Introduction to Health Care Law

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Introduction to Health Care Law

• Professor Edward P. RichardsLSU Law
  Centerhttp//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

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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 churchs 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
• First important preventive treatment

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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
• Sewers
• Clean drinking water
• Land use laws to protect against industrial
  dangers in residential neighborhoods

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Schools of Medical 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
• Courts and legislatures see no reason to favor
  one group
• Physicians unsuccessfully 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
• In many states, there are no legal protections if
  you go to an alternative medical practitioner

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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
• First time there is an objective benefit to going
  to a doctor and hospital

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Licensing and Education

• Once there are objective differences (people
  live) between qualified and unqualified docs,
  people care about licensing and credentialing
• Licensing starts to make sense when there is a
  reason to differentiate between practitioners
• Limits market entry and competition
• Licensing and credentialing has market value
• You can make more money with better training
• You can make more money with better equipment and
  facilities

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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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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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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

• 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
• Physicians can be as ruthless as anyone

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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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The Evolution of Hospitals

• From Nuns to MBAs

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Old Days

• Charitable immunity
• 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 usually 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 (contract)
• 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
• Terms of the contract
• Selection criteria
• Contractual due process for termination
• Limits on privileges
• 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 were closed to save money
• Insurance and government pay is very limited - no
  cross-subsidy
• Under-insured or over-cared-for patients cost
  money

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Managed Care Pressures on Docs

• When is denying care cheaper?
• What is the timeframe issue?
• Insurers increasingly control the patients
• Employee model
• Contractor model
• De-selection
• Financial death
• No due process

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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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Drugs and Medical Devices

• Covered later in the course