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2 Rule Setting: The Meta-Level of Systems, Institutions, and Organization

2 Rule Setting: The Meta-Level of Systems, Institutions, and Organization

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324



N. Knoepffler and M. O’Malley



institutional and customary rules. Conceptually, ordonomic ethics attempts to be

more than a critical voice, pointing out ethical violations and the limits for scientific

research and practice. Rather, ordonomic ethics seeks to generate understanding and

proposals for systematic reform on the level of rules—offering implementable

strategies for political, professional and institutional leaders.

In the German federal government during the past decade, there have been

myriad legal reforms of the healthcare system—the so-called healthcare reform

laws. However, the basic problem of paradoxical incentives for healthcare providers

remains. For example, physicians and their medical institutions have the incentive

to provide the most treatment possible with minimal concern for cost, and patients

have no counter-incentives to limit themselves in their claims for treatment.

A rule-setting solution might involve increasing patients’ personal costs for

therapeutic measure that go beyond a certain minimal standard of treatment. Here,

there would be measures to insure that such financial participation does not put in

jeopardy the patient’s health or financial wellbeing. With respect to providers, an

obvious measure is to have increased control measures and effective penalties for

unnecessary medical treatments. This efficiency approach is a matter of justice, but

it is hardly unique to ordonomic ethics. And patients also have no incentive to

receive unnecessary and wasteful treatments.

A more creative ordonomic approach would seek to shift the incentive structure

such that the medical providers have incentive to provide appropriate services at

minimal cost. One measure with promise is providing medical-provider groups

agreed-upon sums for taking care of a designated group of people—however this is

done. The underwriting amount would correspond to probabilities relevant to the

potential patients’ demographics. When necessary, patient-treatment costs would

deplete the medical provider’s own resources. Care would have to be taken, of

course, to protect the patient from the self-interests of the providers. Nevertheless,

the key is to shift the incentives so that the basic medical-ethical principles are

fostered, that everyone benefits from a healthy population, and that there are

integrated and self-regulating controls for medical expenditures.

Shifting the incentives to medical providers introduces inherent dangers, of

course, which also need to be anticipated and controlled. For example, providing a

lump sum to a nursing home for the comprehensive care of its patients incentivizes

the nursing home to provide as little care as necessary for those patients. Similarly

with the case of the ALS patient in a hospital where the hospital is receiving a

standard payment per overnight stay. The hospital is incentivized to provide as little

nursing care as medically necessary without putting itself in jeopardy of generalized

hospital regulations and laws. Here there might be a solution by introducing

competition among medical groups providing services, and requiring that measures

of care quality be available publically. If a hospital is sparing costs with minimal

nursing staff, this would be a shaming point that would be publically available.

Patients would be incentivized to find medical groups with good reputations for

providing adequate services with outstanding nursing care. And the measures for



An Ordonomic Perspective in Medical Ethics



325



judging this would be relevant, publically available, and provided by independent

auditors. To maintain a healthy incentive for medical groups, patients would also

need the option to switch from poorly-run groups.

The role of minimal standards continues to be relevant for and compatible with

ordonomic ethics. An example from modern aviation is relevant here. Jet aircraft

are immensely complex machines and yet there are astoundingly few incidents of

their failures resulting in personal casualties. How can this be? Gigerenzer (2013,

72–77) argues that this safety record is achieved with a comprehensive and standardized system of checklists. Preflight checks are mandatory and inflight crises are

also addressed with crisis-response protocols to isolate the problem and deal with it.

Such discovery and remedy management can and is utilized to some extent in

medical care. Though this management approach is also not unique to ordonomic

ethics, it may be combined with it. For example, treatment of critical-care patients

like the ALS patient in the case above should include care checklists that include

reasonable access to the call button. This management tool could be incentivized in

three ways. First, the hospital would be incentivized not to overburden their nursing

staff because nursing-care quality would be publically available. Second, blatant

nursing mistakes would be grounds for a refund of the patient co-pay, as judged in a

relatively non-bureaucratic patient advocate acting indecently from the hospital.

Such a refund might be only a symbolic measure in terms of the cost to the hospital,

but it would present a third option. Namely, the number of patient co-pay refunds in

the hospital would also be publically available. And the hospital would have an

incentive to avoid these as well.

The organ-transplant scandal was motivated in large part by scarcity.

Recognizing this, an ordonomic approach could propose rule-setting changes on the

Eurotransplant-level to address this scarcity as a way of minimizing the incentive

for ethical misconduct. The “Spanish model” offers insights to an alternative that

provides nearly three times the number of organs for transplantation than in

Germany (cf. the classical paper by Johnson and Goldstein (2003) on how defaults

save lives). Spain has succeeded by a coordinated effort of greater public information, increased medical-staff training regarding organ donation, and the implementation of an “opting-out” legal framework where informed consent for organ

donation is presumed absent an explicit contrary wish. Increased available organs

reduces the need and incentive for cheating and at the same time increases the

respect for the system. Together with stronger rules and enforcement to deter

cheating, the whole system should function dramatically better. This dynamic is

demonstrated in the chart below (Fig. 4).

The ordonomic measures would raise the rate of available organs, increase the

incentive for compliance, and reduce the incentive for cheating. It continues to be

true that cheating the system would marginally increase a patient’s chance for an

organ, but the increased danger of exposure and associated penalties mitigates

against cheating.



326



N. Knoepffler and M. O’Malley

Doctor A (cheats) raises



Doctor A plays by the rules



points for Patient A



for Patient A



Doctor B plays by the rules



Patient A has marginally



Fair situation for both patients



for Patient B



better chances to receive



and favorable chance for



organ, but Doctor A has



organ for both



significant risk of exposure

Doctor B (cheats) raises



Scenario of cheating – no



Patient B has marginally



points for Patient B



respect for rules, elevated risk



better chances to receive



for scandal for both doctors



organ, but Doctor B has

significant risk of exposure



Fig. 4 Increased available organs reduces the need and incentive for cheating and at the same

time increases the respect for the system



4.3



Rule Following: The Interpersonal Level of Individual

Ethical Decision Making



The rule-following level is the level at which the theory and rules meet reality. As

with any truly practical science, the rules need to be constantly monitored for

effectiveness using objective measures and, to the extent possible, empirical data.

And they need to be continually reformed to achieve optimal performance. With

respect to this paper’s three case studies, these objective measures would include,

for example: (a) rates of organ transplantation and scandals involving transplantation; (b) measures of hospital-patient care satisfaction; and (c) measures of per

capita healthcare expenditures, overall average health insurance rates, and measures

of general satisfaction with healthcare system. Ideally, scientists should be able to

follow trends in comparative markets to recognize policies and practices that are

most effective in achieving desired objectives. Included in these desired objectives

are norm-compliance, but also moral values to the extent that they can be measured.

It may be easiest to measure infractions, but even compliance and flourishing can be

monitored in the form of satisfaction surveys and social psychological studies.

These monitoring attempts have varying levels of meaningfulness, but the point is

that ethics can and should utilize empirical measures to monitor effectiveness.



4.4



Conclusion



Integrative Medicine Ethics (IME) integrating the ordonomics approach offers

solutions to social traps in medicine. Such an integrated approach respects and



An Ordonomic Perspective in Medical Ethics



327



fosters the essential principles of medical ethics and long-cherished moral traditions. Here, the health and well-being of every person in society remains a central

concern—as articulated in the principles of autonomy, human rights and human

dignity. But the approach advocated in this paper integrates these concerns for the

person with the long-term and sustainable concern for all persons in society—the

common good. Thus another central concern of ethics is the context of moral action,

and not merely the moral action of individuals. The context of moral action can be

enriched with effective rules that foster virtuous personal and institutional practices.

That is in everyone’s interest.



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