-affiliated physician networks to cover the rising cost of health care (Showalter, 2007, p 111-114). When these types of arrangements are made, legal issues surrounding the relationship often raise. There are five important Federal fraud and abuse laws that apply to the relationship and to physicians are the False Claims Act (FCA), the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (Stark law), the Exclusion Authorities, and the Civil Monetary Penalties Law (CMPL) and (Office of Inspector General (OIG), 2010). Out of five most important laws that apply to the relationship and the physicians, we are going to focus on the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (Stark law).
My mother once told me to take pictures during a family picnic. That was the day I discovered the art of photography. I found it fascinating how an image could be capable of sharing an entire story. What started out as a hobby, ended up becoming a life-long passion that has allowed me to develop into a more capable individual. When I saved up and bought my first camera, I read vast amounts of photography books and watched countless internet tutorials, in an attempt to teach myself how to become a good photographer. I would then use what I had learned and go outside, for hours at a time, and take pictures of the world around me. I even had the opportunity to practice commercial photography and graphic designing for various public events. These experiences have made a deep impact on my character. Growing up, I was reluctant to work with others, especially in school. Maybe because I was a natural introvert, I believed that in order for something to be done right, I had to complete it on my own and asking others for help was a sign of weakness. However, when complex situations arose during photo-shoots, I realized how lucky I was to be working and collaborating with talented individuals. By sharing the responsibility and by having confidence in my team, the quality of my work drastically improved, and in turn, I thrived in such an environment. It really was a surprise to me how photography has taught me the value of placing trust in others.
One of the biggest contributors to health care costs that I have seen during my time in the healthcare industry is insurance fraud. One example of such fraud came about two months ago. I was taking a phone call from a provider that was upset that one of their claims had denied even though all of their previous claims had been paid. In researching with a partner plan it was determined that the claim denied because this medical provid...
Ethics are the moral beliefs that help direct a person’s behavior These values are molded by social norms, culture, and often times religious beliefs. With that, ethical decision making is the development of measuring the moral associations of a course of action(Squazzo,2011). Every decision has an ethical or moral component due to the fact that they each have effects on others. Organizations often instill ethics agendas to help ease better decision making of employees. According to Jack Gilbert there are five specialties for ethical culture that healthcare organizations can learn from, they are: mindfulness, voice, respect, tenacity, and legacy(Squazzo,2011). Gilbert states mindfulness as being mindful of unethical thing that could
Anthem is one of the United States’ largest health insurance companies. It is the largest managed health care company in the Blue Cross and Blue Shield Association. In February of 2015, hackers stole the names, social security numbers, medical IDs, physical addresses, e-mail addresses, employment information, income data, birth dates and other personal information of about 80 million Anthem and other Blue Cross and Blue Shield members and former members. It is believed to be the largest cyber-attack that has ever occurred in health care history. It has been described as a very sophisticated attack. The source of this attack is still unknown, but several reports have linked it to Chinese hackers. All the company’s product lines were affected including Anthem Blue Cross, Anthem Blue Cross and Blue Shield, and others. Anthem has 37.5 million members enrolled in its affiliated health plans and serves 68.5 million people through all its subsidiary businesses, which includes Medicaid. The CEO Joseph Swedish wrote to its members "I want to personally apologize to each of you for what has happened, as I know you expect us to protect your information. We will continue to do everything in our power to make our systems and security
The Health and Human Services (HHS) settled a case with Blue Cross Blue Shield of Tennessee (BCBST) for $1.5 million for violating the Health Insurance Portability and Accountability Act (HIPAA) and security rules. There are security issues with BCBST in regard to confidentiality, integrity, availability, and privacy. There are also security requirement by HIPAA which could have prevent the security issue if it has been enforced. There are correction actions taken by BCBST which were efficient and some may have not been adequate. There are HIPAA security requirements and safeguards organization need to implement to mitigate the security risk in terms of administrative, technical, and physical safeguards.
There are many different types of health care fraud. This paper will give an overview of the five major types of health care fraud. The different types occur on both the patient/consumer level and at the provider level. According to the Centers for Medicare & Medicaid Services (CMS) the five major types of health
United HealthCare company mission statement states “Our mission is to help people live healthier lives and help make the health system work better for everyone” (UHC). The mission statement further breaks down into improved performance, supported client/physician relationship, and expanded access to quality care at an affordable price. The company also prides itself on the culture they create for their work environment including integrity, compassion, relationships, innovation, and performance. United HealthCare truly believes that the relationship between client and insurance company should be one that the customer feels comfortable and trusts their insurance company (UHC). United HealthCare’s goal in business is to make quality insurance
Ethics is the understanding of the moral values that govern the people in a community or society. Ethics will also cover the broader aspect of culture and its involvement in making decisions. It is only ethical that the organization take care of the needs of their employees especially those needs that affect their health issues. For that matter, the ethical view support that the organization does provide the contraceptives for their employees (Bernard, 2010).
Organizational ethics is an area that is described to be in its infancy therefore it is always developing, as seen all over the world; ethical codes exist within large corporations and are on the rise. This relatively new area of focus is often described as a necessary evil and tricky aspect to start but once completed is very beneficial. Progressively during the last two decades, public and corporate organizations have wanted to diminish deviations from ethical standards by introducing ethics programs. Ethics are the moral values that dictate a person's behaviour; they help determine what is good or bad, and right or wrong, but there are varying degrees between the two extremes. They are not determined by the law but many organizations feel they are required for the organization to be successful because the efficiency level and overall power of the work environment is greatly affected by the socio-economic environment at workplace. Over the past twenty years many organizations have tried to reduce the variances in ethical standards by starting ethic programs. Ethics is important to an organization's effectiveness because it can help prevent an organization from making wrong or unethical decisions that could potentially ruin the organization. It can also help cushion any disciplinary and legal issues that could potentially occur due to employees making unethical decisions.
Ethics is simply doing the right thing. In the business situation ethics are the moral concept of a firm getting through it organizational duties ethically.