Ethical Fading

The American Bar Association recently posted an article in its ABA Weekly Newsletter (May 27,2022)  about a patient signing an agreement with a hospital acknowledging that she will be charged $1300 for surgery but then being billed about $230,000. The Colorado Supreme Court ruled that the signed agreement prevailed; because the increased amount was not disclosed in the written service agreement, the patient did not have to pay it.  Evidently, the hospital misread the patient’s insurance card realizing only much later that she was “out of network.” The hospital tried to argue that the “service agreement” did indeed include the higher amount through the patient’s agreement to pay, “all charges of the hospital.” The hospital argued that the quoted term referred to its chargemaster or internal billing database. The Court disagreed noting that amounts being charged by hospitals “have become increasingly arbitrary and, over time, have lost any direct connection to hospitals’ actual costs.” (Id.)

Which brings me to a recent Harvard PONS blog post entitled “Negotiation Research Examines Ethics in Negotiating” by the staff dated May 23, 2022. Using the spiraling costs of health care, (for example, $77 for a gauze pad or $1,000 for a toothbrush), the post asks why aren’t the hospitals and health care providers more transparent or upfront about the costs? Why, do they instead engaged in ethically questionable behavior by hiding the costs from the consumer until after the fact? (Id.)

The answer is “ethical fading” or the making of a series of “micro-ethical decisions” that take us down that slippery slope. (Id.) It is the “… tendency for the ethical dimensions of decisions to fade from view under certain conditions.” (Id.) For example, in a discussion with someone, we may decide

“…to disclose, conceal, or misrepresent information that would potentially lessen our own outcomes and benefit our counterparts. For example, we might be tempted to claim we have better outside alternatives than we actually do, insist we care strongly about an issue when we don’t, or hide an unattractive aspect of a product or service that we’re selling. (Id.)

Based on a lab experiment conducted by Mara Olekalns, Christopher J. Horan and Philip L. Smith of the University of Melbourne, these researchers found that it came down to whether a party felt she/he had a sense of power or felt powerless in the negotiation process:

The results showed that participants who had been primed to feel powerless in the negotiation (by being told they had no alternatives to the current negotiation) were less deceptive than those who believed they were powerful (as a result of having strong outside alternatives).

…Overall, the study results suggest that, beyond opportunity and our own moral code, a variety of factors can interact to affect whether or not we behave ethically in negotiation. As a result, we need to be particularly vigilant to the possibility that we will behave deceptively, even if we have no intention of doing so. (Id.)

So—be careful of that “slippery slope.” As we all know, one tiny micro slip of ethics can lead to another slightly larger slip which, in turn, leads to an even slightly larger slip and so on until we find ourselves at the bottom of that slippery slope and acting very unethically!

… Just something to think about.

Phyllis Pollack

Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as… MORE