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

2. 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

3. 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

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

5. 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

6. 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

7. 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.

8. 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

9. 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

10. Medical Malpractice and Tort Reform

11. 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

12. 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

13. 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

14. 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

15. 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

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

17. 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?

18. 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?

19. 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

20. 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?

21. 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?

22. 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?