Question

Question 10:

Read the following cases and answer the questions listed below:

When hospital staff failed to speak out about poor care, the challenge began to fall on relatives. Julie Bailey began to take on Stafford General Hospital. Believing that it would never happen to her, it happened at Stafford where she took her mom. Julie Bailey’s mother, Bella, had been taken to Stafford General Hospital in September 2007. But, from her first impressions, she believed something was wrong. She recognized that the patients in her mom’s ward couldn’t speak for themselves and the relatives were visiting them oblivious to what was going on. For 8 weeks, Bella’s family members maintained a 24-hour watch at her bedside keeping a record of what they saw. Julie Bailey reads the records made and indicated the fear they had for being branded troublemakers. Bella Bailey died in the hospital in November 2007. Julie Bailey created a determined campaign, in her café, to make people aware of what she had seen but struggled make her voice heard. In an interview, Julie listed all the people she tried to speak to with the intent to try and tell as many people as possible.

At that time she was unaware that the primary investigator of the Health Care Commission was planning to investigate high death rates at the hospital between 2005 and 2008. The report, when made public, showed managers putting targets ahead of patient care. With the mortality rates being further investigated, the report agreed there were serious concerns about patient care. It appeared that some doctors were even, privately, aware of the problems. The Commission report also said that of the majority of doctors interviewed said they would not have been happy for a relative to have been treated there. Julie Bailey expressed her concern that it wasn’t good enough for their relatives but it was good enough for ours. She says if they had known or the doctors had spoken out none of their relatives would have been put there. A Staffordshire MP, Tony Wright—Labour, Cannock Chase, could not believe that doctors would be happy delivering that level of care and that nurses must have been unhappy working in that situation. He had helped introduce legislation to encourage employees to speak up—The Public Interest Disclosure Act of 1998 was intended to give whistleblowers legal protection from dismissal or victimization. Mr. Wright indicates that the whole point of these provisions was so that individuals could raise their concerns properly without threatening their job, without damaging their career, and without having to go to the media. However, in Staffordshire, there was a whole culture that discouraged complaints. The investigation indicated that nurses felt poorly supported as a profession and consultants appeared to have given up expressing their views since managers were said to dislike critical comments and ignored them. Mr. Wright says that the governments should revisit what it said to health organizations in the past—the good things such as the need to get whistleblower protection in place. The new leadership at Mid Staffordshire NHS Foundation Trust has now made it known that quality of care is now its primary concern. To this end, it is investing 12 million pounds in frontline clinical staff, improved training and facilities, and has published a new “no blame whistleblowing policy” aimed to bring poor practice out in the open.

Required:

1. What corporate governance mechanisms failed at Stafford General Hospital?
2. Were there possibilities of agency problems within Stafford? Why or why not? Could managerial opportunism be an issue?
3. Can the Trust Foundation for Stafford be effective as a market for corporate control?
4. What role do you think the corporate governance structure of the United Kingdom played in the problems at Stafford?
5. How do you think the situation at Stafford will impact global corporate governance?

Answer 1

Answer: (1) At stafford Hospital, the whole intent of taking care of the patients had taken a back seat and the management was just running after achieving targets. The quality of core was not given adequate importance and the hospital was just running to achieve numbers. The hospital stabt was not giver sufficient quidance as well as resources to perform their job in the best possible way. In short the corporate governance of the hospital had missed the terme intent of what a hospital LOR) health care stands for. (2) Agency law has the contract Kability asociated to it. As per the contract liability, the principal liable for any tort committed by the agent while the agent is acting within the scope of his authority. Also, the parênciple is indirectly responsible for the agents actions, as long as the agent is acting with in express, implied LORD appacent terms of contract. Also the principal's liability depends on the condition that whether the specified agent had authority to make the contract LOR) Dot. If the agent

had authority, then principal will be 100% liable for the contract. Duty of care is the liability cor, the legal obligation which is imposed on the accused involve in cases of intentional tout. This duty of care û basically adherence to the standasid of reasonable care to be performed by the accused with the wolved victim (OR) group of victims. In the case of stafford hospital , there were clecor agency problems as the principal was not peatoming its duty of care for the agents appropriately. The staff was not supported to improve their performance delivery, Managerial opportusim was the most critical isue affecting the overall hospital serwice model. The manca ement was just running after numbers & meeting targets and they didn't eveir hesiterte to compromise on quality to achieve the same. (3) The Prest foundation for stafford can prove to be quite good corporate control to improve the overall service of the hospital if the members of the torent keep their eyes and eary to the ground. They need to keep a check on the ground relality & be

conscious about the real efforts made by the hospital to take care q the patients. The trust must set up a whitte blowing cell and encourage the staff as well as the patients to speak up in case they witness any devi- aton of the sowice delivery at the hospital. This way effective control can be exerted and overall dowice delivery of hospital can be improved. 14) The UK corporate Governance structure and the rigidity with the norms are followed have a clear effect on the ground level governance followed by various entities included stafford hospital. The leniency obseswed by the corporate govewnance struct- ure may have set the trend of priontizing numbers and profits over quality q care and as most followers try to follow the leader, the various health care units in UK followed suit & started running after numbers. 15) Statford hospital is an eminent part of the overall health.care in UK. Hence any kind o leeway and Teniency in its sowice model would have a substanrial effect on the overall quality rate q health care in Uk. this will effect the brand of healthcare as well as gov. Qurance of UK and outside world may not feel comfortable

Po trusting the health care delivery at Ukey