Anti-Corruption and Integrity at a Hospital - Research Paper Example

Anti- corruption and integrity at a hospital For all the constructive activities, humans carry out; they also indulge in certain corrupt activities. Corrupt activities could range from corruption of mind to corrupt actions carried out certain individuals under the influence of money. After the materialistic thing of money started playing a key and at the same dubious role in the daily affairs of human living, money related corruption started corrupting the society and many people’s minds. Corruption and the related fraud activities are now visible in maximal facets of human life, wherever the factor of large scale money movement is seen, and that includes public sector entities like government offices, politicians’ offices, defence corporations and in its contracts, government supported healthcare facilities, etc, to entities in private sectors like business organizations, private hospitals, construction industries, even sports, etc. Corruption is a global phenomenon, and it has percolated into every aspect of common life. “Corruption is a global phenomenon that causes poverty, obstructs development and drives away investment. It also debilitates the judicial and political systems that should be working for the public good” (UNODC 2007). Although all these sectors are experiencing corruption and fraud practices for some time now, corruption in healthcare sector only causes repercussion for the common people in a maximal manner. The life saving sector of healthcare is now turning into a corruption encouraging sector. Although, certain individuals working in a hospital may indulge in corruption and fraud practices, and for that entire hospital may not be blamed, the fact is, those individuals may be given the free hand to indulge in corruption because of certain loopholes in hospital’s functioning and processes. Thus, individuals are manipulated as much as they manipulate, and in a way individual corruption masks the structural corruption. So, this paper will focus on and diagnose the corruption and integrity profile in my organization of hospital setting, then will analyse the causes of any fraud practices and/or corruption opportunities that may be visible in my organization, then will discuss and assess the effectiveness of the institutional integrity policies adopted by my organization against corruption and finally will make recommendations for improving the anti-corruption and integrity of my organization. Background As mentioned above, although corruption and fraud activities are visible in many organizational sectors, corruption in healthcare systems is reaching startling levels, negatively impacting various stakeholders. Healthcare industry has spread out throughout the world, and there is no human habitable place in the world, without some form of health care structures or hospitals. All these healthcare structures were established to provide life saving and life caring options to people. However, this corruption is diminishing the efficiency and effectiveness of these centres, and this applicable to maximum countries in the world. That is, corruption in healthcare sector is visible in many countries, irrespective of whether they are rich or poor, developed or developing. “The hospital sector represents a significant risk for corruption, in both developing and developed countries alike.”(Vian, 2005). For example, in the United States alone, corrupt and fraud activities in health care has been estimated to cost US $11.9 to 23.2 billion per year; much of this expense is attributable to hospital-based care. (Vian, 2005). On similar lines, in the African country of Ghana, there is 50% loss in the health funds due to corruption, and so half of the allocated funds do not reach clinics and hospitals in Ghana. (Lindelow, Kushnarova and Kaiser 2006). Thus, corruption in healthcare sector is not region specific and is visible in all countries in maximal hospitals. The reason why hospitals are ‘hotbeds’ of corrupt and fraud activities, is because of the large scale movement of money, thus giving many opportunities to its employees and other individuals or stakeholders to indulge in those activities. Throughout the world, healthcare sector and in particular hospitals receive sizable funds and also allow the flow of funds. There is good flow of money in both the public sector hospitals as well as private sector hospitals, and in particular regions there are maximum allocation of funds. “Globally, hospitals account for 30-50 per cent of total health sector spending (public and private); in some regions, such as Eastern Europe, the percentage may be as high as 70 per cent.” (Vian, 2005). These funds are allocated for operating the hospital and for other hospital based purposes. However, all these purposes could have loopholes, and through those loopholes only, individuals carry out various corrupt and fraud practices, causing losses to the hospital and importantly also causing diminished health care to the patients. That is, although good funds flow into the hospital and healthcare sector, sizable amount funds flow out of the hospital, without giving apt benefits to the hospital and increasing the coffers of other individuals or entities. “Anti-corruption body Transparency International looked at the more than $3 trillion (£1.7 trillion) the world spends on health services each year. It said that at least 5% of funds could be being lost, be it Cambodia's or the US's Medicare public healthcare scheme.” (Medical corruption 'global issue', 2006) Corruption and integrity profile in the organization Among these two sectors, public sector hospitals receive maximal funds. Public sector hospitals receive good corpus of financial aid or funds from the government. As the public sector or government backed hospitals mainly run non-profit basis and provide free and even subsidized treatment to the people, they need external funds. Government allocate sizable funds to operate the hospital and that includes, salaries for the healthcare professionals, procurement of equipments and importantly drugs, and other medical needs. In the private sector also, there will be good flow of money with the fees collected from the patients increasing the hospital’s coffers. In addition, with the need to purchase high level medical equipments and drugs, there will be heightened financial transactions as well. So, whatever be the sector, in healthcare industry there will be high level flow of finances and that mainly leads to corruption and other fraud practices, as there are possibilities for different kinds of corruption. “As many economists have pointed out, corruption is a 'crime of calculation' and is more likely to occur where budgets are large and 'rents' or possibilities for people to gain from decisions made by officials are high. Hospitals meet these criteria for vulnerability.” (Vian, 2005). When these issues are analysed from the perspective of my organization, it is clear that being a large public sector entity, with funds flowing from the government, there are opportunities for corrupt practices. Public Sector hospitals like mine will have many levels of hierarchy, with hierarchies even extending outside the hospital into the government machineries. The funds that has to be utilized for treating the common people has to ‘travel’ and get clearance from all the levels of hierarchies and the concerned officials. With the funds flows flowing through different levels of hierarchies, there are high chances of corruptions happening anywhere. That is, if the funds flow is restricted through few clearances, those clearing areas can be easily monitored and made accountable. However, in the case of public sector hospitals, with the funds needing clearances from various levels of officials, there are high chances of corruption occurring in any stage. “The need to manage multiple stakeholders with different interests and asymmetries in information at many levels (between medical personnel and patients, doctors and administrators, and procurement specialists and clinicians, to name just a few) also creates an environment that is susceptible to corruption” (Vian, 2005). The environment of today’s healthcare system has been negatively impacted by the magnitude of the existing fraud in the system, incompetent practitioners and the neglected patient safety issues. In many cases the basic level employees are front of the line witnesses to much of the corruption practiced within the system. However, they are left to be spectators in this whole event and their nagging subconscious question is whether to stand up against this vice. Thus, it is clear that in organizations like ours, there are many levels, where key decisions are made and where corruption can occur. Although, the basic level employees may not play a major role in those decisions that leads to corruption, they may be silent spectators or could be active opponents to those corrupt practices. Corruption opportunities As mentioned above, corruption and fraud activities could take place anywhere and although we cannot sure at the exact ‘spots’ in the hierarchy, where it can happen, we can focus on the probable areas, where corruption opportunities are present. Some of the common ‘spots’ where it can occur and money can leak is during the procurement of hospital related equipments and drugs and during the Insurance paid treatments. Medical equipments and importantly drugs are the main necessities for any hospital, with which the hospital cannot provide apt treatment to the patients, and without which it cannot even function. Hospital equipment purchasing and procurement of drugs constitute a major part of hospital spending. With sizable finance involved in this process, corruption could occur mainly during the purchasing or procuring process. “Procurement fraud is a large risk in hospitals, as virtually all capital spending involves procurement, and medicines and supplies are often the next largest recurrent expenditure item after salaries.” (Vian, 2005). The corruption during the procurement could happen two-way. The equipment manufacturing company and the Pharmaceutical companies themselves could offer bribes to the relevant hospital officials and make them favour their products, or the officials themselves will ask and negotiate for bribes with those companies to clear their name in the tender list. Corruption opportunities often arise during the drug purchases, more than the equipment purchases, because equipments are purchased once in a while, while hospital has to go for drug purchases regularly as they need to be fully equipped and stocked with all the necessary drugs. Although, the hospitals may not present corruption opportunities during all the drug purchases, there could be occasions, when the companies and the hospital officials could collude. For example, most of the times, hospitals’ essential drug lists and formularies restrict procurement of only pre-approved drugs, which has met efficacy, cost and quality standards. Even then, private drug manufacturers or their agents may still try to bribe the hospital officials to see that their medicine or formulation appears on the list. (Vian, 2005). This bribing of the hospital officials by the Pharmaceutical companies can lead to a lot of negative effects. When the officials receive bribes, there is chance they could clear the drugs, without properly testing the drug’s efficacy. Thus, when officials try this corruption opportunity and selected problematic drugs, it could negatively impact the health of the patients. Instead of curing them, it could lead to further deterioration of their health, even causing untimely deaths. The corruption during drug purchases could also lead to higher drug prices, because the pharmaceutical companies will increase the drugs’ price to compensate for the bribes and other amounts paid to the hospital officials including the physicians. “The outlay in marketing direct to doctors (£7,360 a year per doctor in 2005) adds c$20bn a year to pharma budgets, the costs of which are reflected in higher drug prices for 'brand name' medicines versus their generic counterparts.” (Fouch, 2006). The other corruption opportunity may arise in my organization if the hospital officials try to fraud the insurance companies. As insurance companies fully pay or even pay a portion of the hospital costs of patients, hospital officials could fudge the records and could create fictional or ‘ghost’ patients, thereby making the insurance companies pay to their accounts. That is, hospital officials could create ghost patients, who do not exist in real and who have not been provided any treatment, as someone who exists and who is treated in their hospital premises. This can be done through a series of steps including falsification of invoice records, receipt books or utilisation records, etc. (Vian, 2005). When that is done, it creates of 'ghost' patients, whose bill will be reimbursed and credited into the accounts of hospital officials. Thus, it is clear that there may be many corruption opportunities in the hospital premises as well as in the hierarchy, which could be exploited by the hospital officials. This will surely lead to problematic drugs and equipments, which may not have expected efficacy leading to deficiency in the treatment, causing more illnesses and even death. Major financial losses could also occur to the hospitals, as drugs and equipments manufactured by the company, which provided the best bribe to the officials, are selected instead of going for an cheaply or cost effective option. Effectiveness of institutional integrity policies With so many loopholes in the hospital administration, where corruption opportunities present themselves, it is important to plug these loopholes, to optimize the functioning of the hospital. All these corruption opportunities need to be minimized or even fully blocked through effective institutional integrity policies. When the effectiveness of these integrity policies is focused in my organizations it gives mixed results. Although, my hospital has set of effective integrity policies, there is some vagueness in those policies and that can be infiltrated or negatively tapped by corrupt officials. When one focus on the positive side, there are set of institutional integrity policies that has actualized an environment of corruption and other fraud control. There is a better administrative system that oversees all the procurement of the drugs and also the inventory control. This administrative system and the related integrity policies stipulate that all the drug procurements should be carried out according to the set standards in prices, quality, delivery etc. These set standards are based on current industry standards and takes into many social factors, even while being cost effective. Any officials who try to override these administrative systems and polices cannot do it and even if he/she tries will be caught and reprimanded. The important administrative systems and tools, which are implemented in my organization to prevent corruption includes hospital drug formularies, which have a set standard for all the drugs, and importantly technical review committees, which only check and certify whether all the purchased medical equipments are of good quality. In addition, there is an optimal inventory system, which keeps apt update of all the drugs and importantly safeguards its supplies. “Each management system should have clearly defined levels of responsibility and approval of decision-making, with appropriate checks and balances.” (Vian, 2005). As an extension of the above mentioned technical committees, there some more technical and review committees, which further focuses on the procurement process to eliminate the corruption opportunities. That is, the decision making process for the procurement is divided into multi-levels, with the decision to go for a particular pharmaceutical company or equipment manufacturing company, only taken after going through those multi-levels. In our structure, there are pharmacy and therapeutic committees with knowledgeable, efficient and clean experts. “The committee structure helps to balance the influence of clinicians with strong personal interests” (Vian, 2005). As part of these integrity policies, my organization has certain set of codes or codes of conduct, which has to be followed by all the hospital officials, particularly those in the procurement sections. These codes of conduct cover all the steps in the procurement processes, thereby ‘checkmating’ every corruption opportunity or maximum opportunities that may arise. One of the codes that prevent the officials colluding with the pharmaceutical companies is the conflict-of-interest cause, which prevents the procurement deciding officials to have any association with the companies and also prevent them from involving themselves in other related commercial activities. Recommendations and conclusions Although, the organization has quite a good number of institutional integrity policies, there is still scope for further improvement. One of the key steps that can be taken is making the hospital processes importantly the drug and equipment procurement process as much transparent as possible. In the hospital sector, transparency actualizing initiatives that should be considered includes “public access to procurement bidding results, monitoring of procurement prices paid, analysis of procurement bids for evidence of collusion, and setting performance standards for hospitals and suppliers.” (Vian, 2005). When these steps are implemented, it will make the whole process more open and transparent, thereby restricting any behind the scene activities and colluding by the concerned officials. Among these transparent based activities, public access could a revolutionary and at the same time very effective recommendation that can be tried. Although, organizations in certain sector including hospital sector are trying this approach, it has not become widespread, including in my organization. So, my organization’s administration should consider this transparency initiative. When public are involved, there will be extra vigilance, because with the public only accessing the hospital services, they will be vigilant to prevent any corrupt activities, which may undermine their treatment. In addition, with public constituting a wider mass of people, it would be difficult for the hospital officials to collude and bribe all of them. So, whatever be the nation, it is said that corruption needed to be tackled through greater transparency, such as the publication of health budgets and performance, with the Transparency International also calling for the health authorities to allow more oversight from members of the public. (Medical corruption 'global issue', 2006). The other recommendation that can be tried is adopting a centralized buying concept. Through this process, the provincial governments can buy the products in bulk, by negotiating favourably with the pharmaceutical companies. When they do that, there will be more public scrutiny in all levels, and so they have negotiate better price, without any opportunity to indulge in corrupt practise. These will increase the likelihood of detecting corruption as well as the consequences of getting caught, and also holding the hospital officials and medical personnel to account. (Vian, 2005). Thus, if all these recommendations are implemented, all or even most of the corruption opportunities could be eliminated, thus blocking any leak of precious funds as well as increasing the efficiency of hospital’s functioning. References Lindelow, M., Kushnarova, I and Kaiser, K. (2006). “Measuring corruption in the health sector: what we can learn from public expenditure tracking and service delivery surveys in developing countries”. Transparency International, Global Corruption Report. Retrieved from: http://www.transparency.org.uk/corruption-data Medical corruption 'global issue' (2006). BBC News. Retrieved from: http://news.bbc.co.uk/2/hi/business/4666328.stm Fouch, S. (2006). "Medical Corruption: A new global health threat?" Triple Helix, Christian Medical Fellowship. Retrieved from: http://web.squ.edu.om/med-Lib/med/net/E- TALC9/html/clients/cmf/html/spring_06/corruption.htm UNODC. (2007). Countering the global problem of corruption. Retrieved from: http://www.unodc.org/newsletter/en/200601/page004.html Vian, T. (2005). Corruption in hospitals. Retrieved from: http://www.bu.edu/actforhealth/actforhealth04/Part%201_3_corruption%20in%20hospitals.pdf. Read More