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The Economics of Clinical Ethics Programs: A Quantitative Justification

Published online by Cambridge University Press:  29 July 2009

Matthew D. Bacchetta
is a member of the class of 1998, Cornell University Medical College, New York, New York.
Joseph J. Fins
is Assistant Professor of Medicine at Cornell University Medical College and Director of Medical Ethics at The New York Hospital, New York, New York.


The restructuring of the healthcare marketplace has exerted pressure directly and indirectly on clinical ethics programs. The fiscal orientation and emphasis on efficiency, outcome measures, and cost control have made it increasingly difficult to communicate arguments in support of the existence or growth of ethics programs. In the current marketplace, arguments that rely on the claim that ethics programs protect patient rights or assist in the professional formation of practitioners often result in minimal levels of funding and preclude program growth. Where ethics programs could once sustain themselves on goodwill alone and values arguments in an expanding healthcare market they are now encountering—at least by anecdotal reports—cutbacks and even elimination. To respond to these challenges, we offer an economic model that can be used to demonstrate the “value” of an institutionally based ethics program.

Copyright © Cambridge University Press 1997

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1. Wilson, Ross J, Glaser, JW, Rasinski-Gregory, D, Mclver, Gibson J, Bayley, C. Health Care Ethics Committees: The Next Generation. Chicago: American Hospital Publishing, Inc., 1993:188.Google Scholar

2. Authors' personal communication with ethics committee chairs who participate in the Metropolitan New York Ethics Committee Network. Conversations with others engaged in clinical ethics and a review of the bioethics literature have not revealed a systematic survey of the current status of ethics programs in light of changing economic factors and institutional downsizing. A systematic evaluation of this question is warranted.

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10. In addition to dollar savings associated, clinical ethics programs can also be understood as a value added service that enhances institutional reputation and community goodwill. This might translate into improved market share and patient satisfaction.

11. This variable is probably less fixed for self-insured organizations.

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13. See, Banker, RD, Datar, SM, Kekre, S, Mukhopadhyay, T. Cost of product and process complexityGoogle Scholar. See also, Cooper, R and Turney, PBB. Internally focused activity-based cost systems. Both in Kaplan, RS, ed. Measures for Manufacturing Excellence. Boston: Harvard Business School Press, 1990:269–90 and 291305.Google Scholar

14. A retrospective review of ethics case consultation at The New York Hospital indicates that 20 of 76 case consultations (26%) followed from classes, seminars, rounds, and other educational programs.

15. The experience at The New York Hospital, May 1994–January 1996. Given the confidential nature of this information we are unable to reveal the exact epidemiology of our case consultation experience.

16. For clarity, we used a simplified model in this financial analysis. We deliberately omitted elements that were extraneous or beyond the control of clinicians, such as tax effects, inflation, and market fluctuations.

17. To put this estimate into a contemporary context, a semi-private ICU bed at The New York Hospital is $2,475 per day, and $1,765 at The University Hospital at The University of Virginia. These charges exclude physician fees, X rays, laboratory tests, and other associated costs.

18. We have modeled the cost savings per critical case at $10,000 for the above-cited reasons. The break-even analysis (Figure 2) offers a range of cost savings per critical case. This analysis demonstrates cost avoidance when the cost savings per critical case is reduced by a third.

19. As noted previously (note 14), 26% of case consults came from clinicians who had attended educational programs. These calls to the ethics program can account for longitudinal growth of the consultation service. This will translate into an incremental yearly increase in the number of reference cases. At our institution that annualized rate of growth based on semi-annual assessment was over 20%. Other programs may have different trends in the number of case consultations they perform. Continued growth, a decline in case volume, or a plateau in activity can be accommodated in this discounted present value analysis.

20. Microsoft Excel 5.0 used for spreadsheet analysis.

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