But That Would Be Wrong: Ethics of Stealing and Deception

Hearing Health & Technology Matters
August 14, 2012

Last time Hearing Economics described thefts and deceptions in professional settings. Transgressions were bizarre, some absurd, but all actually happened. Most were illegal; all received some form of punishment.  The point was that owners and managers are responsible for imposing and enforcing checks and balances in hearing healthcare environments in order to protect patients, staff, and assets from theft and manipulation.  Indeed, checks and balances are important preventive measures put in place to protect people from making bad choices and create a reliable, trusting environment.  

Which brings us to the topic of today’s post: Illegal or not, do situations exist in which stealing or deceptions are ethically defensible in hearing healthcare environments?  I think I’m on reasonably firm shifting sand when I say that the Economic view is that all are OK so long as they are not illegal and are done for the good of the firm. Readers are encouraged to send in stories of legal stealing and deception that helped their companies prosper — I’m sure we could all benefit from such information.

While we anxiously await examples, it’s worth a minute to define terms.  Bad behavior is often described as “morally and ethically wrong.” But seriously, does anyone reading or writing this post know the difference between moral and ethical?  Can something be morally right and ethically wrong, or vice-versa? This area has consumed the life of more than one philosopher, so don’t look for an answer in this post.  However, I was encouraged to dig a little when I discovered that I could ask the Universe on its brand new twitter account.  I haven’t heard back from The Universe–making me wonder fleetingly if I am just a speck–but I quickly left that path to seek out more reliable, or at least closer, experts.  Somewhat tautologically, it turns out that morals are beliefs and ethics are “advanced expressions of morality”2 based on consistent reasoning.  You have to wonder how consistent rationalizations are handled.

You’re in the moral ballgame if your gut tells you that a proposed act is “wrong” (e.g., stealing from the business) or “right” (not stealing).  Rushworth M Killer, deceased ethicist and author of How Good People Make Tough Choices calls these “right-wrong” decisions moral temptations: clear-cut decisions about behaviors that are widely “understood to be wrong” and provide excellent career opportunities for televangelists.  Dealing with what Dr. Killer calls “right-right” decisions moves you up to the big leagues of ethical dilemmas, where choices set one central value (not stealing is good) against another (taking money from the wealthy to feed the poor serves the Greater Good) “in ways that will never be resolved simply by pretending that one is wrong.’”  So much for rationalizing… ethics requires honesty in one’s thinking.

How about those transgressions in healthcare mentioned last week? Were they moral temptations or ethical dilemmas?  What is the economic view?  Below are a few examples, grouped according to the aforementioned Central Values pitted against the good of the firm.1

Central Value:  Family Matters

  • The poor accountant last week embezzled $16 million, but her motive–only now revealed–was pure.  She used that money unselfishly to prop up her son’s failed ambulance business.  The big picture emerges:   A mom helping her son, a family business, ambulances saving people’s lives, the world a better place.  Ethically, how can you blame the woman for repurposing that money to such a worthy cause?
  • A close-knit family business in Long Island employed 11 family members who provided Special Ed services to disabled toddlers.  In the process, the business is accused of falsifying records and overbilling about $2mil.  But hey, the kids got (some) services, the family prospered, and $2 mil is a drop in the bucket in  the program’s $2 billion budget.  
  • “Your office manager confesses that she stole money from the office account to buy medicine for her ailing father. Her father has died, and she offers you a check from the insurance proceeds to pay you back. After you cash the check, do you fire her or forgive her?” 3 

Comment:  With notable exceptions (Robin Hood, Soprano family) most of us will see these examples as moral temptations rather than ethical dilemmas.  It is wrong to steal.

On the other hand, it is not only OK to steal but stealing is a cornerstone of Robin Hood and Tony Soprano ethics – one ethic says it’s for the Greater Good of the Family of Man, the other’s ethic says it’s for the Good of The Family.  Not stealing (or not doing other wrong things) would be an ethical dilemma for those bound by oath to organizations such as these. 4 

The Economic view is clear cut for the three cases, unless the Sopranos go into healthcare.  Stealing from the firm raises Costs, which reduces Supply, raises Price, and cuts Demand.  Not good for the Business.  Not good for Consumers.  Separate the transgressors from the Business and get the stolen funds back, using legal means if necessary.  Beyond that, any punishments are the purview of the courts.

In general, professions are not well served by instances of moral and/or ethical failure.  The ripple effects of such failures tend to reach consumers, who react by complaining.  Complaints get the attention of agencies, which in turn react by applying scrutiny to the profession. Life gets really rough when Government agencies move from scrutiny to regulations and investigations of the profession and its members.  Just ask Tony Soprano, who practically lives with the Feds in his house.  He’ll tell you:  it’s a lot easier and far more profitable to police your own organization than have the Government step in or, worse, take over.  

Next week, back to Government Regulation in hearing healthcare.  Click here if you want to jump to the 3rd post in the “Wrong” series.




Readers are reminded that “the firm” in economics refers to all non-government entities making transactions of Supply and Demand, either for-profit or non-profit. 

2 This quote surfaced years ago when the post was written. The link is now broken, attribution can no longer be given, but someone other than me said it.

This conundrum is provided courtesy of Dr. Rushworth M. Killer.

4 The ethical dilemma of organizational omerta deserves further scrutiny. I’ll revisit it when membership organizations’ ethical codes come up.

  1. An interesting place to start any discussion of ethics is provided by PBS in the Series “Ethics in America”. This series of 10 episodes was started and hosted by Fred Friendly when he was at Columbia, I think. Some really interesting topics and people participated in this series and it is worth the time to stream it from the PBS site.

  2. But what about stealing from the taxpayers (Medicare/Medicade fraud)?

    Let me give you a crystal clear example: In June 2010, Cochlear Americas “settled” with the DOJ by paying an $880,000 fine over their paying kickbacks to CI center staff through CA’s unlawful “Partners Program.”

    It took former CFO Brenda March filing a qui tam action against Cochlear for violating the Anti-Kickback Act and the False Claims Act to end their “frequent flier” program.

    Interestingly, unlike America with the strict FCPA laws, Australian laws and governmental policies actually encourage the paying of foreign bribes, as they are allowed to be deducted on their corporate taxes as a customary business expense: The acts that would land a CEO in prison here are actually officially sanctioned down under.

    Also, it’s worth noting that Cochlear Americas was prosecuted not for the actual acts of bribery of hearing care professionals — Those went unpunished — but instead only on the fraction of cases involving CI’s purchased for patients who had their hardware paid for by the Government.

    My questions:

    1) What investigation, if any, was performed by AAA &/or ASHA to find out if any Members were involved in this fraud? Did these Ethics Boards even file the necessary Freedom Of Information Act request needed to uncover this potential wrongdoing?

    2) Were any AAA &/or ASHA Members actually disciplined?

    From the DOJ press release dated 9 June 2010:

    United States Settles False Claims Act Allegations with Cochlear Americas for $880,000

    WASHINGTON – Cochlear Americas, a Colorado-based cochlear implant manufacturer, has agreed to pay $880,000 to resolve allegations that it paid illegal remuneration to health care providers to induce purchases of cochlear implant systems, the Justice Department announced today. Cochlear Americas is a subsidiary of an Australian company, Cochlear Limited.

    The settlement resolves a lawsuit brought by a whistleblower, Brenda March, in 2004. The lawsuit, filed in the District of Colorado, alleged that Cochlear Americas violated the Anti-kickback Act and the False Claims Act by paying various forms of illegal remuneration to physicians who prescribed the use of the Cochlear-manufactured devices for Medicare and Medicaid patients.

    The United States intervened in the lawsuit in January 2007, and then shortly thereafter, moved to stay the suit, while the United States pursued an administrative civil monetary penalties investigation against Cochlear. The settlement announced today resolves that administrative matter as well as the lawsuit initiated by the whistleblower.

    “Today’s actions demonstrate that the United States will not tolerate the payment of kickbacks by any entity involved in providing medical goods and services to beneficiaries of federal health care programs,” said Assistant Attorney General Tony West, head of the Justice Department’s Civil Division.

    “This office is determined to protect the integrity of the Medicare and Medicaid programs for the citizens of Colorado and of the United States,” said David Gaouette, U.S. Attorney for the District of Colorado.

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