Introduction to Health Care Law

Professor Edward P. RichardsLSU Law Center

http://biotech.law.lsu.edu/

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Key Issues

Scientific medicine is about 120 years old Technology based medicine is less than 60 years old Doctors are not scientists and many do not practice

scientific medicine. There is no stable model for medical businesses, leading

to constant change and unending legal problems. Health care finance shapes medical care and is a huge

mess

Critical Dates in Medicine

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1400s

Birth of Hospitals Places where nuns took care of the dying No medical care – against the Church’s teachings No sanitation – assured you would die

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Early 16th Century

Paracelsus Transition From Alchemy

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Mid 16th Century

Andreas Vesalius Accurate Anatomy

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Early 17th Century

William Harvey Blood Circulation – the body is dynamic, not static

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1800

Edward Jenner Smallpox and the notion of vaccination

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1846

William Morton - Ether Anesthesia

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1849

Semmelweis Childbed Fever and sanitation Controlled Studies

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1854

John Snow Proved Cholera Is Waterborne Basis of the public sanitation movement

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1860-1880s

Louis Pasteur Scientific Method Simple Germ Theory Vaccination For Rabies Pasteurization to kill bacteria in milk

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1867-1880

Joseph Lister Antisepsis – surgeons should wash their hands

and everything else, then use disinfectants Listerine

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1880s

Koch Modern Germ Theory

Organic Chemistry Birth of the modern drug business

The real starting point for scientific medicine

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1850s - 1900s

Sanitation Movement - Modern Public Health

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Schools of Practice - Pre-Science (1800s)

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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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 to create a monopoly

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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

Transition to Modern Medicine and Surgery

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The Business of Medicine

Mid to Late 1800s Physicians are Solo Practitioners Most Make Little Money Have Limited Respect

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Surgery Starts to Work in the 1880s

Surgery Can Be Precise - Anesthesia Patients Do Not Get Infected - Antisepsis

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Effect on Licensing and Education

Once there are objective differences (people live) between qualified and unqualified docs, people care You can make more money with better training You can make more money with better equipment and

facilities Effective Medicine Drives Licensing

Licensing Limits Competition Physicians Start to Make Money

The Tipping Point

About 1910, going to the doctor, and particularly the hospital, shifted from being more dangerous than avoiding them to increasing your chance of survival.

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Bars on Corporate Practice of Medicine - 1920s

Physicians Working for Non-physicians Concerns About Professional Judgment Cases From 1920 Read Like the Headlines Banned In Most States Real Concern Was Laymen Making Money off

Physicians

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Physician Practices

Shaped by Corporate Practice Laws Sole Proprietorships Partnerships Mostly Small

Some Large Groups First Organized As Partnerships Then As Professional Corporations

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Impact of Corporate Bans on Institutional Practice

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 Physicians Can Be As Ruthless As Anyone

Evolution of Hospital Administration

From Nuns to MBAs

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From Hotel to High Tech - The Evolution of Hospitals

Started With Surgery Medical Laboratories

Bacteriology Microanatomy

Radiology Services and Sanitation Attract Patients

Internal Medicine Obstetrics Patients

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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

Chronic Diseases Better Drugs Better Studies Childhood Leukemia

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Hospital Liability - Old Days

Charitable Immunity No professional services Physicians provided or supervised professional services

No Independent Liability for Nurses No Liability for Physician malpractice

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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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After Professionalization

Demise of Charitable Immunity Liability for Nursing Staff Negligent Selection and Retention Liability for Medical

Staff

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Hospital Staff Privileges

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 Part of 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

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Hospital Economics

Old Days More Patients Meant More Money More Docs to Admit Patients Insurance Was So Generous It Cross-subsidized

Indigent Care Now

Hospital beds are being closed to save money DRGS- Insurance and Government Pay is Very Limited

- No Cross-Subsidy Under-Insured or Over-Cared-For Patients Cost Money

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Specialty Hospitals

Complex care is safer when regionalized Specialty hospitals can provide better care at

lower prices Do not need to provide money losing services Do not take uninsured patients

Shift the most valuable patients from community hospitals

Dramatically increase unnecessary surgery

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Bottom-Line

Health care is an industry in transition Key Problems

Access Cost Distributive justice Quality