The key to preventing whistleblower lawsuits

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Tim Mullaney
Tim Mullaney

Recent research suggests nursing home leaders, especially those who hire workers, may need to think more deeply about how whistleblower lawsuits come about.

To understand this research, it's helpful to consider the high-profile whistleblower charges against Life Care Centers of America for unreasonable and unnecessary therapy billing.

Although Life Care vigorously defends its therapy practices, the media has presented the case as a textbook example of employees turning to the government due to rot in the upper reaches of a company. Life Care's problems “come from the top,” CBS reported last month. The network pulled this quote from Justice Department documents:

“Cathy Murray, Life Care's former Chief Operating Officer … frequently told her employees, their job was to make money for Forrest Preston, the founder, sole shareholder and Chairman of the Board of Life Care.'”

This fits a familiar narrative about whistleblowers: If company leaders are ethical and responsive to reports of inappropriate or unlawful practices, workers will report problems and the issues will be resolved internally. Customers — in this case, residents — are better off, and there's no damage to the company in terms of legal fees, bad press or government penalties. But if facility management or company leadership ignores or retaliates against staff members who raise concerns, these workers may have no option but to tug on Uncle Sam's sleeve.

However, having ethical and responsive leaders might not be enough to create a culture friendly to internal whistleblowers. This is according to David Mayer, Ph.D., a University of Michigan Ross School of Business researcher.

“What we've neglected is understanding better the role of people who are not in formal positions of power — our peers. If we don't get consistent support from our coworkers, we're much less likely to act,” Mayer told NPR reporter Shankar Vendatam last week.

Mayer has found that the effects of having an ethical leader are “completely neutralized” if a worker feels his or her peers are unethical, Vendatam reported. You can read more about his experiments here and here.

The upshot of Mayer's work: When it comes to discouraging internal whistleblowers, the problems don't always start at the top. Even in a company with impeccable upper management, a cohort of unscrupulous lower-level workers can create an environment where corners are cut, care is compromised, documentation is mishandled and no one speaks up.

There are many pressing reasons to address the long-term care labor shortage. But Mayer's research provides some compelling evidence that hiring managers must have the best pool of candidates to draw from. Otherwise, the result could be whistleblower lawsuits that aren't cases of top-down mismanagement, but of rot blooming from the rank-and-file that goes unreported until the government becomes involved.

The recently reintroduced Older Americans Act and the immigration bill working its way through the Senate both could enrich the pool of prospective CNAs, maintenance and dietary workers, and other entry-level or low-skilled positions that may not require advanced degrees or multiple certifications, but which are crucial to creating an ethical, open culture. And managers should certainly consider the new guidelines for hiring convicted criminals, and have the database of Medicare-excluded individuals bookmarked.

I'll close with one more sobering insight from Mayer's research. It might take only a few bad eggs to squelch internal whistleblowers. Only about 10% to 20% of people in his experiments seem to be unscrupulous by nature, Mayer found. And few people are naturally inclined to act ethically regardless of environment. The “majority” of people fall in what he calls “the area in the middle.”

That is, most of us could go either way. In the right environment, we're making waves for necessary changes. But in the wrong environment, we go with the flow, carried along by the current — even if we don't like what we see around us, or where we're headed.

Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.