Developing an Ethical Code of Conduct
Why Labs Should Seek Solutions from Big Business
By Sarah Watts-Justice, MHA, MPA
In healthcare settings, conflict often exists between business and patient needs. Clinical laboratories are no different. When labs put profits ahead of patient safety, quality and efficiency are frequently put in jeopardy. This is unfortunate, as well as unnecessary. But laboratorians can learn to avoid this pitfall by looking for examples in other types of businesses.
Where can laboratorians find some good examples of patient/business conflicts? The biotech and pharmaceutical industries provide some examples of what not to do—putting business profits before patient needs. Examples include marketing the use of drugs for off-label purposes, misleading doctors and the public about safety concerns for certain drugs, and falsifying evidence regarding the safety and efficacy of drugs. The healthcare system ends up bearing the financial burden for these actions, while patients suffer the consequences of inappropriate and excessive therapies.
Similar examples of questionable behavior are seen in some diagnostic services in hospitals. For example, large medical studies have not proven computed tomography angiograms to be better than older or cheaper tests that expose patients to large doses of radiation. Yet these tests have made their way into everyday medicine thanks in part to heavy lobbying by cardiologists and radiologists.
Other examples of business/patient conflicts come straight from the lab. Most clinical labs manage their send out tests and associated costs, but they do not aggressively manage the use of tests that are highly profitable, even if there is indication that the test is being overused. Some labs promote proprietary tests and panels that have not undergone adequate clinical validation. In some cases, the local lab benefits financially, but in other instances the lab is producing a profit for the license holder.
Promoting Ethical Business Behaviors
What can the clinical laboratory industry do to promote ethical business behaviors? To begin with, laboratory professionals could learn some valuable lessons from companies and institutions outside of the healthcare industry. Many companies now embrace societal goals and long-term sustainability strategies without hurting the bottom line (See Box, below). Not only have these companies realized that putting consumers’ needs first can be good for the bottom line, but they also are leading the way towards achieving a strategic balance among ethical, social, environmental, and commercial goals. Once considered to be detrimental to the bottom line, many companies today consider such goals essential to long-term survival of the business. With a little innovation, incorporating these types of goals into a business also can help the bottom line.
Examples of Business Practices from Other Industries
These companies have shown that foregoing certain short-term opportunities and profits in exchange for larger societal goals and long-term sustainability can be done without hurting the bottom line.
Nestlé—Invested in local farmers by sharing new farming practices, guaranteeing bank loans, and helping secure inputs, which ultimately increased quality production, decreased environmental impact, insured Nestlé’s long-term supply, and improved the lives of many farmers.
Patagonia—Created the Common Threads Garment Recycling Program, a partnership with the Teijin Company, that recycles certain Patagonia clothing into second-generation polyester fibers that Patagonia then reuses in the following season’s clothing. Patagonia’s energy costs to recycle the materials are 76% below those for virgin sourcing.
iTunes, Kindle, and Google Scholar—Created profitable distribution models that also dramatically reduce paper and plastic usage.
Chiquita—Forged a partnership with the Rainforest Alliance to develop sustainability standards for rain forest banana farms. By implementing these standards, Chiquita increased farm productivity by 27% and reduced costs by 12%. In addition, the company also improved employee satisfaction and, in 2004, received the Trust for the Americas Corporate Citizen of the Americas Award.
Hyundai—Experienced quality problems in the late 1990s but made a comeback by re-engineering its cars for long-term value and offered an unprecedented 10-year car warranty. Three years later, Hyundai had quadrupled sales in the U.S. and was able to enter the luxury car market.
Verizon—Developed a phone and calling plan specifically designed to meet the needs of seniors and the disabled. The company sold 400,000 of the new phones and doubled senior customers’ wireless spending.
Nike—Redesigned its shoes so that they were free of harmful chemicals instead of requiring overseas workers to wear facial masks. Nike also has increased the number of shoes that contain recycled material.
Take, for example, the retail giant Walmart. This company may seem an unlikely model given some of the bad press it receives, but Walmart has recently emerged as a leader in green supply chain movements. During the past few years, the company has launched a variety of initiatives that promote green-friendly corporate practices. Walmart established tough new rules for reducing suppliers’ waste by trimming packaging 5% from 2008–2013. This move is estimated to generate $12 billion in savings across the retailer’s global supply chain.
Walmart also created a worldwide sustainable product index for its suppliers, which measures product-related energy use and waste and evaluates impact on natural resources and communities. If companies do not adjust their supply chains and operations, they face losing Walmart as a distributor of their products. The Fishin’ Company quickly adopted Walmart’s standards and in doing so won unprecedented purchase orders and long-term contracts.
One area that could produce an immediate return for clinical labs and other parts of healthcare institutions is the bidding process. When a hospital, lab, or other entity participating in healthcare services goes out to bid for suppliers or vendors, incorporating a set of standards in the bidding proposal process based on your values represents just one way to influence positive change. Implementing this process puts pressure on other entities to be accountable and work towards your standards. Furthermore, holding current and potential vendors accountable for more than just their prices is one way of assuring that an organization is equally interested in producing valuable services and products to patients and generating profits for its shareholders.
By adhering to an ethical code of conduct (See Box, left), clinical labs can internally prioritize their values, welcome innovation, and change to better meet the needs of their patients.
Ways to Promote Ethical Business Practices in the Lab
- Create a value statement that spells out your commitment to patient, societal, and environmental goals. If possible, list specific objectives and timelines. This can be used to guide internal decision-making processes, but it also can be used to hold vendors accountable for their behaviors.
- Incorporate your values and ethical standards into your bidding process as selection criteria for vendors and referral labs. Ask potential vendors to explain what their 5- and 10-year goals are and what they are actively working on today to meet those goals. Have them give specific examples of services, processes, or strategies that focus on societal value, sustainability, and patient care.
- Assure that all test-related promotional activities serve the patient’s interest, not a corporation’s. For example, when promoting a new test panel to clinicians, make sure that the panel has proven clinical value for patients. Likewise, carefully review the medical and diagnostic value of any emerging technologies before your lab agrees to any co-marketing for new tests, test panels, methodologies, or testing algorithms. All information given to clinicians should openly acknowledge limitations or uncertainties, include current recommendations from medical guidelines and literature, and compare new technology and practices to existing technology and practices.
Sarah Watts-Justice, MHA, MPA, is a business research and development analyst at ARUP Laboratories, Salt Lake City, Utah.