Business Ethics and Health Care : A Stakeholder Perspective

The purpose of this paper is to examine the recent controversy in health care delivery around whether or not it should be conceptualized as a business. Concurrently, should health care organizations adopt standard business practices? We suggest that such questions implicitly appeal to a common understanding of business and business practices which is no longer very useful. This common notion, which we call, "Cowboy Capitalism", conceptualizes business as a competitive jungle resting on self-interest and an urge for competition in order to survive. Business is to be separated from the discourse of ethics on this view. Such a Separation Thesis runs deeply in our cultural understanding of business making it an institution which can at best be amoral. Alternatively, we suggest that a new understanding of business has emerged over the past 15 years, one which rests business on a firm moral foundation which requires all participants in business to accept the responsibility for their actions. Variously called "stakeholder capitalism", "managing for stakeholders", or "stakeholder management" this new understanding does not appeal to the separation of business and ethical discourse, but admits that the best run businesses may well have "noble causes" or a "sense of purpose" which drives their ability to innovate as well as their ability to earn superior returns. We examine four misconceptions about the relationship between health care and business which appeal to the old story of business. And, we suggest that stakeholder capitalism offers a framework in which health care delivery institutions can begin to innovate, earn superior returns, and begin to conceptualize health care reform