BROOKSTONE HOSPICE: HEEL OR HEROINE?

BROOKSTONE HOSPICE: HEEL OR HEROINE?

I. CASE ABSTRACT

Mr. Gardner had joined the Brookstone Hospice three weeks before the medical emergency and was receiving regular nursing visits. On Sunday, February 18th, Gardner’s daughter Beverly had contacted Brookstone’s duty nurse, Kathy Bennett, saying that her father seemed to be bleeding profusely internally. The problem had been in progress for 16 hours. His family was at a hysterical level when the visiting nurse arrived at his home. The nurse called Kathy to tell her that Mr. Gardner needed to be admitted to a hospital.

Kathy then followed the lengthy admittance procedure for Covington General (the Hospice had a contractual agreement with this hospital). The patient’s primary doctor refused to go to Covington General Hospital. He wanted Gardner transported to Catholic Charities Hospital. No contractual agreement existed between Brookstone and Catholic Charities. While they were discussing this admittance issue with the primary doctor, Mr. Gardner waited in the ambulance to be transported. Kathy had ordered an ambulance because of the high concern of the visiting nurse and family.

Kathy then tried to contact any one of the four Hospice doctors who were on call, but to no avail. After trying for 45 minutes to get approval to transport Gardner to the nearest hospital, Covington General, Kathy acted on her own and gave permission for transporting the patient to the hospital.

At the hospital, the Emergency Room doctor, Dr. Wallace, recommended urological surgery for Monday. Brookstone had a well defined policy about how Hospice patients were to be treated once a patient signed with the Hospice: no other health care professional could take any action whatsoever without contacting the Hospice. The Hospice doctors tried to discourage Mr. Gardner from having the surgery, but the operation was performed. Mr. Gardner’s life has been extended from three months to three years as a result.

A physician at Brookstone Hospice commented on the situation discussed in this case - "That man (patient - Sam Gardner) is 86 years old and has cancer...That surgery will cost (our) Hospice a minimum of $7,800. We will pay for that decision (of nurse Kathy Bennett) right out of our pockets...Gardner will be dead in three months. Our purpose is not to extend life but to ensure quality life even until death."

Kathy was subsequently fired from her job at Brookstone because of her violation of numerous policies and procedures which cost Brookstone $7,800.

II. CASE ISSUES AND SUBJECTS

Values and Ethics Individual Values Versus
Mission and Objectives Organization Values
Legal and Ethical versus Organizational Structure and Economic Responsibilities Culture
Policies and Procedures Role Conflict
Profit Versus Patient’s Life Termination of an Employee
Stakeholders Matrix Organization


III. STEPS COVERED IN STRATEGIC DECISION-MAKING PROCESS
see Figure 1.5 on pages 20 and 21

IV. CASE OBJECTIVES

1. To provide the students with a case to examine his/her personal value system.

2. To discuss the mission and objectives of a Hospice and to compare them with objectives of key stakeholders (e.g., patients and employees).

3. To discuss the concept of dying with dignity and the value (cost) of life.

4. To discuss the physician’s comments "...that surgery will cost (our) Hospice a minimum of $7,800. We will pay for that right decision right out of our pockets."

5. To discuss, as a part of the evaluation and control process, the termination of Kathy for her handling of Mr. Gardner’s hospitalization.

6. To illustrate the impact of policies and procedures upon individual and organizational decision making.

V. SUGGESTED CLASSROOM APPROACHES TO THE CASE

1. We have found this to be an excellent case to question the students’ value systems.

2. Try dividing the class into the following groups - (1) patient and family, (2) Kathy Bennett and (3) Jim Cole - Hospice Administrator.

• Let them discuss the issues, but hold patient’s comments until Bennett and Cole have finished presenting their positions.

3. Students have a difficult time analyzing this case in a paper. Their values strongly affect their analysis.

• It can be an excellent exam case to use to examine values and ethics and stakeholders’ conflicts with organizational objectives.

4. We have found this to be an excellent case for open-class discussion.

• We have students write on a piece of paper whether Kathy should have been terminated or not, and why? This forces a decision and improves class discussion.

VI. DISCUSSION QUESTIONS

1. Was the firing of Kathy appropriate given her actions?

2. Would you sign up your parents for Brookstone Hospice care?

3. Do you agree with the mission and objectives of Brookstone Hospice?

4. Is Brookstone’s problem typical of all health-related businesses?

5. How should life and death decisions be made? Who should decide? Why? How can costs be controlled?

6. What do you think of the physician’s comment that Kathy’s decision would cost the doctors $7,800 out of their pockets?

7. Was Kathy correct in her handling of the incident?

8. Should a Hospice be profit-making or not-for-profit?

9. Does Brookstone have an appropriate organizational structure?

10. What do each of Brookstone’s stakeholders want from Brookstone?
11. Why couldn’t Kathy locate one of the four doctors on call? Whose fault is this?

12. Should Mr. Gardner’s family have been required to pay for his life-extending surgery?
VII. CASE AUTHOR’S TEACHING NOTE by Sharon Olson and Sharon Ferguson*

This case is applicable to a business ethics class, a general management class, a personnel class, or a strategy class (if used early in the semester). Brookstone Hospice provides an excellent illustration of: questionable business ethics; the impact of structure on the functioning of an organization; a study in the paradox of control; individual versus corporate ethics; and a company’s focus on strategy while excluding mission and purpose.

An interesting method of beginning the discussion is to ask students - What would you have done if you had been Kathy Bennett? Essentially her options fell into the lose/lose category. If she had chosen not to send the ambulance to transport Mr. Gardner because she was unable to locate the Hospice doctor, she knew the patient would die but procedure would have been followed. If she did send the ambulance, she was well aware of the violation of company procedure.

Insight into the value system of the organization was evident in the comments made by administrator Jim Cole, who appears to measure success in dollar terms. His comment "...we grossed $2.5 million (last year) and are projecting $3.2 this year..." seems central to the issues at hand. Ask the accounting and finance majors how this can be reconciled with the cash flow problems the company is having.

Of course, a growth company will experience cash flow problems, and the question is, "Are patients being sacrificed for growth purposes?" Is growth for its own sake that important? The question becomes - were those revenues generated with strict adherence to company procedure and a corresponding increase in human suffering? After all, Bennett seems to have lost her job because of the decision she made to transport a patient to the hospital - a visit which cost Hospice $7,800. That bill seems to have been the real root of the dismissal - not the procedure violation as stated.

The ethics of the team doctors appear commensurate with that of Cole. One of the physicians commented, "That man is 86 years old and has cancer...That surgery will cost Hospice $7,800 minimum...we will pay for that decision right out of our pockets...Gardner will be dead in three months." His comment also gave insight into Brookstone’s strategy as well. Because of the nature of the services provided by the Hospice, the management must recognize that what Brookstone does in terms of goals, missions, etc. should be more important than how it does them. Yet their strategy appears to have priority over their mission. Company procedures must be re-evaluated in this light. This firm is dealing with human lives where change is a given fact. Brookstone should see itself as needing to manage that change within an environment of uncertainty and disorder. The bureaucratic procedures do not enhance this process but rather - as noted already - place focus on the "how to" aspect of services provided instead of on the services themselves.
___________
*Reprinted by permission of the authors


Brookstone is a study in paradoxical structures as well. The firm is described by Cole as a loose structure wherein the employees themselves make decisions, but Bennett suddenly finds herself terminated for making a decision. While the matrix structure of Brookstone would normally lend itself to the self-initiated decision process, the procedures outline operating in a matrix structure under bureaucratic guidelines. The two simply do not mix.

Another aspect which must be considered from a managerial perspective is the fact that no mention is made of action taken regarding the four Hospice doctors who could not be contacted although they were on call. Surely policy demanded that they be available as needed. Some action is required regarding them. Otherwise Bennett has the beginnings of an excellent lawsuit.

The case also involves a patient caught in the middle. His own primary care doctor refused to care for Gardner if he were admitted to Covington General (CGH). Brookstone Hospice meanwhile contracted with Covington General and not Catholic Charities, the facility preferred by the primary care doctor. The result was a patient left on hold, bleeding to death in an ambulance while waiting for the issue to be resolved.

No doubt Kathy Bennett did attempt to follow procedure. She spent 45 minutes (which must have seemed like an eternity) attempting to abide by all the regulations. Then as a matter of personal and professional ethics, she made the decision - a life saving decision - to transport the patient to CGH.

Brookstone may be one of the best examples available to illustrate the philosophy of "The business of business is business." As a series on Ethics published by the Wall Street Journal several years ago noted, "The ethics of business have fallen due to increased financial pressure to show a profit" (Wall Street Journal, Dow Jones Company, October 31, 1983, pp. 23, 41). That same series went on to note that because of time and money pressure, business people do what is expedient - not what is right. Bennett in contrast elected to do what was right for the patient but because her actions cost Brookstone $7,800, she is now unemployed. The direct contradiction between her personal values and those of the corporation is readily apparent.

But what happens now? Should Brookstone maintain its stringent procedures? Was this a one in a million case which will probably never happen again? Should some action be taken against the doctors involved? Should Brookstone consider contracting with some other hospitals than just Covington General? What action should Bennett be contemplating? Should Brookstone Hospice consider revamping its structure to enhance its mission?


VIII. STUDENT PAPER

The Brookstone Hospice case poses the question whether or not the Hospice nurse supervisor, Kathy Bennett, should have been fired for taking action which resulted in extending a patient’s life at a cost which the Hospice could not afford. The question involves legal, ethical, and managerial consideration which must be addressed to arrive at a resolution.

Summary

Case facts include a legal contract between Brookstone Hospice and Sam Gardner (age 85, terminally ill with a kidney malignancy, and expected to die within three months). The Hospice contract provided in-home assistance, with no more than seven days of 24-hour hands-on care if needed, to support both the patient and family in preparation for and acceptance of the patient’s relatively pain-free death. A medical crisis occurred near the end of Mr. Gardner’s first month under Hospice care. It resulted in Kathy Bennett, without proper authority, approving Mr. Gardner’s admission to Covington General Hospital -- a hospital with which Brookstone had a contract, presumably for the 24-hour care noted earlier. At the hospital, the emergency room doctor decided to operate. This decision was not approved by Brookstone. The operation increased Mr. Gardner’s life expectancy by three years; it also cost more than the Hospice could pay and still meet its weekly payroll. Mr. Gardner was happy but the Hospice was not. Consequently, Kathy Bennett was fired.

Legal Considerations

Organizations have the legal right to fire employees assuming there is no union contract or prejudice based on race, color, creed, sex, or national origin. The union contract restricts an organization’s legal right to fire by placing conditions on that right. Federal law precludes an organization from firing an employee solely for the prejudicial reasons noted above. Neither of these circumstances applied in the Brookstone case. Kathy was fired because she committed the Hospice to Mr. Gardner’s hospitalization without having proper authority (a Hospice policy violation) and/or because her actions adversely affected the Hospice’s profit position (a financial issue). No law was broken concerning the reason she was fired, so the Hospice had a legal right to fire her.

Ethical Considerations

The case poses several ethical questions. The basic one puts a patient’s right to life against Hospice profitability. Equally significant, however, is that physicians and other medical personnel are sworn to preserve human life to the best of their ability. Culturally, Americans favor an individual’s right to life; indeed, it is constitutionally guaranteed. The significance currently placed on the right to life in America can be seen in the anti-abortion movement, and efforts to ban the death penalty. Not only do Americans value life, they believe in quality of life, as is seen through legal and popular provisions for shelters for the homeless, Medicare, and Medicaid. In American culture, the Hospice concept is almost an anathema. The concept is bearable only because of Americans’ equally strong belief in an individual’s right of self-determination within the constraints of the law.

Constitutionally the right to the "pursuit of happiness" extends to the right of self-determination and thence to a business’ right to make a profit. In today’s world, it could be argued that the right to profit may be more important than the right to life, since among other things there is a lack of low-rent housing primarily because landlords cannot profit by providing such housing. One could therefore argue that Mr. Gardner exercised his right of self-determination when he signed the contract with the Hospice and thereby subordinated his right to life to the Hospice’s right to make a profit. In this argument, Kathy’s interference by sending him to the hospital where he underwent life-extending treatment could be said to have been a contract violation on the part of the Hospice, and, if anything, Brookstone could be sued for breach of contract.

However, there is also the issue of the physician’s Hippocratic Oath to consider. The surgeon was faced with a legal-ethical conflict. Sworn to preserve life, his supervisors had denied that oath in their contract with the Hospice. Since the mission of a hospital is to preserve life, it is arguable that the hospital should never have accepted the Hospice contract. On the other hand, had the hospital not accepted the contract, it would be denying the relatively pain-free death the Hospice was committed to provide.

In sum, America has yet to resolve the ethical debate between the right to life and the right to profitability. High medical costs are beginning to affect that debate, particularly in view of the "graying of America." Perhaps America will eventually adopt the British position where socialized medicine is the rule; life extending treatment after age 55 is not allowed unless privately paid for, and Hospices are common and accepted. In any case, when a country’s ethics are firm, they are generally grounded in law. Ethics, and consequently laws, change. America has conflicting laws concerning these issues (abortions are legal; the death penalty exists; contracts are inviolable, in most cases, once signed; and Medicare provides life-extending treatment but no nursing home care). These laws represent the conflicting ethics of the country as well as the continuing ethical debate.

Managerial Considerations

The case poses several managerial issues. First, the fact that matrix management was employed in the Hospice and there was no formal organizational structure obviated the point that decision lines were unclear within the Hospice organization. Teams were formed for patient care. There was an internal decision authority line from team members to team chiefs; there was an additional internal authority line between the team nurse and the team doctor. Team doctors also reported to the in-house physician. The case states that Hospice doctors report to the Chief Medical Director but does not state whether he is the same as or different from the in-house physician. The overall administrator, Jim Cole, sees himself as the boss -- the final authority.

Kathy, as nurse supervisor, coordinated the nurses (i.e., their team assignments) but it is questionable what chain of command authority (hire or fire) she had over them. It is unclear to whom she reported as a staff member -- was it the team operator or the Executive Medical Director? Regardless, it is evident that confusing lines of operational and staff authority are present. Similarly, the fact that Kathy could not find the on-call doctor indicates both a total lack of communication and coordination and a lack of supervision of the doctors. Operating on the principle that "there is always a higher authority," Kathy should probably have called Jim Cole when faced with the crisis and no doctor was available. Since Jim is apparently not a doctor, he may not have had sufficient medical knowledge or have been able to find a doctor. If nothing else, Kathy’s call to him would have alerted him to the fact that his "loose" management style was not working.

Additionally, Kathy was fired by committee. The committee included not only Jim Cole, but at least one team doctor - who was at best Kathy’s organizational equal. The committee approach highlights Jim Cole’s reluctance to take responsibility for his actions. The meeting was accusatory; no attempt was made to discover Kathy’s motive for sending Mr. Gardner to the hospital, or why she had done so. It should be noted that Kathy may have sent Mr. Gardner to the hospital only to obtain for him the work of hands-on care authorized under his contract with the Hospice. Further, the committee failed to consider either the internal or external impact of the firing decision. Externally, if Kathy discussed her feelings about the firing -- as she obviously has -- she paints a picture of an inhumane Hospice, which could cause other medical professionals not to refer future patients to the Hospice for care. Internally, the fact that Kathy was fired for making an on-the-spot decision could reinforce others’ determination to avoid making decisions. This, in turn, could result in such fear of decision-making that the Hospice would be ineffective -- both in planning for the future, and in making patient care decisions.

Thus, it is apparent that there is not only a lack of clear-cut authority and communication at Brookstone, but also a failure to identify responsibility. Decision by committee reinforces the lack of identifiable authority and responsibility lines. If the functions of management are to plan, organize, direct, control and communicate, one wonders how any of these functions are effectively accomplished at Brookstone under the current regime. Brookstone’s management problems, countless, are the prime factor in its shaky financial condition. Kathy was an unfortunate, convenient scapegoat.



Conclusion

Given that Coventry General violated its contract with Brookstone, the matter could have been resolved by a refusal by Brookstone to pay the hospital bill and a reprimand to Kathy. Since Kathy was fired instead, one might say that the action was legally supportable, ethically debatable, but epitomized poor management techniques. Thus, Kathy should not have been fired. Other, better solutions were available to Brookstone.


IX. EFAS, IFAS AND SFAS EXHIBITS - Were inappropriate for this case.


X. FINANCIAL RATIO ANALYSIS - Was inappropriate for this case.