Basic Health Law for Public Administration Strategic Management of Health Care Organizations 1 Feb 2004 Edward P. Richards Professor of Law, LSU Law Center

Learning Objectives Introduce Administrative Law, which is not covered in the reading assignment Discuss the case studies at the end of the chapter to bring out issues in the readings Discuss general issues

Systems of Law Criminal Law Can imprison or execute Constitutional protections Private Law Torts Contracts Administrative Law Government regulatory law Most health law is administrative law

Agencies Carry out Political Choices Agencies carry out executive branch policy Control through the appointments process Independent agencies (SEC) Legislative control Budget Statutory Direction

Agency Functions Rulemaking Agencies can make rules to particularize statutes and for public guidance The public participates in rulemaking Adjudications Licensing, permits, inspections Prosecute through the Justice Department or AG

Judicial Deference to Agency Action Courts defer to agency decisionmaking in areas of agency expertise Fact finding Rulemaking Cannot be "arbitrary or capricious" Courts do not defer to agency interpretations of the law, but look to its persuasiveness

St. Mark's Baths ... defendants and the intervening patrons challenge the soundness of the scientific judgments upon which the Health Council regulation is based .... While these arguments and proposals may have varying degrees of merit, they overlook a fundamental principle of applicable law: "It is not for the courts to determine which scientific view is correct in ruling upon whether the police power has been properly exercised. The judicial function is exhausted with the discovery that the relation between means and end is not wholly vain and fanciful, an illusory pretense.

Why do Courts Defer to Agencies? Expertise Agencies have expert staff who manage complex problems Efficiency Agencies have more efficient enforcement powers because they are not limited by criminal law protections Speed and Flexibility Agencies can act without new legislation Agencies can tap new expertise as needed

What Does this Mean in Health Care? Congress and state legislatures have great freedom to pass laws giving agencies the power to regulate health care Regulatory actions, especially federal regulations, are very difficult to fight in court Failing to follow regulations can result in large fines and imprisonment

Medical Malpractice and Tort Reform

Cost Medical malpractice is not a significant % of the total health care budget The problem is that it is not evenly distributed over the budget Some docs get what they deserve - neurosurgeons and bad backs Some pay unfair rates because of others in the specialty The cost is also overly cyclical because of flaws in the insurance market

Fairness Current system provides no compensation for most injuries under $100,000 and none under $50,000 In some states plaintiffs with the right facts get a windfall In some states plaintiffs with terrible injuries do not get adequate compensation

Efficiency The majority of the dollars in the med mal system go to lawyers, not injured persons The system can be fast with a settlement, but can take years or decades if there are is a trial with contested legal issues These delays hurt claimants and exacerbate the insurance cycle

Open Courts Problem Tort reform has been limited by open courts provisions in some states Tort reform is mostly one-sided Administrative compensation is more balanced

Quality Current system does not link fault determinations made for compensation to discipline or reeducation to improve quality Random nature of claims undermines any signal that malpractice claims might send to improve quality Plaintiffs and defendants argue unworkable and sometimes even dangerous standards of practice to win their cases

What is the real solution? Why do people sue? What is different in Europe?

Case 1 - Reporting Child Abuse Administrator finds that child abuse reporting is down from previous years Finds that residents are not reporting Parents injured a child after a report that was ignored Must protect the best interests of the patients and their privacy What are the issues?

Case 2 - Effective Consent Ghost surgery Patient is upset to find that the cardiac catheterization was done by a resident without his permission Threatens to sue No consent form in the file What are the issues? Is it true that there are no damages?

Case 3 - The Missing Needle Protector Old and politically powerful surgeon is getting sloppy Administrator is working on limiting privileges Operating Room supervisor says they left a needle protector in a patient Missed it in the post surgical count, caught it later, after the patient was dismissed Surgeon does not the patient told, says it probably will not be a problem

Case 4 - Is this the Most Efficient Way? Patient is injured by a delayed diagnosis Nurse was overworked, doing a double shift, and screwed up Defense attorney says the case will likely settle for $25k Wants to go slow because it is a contingent fee case to make the plaintiff more willing to settle Is this the right thing to do?

Case 5 - Paid off Legislator Not really an administration issue, unless you are paying him off LA rule is no more than $100 Is that a good policy? What should be the relationship between interest groups and legislators?

Case 6 - Staying out of Jail Federal law prohibits hospitals taking federal payments from giving physicians any financial incentives to refer patients to the hospital Administrators have gone to jail over this Many hospitals do this anyway, often as part of deals that have been in place for years What do you do when you find such a deal that involves critical staff? What if you will go broke without the deal?