Blog By: Andrew Drawec
CVS Caremark was founded in 1963 by Stanley and Sidney Goldstein in Lowell, Massachusetts. The company was originally a small retail store which offered health and beauty products as well as an arrangement of general merchandise. Since then, the company has evolved into a multinational company which is ranked number #18 on the list of Fortune 500 companies. The chain now owns and operates 7,400 retail stores across the United States. In February of 2013, the company has decided to mandate that their employees reveal their own personal health information such as their weight, height, and underlying medical conditions. The company feels that if they gather all of this information from their employees, they can begin to make drastic cuts to their healthcare costs, by identifying employees that are particularly costly to the company. If the employee fails to give up their health information, the company will then impose a penalty on the employee of $600 a year out of their paychecks. There are many differing viewpoints about this policy, in which many are calling on the company to not impose the policy, as it is very detrimental to their employees. This new policy will be analyzed by the four major ethical theories, which will all help us decide if this policy is ethical or not. As well as, deciding if the policy should not be imposed.
The first major ethical theory that will analyze this case is the theory of Individualism. The ethical theory of Individualism is the theory that states that a person or firm has the right to make any decisions that they desire, as long as it is within the boundaries of the law and human rights. In this particular case with CVS Caremark implementing this new policy, this example would not violate the theory of Individualism. Under Individualism, the company can do whatever they like as long as it is within the bounds of the law. CVS is not breaking any laws by implementing this policy and it is doing what is in their best interests in order to maximize profits. With cutting the the costs of healthcare significantly, the company can increase their bottom line by a huge margin.This new policy would not violate the theory of Individualism, as the company is only doing what is in their best interests.
The second major ethical theory that will analyze this case is the theory of Utilitarianism. Utilitarianism is the ethical theory that states that an individual or firm has the right to make any decision that they want, as long as it maximizes overall happiness among everybody involved. In this particular case, there are three main groups of stakeholders that we have to analyze in this case, to see if this policy maximizes overall happiness. To begin with, the most important group of stakeholders in this case are the employees. The employees of the company are the workers who make the company who it is today. With this new policy, a lot of employees are very upset about this policy and are unwilling to give up the information. However, to top it all off, if they do not give up the information, they will be facing a huge penalty of $600 per year. This does not maximize happiness among the employees as they are the ones who are affected most int his case. The second main group of stakeholders that we have to analyze in this case are the upper managers in CVS Caremark. The upper management group is the only group in this case that happiness would be maximized.The upper managers want to see the most profit and gain out of the company as possible. With the lowering of healthcare costs, managers can expect to see a huge financial gain, as there will be more profit to please the stockholders. The third group in this case are the stockholders who are the owners of the company. Since this case is already gaining media attention, the stockholders will begin to worry that this new policy will actually have a detrimental impact on the company in regards to its finances, as well as with the company's reputations. From this information, it is clear that this new policy violates the theory of Utilitarianism as the policy does maximize happiness among all of the stakeholder groups.
The third major ethical theory that will analyze this case is the theory of Kantianism. Kantianism is the ethical theory that states that everyone should do what is right for everyone, because it is the right thing to do. Kantianism is based on the idea that everyone must act upon certain maxims, which are rules that determine how humanity should act as a whole. These maxims should be followed even if they would benefit the individual greatly, because following the rules is the right thing to do. This example can also be compared to the Formula of Humanity, which states that you must not take advantage of each other or treat each other as mere means. In this case of CVS Caremark, they are not doing the right thing to do. In this case they are exploiting their employee's personal health information, which is violating the Formula of Humanity. Everyone has the right to their own privacy and have the right to tell others what type of disease they have and can choose who to tell their weight to. CVS is mandating this information, and in fact penalizing the employees who want to protect their information and not surrender it to their employer. Kant would think that CVS Caremark is not being an ethical company because of their decision to mistreat their employees by forcing them to give up sensitive personal information in order to cut healthcare costs. Just the fact that they are mandating this information from their employees or else face a monetary loss is not the right thing to do. It is clear in this case that the Kantianism theory is violated by CVS Caremark.
The fourth and final major ethical theory that will analyze this case is the Virtue theory. Virtues are important factors in any individual’s life as well as the decision makers in a company or organization. As stated above they are what lead to us to be happy and lead successful lives. Without these virtues everyone would live in a dismal world, where there is no happiness and nothing to be excited about. Some of these virtues are respect, dignity, honesty, courage, temperance, and justice, while some of the vices in this case may be disrespect, and dishonesty. In this case, the main virtues of honesty, respect, and justice were broken by the upper management of the company. The employees here are the ones who have the courage to go to work every day and work to make the company a better place. Instead of being treated with respect back for all of their courage, they are being mistreated and exploited by the company they work for by asking for such personal health information. Also, this case does not fit into temperance because they are being greedy and only want more profits, when in fact the company has been quite profitable for some time. It is clear that this case does not agree with the Virtue theory, because CVS Caremark’s decision goes against many of the virtues which make this world a better place to live and have an enjoyable lifestyle.
CVS Caremark is completely in the wrong with this new policy. They are completely exploiting their employees who work so hard to make the company profitable and reputable. There are so many other ways that the company could be cutting costs in other areas. They could also offer free health services that will encourage their employees to lead happier and healthier lives, which will in-turn cause the healthcare costs to decrease. A little investment always seems to pay off in the end. However, penalizing employees who do not want to reveal their personal information is not the way to cut costs. The above case violate the theories of Utilitarianism, Kantianism, and the Virtue theory.
These facts and analyses are based on an original paper entitled "CVS Caremark: Mandating their employees to reveal personal health information" by Andrew Drawec (2013).
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