Angie Hlad_Unit 4_Assignment_GB590_Final

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XXXX Purdue University Global GB590: Ethics in Business and Society Dr. Pam Delotell December 4, 2023

Section 1: Justice and Social Contract Theories In the intricate tapestry of political philosophy, the discourse on justice and social contract theories has emerged as a foundational cornerstone in understanding the dynamics of societal organization and governance. Rooted in the intellectual traditions of thinkers like Thomas Hobbes, John Locke, and Jean-Jacques Rousseau, the exploration of justice within the framework of social contract theories delves into the fundamental questions of legitimacy, authority, and the balance between individual rights and communal obligations. This paper seeks to navigate the terrain of justice within the context of social contract theories, examining the underlying principles, historical evolution, and contemporary relevance of these theories in shaping our understanding of fairness, equity, and the collective pursuit of a just society. This paper will explore the theoretical landscapes and unravel the intricacies and implications for real-world business applications. Social Contract Theory Social contract theory is a philosophical concept exploring political authority's legitimacy and origins. It posits that individuals in a hypothetical "state of nature" willingly come together to form a society and establish a social contract, an implicit agreement among them. This contract involves surrendering some individual freedoms to a governing authority in exchange for the protection of their remaining rights and the benefits of organized communal living. Key proponents of social contract theory, such as Thomas Hobbes, John Locke, and Jean-Jacques Rousseau, offer different perspectives on the nature of this contract, the role of government, and the balance between individual liberties and collective responsibilities. Overall, social contract theory serves as a foundational framework for understanding the moral and political foundations of society (Frey, 2023; Cudd & Eftekhari, 2021). Justice Theory Justice theory concerns the fair and equitable distribution of goods, opportunities, and rights within a society. It seeks to answer questions about what individuals and institutions are just and how

they should behave to ensure fairness. There are different approaches to justice, including distributive justice, which focuses on the fair allocation of resources, and procedural justice, which emphasizes fair processes in decision-making. Notable contributors to justice theory include Aristotle, John Rawls, and Robert Nozick, each offering distinct perspectives on the nature of justice (Constitutional Rights Foundation, 2007). Historical Foundations In his work, Hobbes argued for a strong central authority to prevent the chaos he believed would arise from the inherent selfishness of individuals. On the other hand, Locke emphasized protecting individual rights and limited government, asserting that the social contract should guarantee natural rights like life, liberty, and property. In “The Social Contract,” Rousseau opposed collective agreement, where individuals come together to form a general will representing the common good. The historical foundations of these theories are rooted in the societal upheavals of the Enlightenment period of the eighteenth century, the emergence of nation-states, and the questioning of absolute monarchies. Theories of justice and social contract provided frameworks for understanding the relationship between individuals and the state, offering alternatives to autocratic rule (Frey, 2023). The Social Contract is firmly rooted in politics and government in the context of defining and consenting to how a society lives and works together ethically. Advantages and Disadvantages In the contemporary world, incorporating these theories into decision-making has advantages and disadvantages. Advantages include promoting individual rights and establishing a social order to benefit all members. However, challenges arise in determining the specifics of the social contract, as interpretations may differ, potentially leading to disputes over justice and the distribution of resources (Becker, 2001). For example, many criticized Rawls's justice theory, stating it did not consider and contradicted those with different religious backgrounds (Constitutional Rights Foundation, 2007).

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Additionally, balancing individual freedoms with collective well-being remains a persistent issue. Balancing order and liberty while addressing diverse perspectives is crucial for successfully applying justice and social contract theories in modern governance. Section 2: Business Case Analysis Ramifications of Inappropriate Vendor and Customer Relationships Inappropriate vendor or customer relationships within the business realm can have profound ramifications for the companies involved and the broader societal context in which they operate. At the business level, such relationships can erode trust, compromise integrity, and undermine the principles of fair competition. Unethical behavior, favoritism, or collusion can distort the market, leading to skewed economic outcomes that disadvantage other competitors and hinder healthy business practices (Agarwal & Narayana, 2020). Moreover, businesses engaging in inappropriate vendor or customer relationships risk reputational damage and losing customers, partners, and investors. Conversely, a robust vendor- customer relationship is paramount for both parties' success. Firstly, effective communication and collaboration between vendors and customers lead to a better understanding of business needs and requirements. This understanding forms the basis for customized solutions, fostering innovation and efficiency. A transparent and trustworthy relationship builds confidence, reducing the risk of misunderstandings and disputes. Additionally, a good vendor-customer relationship often results in timely deliveries and high-quality products or services, enhancing operational reliability. Cost- effectiveness is another significant benefit, as vendors who understand their customers' goals can offer tailored solutions that maximize value. Moreover, a positive relationship promotes long-term partnerships, creating a stable foundation for growth and adaptation to changing business landscapes. Ultimately, a symbiotic vendor-customer relationship is a strategic asset, driving mutual success, sustainability, and competitiveness in the marketplace (Kanara, 2020).

At a societal level, these ramifications extend beyond the individual businesses involved, affecting the overall trust in the market system. A perceived lack of fairness and transparency can contribute to a loss of public confidence in the business sector, potentially leading to increased regulatory scrutiny and calls for reform. Thus, the consequences of inappropriate vendor and customer relationships reverberate through both the microcosm of individual businesses and the macrocosm of societal expectations, emphasizing the importance of ethical conduct and integrity in fostering a sustainable and equitable business environment (Dorsch et al., 1998). Kaiser-Permanente Kaiser Permanente (KP) is a prominent not-for-profit healthcare organization providing comprehensive healthcare services and health plans across the United States. With a robust infrastructure, KP boasts support for over twenty-three thousand providers and operates an extensive network comprising 39 hospitals, 734 medical centers, and additional facilities (MarketLine Company Profile: Kaiser Permanente, 2023). The organization's membership has grown substantially, surpassing 12 million since December 2022. As of the third quarter of 2023, KP reported a net income of $239 million, as outlined in the Kaiser Permanente Foundation health plans and hospitals Q3 2023 financials (2023). I chose this company to illustrate a pervasive issue within our healthcare system, representing the broader challenges numerous organizations face engaging in similar fraudulent acts. Throughout my career, I have dedicated much of my professional life to supporting Medicare Advantage plans and their members, employing hands-on and consulting approaches. In my previous leadership role, I spearheaded my organization's commitment to sound chart review and coding practices, ensuring that the health status of our membership was accurately and appropriately portrayed in the assessments of Medicare and Medicaid. Moreover, my team was pivotal in educating healthcare providers on proper documentation practices and fostering awareness of identifying and preventing fraud, waste, and abuse. This experience and my value of integrity have equipped me with a deep understanding of the

complexities within the healthcare sector and a commitment to upholding ethical standards in the face of systemic challenges. Ethical Issue In 2021, the U.S. Department of Justice (DOJ) asserted that Kaiser Permanente had violated the False Claims Act by improperly adding diagnoses to medical records, sometimes for patients who did not have those diagnoses. This deceptive practice resulted in astonishing fraudulent profits for KP in billions of dollars. Medicare guidelines stipulate that, for a health plan to receive reimbursement for a beneficiary's health condition or diagnosis, the condition must be assessed and treated in a face-to-face encounter with the provider, influencing the care and treatment plan of the beneficiary. Such practices that do not abide by this standard are unlawful and ethically unacceptable in the medical field (Sullivan, 2021). According to an October 2022 article in the New York Times, providers involved in these deceptive practices were rewarded with gifts and bonuses. Furthermore, despite the increased scrutiny of Medicare overpayments, Centers for Medicare/Medicaid Service (CMS) regulators are reported to be less aggressive. Critics argue that the lack of oversight has led the industry to compete based on fraud rather than focusing on providing quality care. While this paper centers on Kaiser Permanente, it is essential to recognize that this issue extends beyond a single organization, as several other firms, such as Anthem and United Health Group, have been implicated in fraudulent business practices at different times (Abelson & Sanger-Katz, 2022). Numerous organizations rely on external vendors to conduct chart reviews, serving as the conduit for introducing nonexistent conditions and diagnoses. This blatant misuse of taxpayer dollars intended for the well-being of America's senior citizens is deeply troubling. The attempt to make patients appear sicker not only defrauds those who genuinely reflect the poor health status of our elderly population but also undermines the integrity of the healthcare system.

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Section 3 Personal application An action plan should be implemented to address the issue of fraudulent practices within the company's operating processes. First, a comprehensive review of existing procedures related to chart documentation and coding practices should be conducted. This includes scrutinizing the roles and responsibilities of internal staff and external vendors involved in these processes. Establishing clear guidelines and protocols for accurate and ethical documentation is crucial. A robust training program should also be developed to educate employees and vendors about the importance of ethical coding practices and the potential consequences of fraudulent activities. This program should include ongoing training sessions to keep everyone updated on evolving industry standards and regulations. Implementing regular audits and checks on chart documentation will serve as a preventive measure. These audits should focus on identifying potentially fraudulent activities and continuously improving the accuracy and transparency of the documentation process. Medical coding often involves navigating through nuanced situations where specific diagnostic codes may not exist for certain conditions. Despite this, medical coders rely on standard and official coding guidelines established by the American Medical Association (AMA) to guide their decision-making in selecting the appropriate diagnostic code. In this context, Deontology, which underscores adherence to moral rules and duties, emerges as the fitting ethical theory to inform decision-making. The advantage lies in having a clear ethical framework that prioritizes specific principles, mirroring the strict adherence required in medical coding. However, a potential drawback may arise from the lack of flexibility in situations where strictly following rules might lead to morally suboptimal outcomes. In the alleged Kaiser Permanente (KP) fraud case, where chart reviews are crucial in ensuring correctness, any unsupported diagnosis codes could result in substantial repayments to Medicare. This, in turn, diminishes payments from CMS, potentially affecting the availability of care to the members. One could argue that reducing care availability to health plan members is morally wrong.

Consequentialism, as a decision-making basis, would involve evaluating the ethical implications of each action based on its outcomes. Medical coding, as described, is rule-based. The disadvantage here is the potential for engaging in morally questionable actions if they are perceived to lead to a greater good. For instance, increasing reimbursement to the health plan might benefit members; however, doing so fraudulently is unethical. Integrating Justice and social contract theory into decision-making involves considering the general agreement on what is morally right or wrong. For example, there is a shared belief that lying is wrong, so applying social contract or justice theory to uphold sound coding practices makes sense. However, a disadvantage arises when moral turpitude comes into play, as KP illustrates, offering bonuses and gifts, where self-interest may override ethical considerations. Integrity is crucial in upholding the highest ethical standards in medical coding. This involves instilling a sense of honesty and accountability among coders, emphasizing the importance of accurately reflecting the health status of patients. A commitment to integrity ensures that coding practices are transparent, reliable, and trustworthy, aligning with the overarching principles of Deontology. Additionally, recognizing the significance of service to others, as noted in my purpose statement, within the healthcare context is essential. Creating opportunities for medical coders to engage directly with healthcare providers or community outreach initiatives can enhance their understanding of the impact of accurate coding on individuals’ lives. This reinforces the value of service and establishes a connection between the coder’s role and the broader goal of enhancing healthcare delivery. Incorporating these values into the action plan aligns with ethical theories such as Deontology. It creates a foundation for a healthcare system that prioritizes compassionate, fair, and integral practices, fostering an environment where the well-being of both patients and healthcare professionals is paramount.

References Abelson, R., & Sanger-Katz, M. (2022, October 8). The cash monster was insaitable: How insurers exploited Medicare for billions. New York Times . Agarwal, U. A., & Narayana, S. A. (2020). Impact of relational communication on buyer-supplier relationship satisfaction: Role of trust and commitment. Benchmarking: An International Journal, 27 (8), 2459–2496. Becker, L. C. (2001). Social contract. In L. C. Becker, & C. B. Becker, Encyclopedia of Ethics. Routledge. Constitutional Rights Foundation. (2007). BRIA 23 3 c Justice as fairness: John Rawls and his theory of justice. Bill of Rights in Action, 23 (3). Cudd, A., & Eftekhari, S. (2021). Contractarianism. In E. N. Zalta, The Standford Encylopedia of Philosophy. Dorsch, M. J., Swanson, S. R., & Kelley, S. W. (1998). The role of relationship quality in the stratification of vendors as perceived by customers. Journal of the Academy of Marketing Science, 26 (2), 128– 142. Frey, R. (2023). The social contract by Jean-Jacques Rousseau. Salem Press Encylopedia of Literature. Kaiser Permanente Foundation health plans and hospitals Q3 2023 financials . (2023, November 3). Retrieved from Kaiser Permanente: https://about.kaiserpermanente.org/news/kaiser- foundation-health-plan-and-hospitals-q3-2023-financials Kanara, K. (2020, March). Rethink your relationship with your vendors. Managing People . (2023). Marketline Company Profile: Kaiser Permanente. Sullivan, T. (2021, November). DOJ alleges Kaiser defrauded Medicare out of $1 billion . Policy & Medicine: https://www. policymed.com

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