Health Care Torts
Spring 2004
Edward P. Richards
Harvey A. Peltier Professor of Law
Paul M. Hebert Law Center
Louisiana State University
Baton Rouge, LA 70803-1000
richards@lsu.edu
http://biotech.law.lsu.edu
Course Organization
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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
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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
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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?
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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
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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
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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?
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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?
Cavemen to the Civil War
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Started With Surgery
Medical Laboratories
 Bacteriology
 Microanatomy
Radiology
Services and Sanitation Attract Patients
 Internal Medicine
 Obstetrics Patients
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Reformation of Hospitals
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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
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Ventilators (Polio)
Electronic Monitors
Intensive Care
Hospitals Shift From Hotel Services to Technology
Oriented Nursing
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Post World War II Medicine
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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