Health Care Torts Spring 2004

1
Health Care TortsSpring 2004

• Edward P. Richards
• Harvey A. Peltier Professor of Law
• Paul M. Hebert Law Center
• Louisiana State University
• Baton Rouge, LA 70803-1000
• richards_at_lsu.edu
• http//biotech.law.lsu.edu

2
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

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History of Medicine

• Why bother?

10
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/Emp
  loymentofPhysician.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 Companys 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