Nursing assignment essay help: Analysis of Hospital Corporation of America

Detailed Analysis of Hospital Corporation of America

 In order to manage the Park View Hospital in Nashville in 1968 Dr. Thomas Frist, Sr., Dr. Thomas Frist Jr. And Jack C. Massey founded the Hospital Corporation of America. The organization grew manifolds in the next two decades through acquiring as well as building new hospitals. They also contracted many facilities for their owners at the same time. In the year 1994 the major merger with Columbia Hospital Corporation occurred and it finally became Columbia / HCA Healthcare Corporation. The combined companies designated Richard Scott as their chairperson and CEO who was the founder too. Before planning an expansion across Florida and Texas, Scott, a lawyer purchased two troubled hospitals in El Paso.

By the year 1997 Columbia/ HCA grew manifolds and became a for-profit healthcare services provider corporate giant in United States. It was operating 343 hospitals, 136 outpatient surgery centres and around 550 home health locations. It also provided ancillary and extensive outpatient services in the 37 states of U.S. as well as other countries like U.K. and Switzerland. It utilised economies of scale for maximising profits and employed an extensive network of 285,000 employees. In the year 1996 Times magazine named Richard Scott most influential person while in 1997 Fortune magazine named Columbia / HCA, the most admired healthcare company.

But in 1997 federal government launched an investigation in the company’s business practices and the organization had to pay a hefty fine of $1.7 billion for committing  fraud by billing Medicare fraudulently and committed  14 cases of felonies. It was also found guilty of violating the ant kick-back laws.

Case Assessment

Organizational Ethical leadership problems which resulted in Columbia / HCA’s misconduct

Scott believed in creating competitive environment in HCA by cutting cost at the facilities of the company. Its main focus was on creating economies of scale through its huge size and utilise internal control of cost and varied sales activities. The strategy was to acquire new business and focus on bottom-line performance. To such an extent profits were emphasised that the healthcare services and staffing took a backseat in Columbia/HCA.

 It was found that the training periods which took six months in other organizations were completed in just two weeks at Columbia/ HCA. Moreover the organization was accused of serious issues like ‘patient dumping’. Patient Dumping means discharging the patients of emergency rooms or simply shifting them to other hospitals even if they are not in stable condition. The Department of Health and Human Services Inspector General’s Office imposed fines on HCA for numerous such cases of patient dumping.

 Due to problems with ethical leadership the company targeted the non-profit hospitals or the ones which were performing badly. The negotiations done with these hospitals were kept secret and not even disclosed to the staff or to the public. It worked with hospitals to eliminate the community services around those areas. Even the non-profit hospitals were threatened that a competing branch of HCA will be opened near them.

 The patient referrals from doctors were used for increasing revenue and to encourage good amount of referrals the doctors were given incentives like free rent, vacation sponsored trips etc.

To increase the profits many costs of Columbia/ HCA were passed onto Medicare through the practice of “upcoding”. In this process of “upcoding” the patient’s illness was exaggerated during eth Medicare claims.

 AT the same time the employee performance mattered the most for Columbia/HCA’s success so  the high-performing managers given rewards and bonuses while the  underperformers were asked to quit or leave job. That is why some of the employees due to this unethical corporate culture resigned from the organization. They did not have any compliance department too because Rick Scott not even thought of focussing on the compliance issues.

Case Analysis

 Strengths and weaknesses of HCA’s current Ethics Program

Currently Hospital Corporation of America with its chain of 164 hospitals and 106 ambulatory surgery centres across 20 states, London has been recognized as the World’s most ethical companies in 2011 by Ethisphere Institute (HCA Named to Ethisphere’s 2011 “World’s Most Ethical Companies”, 2011). This is for the second year that HCA has received this award.

 The current ethics and compliance program of HCA has depicted industry-leading ethics and compliance to the extent that it is being used as models by other organizations. Several years ago they established an enhanced charity care and an uninsured discount policy that has been emulated by the hospitals all across the country. As per the current ethics policy of HCA, it has become the first provider of pricing estimates to its patients.

 It has become active philanthropically which means it supports the agencies or non-profit organizations which are into promotion of wellbeing and health or support youth and childhood developmental programs and foster the arts in the areas of Middle Tennessee. Through its HCA foundation it has awarded grants of $83.5 million since the year 2007.

 Among the healthcare companies HCA has become the leader which supports environmental practices. Moreover it is supporting the cause by buying eco-friendly products only and uses sustainable construction materials and enhances the recycling efforts and it also uses energy and water in an efficient manner. To support environmental practices it installed both geothermal as well as solar energy sources in the facilities in the year 2011 and thus setting the standardised environmental questions for healthcare purchases. HCA is also the prime member of the two organizations which champion eco-friendly practices in the healthcare industry that is: Practice Green health and charter member of Healthier Hospital Initiative.

 HCA realises the importance of strong ethics program as it is the key component of any successful business model. Moreover HCA keeps on regularly scrutinising the ethical standards in order to keep up with the ever changing regulatory environment (HCA NAMED TO ETHISPHERE’S2012 “WORLD’S MOST ETHICAL COMPANIES”, 2012).

SWOT Analysis of Current Ethics Program of HCA

• New ethics program has a hotline which helps it in identifying misconduct and helps in taking corrective action.
• It has leading position in in-patient marketing
• Service Offerings are very wide
• Promotes  the agencies supporting wellbeing , health or youth or childhood development programs
• Supports environmental practices

WEAKNESSES

• Staffing issues still prevalent in HCA
• Increased pressure on the doctors to focus on profits because of private equity ownership (Creswell and Abelson, 2012).
• To achieve a balance between profit and care is very hard in investor owned hospitals like HCA.
•  High-level of indebtedness

EXTERNALOPPORTUNITIES

• Hospitals are located in mostly high-growth and populated areas where people like to follow ethical organizations like HCA.
• Increasing amount of ageing population [provides opportunity of earning higher profits for HCA.
• Redefined emergency care through billboards popping with flashy and catchy ads.
•  It created opportunity for treating the highly critical patients first and enhanced the profits too.
•  It reduced the overcrowding of the emergency rooms in HCA facilities.

THREATS

• Increasing number of uninsured accounts of patients.
• Cost containment measures
•  Intensive competition in healthcare sector.
•  Due to new screening system at HCA sometimes serious patients were sent to other medical facilities or left untreated.
• The screening process of patients is very aggressive at HCA and might cause losing many patients.
• More staffing is required for proper care as the staffs is dysfunctional in many facilities.

 Source: (Hospital Corporation of America (HCA) SWOT Analysis, n.d.)

This program is totally complaint with the Sarbanes- Oxley Act as HCA now runs around 40 repeatable analytics which covers the dormant accounts, year-end accruals, extreme percentage changes and unusual ledger transactions all of which conform to the Section 404 of Sarbanes Oxley Act. Through testing for unusual balance sheet and any income statement activity at HCA auditors can now report the company’ financial data with great confidence and provide great amount of quality assurance. The unnatural account changes are being tracked by the  ACL through comparative analysis which in turn is totally complaint with Sarbanes-Oxley Act is done by HCA for business reasons too  (McMohan and Whitaker, 2011).

 AT the same time the new ethics program is quite satisfying towards the provisions of Federal Sentencing Guidelines because it first made payments to  the Internal Revenue Service ( IRS) for around 71 million and it became the first organization to be removed from the INFACT”s Hall of Shame. This clearly indicated the landmark development in business ethics at HCA. It also paid the federal government more than $840 million as civil penalties and criminal fines. The new ethics program has appointed 26 executives who oversee and monitor the ethics and compliance for many issues which range from pollution to taxes to the Americans as per the Disabilities Act. Moreover as per the agreement signed for ‘Corporate Integrity Agreement’ it oversees the implementation and adherence to the act. It also provides training to its staff members as it plays vital role in making employees understand  the HCA’s new image which is  ethics and legally compliant.

 The Hospital Corporation of America has strong quality standards department which conducts strict quality review assessments in periodic manner. One of their periodic reviews conducted by HCA ensures that the hospitals are complying with the National Patient Safety Goals (Pillow, 2007).

Suggestions for Columbia/ HCA to sensitize its employees towards ethical issues

Marketing ethics includes decisions related to what is right and what is wrong as regards to organizational planning and implementation (Ferrell and Hartline, 2008). The benefits which can be derived from ethical standards of marketing are:

• Organizational  performance
•  Social acceptance and  advancement in the organization
• Individual achievement in group
• Stakeholders

There is evidence which show that if these issues are ignored it can destroy their trust level with customers and government intervention is needed. The best way of dealing with such problems is to work some ways during the strategic planning process and not wait for the major problems to materialise. Like it happened in the case of HCA, The Hospital Corporation of America, which had severe allegations of healthcare fraud. Due to which  the company became a target of state and federal investigations of  its Medicare and  home-health-care billing practices, But now HCA is committed towards spending approximately $ 4  million every year on this ethics and compliance program. This ethics program includes two external ethical compliance committees along with two internal committees which regularly draft the ethics policies as well as there is periodical monitoring of ethical compliance. Finally the twenty member department implements the whole ethical program. HCA uses the Extensive training programs which help the employees to understand the focus which HCA has on ethics as well as legal compliance. During initial employment, every employees undergoes a formal  ethical compliance orientation along with that every HCA employee is  bound to complete 1 hour refresher course which is related to HCA’s ethical code of conduct every year (Ferrell and Hartline, 2008).

To enhance the implementation of ethics many organizations implement code of ethics in organizations also known as code of conduct which comprises of formalised rules as well as the standards which are description of expectations of the company from its employees. The codes of conduct help in promoting ethical behaviour in organization by bringing amazing reduction in unethical opportunities behaviour. This way the employees know very well that what will be the result or consequences if they violate the rules and they also get to know what is expected from them. Like at HCA the code of conduct already specifies that any violation in the code of ethics will trigger an oral warning, written reprimand, termination, written warning, suspension and/ or restitution which depend on the nature of severity and frequency of violation (Pride and Ferrell, 2011).

 A successful ethics program should be viewed as part of overall marketing strategy implementation. Ethics officers should continuously monitor the ethical performances of the employees. Open communication and coaching regarding ethical issues on regular basis is very important in organizations. The employees should get to know the importance of ethics for HCA through regular ethics training, and there should be clear channels of communications and follow-up support should be provided by the organization which is best done in HCA through the support ethics hotline.

 Simultaneously severe punishments or penalties should be imposed on the employees at all the levels in the organization who violate codes of conducts or ethics policies. Since it is impossible to train all the employees to perfect ethics lawyers, soothe vital ethical issues should be identified and proper implementation of code of conduct and compliance programs which incorporate high level of ethical as well as legal concerns would be the best approach for HCA avoid litigations and prevent violations (Hariharan, Seetharaman and Gora, 2007).

 For effective compliance and Ethics training for employees following recommendations should be followed:

• Employees should be sensitized about the general issues so that they can spot the potential problems and approach the right person for clarifications.
•  Managers should be educated about the ‘walk the talk’ to create strong ethical environment.
•  Ethics training seminars and In-person compliance should be short sessions and should be woven into business presentations.
•  The training sessions should be interactive.
•  For applying ethics training and compliances the training and referencing material should have list of unambiguous “Do’s and Don’ts”.
• To drive employees towards robust ethics training and compliances gimmicks like teasers, games etc. should be employed (ESTABLISHING A COMPLIANCE AND ETHICS PROGRAM, 2006).

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