Health Care TortsSpring 2004

Edward P. RichardsHarvey A. Peltier Professor of Law

Paul M. Hebert Law CenterLouisiana State University

Baton Rouge, LA 70803-1000richards@lsu.edu

http://biotech.law.lsu.edu

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Course Organization

Most of the classes will involve discussion of cases and other materials No book - everything will be on the WWW or

handed out Limited PowerPoint

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Discussion Groups

You will be assigned to one of four groups Your group will be responsible for the materials assigned

for a given day If we do not finish, you carry over until we finish the

material If you are not in class when I call on you, you are

responsible for group assignment due the next day you are in class, whether it is your group or the next

If you do not prepare, I reserve the right to reduce your final grade by up to a letter

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Purpose of the Course

Law Learn basics of health care tort law in the US Learn the special issues of LA health care tort

law Risk Management

Discuss how to counsel clients to reduce liability

Public Policy

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Why Study Health Care Torts?

Medicine is in flux There is no societal consensus on acute medical

care or on prevention Health care finance is a mess Health care is seen as too expensive Ripe ground for tort law Difficult policy problems

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Legal Role of Tort Law

Interstitial Compensation Provides a compensation system for rare or

unanticipated injuries Provides a background deterrence system for

evolving societal problems Acts as a general claims resolution system for

routine claims

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Political Role of Tort Law

Bread and Circuses Lottery Justice Creates the illusion of justice through anecdotal

compensation and deterrence Defuses political action that would increase individual

justice Generates high transaction costs that support the bar

and politicians and entrench the system

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Is Tort Law a Good Thing in Health Care?

Pros Informed consent Helped highlight problems of managed care Can target unethical or incompetent behavior

Cons Vaccine law Contraceptive liability Medical malpractice insurance issues Interferes with quality assurance

History of Medicine

Why bother?

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Cavemen to the Civil War

Rich literature Lots of theories of medicine Lots of treatments Only a few things worked at all

Some cutting and sewing of wounds Some drugs - opium, digitalis

On balance, you were better off without medical care

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Pre-Modern Era Science Leads Practice

Early 16th Century - Paracelsus -Transition From Alchemy

Mid 16th Century - Andreas Vesalius - Accurate Anatomy Early 17th Century - William Harvey - Blood Circulation 1800 - Edward Jenner - Smallpox 1846 - William Morton - Ether Anesthesia 1849 - Semmelweis - Childbed Fever - Controlled Studies 1854 - John Snow - Proved Cholera Is Waterborne

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The Profession - Through the 1870s

Most Medical Schools are Diploma Mills No Bar to Entry to Profession

Small Number of Urban Physicians are Rich Most Physicians are Poor

Cannot Make Capital Investments Training Medical Equipment and Staff

Physicians Push for State Regulation

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Schools of Practice

Allopathy Opposite Actions Toxic and Nasty

Homeopathy Same Action as the Disease Symptoms Tiny Doses Less Dangerous

Naturopaths, Chiropractors, Osteopaths, and Several Other Schools

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Legal Consequences

No Testimony Across Schools of Practice Different from Medical Specialties

Surgery, Internal Medicine, Pediatrics All Same School of Practice - Allopathy All Same License Cross-Specialty Testimony Allowed

Still important with the rise of alternative/quack medicine Locality rule - no national standards

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Pre-Modern Hospitals

L'Hotel-Dieu - Paris Myth dates it from medieval times Nursing, no medical care The Church did not believe in medicine

US Hospitals Run by Nuns Just lodging and nursing

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Legal Consequences

Charitable Immunity Really want to sue a nun?

Borrowed Servant Doctrine Seen as protective, but really allowed suit

against the only solvent, reachable party Capitan of the Ship variant

No legal relationship with the physicians

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Beginnings of the Modern Era

1850 - Report of the Sanitary Commission Of Massachusetts

1860-1880s - Louis Pasteur - Scientific Method, Simple Germ Theory, Vaccination For Rabies, Pasteurization

1867-1880 - Joseph Lister - Antisepsis (Listerine) 1880s - Koch - Modern Germ Theory Organic Chemistry – 1880s - drugs 1860s - 1900s - Sanitation Movement - Modern Public

Health

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Modern Medicine and Surgery

Surgery Starts to Work in the 1880s Surgery Can Be Precise - Anesthesia Patients Do Not Get Infected - Antisepsis

Professionalism Starts to Matter What is a Quack if Nothing Works? Why Train if Training Does Not Matter?

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Licensing and Education

Effective Medicine Drives Licensing Licensing Limits Competition Physicians Start to Make Money Money allows investment in capital stock

Training Equipment Staff

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Hospital-Based Medicine

Started With Surgery Medical Laboratories

Bacteriology Microanatomy

Radiology Services and Sanitation Attract Patients

Internal Medicine Obstetrics Patients

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Reformation of Hospitals

Paralleled Changes in the Medical Profession Began in the 1880s Shift From Religious to Secular

Began in the Midwest and West Not As Many Established Religious Hospitals

Today, Religious Orders Still Control A Majority of Hospitals

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Post WW II Technology

Ventilators (Polio) Electronic Monitors Intensive Care Hospitals Shift From Hotel Services to

Technology Oriented Nursing

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Post World War II Medicine

Conquering Microbial Diseases Vaccines Antibiotics

Shift to Chronic Diseases Better Drugs Better Studies Childhood Leukemia

Shift to Specialty Training

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Health Care Finance Post WW II

Kaiser started during the 1930s to care for workers on the Grande Coulee Dam

Blue Cross/Blue Shield was started by docs and hospitals to assure their payment

Health insurance became a common employment benefit during WW II to escape from wage controls

Indigents were only covered by charitable institutions

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Corporate Practice of Medicine

Physicians Working for Non-physicians Concerns About Professional Judgment Cases From 1920 Read Like the Headlines

Banned In Most States LA does not ban, but says there cannot be any

control of medical decisionmaking http://biotech.law.lsu.edu/cases/la/adlaw/bome/

EmploymentofPhysician.pdf

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Physician Practice Organization

Mostly Small Sole Proprietorships Partnerships Then Professional Corporations

Limited bargaining power Cannot join with other doc groups for bargaining

because of antitrust laws Pressure to form larger corporate units

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Impact of Corporate Practice Bans

Physicians Do Not Work for Non-Governmental Hospitals Contracts Governed by Medical Staff Bylaws Sham of “Buying” Practices

Physicians Contract With Most Institutions Charade of Captive Physician Groups

Managed Care Companies Contact With Group Group Enforces Managed Care Company’s Rules

Very important to sort out when you are filing a lawsuit

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Legal Consequences when Suing Hospitals

Physicians are Independent Contractors Hospitals Are Not Vicariously Liable for

Independent Contractor Physicians Hospitals Are Liable for Negligent Credentialing

and Negligent Retention Hospitals Can Be Liable if the Physician is an

Ostensible Agent

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Joint Commission on Accreditation of Hospitals

1950s Now Joint Commission on Accreditation of

Health Care Organizations American College of Surgeons and

American Hospital Association Split The Power In Hospitals

Medical Staff Controls Medical Staff Administrators Control Everything Else

Enforced By Accreditation

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Contemporary Hospital Organization

Classic Corporate Organizations CEO Board of Trustees Has Final Authority Often Part of A Conglomerate

Medical Staff Committees Tied To Corporation by Bylaws Headed by Medical Director

Constant Conflict of Interest/Antitrust Issues

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Medical Staff Bylaws

Contract Between Physicians and Hospital Not Like the Bylaws of a Business Selection Criteria Contractual Due Process For Termination Negotiated Between Medical Staff and Hospital

Board If the met federal standards, peer review

decisions are exempt from antitrust law attack

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Managed Care Revolution

Driven by special ERISA rules HMOs really started in the 1970s Caught fire in the 1980s Managed care high point in the late 1990s

Liability concerns are pushing companies to passive management of costs

Important legal issues on when you can sue the insurer for malpractice

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Managed Care Pressures on Hospitals

DRGs Capitation Negotiated Reimbursement Still Need Butts in Beds Must Get Them Out Quick and Cheap Death Can Be Very Cheap Right to Die – Yes Please Do!!

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Managed Care Pressures on Docs

When is Denying Care Cheaper? What is the Timeframe Issue? Insurers Now Control the Patients Employee Model Contractor Model De-selection

Financial Death No Due Process

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New Challenges

Aging Population Emerging Infectious Diseases

Antimicrobial Failure New Agents (HIV, Ebola)

How To Pay For Health Care How To Deliver Health Care Medical Business Organizations