Medical Liability

 Overview Cases
 In re Baby K
o Facts: Baby K was born without a brain stem and was going to die soon. The hospital sought a
declaratory judgment in the form of not requiring them to provide respiratory assistance under
the EMTALA. Baby was in a nursing home most of the time, and every time that the baby
stopped breathing it was taken to the hospital. The hospital’s argument was that providing
treatment was “ethically inappropriate.”
o EMTALA: Imposes two duties on hospitals
 First, those hospitals with an emergency medical department must provide an appropriate
medical screening to determine whether an emergency medical condition exists for any
individual who comes to the emergency medical department requesting treatment.
 Second, if the person presents with an emergency medical condition, the hospital must
provide either:
 Within the staff and facilities available at the hospital, for such further medical
examination and such treatment as may be required to stabilize the medical
condition, or
 For the transfer of the individual to another medical facility in accordance with
subsection (c) of this section.
o Notes
 Two ways to look at the healthcare system: descriptive v. normative
 Descriptive concerns how doctors DO act.
 Normative refers to how doctors SHOULD act.
 Medicare
 Private insurance was initially dominated by providers.
 Once Medicare came along, the government attempted to replicate private
insurance.
 “Prospective payment” for services rendered.
 Congress passed an “unfunded mandate” called EMTALA. Forced the hospitals
to provide care without any additional money.
 EMTALA
 The screening exam must be the same for everybody.
 If there is no “emergency medical condition”, you don’t have to provide
treatment.
 Wickline v. State
o Facts: Woman lost her leg when Medi-Cal refused to allow her to stay in the hospital an
additional 8 days. Medi-Cal only wanted her to stay 4 days.
o Rule: Third party payors of health care services can be held legally accountable when medically
inappropriate decisions result from defects in the design or implementation of cost containment
mechanisms as, for example, when appeals made on a patient’s behalf for medical or hospital
care are arbitrarily ignored or unreasonably disregarded or overridden.
o Analysis: A doctor that doesn’t protest cannot blame the third party payor if problems arise with
the patient.
o Notes
 Although “managed care” used to be popular, the idea became unpopular and healthcare
costs went through the roof.
 Managed Care
 Selective contracting: an HMO or PPO would selectively contract with a
particular specialty group in a particular area. Patients were sent to specialty
 group for a “discount” off the usual fees. This method was very successful in
reducing costs, but people didn’t like not being able to go to “their doctor.”
o HMO: Health Maintenance Organization.
 Staff Model; Group Model; IPA; Network Model
o PPO
THE NATURE OF MEDICAL PRACTICE
 HEALTH CARE MYTHS?
 Doctor should be able to know what conditions the patient has and prescribe the right treatment.
o No “right” way to treat a person. No cookbook for medicine or law. Can’t say “you’ll live”
or “you’ll win.” If you dumb something down it will probably be misleading.
o Older generations don’t ask as many questions of their doctor, but younger generations do.
Same with informed consent- it is relatively new concept. Now there is more
information out there about doctors so patients can become more informed.
 There is a best treatment for each procedure.
o There is a strong movement toward the use of clinical guidelines.
o Dartmouth Atlas: Based on where you live, the treatment that you receive for each problem is
vastly different.
 A lot of what doctors do is influenced by non-scientific factors.
 Medicine is an exact science. Standard treatments are supported by scientific proof of efficiency.
 More is better.
o Get more money and better safe than sorry.
o Staff model HMO’s: hires own in-house doctors, employees, and facilities. Incentive is to
keep people healthy, just being paid a monthly fee so you don’t want to do unnecessary
treatments. Predominantly though we have “fee for service” insurance which makes
doctors want to do more procedures (Blue Cross/Blue Sheild). Diagnosis group:
hospitals are paid a set amount for certain diagnoses by the HMO and this changed the
incentive to want to get the patients out as soon as possible. These financing schemes
can have a significant impact on how medicine is practiced.
o HealthSouth: changes in medicare presented Scrushy with an opportunity that carved out of
medicare was rehabilitation and that gave him the chance to start outpatient rehab
centers and took that business away from the hospitals.
 Whatever care is needed, it is needed right away.
o How significant are behaviors and do people bring health problems upon themselves and how
do we deal with that?
 Much of medical care is a matter of life and death.
o Actually there is more and more that just relates to quality of life.
HEALTH CARE: PAST AND PRESENT
 Resignation and fatalism toward natural occurrences characterize pre-industrial societies, just as a sense
of self-direction and control characterize modern society. Hospitals had their origin as being
religious and charitable institutions for the hopelessly sick and poor- they were places to comfort
the indigent dying. However, in modern medicine we no more can explain death and suffering
as a consequence of fate. It is our medicine, or lack of it, that denies death and suffering.
 3 developments altered the course of medicine:
o Ether
o Discovery of antisepsis and subsequent improvement of infection prevention
o X-ray
 Dramatic advances in health are also related to improved nutrition, life style, and education.
 Role of the Doctor
 o Until WWII the general practitioner family doctor was still in the majority. However now,
doctors and patients both believe that the absence of continuity, personal concern, and
individual attention are detrimental to our current system.
o It is widely believed that illness, per se, tends to create at attitude of dependence, of
“regression” to helplessness, and perhaps to childlike behavior.
o An unusually high number of American doctors are trained to specialize. This is probably
because they get more money. There is also a decline in the number of general acute
care hospitals and an increase in specialized facilities.
o People don’t sue doctors that they like and that have a good bedside manner.
 Roe v. Wade: thinks Blackmun was more concerned with the rights of the doctor and
that was probably because he used to counsel doctors at the Mayo Clinic.
 Hospital and doctor relationships
o American hospitals are dominated by private non-profit hospitals- many owned by religious
organizations. All hospitals want the most advanced equipment, but the academic
medical centers must have it for research and training. These centers rely heavily on
residents and interns for delivery of care, and most important, are likely to have a much
lower-class population of patients. If a major teaching hospital is in the inner city, then
either a large and endowed institution or a state government pays for some of the care
for the inner city poor.
o All hospitals in the inner city try to convince Medicare that they deserve an extra subsidy for
treating a poorer, less-insured, and often sicker population. The federal govt calls these
disproportionate share payments.
o The rise of managed care and of more aggressive bargaining by insurers has begun to change
this basic pattern. Insurers have become more likely to refuse to approve a given service
or to insist on a lower price. Hospitals still need to attract physicians by offering the best
equipment, however, so they are caught between the demands of doctors and payers.
 The Organization of Medical Care
o About 40 % of private physician income is now earned in the hospital. Doctor’s have “staff
privileges” at hospitals. But the doctor’s relationship to the hospital is peculiarly
ambiguous. As a rule he assumes neither administrative nor financial responsibility.
Yet, in practice, his is the most powerful voice in the organization. Administrators
usually can’t control the professional practice aspect of medicine.
 There are 2 lines of authority, with administrators being in control of economics of
running the organization. In the past the hospital has not be held liable for the
negligence of the physicians unless you could show a large degree of control.
o It is sometimes proposed that hiring the medical staff on a salary or contract basis would
increase the doctor’s sense of responsibility for hospital administration and help clarify
the lines of accountability. However, most of the profession is opposed to such a
practice, alleging “hospital domination” or the “corporate practice of medicine.”
 The “art” of healing
o The definition of disease and illness varies from society to society and with the times- it is
extremely arbitrary and parochial. The prevailing mood in the US is that disease is seen
as an external invasive threat and there is a predilection for diagnosing infections since
they can often be dealt with actively and quickly.
o The redefinition of “health or wellness” as “a state of complete physical, mental, and social
well being, and not merely the absence of disease or infirmity” has been antithetical to
true health in that it limits the ability of people to cope with pain, sickness, and death as
integral parts of life.
 In backlash to the procedures administered to concentration camp prisoners at the
hand of the Nazi’s and even US studies like the Tuskegee syphilis study the
notion of informed consent gained importance and priority.
 o Doctors do not just administer placebos, they are placebos.
o Emphasis on trust in the patient-physician relationship and its importance in healing.
o There are locational variations in treatment frequency. How does this interact with the
national standard of care in malpractice cases? Should we have stuck with the locality
rule because that was the only coherent way to determine the amorphous concept of
“custom.” On the other hand, some say we should instead go to a reasonable prudent
physician standard with the Leaned Hand calculus. AL has a national standard even
though the statute says “same general neighborhood.” Some states even have a
“respectable minority” rule.
 The national standard has some drawbacks in that if you get too far ahead of the curve
with new technology then you will be outside the standard of care even though it
is an improvement. But this rarely happens because medicine develops
incrementally and progress is slow.
 MedicalAssurance/ProAssurance now: a physician’s mutual to help doctors assess
risk. Offers malpractice insurance. Stan helped them develop their tough
litigation strategy.
o Litigi-phobia: doctors think they are 3 times more likely to get sued than they actually are.
Doctors are also very hierarchical.
 Technology
o The excess of technological measures has been characterized by an over reliance on
technologically depicted features of illness, inadequate understanding of the capabilities
and limits of machines and the information they generate, and relative inattention to
those aspects of medicine learned by inquiry into the patient’s experiences and views.
 Practice guidelines and practice pattern schemes are becoming more important, especially in the area of
managed care. They want to see who is outside of their encouraged practice guidelines or who is
doing too much thus unbalancing the status quo.
 Culture of candor: where people are willing to acknowledge and report mistakes and errors (used in
continuous quality improvement (or total quality management) type systems). This is against the
historical culture of medicine where you don’t own up to your mistakes, they want perfectionists.
o There was a recent study (4-5 years ago) which said that there are over 96,000 deaths from
medical error each year.
o One way to deal with quality improvement is to sanction doctors who make errors based on
low quality. Also use the culture of professionalism inherent in the medical field (but
this can backfire because the culture also says don’t say you made a mistake). Licensing
doesn’t really act as a quality control or deterrent either. Neither do malpractice suits
because only a small number of suits actually get brought. To practice in a hospital you
have to have staff privileges and this could be a quality control device, but problem with
unwillingness to criticize other doctors. There is a problem with the market being a
deterrent, because there is a market failure because there is a lack of information
because it is difficult for consumers to know enough about medicine to know if one
doctor is better than another.
 Lack of information: only way for public to get info is if managed care acts as a
gatekeeper and puts out a list of approved (thus we read good) physicians. Some
states offer a report card for doctors but this is rare and has inherent problems
with collection and analysis.
 Nelson says the real competition should take place not in selecting the physician, but
the role of the market in terms of selecting health care plans. There is more
potential for the market to improve quality in that area. But with most employees
you don’t have a choice about the health benefit plan your employer offers.
 The Nature of Medical Judgment
o Variations in Physician Practice: The Role of Uncertainty
  There is a huge difference between prices and the number of procedures that are
conducted in different places. Think about The New Yorker piece.
 Defining a disease
 There is a defining line between what is “normal” and “abnormal”
 Oftentimes, physicians can’t agree on simple treatment issues.
 In fact, physicians were asked to diagnose a disease, and then repeat the exact
procedure later. The physicians only agreed with themselves 89% of the time.
 Selecting a Procedure
 For any disease, there are dozens of treatment options.
 And even using the best treatment, there often isn’t an answer.
 Putting it all together
 How to manage a patient requires synthesizing all the information about a disease,
the patient, signs and symptoms, the effectiveness of dozens of tests and
treatments, outcomes and values.
o Class Notes
 55% of Medicare spending occurs on individuals during the last two years of their life in
hospitals.
 Five best medical centers:
 UCLA; Mass General; Cleveland Clinic; Mayo Clinic; Johns Hopkins
 More care doesn’t mean that you are getting better care.
 “Tracking the Care of Patients with Sever Chronic Illness” – www.dartmouthatlas.org
 “The Cost Conundrum” – Atul Gawande
 Oversight of the quality of medical care: regulation, management, or the market?
o What levers are available to improve the quality of professional judgment and of health care
production successes?
 The first such lever is the generation and dissemination of information
 The culture of professionalism has played an important role in stimulating quality
 Sanctions have a legitimate role, however marginal, in encouraging quality.
 Incentives have an obvious role to play in encouraging quality.
 Insurance and Regulation
o General Principles
 Today there is too little coverage at too high a cost.
o The Pre-1929: Erecting Medical Infrastructure and Eschewing National Health Insurance
 Insurance was mainly non-existent and hospitals were where people went to die.
 The nation only spent 3.5% of GDP on health care.
o 1929-1940: Enter Health Insurance
 The beginning of the Blue plans. (BCBS)
 Under these plans, patients were given “free choice of provider”; with relatively low out
of pocket cost at the time of service. Providers received retroactive fee for service
payment for all services they deemed medically necessary.
o 1940’-50’s: Workplace Groups: Great Leap Forward
 Unions began to seek group health care coverage from employers as a type of fringe
benefit.
 Brought health coverage to much of the middle class through a combination of private
action and the tax subsidy.
 55% had health care coverage.
o 1960-70: Enter big government, incrementally
 A great expansion of government coverage under JFK for the frail and aged.
 Medicare was enacted in 1964.
 Medicaid was created at the state-level for the deserving poor.
  (SEE NOTES BELOW FOR BETTER EXPLANATION)
C. THE HEALTH CARE FINANCING AND DELIVERY SYSTEM
 Insurance and Regulation
o Bovbjerg, U.S. Health Care Coverage & Costs: Historical Development & Choices for the
Future (1993) CB 45
o U.S. healthcare system is a “paradox of excess and deprivation.” American health policy faces
dual problems of too little coverage at too high a cost.
o THESIS: the American incremental approach is insufficient to widen coverage while
maintaining quality and lowering costs (a trilemma)
o 1920s: patterns for accreditation and licensure were set. Most physicians were solo
practitioners, and most practiced fee-for-service medicine. Most hospitals were non-profit.
There was virtually NO health insurance coverage because illness/medical services were not
considered insurable risks.
o Insurance may have seemed less important because expenses for available care were not large
relative to typical incomes. Example: The average day in a hospital cost only a few dollars and
physicians did not charge-or earn-large amounts.
o In short, in the era before health insurance, when patients themselves paid for almost all heath
care, the medical economy behaved much like the rest of the economy and was small relative to
the whole.
 Modern health insurance is more like prepaid services than it is like “real” insurance
(with the exception of coverage for catastrophic conditions)). “True” health insurance
probably would be more like life insurance, and it probably wouldn’t cover routine
medical exams/procedures.
 1930s—”Rise of the ‘Blues’”: Blue Cross for hospitals and Blue Shield for physicians. Basically,
medical providers were trying to stay in business. The Blues set the basic pattern for coverage: fee-for-
service reimbursement. Doctors were paid on prevailing fee-for-service rates, and hospitals received
their costs for services performed.
o This worked because there wasn’t much coverage, and health coverage really wasn’t very
expensive.
o The important thing to remember is that the Blues were provider-dominated (and they
strengthened doctors’ positions).
o They were not for profit and community-rated (everyone in the community paid the same rate
(no individual risk determination)).
o There was basically no oversight of doctors or their decisions.
o Eventually this system became too expensive.
 1940s: b/c of wage/price controls and WWII it was very difficult to attract new workers, so employers
started offering health insurance as a fringe benefit (this is the link b/w employment and health
insurance and it is an oddity as compared to the rest of the world).
o Other things happened that strengthened this link:
o IRS decided to make health insurance deductible to the employer and non-taxable to employees.
o NLRB said unions could collectively bargain over health ins. benefits.
o These developments meant that more and more money was spent on health care—and there was
less incentive for individuals to economize.
 Two problems insurers always face:
o Moral hazard: b/c someone else is paying for it, an insured is not as likely to be careful about
his health.
o Adverse selection: those who are unhealthy are more likely to seek out health insurance.
Nelson’s example: Homeowner in a flood zone is most likely to seek flood insurance and
obviously more likely to need it than someone living in the mountains.
 1950s: federal gov’t had a relatively limited role in medical regulation. VA hospitals and Indian Health
Service facilities. But the feds. began to subsidize the medical field:
o Hill-Burton Act: provided grants to expand and modernize hospital capacity
o Federal grants for education and research
o By 1960, two-thirds of Americans had private coverage, but over 55% of health care spending
came from patients’ own pocket
 1960s—Enter Big Gov’t, Incrementally:
o Medicare (1965) was enacted to provide conventional third-party coverage for the aged (those
within the Social Security System and past retirement age) and the disabled (those unable to
work). The program was patterned after “The Blues.”
o Medicaid was created to cover what one might call the “deserving poor” (basically those who
were unable to work by virtue of age, blindness, or disability).
o Medicare Part A (parallel to Blue Cross)-provided hospital coverage
o Medicare Part B (parallel to Blue Shield)-provided physician and other coverage
 Cost-based reimbursement for hospitals: hospitals received costs PLUS a margin for
profit (even if the hospital was non-profit). This encouraged hospitals to SPEND,
SPEND, SPEND.
 Fee-for-service for doctors: so, the more care doctors provided, the more money they
would make.
 After only a few years, the costs of Medicare skyrocketed. “Medical need” proved to be
an insufficient limit. Medical need was once though to set a natural limit on services; in
fact, need is an expansive rather than limiting concept. Additional care can almost always
offer some level of legitimate benefit to some patients…
 Fiscal intermediaries (essentially BCBS) basically ran the system (b/c the gov’t hired
BCBS to run it).
 Throughout the 1960s, private health insurance coverage expanded as well. So, NO ONE
had any incentive to economize.
 1970s: First efforts at cost-containment
o Nixon imposed wage and price controls on everything—including medical care.
o Also, there was a movement toward focusing on health planning, with the idea of limiting
supply (a supply-side strategy) (the adage is “a bed built, is a bed filled, is a bed billed,” i.e., if
you continue to allow hospitals to expand, then gov’t is going to have to keep paying MORE and
MORE).
o Certificate of need programs: this required hospitals to obtain a certificate of need before they
could expand services. If they didn’t get a certificate of need, then they wouldn’t qualify for
governmental reimbursement programs. Existing providers like this idea, b/c it reduces
competition by creating market barriers.
o Even though reimbursement programs have changed and health planning strategies aren’t
needed, things like certificate of need programs remain.
o Nixon was also interested in HMOs, and there was federal legislation encouraged HMOs (cost-
containment).
 1980s: TEFRA (1982) adopted prospective payment and created DRGs (diagnosis related groups)
(rates set in advance for a particular diagnosis). The purpose was to force efficiency and cost-
containment. Now, hospitals had to get patients in to get paid, but they wanted to get them out quickly
(“sicker and quicker”). Under this scheme, each institution is at financial risk for each case; a hospital
earns no more for spending more and is able to keep the balance if it spends less.
o Increasing pressure on hospitals to get doctors to send patients to their hospitals
o “Upcode”: for example, try to get a patient into a higher payment code
o “Unbundle”: instead of performing several services at once, do them separately to try to increase
compensation.
 o On the private side: the rise of managed care.
o HMO—health maintenance organization (more on this at the end of the outline)
 Staff model: integrates finance and delivery; the HMO actually owns facilities and
provides the medical services to its insured (for a set premium). This created incentives
to do less but keep individuals healthy.
 Network model
 Group model
 In the Network and Group models, the HMOs don’t actually own the facilities or
employ the providers. Instead, they contract with networks or groups.
o PPO: these are all different. They offer more flexibility, but they cost more. They use a variety
of methods to contain costs.
 Selective contracts: selectively contract with individual physicians for discounted
services. If insured goes to an on-panel provider, it costs less out-of-pocket.
 Other cost-containment devices:
 Discounted fee for service—creates incentive to do more
 Capitation (maximum per person)—this creates an incentive to do less and
certainly avoid unnecessary treatment
 Withhold accounts—e.g., account set up to pay for specialist referrals—if there is
any money leftover at end of year, it goes to the providers. This creates incentive
to NOT refer patients unnecessarily.
 Hospital discounts
 Utilization review—more likely to use retrospective review rather than
prospective review
 Gatekeepers—to get to a specialist, an individual has to a primary care physician
to get a referral.
 B/c of opposition (and legislation), many insurers have moved away from many of the cost-containment
techniques. Instead, they are offering “choice” to consumers of different plans.
o POS—point of service: insured can go off-panel, but it will cost a little more.
o Decline in private coverage because of: (1) Rising Costs; (2) Declining insurance pooling.
 One can argue that the U.S. health system is NOT really a system at all. Instead, it is a mélange of
incremental responses to perceived problems. In contrast to countries like Canada or Britain, there has
been no system-wide social reform of the healthcare system in the U.S.
 The U.S.’s incremental approach has failed to control costs.

2. The Crisis in Coverage and Spending

Bandow, Dangerous Medicine: A Critical Analysis of Clinton’s Health Plan (1993) CB 57
 Says that there is no health care crisis and that the arguments that America has a health care crisis
reflect a “sky-is-falling” mentality. Lower quality American health is due to non-medical factors, and
the % of GDP spent on health care is NOT necessarily indicative of a crisis.
 The problem of access to healthcare is stated simply: An estimated 40 million Americans are not
covered by any private or governmental insurance plan.
 The perceived problem with quality is more subtle. Americans have longer-and healthier-life spans than
ever before, but we do not feel health or well cared for.
 In its technical brilliance, American health care is unsurpassed. But the bad side of American health
care is very bad.
 Asserts that while there may be serious problems with American healthcare, there is no crisis.
3. Changes in Financing and Delivery Systems
Medicare and the American Health Care System: 1996 Report to Congress
Prospective Payment Assessment Commission
  National health care expenditures ...increased at more than twice the economywide rate of inflation since
1975.
 There is no mandate that employers provide insurance; this is done to attract and keep employees.
 The recent changes in health care expenditures trends are due partly to pressure exerted by private
payers.
 The most common managed care models are health maintenance organizations (HMOs), preferred
provider organizations (PPOs), and point of service (POS) plans.
 HMO-in a traditional HMO plan, subscribers must receive their care from a limited group of providers.
 PPO & POS subscribers may not be subject to the same level of plan oversight as in HMOS; Generally
they may got to any provider, but their out-of-pocket payments are lower if they choose participating
providers that give the insurer discounted rates.
By the Numbers
 1995: 69% of employees in firms with 200 or more workers were in either an HMO (29%) or a PPO and
POS (40%).
Cost Control
Managed care plans use a variety of techniques to control their costs:
 They actively seek providers with lower-cost practice patterns and offer them a defined patient base in
exchange for favorable payment rates.
 Managed care plans often use discounted fee-for-service rates to control their costs.
 Also use per case, per day,, or per person payments to shift some of the financial risk of treating patients
to providers.
 Per person, or capitation, payment system is the most comprehensive way to shift financial risk to
providers.
o Under capitation, providers receive a prepaid sum to furnish a defined set of services to a plan’s
enrollees. This creates a monetary incentive for physicians to limit patients’ use of services (or
encourage preventive services) because the physician receives the same payment regardless of
the volume or intensity of the care, or even if no care is provided at all. Capitation is the system
of payment for each customer served, rather than by service performed. Nelson says so much per
head per month and shifts the risk back to the provider. The less treatment you have to provide,
the more money you make.
 Many managed care plans also require primary care physicians to act as “gatekeepers” to specialty care
services. Under these arrangements, the primary care physician must preauthorize any services a patient
receives.
 Federal Healthcare Regulation
o The Iron Triangle of Health Care
 Quality

Access Cost
o Markets v. Regulation
 Market-based approach
 Health care as commodity
 Enforce antitrust laws to foster competition on price and quality
 Focus on competition among health plans-FEHBP as model
 Change current tax treatment to discourage over-insurance
 Change nature of health insurance-high deductible plans
 Regulation-based approach
  Treat health care as a public good
 Use of bureaucratic mechanism rather than price –mechanism for allocation
 Use planning to prevent duplication of serves and limit supply
 Price controls or rate regulation
 Could use comparative or cost effectiveness studies to ration.
o Hill-Burton Act
 This act responded to the first of President Truman’s proposals and was designed to
provide federal grants and guaranteed loans to improve the physical plant of the nation’s
hospital system. Money was designated to the states to achieve 4.5 beds per 1,000 people.
The states allocated the available money to their various municipalities, but the law
provided for a rotation mechanism, so that an area that received funding moved to the
bottom of the list for further funding.
o Medicare
 Part A covers hospital services
 Part B covers physician services
 Part C encourages enrollment in managed care plans
 Part D is the prescription drug benefit plan.
o EMTALA
 All hospitals with emergency rooms that accept Medicare are covered
 Applies to any person coming to emergency room seeking care-not just Medicare patients
 Passed in reaction to hospitals dumping patients, rather than treating them.
o Sanctions for EMTALA violations
 Civil monetary penalties
 Exclusion from Medicare
 Doctors can be fined.
 The IRS may remove the tax-exempt status of hospitals.
 Consumer-Driven Health Plans (CDHP)
o This is the type of plan that Republicans have often pushed.
o John McCain favored changing the tax exclusion to a tax credit
o General Principles
 Medicare Part-D also included authorizations for employers to offer health savings
accounts.
 The account (or reimbursement account) being coupled with a high-deductible health
care plan.
 This account can be carried over from year-to-year.
 Adverse Selection
 Sicker people tend to buy more health insurance.
o Taxes
 Tax Credit for purchasing health insurance is a possible solution.
 The current health care bill taxes “Cadillac” health care plans.
o Insurance Reforms
 No pre-existing condition exclusion.
 Guaranteed issuance
 Guaranteed renewal
 Community rating
 Everybody pays the same rate (basically). They can adjust for age.
o Employer Mandate
 Force employers to purchase insurance. It may be cheaper to pay the tax instead of
insuring.
o Insurance Exchange
  You would be buying policies through the insurance exchange. There would be 4 levels
of plans. Each level defines the actuarial risk and the benefit package.
 The Treatment Relationship: Formation, Termination, and Regulation
o General Principles
 The provider-patient relationship is governed by contract, tort, and fiduciary law.
 The treatment relationship starts and ends in contract law.
 The content of the treatment is governed by tort and fiduciary law.
 The doctor normally has the right refuse to accept a patient. This is true, to a lesser
extent, for hospitals.
 Hospitals may not run patients away in emergencies until they have at least stabilized the
patient’s condition.
 Neither doctors nor hospitals may refuse patients for certain discriminatory reasons, such
as the patient’s race, sex, or HIV-status.
 The Duty to Treat: The Duty to Accept Patients
 Hurley v. Eddingfield 1901
o Facts: The doctor was the family physician for the decedent. When the decedent became sick,
word was sent for the doctor and he was given his fee. However, the doctor, for whatever reason,
refused to come and treat the patient; no other doctors were available. As a result of the doctor
not coming, the decedent died. The family sued the doctor for $10K and lost. Was there a
wrongful act by the doctor for refusing to enter into a contract to treat decedent?
o Rule: A medical license does not require, and the license does not engage, that the doctor will
practice at all or on other terms than he may choose to accept.
o Analysis: Counsel attempted to compare doctors to common carriers and innkeepers. There is no
affirmative duty on a doctor to come to the aid of a patient.
 Wilmington General Hospital v. Manlove 1961
o Facts: The Manlove child was sick with diarrhea and was given medicine by Hershon. The child
didn’t sleep and later developed a fever. Hershon continued to prescribe medication. On a day in
which Hershon wasn’t working, Manlove took the 4-month old to the hospital. The nurse refused
to treat the child and suggested that Manlove wait until Hershon returned to work the next
morning. The child died that afternoon of bronchial pneumonia.
o Rule: A private hospital may be liable for refusal of service to a patient in the case of
unmistakable emergency, if the patient has relied upon a well-established custom of the hospital
to render aid in such a case.
o Analysis: The lower court found that the private hospital was quasi-public based on public
money and tax exemptions. While a private hospital normally has right to refuse patients, a
different circumstance is presented in emergency situations. There was no evidence that an
emergency had presented to the nurse. Affirmed and Remanded.
 Sophie’s Choices: Medical and Legal Responses to Suffering
o General Ideas
 Suffering has become a sufficient condition for a “right”. There are times when the
collective conscience of a community determines that someone shouldn’t be forced to
suffer. We feel a need to help others who may be suffering.
 Wideman v. Shallowford Community Hospital
o Facts: Wideman was 4 months pregnant and began experiencing abdominal pain. She contacted
Dr. Ramsey, who instructed her to come to Piedmont hospital immediately. The EMS
(ambulance) she contacted instead took her to the Shallowford hospital. Upon arriving at the
Shallowford hospital, the attending doctor spent considerable time speaking with Dr. Ramsey.
The mother eventually gave birth to the child, who died hours later. Is there a constitutional right
to medical care?
 o Rule: A constitutional duty can arise only when a state or municipality, by exercising a
significant degree of custody or control over an individual, places that person in a worse situation
than he would have been had the government not acted at all.
o Rule: As a general matter, the state is under no constitutional duty to provide substantive
medical services for those within its border.
o Analysis: Roe doesn’t stand for the constitutional right to an abortion, merely the protection
from an unduly burdensome interference. The state never exercised such control over Wideman
in this case.
o Notes
 The “No Duty” Rule: physicians are not obligated to provide care to a particular patient
unless they have agreed to do so.
 A doctor who is “on call” for a hospital emergency room voluntarily undertakes the
hospital’s greater duty of care.
 Quasi-Public Status: certain occupations and businesses are considered to be “common
callings”, meaning that they cannot turn away customers without a good reason.
 Electric companies, phone, trains, etc.
 This doctrine has been used to give doctors access to the medical staff at
hospitals.
 However, this doctrine hasn’t been used to force doctors to treat patients.
 Hill-Burton Act: requires hospitals who have received construction grants under the Act
to provide 3% of their care to indigent patients for 20 years.
 However, there are very few hospitals that are still under this obligation.
 Non-Profit: part of their tax-free status includes an obligation to treat some patients for
free.
 Hospitals:
 (1) a common law duty to treat emergency patients regardless of payment, but
only in severe emergencies;
 (2) common law and regulatory duties to treat all patients who can pay; but
 (3) no enforceable duty to treat nonemergency or mild emergency patients who
cannot pay.
 EMTALA
o Obligations
 If a person comes to the hospital property seeking treatment, makes it into an ambulance,
then EMTALA obligations begin.
 Requires an appropriate medical screening to determine if there is an emergency.
 Can’t transfer or discharge unless the patient is stabilized.
 However, transfer can occur if the patient waives the right or another facility has
better equipment to treat.
o Sanctions
 Imposition of a fine against the doctor and hospital
 Private right of action against the hospital
 Exclusion from Medicare program
 If non-profit, possible revocation of non-profit status.
 Burditt v. U.S. Department of HHS
o Facts: Rivera arrived at the hospital on 12-5-86 in labor. She had no attending obstetrician, so
Burditt was assigned to her. Burditt, however, didn’t want to treat Rivera and wanted to transfer
Rivera 170 miles away. Burditt arrived 50 minutes after Rivera’s arrival to begin treatment.
Rivera had high blood pressure, and Burditt really wanted to transfer her to another facility. 40
miles into the trip, the baby was born, and, against Burditt’s wishes, Rivera returned to the
hospital. Burditt still refused to treat the mother or baby and the mother left in good health.
 o Rule: Hospitals that execute Medicare provider agreements must treat all human beings who
enter their emergency departments in accordance with EMTALA.
o Rule: EMTALA is constitutional; it unambiguously requires hospital to examine and stabilize,
treat, or appropriately transfer all who arrive requesting treatment.
o Analysis: Rivera’s blood pressure was through the roof. Better still, having the baby at the
hospital is far better than in an ambulance. A woman in labor is entitled to better treatment than
normally under EMTALA.
o EMTALA has two duties:
 First, those hospitals with an emergency medical department must provide an appropriate
medical screening to determine whether an emergency medical condition exists for any
individual who comes to the emergency medical department requesting treatment.
 Second, if the person presents with an emergency medical condition, the hospital must
provide either:
 Within the staff and facilities available at the hospital, for such further medical
examination and such treatment as may be required to stabilize the medical
condition, or
 For the transfer of the individual to another medical facility in accordance with
subsection (c) of this section.
o Notes:
 EMTALA was passed to prevent patient dumping.
 Creates a private right of action against the hospital, but not against the physician.
 A hospital isn’t forced to do “what it cannot do.” If the hospital doesn’t have the means to
fully stabilize the patient, they can be transferred as they are.
 EMTALA applies to a patient that is insured. The obligations exist.
 Bryan v. Rectors
 The doctors entered a DNR on a patient, coupled with a heart attack by the
patient. The hospital didn’t treat the heart attack and a suit ensued.
 EMTALA requires treatment for the “immediate aftermath”.
 Preventive Dumping
 Hospitals cannot easily get around EMTALA requirements by discharging before
an emergency or directing an ambulance to a different hospital.
 EMTALA is triggered if a patient presents anywhere on a hospitals property.
 The hospital must stabilize “regardless of how that person enters the institution or
where within the walls he may be when the hospital identifies the problem.”
 Appropriate Medical Screening
 Hospitals often may not give the patients the most rigorous medical screening.
This may bring rise to a medical malpractice claim. However, courts have
consistently state that EMTALA cannot be used to bring claims for medical
malpractice, and they have tried to distinguish between a denial of care and the
negligent provision of care by looking at whether the hospital screened the patient
in the same way in similarly screened other patients.
 Drew v. University of Tennessee
o Facts: Drew was an indignant man that presented to the hospital on 4-13-95 with hypertension,
nausea, and a small cut on the forehead. The resident saw him first, and Ely saw him on the 14th.
AreHart, a medical student, checked on Drew and Drew threatened to leave the hospital or wrap
a cord around AreHart’s neck. AreHart phoned Ely and told him he was going to stay with Drew
for the protection of the floor. However, Drew had already disappeared and was found dead in a
lake one week later. The lower court dismissed all the claims.
o Rule: In resolving substantive due process claims entails a determination of whether the state
actor’s conduct was such as to “shock the conscience.” To pass this test, the conduct must be so
egregious as to violate society’s ideas of decency and fair play.
 o Rule: EMTALA does not abrogate state sovereign immunity.
o Analysis: Nothing that the doctor did could be described as “shocking the conscience.” Also,
there is no equal protection claim because the doctor and hospital didn’t discriminate. The UT
hospital was immune as a state entity. Doctors are immune from lawsuits under EMTALA as
well. Even though the hospital attempted to classify Ely as an independent contractor, the facts
show that Ely was working as an employee of the hospital.
 Morgan v. North Miss. Medical Center
o Facts: Morgan was injured on 8-22-03 when he fell 12 feet from a tree during a hunting trip. He
was taken to the NMMC and stayed 9 days before being transferred home on the 10th day. 12
hours after arriving home, he died from complications. The wife sued under an EMTALA failure
to stabilize. Haigh didn’t diagnose a thoracic compression fracture of the vertebrae, but another
doctor disagreed. Morgan has a history of back pain and refused an MRI to determine if the
compression fracture was serious. Haigh was never involved in talks concerning ability to pay.
o Rule: “If a hospital has screened an individual ... and found the individual to have an emergency
medical condition, and admits that individual as an inpatient in good faith in order to stabilize the
emergency medical condition, the hospital has satisfied its special responsibilities” under
EMTALA
o Rule: To impose EMTALA liability, “a hospital must actually perceive the seriousness of the
medical condition and nevertheless fail to act to stabilize it.” EMTALA liability can’t occur for
something not recognized by the hospital (vertebrae).
o Analysis: The AL tort of outrage has only been allowed in three circumstances: “cases having to
do with wrongful conduct in the context of family burials; cases where insurance agents
employed heavy-handed, barbaric means to coerce a settlement; and cases involving egregious
sexual harassment.” The doctors kept Morgan there for 9 days. They did identify the fracture, but
Morgan was resisting treatment. Dismissed.
 Wrongful Reasons to Reject Patients
o The federal civil rights act make it unlawful for physicians and hospitals that receive federal
money to discriminate on the basis of a patient’s race, sex, religion, disability or other
enumerated characteristics.
o Rehabilitation Act of 1973: applied to federal programs but not to the private sector
 Section 504: “No otherwise qualified handicapped individual in the United States, as
defined in section 706(7) of this title, shall, solely by reason of his handicap, be excluded
from the participation in, be denied the benefits of, or be subjected to discrimination
under any program or activity receiving federal financial assistance.”
o Americans with Disabilities Act: applies to the private sector as well. It protects persons with
disabilities from discrimination when the person is otherwise qualified. May require reasonable
accommodation to become qualified.
 United States v. University Hospital
o Facts: A baby was born on 10-11-83 with multiple birth defects: spina bifida, microcephaly,
hydrocephalus, etc. The baby had a messed up head, spine, and almost certainly would be
retarded. A surgery was scheduled to correct the spinal defect, but the parents changed their
mind and decided to go with a more conservative approach. A friend of the family, who was also
an attorney, filed a motion seeking the court to compel the parents to conduct the procedure.
HHS got a complaint that the child was receiving good medical attention, and sought the medical
records from the hospital. The court found that the parents were making the decision and that
decision was reasonable.
o Rule: §504 prohibits discrimination against a handicapped individual only where the
individual’s handicap is unrelated to, and thus improper to consideration of, the services in
question.
 o § 504: No otherwise qualified handicapped individual in the US, shall be excluded from the
participation in or be subjected to discrimination under any program or activity receiving federal
funding assistance.
o Handicapped Individual: “any person who (i) has a physical or mental impairment which
substantially limits one or more of such person’s major life activities, (ii) has a record of such
impairment, or (iii) is regarded as having such impairment.
o Dissent: Analogizes disability discrimination to racial discrimination. The court cites Congress’s
express statement that the Rehabilitation Act was modeled after the Civil Rights Act of 1964 as
evidence of Congressional intent to treat disability discrimination as racial discrimination. The
plain language of 504 and its legislative history mean that the section applies to the provision of
medical services to handicapped infants.
o Bragdon v. Abbott
 Facts: A woman sue a dentist under the ADA when he refused to work on her (she had
HIV) unless done so in a hospital. The woman would have been responsible for the
additional cost of having the procedure done in a hospital.
 Rule: To refuse treatment to an HIV patient, the dentist would have to show that the
patient posed a direct threat to his health or safety; a direct threat is defined as a
significant risk to the health or safety of others that cannot be eliminated by a
modification of policies, procedures or by the provision of auxiliary aids or services.
 Analysis: HIV is a physical impairment that substantially limits one or more major life
activities. There are many ways to protect oneself from infection.
 Glanz v. Vernick
o Facts: Glanz’s decedent brought suit against Vernick after the doctor refused to perform surgery
on a patient that was infected with HIV. The patient complained of ear infections which were
first treated with ear drops. Later, Vernick discovered a perforation in the ear that needed
surgery. When Vernick learned of the HIV, he refused to treat. Vernick also argued that he
thought the patient had AIDS. Another doctor performed the surgery. After the patient died
(presumably from HIV), the plaintiff brought suit seeking compensatory damages for the pain,
anguish, and suffering.
o Rule: Doctors can take into account the fact that a patient is HIV positive when considering
whether to perform a surgery.
o Analysis: The patient was otherwise qualified: he didn’t have AIDS, having HIV alone isn’t a
disqualifying factor. Deferring to the doctors too often would give them too good of a chance to
develop a pretextual reason for refusing to treat. The plaintiff must first show why they are
qualified; the burden then shifts to the doctors to prove otherwise.
o Burden of proof issues: (1) P must make a prima facie showing that he was “otherwise
qualified” for surgery; (2) Then D must show that P’s handicap made him unqualified; (3) P then
has opportunity to rebut by proving either that D’s reason is a pretext OR that the reason
encompasses unjustified consideration of the handicap itself.
 Walker v. Pierce
o Facts: Pierce was a doctor that received Medicaid payments. He had a standing condition that he
would only deliver a third child if the woman would consent to sterilization afterwards. Walker
went to Pierce for her 4th child and he refused to do so. Walker looked for another doctor but that
doctor wasn’t taking patients at the time.
o Rule: The doctor-patient relationship is a voluntary one.
o Analysis: The woman made the choice to go to Doctor Walker. She knew his policy on
sterilization and went ahead and signed the papers.
o Notes
 What constitutes a disability?
  Disability can be shown not only by the presence of a disabling condition but also
by a history of a disabling condition or by showing that one is regarded by others
as having a disabling condition.
 In 1999, the SCOTUS raised the bar by holding that a person is not actually
disabled if medications or medical devices can alleviate the disability symptoms.
 The Structure of the Treatment Relationship (forming a physician-patient relationship)
 General Principles
o In most states, there must be a relationship in order to impose a duty.
o No patient relationship is established in an insurance physical examination.
o 3rd parties
 A physician prescribes a medication to a patient, and the patient isn’t warned about the
effects. The patient injures a 3rd party. Can the 3rd party bring suit against the Doc?
 The cases are split on the matter. It’s a failure of a duty to warn, or a failure to adequately
prescribe medicine.
 Adams v. VIA Christi Regional Medical Center
o Facts: Dr. O was the Adams family physician. He used to deliver babies, but publicly
announced he would stop doing so in 1990. The sent letters to patients and informed the hospital
of his decision to stop delivering babies. The last time Nichelle saw Dr. O was in 1988 and in
1992 Nichelle was complaining of stomach pains. In July 1991, Nichelle completed a Planned
Parenthood form in which she said she had no family physician. On July 22nd, Mother Adams
called Dr. O and complained about Nichelle having stomach pain. Dr. O didn’t come see
Nichelle, and there is some question about whether he told Mother Adams to take her to the ER.
At midnight, Nichelle was taken to the ER and Dr. O later arrived. She subsequently died later
that day. There is evidence that Nichelle may have lived if she had gone to the ER earlier that
day.
o Rule: A doctor’s undertaking to render medical advice may create or renew a physician-patient
relationship.
o Analysis: Dr. O gave Mother Adams advice. It is immaterial that he hadn’t seen Nichelle in 4
years. Dr. O gave Mother Adams “medical advice.” Crap case.
 Clanton v. Von Haam
o Facts: Clanton was at the hospital complaining of back pains. She was given pain medicine and
sent home. However, later, when the pain got worse, she called her old doctor who had seen her
for unrelated problems and told him about the symptoms. The doctor refused to make a house
call, and told her to come to the office in the morning. Clanton was admitted to the hospital and
is now a paraplegic. Did the doctor that treated her for something unrelated have a fiduciary duty
with Clanton?
o Rule: A doctor is not required to undertake treatment of every patient who asks for treatment.
o Rule: Just because a doctor knows of a patient’s condition doesn’t give rise to a physician-
patient relationship.
o Analysis: Clanton never thought that the doctor she phoned had undertaken treatment on her
behalf. Clanton understood that the doctor wasn’t going to treat her. There was never a
“consensual transaction” between the doctor and patient.
 Reynolds v. Decatur Memorial Hospital
o Facts: 2.5-year old Kevin was jumping on the coach when he fell two feet to the floor. He was
taken to the hospital at 1045pm and subsequently seen by Dr. Bond at 105am. Kevin had a fever
and an abnormal breathing problem. Bond didn’t initially consider a cervical spine problem, but
after talking with Fulbright (neurologist), decided to consider the issue. Fulbright often gives
opinions without seeing a patient; for this service he didn’t bill.
 o Rule: The physician-patient relationship is a consensual relationship in which the patient
knowingly seeks the physician’s assistance and the physician knowingly accepts the person as a
patient.
o Rule: A doctor who gives an informal opinion at the request of a treating physician does not owe
a duty of care to the patient whose case was discussed.
o Analysis: Fulbright never saw, examined, or came to a diagnosis for Kevin’s condition. He
didn’t bill the family for his services. This was a “curb-side” consultation.
o Oliver v. Brock (Ala. 1976) represents an extreme of a court refusing to find a P/P relationship.
In Oliver, the treating physician consulted a colleague in response to concerns expressed by the
patient’s mother about the appropriateness of care being provided her daughter. The treating
physician reassured the mother on the basis of the consultation and also mentioned the
consultation on his discharge summary. Even so, the court found no P/P relationship b/w patient
and the doctor who was consulted.
 Lyons v. Grether
o Facts: Lyons went into the doctor’s office with her 4-year old son and guide dog. The woman
was refused treatment unless the guide dog was removed. The woman refused to remove the dog,
for fear of its safety. The woman was evicted from the office and humiliated. She didn’t receive
treatment for her vaginal infection until 2 days later.
o Rule: The physician-patient relationship springs from a consensual transaction, a contract,
express or implied, general or special, and a patient is entitled to damages resulting from a
breach of a physician’s duty.
o Rule: A doctor’s appointment for a specific ailment may give rise to a fiduciary duty to provide
treatment.
o Analysis: An appointment with a doctor is, alone, insufficient to establish a relationship.
However, the fact that the appointment was for a specific ailment implies that the doctor had
agreed to provide treatment.
o Notes
 Consultations
 A curb-side consultation does not create a relationship between a patient and the
colleague.
o However, if the doctor does take responsibility for diagnostic treatment,
there may be a relationship.
 However, if a physician assumes some responsibility for diagnostic or treatment
decisions, then a relationship may be created.
 Diggs v. Arizona Cardiologists (Ariz. Ct. App. 2000): Treating physician ordered
EKG of patient. Physician called Cardiologist even though Cardiologist was not
on-call. Cardiologist read the EKG and said patient could go home. Patient died
of a heart attack. The ct. brushed over the P/P relationship. Even though
Cardiologist provided services gratuitously, he still had a duty not to make
Patient’s condition worse.
 Monzingo v. Pitt County Memorial Hosp. (N.C. 1992): Allowed suit against
physician who merely supervised the OB residents who made an error. He was at
home “on call” when the difficulty arose and he responded immediately when
asked to come to the hospital. By the time he arrived, the delivery had been
completed. P argued that supervising physicians have a duty to check in
periodically when they know that a difficult case is in the hospital. Thus, duty
was imposed by virtue of the physician’s supervising status even though he never
saw the patient until it was too late.
 Most states are willing to impose liability on supervising residents. It turns on
state law.
 Employment and Insurance Physicals
  In general, no patient-physician relationship is created when the physician
examines a patient at the request and for the benefit of a third party, and the
patient therefore has no cause of action if the physician fails to diagnose a disease
or disclose abnormal findings.
 There are a few exceptions:
o Imminent danger: Failure to take reasonable steps to notify the patient of
any findings that pose an imminent danger to his physical or emotional
well-being
o Affirmative advice on how to be treated: e.g., mistakenly telling –ee that
surgery isn’t necessary.
o Duty NOT to harm
 Duties to Third Parties
 Do doctors owe a duty to third parties that may be injured by the doctor’s
negligence? Ex. A failure to diagnose seizures leads to a third party dying in an
automobile accident.
o The general consensus is that there is a duty, but the extent of that duty is
questioned.

 Abernathy v. Valley Medical Center(NEVER DISCUSSED)
o Facts: Abernathy was deaf and complaining of abdominal pains. When he went to VMC, they
had to call an interpreter service to get someone to communicate with Abernathy. The following
day on January 3, 2005, another interpreter was called but it took a while for that person to
arrive. Abernathy was complaining and upset during the process. The hospital, while waiting on
the interpreter, tried other means of communication. Abernathy checked himself out on the 3rd,
and went to another hospital where the surgery was performed. In a MSJ, Abernathy claims that
VMC violated the ADA.
o Rule: To make an ADA claim, a person must prove that (1) he is qualified individual with a
disability; (2) he was either excluded from participation or denied the benefits of a public entity’s
services, programs, or activities, or otherwise discriminated against by the public entity; and (3)
such exclusion, denial of benefits, or discrimination was by reason of his disability.
o Rule: The reasonableness of an accommodation is determined by (1) the cost of making
accommodation; (2) the size of the public entity; (3) staff to make accommodation available; (4)
the importance of the service to the disabled person; and (5) any other factors bearing on a
particular situation.
o Analysis: The “public entity shall take appropriate steps to ensure that communications with ...
members of the public with disabilities are as effective as communications with others.”
 (NEVER DISCUSSED) FOR NEXT CLASS READ Abernathy v. Valley Medical Center 2006 WL
1515600 W.D. WA
 Limiting the Scope of the Treatment Relationship
o Instead of finding no patient doctor relationship, the court might find that the relationship
existed, but in limited respects.
 Tunkl v. Regents of the Univ. of California
o Facts: Tunkl was taken to the non-profit hospital. He was suffering from pain, under sedation,
and probably unable to read. The hospital gave him a release form to sign that waived liability
for the Board and the Hospital. He signed the release but then later argued it didn’t count because
he didn’t know what he was signing. The jury ruled against Tunkl, and the appeal concerns the
legitimacy of the waiver as a matter of law.
o Rule: An exculpatory provision may stand only if it does not involve the “public interest.”
o Rule: Contracts involving the “public interest” have some of the following characteristics:
 Concerns a business of a type generally thought suitable for public regulation
  Party wanting exculpation is performing service of great importance to society
 Party holds himself out as willing to perform
 Party seeking exculpation possesses decisive advantage of bargaining strength
 Party confronts pubic with standardized adhesion contract of exculpation
 Person or property of purchaser is placed under control of seller.
o Analysis: There is no concrete definition of “public interest” The contract only need to fulfill
some of the characteristics. Tunkl would be in no position to reject the proffered agreement, to
bargain with the hospital, or in lieu of agreement to find another hospital. This was an adhesion
contract.
o Malloy v. Fong is a CA case that had allowed a charitable hospital to be sued.
o Notes
 In Madden v. Kaiser, the court upheld a waiver that simply forced malpractice claims to
be arbitrated. Arbitration doesn’t alter the standard of care, mere the means by which the
claim is settled.
 Waivers also happen when physicians depart from the standard of care. Such departures
occur when a patients checks out of the hospital against a Doc’s advice, or refuses
treatment for religious purposes.
 Physicians are entitled to limit their practice to a particular specialty and geographic area.
Docs are also not obligated to provide care that offers no medical benefit.
 Docs are also allowed, under Congressional acts, to conscientiously object to performing
certain procedures-like abortions.
 Terminating the Treatment Relationship
 Ricks v. Budge
o Facts: Ricks cut his middle finger on some barbed wire and it became infected. He cut his finger
on 3-8-35 and went to the Budge Hospital on the 11th. The wounds were examined by Dr Budge
and treated. On the 15th Ricks wanted to leave the hospital against Budge’s recommendation.
However, Ricks paid his bill and left. On the 17th Ricks let Budge know that the finger was
getting worse. Budge told Ricks to go to the hospital. Budge arrived and refused to treat Ricks
because of overdue bills owed that weren’t related to the treatment. Budge helped Ricks get
dressed and sent him down the street to another hospital where the middle finger was ultimately
amputated.
o Rule: A doctor, upon undertaking an operation or other case, is under the duty, in the absence of
an agreement limiting the service, of continuing his attention, after the first operation of first
treatment, so long as the case requires attention.
o Rule: If physician withdraws and patient still needs care, physician must give patient sufficient
notice so the patient can procure other medical attention.
o Rule: The doctor patient relationship can be terminated (1) only be the cessation of the necessity
which gave rise to the relationship, or (2) by the discharge of the physician by the patient, or (3)
by the withdrawal from the case by the physician after the giving the patient reasonable notice so
as to enable the patient to secure other medical attention.
o Analysis: Budge told Ricks to come back and see him if the condition worsened and that’s what
Ricks did. Remanded.
 Payton v. Weaver
o Facts: Payton was an overweight, impoverished, drug-addicted, mother who needed kidney
dialysis on a regular basis. Weaver provided the service for Payton, but eventually cut her off.
Payton would come in drunk, behave erratically, and curse. Payton then sued for a petition to
mandate. A settlement was reached where Weaver would continue to treat as long as Payton met
certain conditions. Payton still didn’t meet the conditions and Weaver cut her off. She lost a trial
case where it was found that Payton’s actions knowingly or intentionally violated the agreement.
o Rule: A doctor may abandon a patient “only after due notice, and an ample opportunity afforded
to secure the presence of other medical attendance.”
 o Analysis: It is unlikely that the legislature intended to impose upon whatever health care facility
such a patient chooses the unqualified obligation to provide continuing preventive care for the
patient’s lifetime. “It may be that there exists a collective responsibility on the part of the
providers of scarce health resources in a community, enforceable through equity, to share the
burden of difficult patients over time, through an appropriately devised contingency plan.
o Notes
 You can terminate the relationship because of failure of a patient to pay but you still have
to go through the process, giving notice to the patient.
 Abandonment Liability Elements:
 Termination of care at a critical stage
 Done without a valid reason
 Without sufficient notice
 The patient has to be injured
 Regulating the Treatment Relationship
 Professional Licensure
o Gellhorn argues that the real purpose of licensure requirements is to restrict access by making
entry to the field expensive and time-consuming in order to reduce competition for professionals
already in the field. He discounts claims that licensure requirements are enacted to protect the
public.
o Licensing was required when snake oil salesmen would roam the countryside promising cure alls
o Many people feel that there are too many specialists, and not enough general practitioners. Some
argue that the ideal balance is somewhere between 160-200 physicians for every 100,000 people.
o Medical Examiner Boards do NOT actively pursue and enforce disciplinary regulations on
already-licensed physicians. Generally, they only pursue the most egregious cases. Nelson says
lax enforcement. Some state boards are beginning to provide more information to consumers.
o Things for doctors that require licensing:
 Doctors want privileges at a hospital
 Board certification
o The Health Care Quality Improvement Act establishes a centralized data bank that collects
information about (1) disciplinary actions from all states, (2) malpractice settlements, and (3)
negative hospital privileges determinations.
 State v. Miller
o Facts: Miller operated a medical facility out of his home without a license. He would use
pictures or locks of hair to diagnose the patient and then attempt to medicate them by giving mild
electric shocks. He also had a natural vitamin store which he gave patients. He didn’t charge the
patients any money, but often accepted the recommended $10 donation. The main harm that
Miller was doing was delaying actual medical treatment for the patients. Miller was convicted on
7 counts and sentenced to jail. However, the sentence was suspended and he was placed on 5
months probation.
o Rule: A person is deemed to be engaged in the practice of medicine if they (1) publicly profess
to be physicians or (2) publicly profess to assume the duties incident to the practice of medicine.
o Rule: The “duties incident to the practice of medicine” are defined as diagnosing patient’s
ailments and prescribing the proper treatment.
o Analysis: It doesn’t matter that Miller didn’t call himself a doctor. He assumed the duties that a
doctor performs.
o Notes
 Practicing without a license is a criminal offense. Assisting someone without a license
may also be considered a criminal offense.
 The legislative definition of “practicing medicine” typically is quite broad. Examples of
things prohibited under licensure statutes: magnetism, mental suggestion, faith healing,
 color wave therapy, reflexology, massage, hypnotism, tattooing, electrical hair removal,
and publication of a medical self-help book. Even offering nutritional advice might be
subject to criminal prosecution or perhaps publishing a medical self-help book.
 Defendants have been equally unsuccessful in their attempts to claim a constitutional
right to provide care. Courts uniformly have upheld state licensing regulations so long as
they are rationally related to serving some legitimate state interest.
 Most courts have found that there is no fundamental right of access to treatment
unlicensed providers.
 Most courts rule against midwifery. A woman doesn’t have a right to give birth through
an unlicensed doctor or midwife.
 Physician Extenders: Can a physician delegate tasks to others without assisting in the
unlicensed practice of medicine? Traditionally, nurses have performed a wide range of
functions within the health care system, sometimes under the control of physicians and
sometimes exercising independent, nursing judgment. Physicians assistants usually are
characterized as “dependent” practitioners, who perform only tasks delegated by
physicians. Some legislatures have been extremely active in attempting to mark the
bounds of appropriate delegation.
 Modi v. WV Board of Medicine
o Facts: Modi was charged with violations of the state’s medical law. Modi was using
depossession to heal people by way of hypnosis or hypnotherapy. Modi didn’t explain the
procedure to the patient and was attempting to remove spirits from the patient’s body. The
patient filed a complaint after Modi billed the insurance for psychotherapy when he, in fact, used
depossession. The medical board found that the $1K fine was without merit, but remanded the
case for consideration of the experimental treatment without informed consent.
o Rule: Circuit courts are permitted to reverse, vacate, or modify Board findings only where they:
 violate constitutional or statutory provisions
 exceed the statutory or judicial authority of the agency
 are made in violation of procedural rules
 are affected by other legal error
 are clearly wrong in view of the reliable, probative, and substantial evidence on the whole
record or
 are arbitrary and capricious or characterized by an abuse of discretion or a clearly
unwarranted exercise of discretion.
o Analysis: The medical board’s decision was weirdly put together. This stems, in part, from the
board refusal to hear expert testimony on Modi’s behalf from people not licensed to practice
medicine. The board should have listened to Modi’s experts. The Board should have either
adopted what the hearing examiner determined or at least explained why they didn’t.
o Notes
 Types of Licensure problems:
 Quality of care
o This is the most traditional domain of licensure: protecting patients from
poor quality care. The claim is based on the failure to follow accepted
medical practice.
 Ethical violations
o If you’re a doctor, don’t have sex with your patients.
 Other professional norms
o Boards are often charged with monitoring the physician’s obligations to
act within professional norms in his or her contact with third parties.
 Restrictions on advertising or business arrangements
o Professional disciplinary codes often attempt to restrict the range of
permissible advertising or solicitation that may be employed by licensees.
 Facility Licensure and Accreditation
o Three terms are commonly used to describe the multi-level process for inspecting and approving
health care facilities by state, federal, and private agencies: licensure, accreditation, and
certification.
 Licensure is the mandatory governmental process whereby a health care facility receives
the right to operate.
 In the US, licensure operates on a state-by-state basis.
 Accreditation is a private voluntary approval process through which a health care
organization is evaluated and can receive a designation of competence and quality.
 Theoretically, a hospital does NOT have to be accredited. But as a practical
matter, JCAHO accreditation is essential for federal government reimbursement
and private insurance reimbursement.
 JCAHO is comprised of individuals from private organizations in the medical
field. Historically, there was a very “cozy” relationship b/w hospitals and
JCAHO, but this relationship has become more adversarial.
 Certification is a voluntary procedure for health care organizations to meet the
qualifications for participation in government funding programs, specifically Medicare
and Medicaid.
o The three functions of licensure, accreditation, and certification are intertwined to a considerable
extent.
 Donabedian’s Theories of Review/Evaluation of Quality
o Structure Review: inspect the actual, physical plant structure and the organizational structure.
Historically, this is what JCAHO did—they would check to see that there were proper structures
and organization.
o Process Evaluation: this involves actually reviewing patient files to determine whether proper
procedures were followed (this is what traditional peer review involved, i.e., retrospective file
review).
o Outcomes Evaluation: e.g., patient satisfaction surveys; actual outcome of procedures (e.g.,
Did patient get better? Die?). Historically, this was the most neglected type of review. But this
is becoming a major focus in both governmental and private reviewing organizations.
 Estate of Smith v. Heckler
o Facts: A lawsuit was filed against a nursing home over the conditions. Smith argued that the
nursing home was “facility oriented”, and not “patient oriented.” Also, the nursing home was the
equivalent of a bad orphanage for old people. Did the nursing home meet the standards required
by HHS? The regulations provide for the frequency and general content of patients’ attending
physician evaluations, nursing services with policies “designed to ensure that each patient
receives treatments, medications, … diet as prescribed, … rehabilitative nursing care as needed,
… is kept comfortable, clean, well-groomed, is protected from accident, injury, and infection,
and is encouraged, assisted, and trained in self-care and group activities.”
o Rule: The Congressional statutes require certain substantive elements, i.e., a certain level of high
quality care.
o Analysis: But the Secretary’s regulations focus too much on structure, e.g., the facilities and
organizational structure (only 30 out of 541 questions contained in the Secretary’s form were
related to patient care). The Secretary must promulgate regulations that allow her to remain
informed, on a continuing basis, as to whether facilities are meeting the requirements of the Act.
 Cospito v. Heckler
o Facts: Several patients at a psychiatric hospital challenged a deaccredation decision by JCAH
that resulted in federal funding being cut to the hospital. In the mid-70’s, the hospital was
reviewed for accreditation purposes several times, and failed on each review. The survey consists
of an on-site visit conducted by a team of surveyors. The surveyors evaluate the quality of the
 facility’s environment and review its administrative records to determine whether they conform
to applicable standards.
o Rule: “Patients do not have a settled interest in receiving benefits at any particular facility,
including a decertified one, and therefore there has been no deprivation of ‘property.’”
o Rule: Although JCAH makes a report on a facility, the HHS Sec makes the ultimate decision as
to decertify.
o Analysis: JCAH accreditation and federal funding are two separate things. The patients are
slightly different than most because they were involuntarily committed. But, the loss to patients
was only “indirectly” caused by the HHS Sec’s decision to decertify. Because all actions of
JCAH are subject to a full review by a public official who is responsible and responsive to the
political process, there is no violation.
o Notes
 Certificate of need programs (exists in AL)
 This required hospitals to obtain a certificate of need before they could expand
services. If they didn’t get a certificate of need, then they wouldn’t qualify for
governmental reimbursement programs. Existing providers like this idea, because
it reduces competition by creating market barriers.
 Which facilities are covered?
 Usually, the only way to know the answer is to simply ask the governing
authorities, since statutes and regulations frequently fail to flesh out these details.
 Doc-in-a-box
 Many states have amended their statutes to cover these facilities, especially when
they specialize in surgery.
 OBRA ‘87
 An extensive set of regulations that govern in considerable detail the treatment
plans, living environment, legal rights, and regulations that are focused primarily
on the process of care.
 JCAHO’s “sentinel event” policy: This requires hospitals to take the following actions
whenever there is a death or seriously injury resulting from treatment: inform the patient
or family and conduct a “root cause” analysis, and institute a corrective action plan. But
hospitals DON’T have to report these events to JCAHO (but if JCAHO finds out they’re
not following the policy, it jeopardizes their accreditation).
 Regulating Access to Drugs
o Basically any new drug must be approved by the FDA before it can be sold in the U.S. Drug
manufacturers are responsible for conducting tests for safety before submitting new drugs to the
FDA for pre-marketing approval (the FDA does NOT conduct tests/trials).
o Companies generally conduct three phases of trials:
 Phase I: focuses on safety, how the drug works, and the drug’s side effects. This uses a
very small number of healthy individuals, and perhaps uses terminally ill individuals at
whom the drug is targeted.
 Phase II: again focuses on safety and side effects. Uses 100-300 volunteers who have
the condition(s) or disease(s) at which the drug is targeted. This phase seeks to establish
optimal dosage.
 Phase III: focuses primarily on the drug’s effectiveness. Uses very tightly controlled,
double-blinded studies (i.e., the people administering the tests don’t know who is getting
the drug and who is not, and the test subjects don’t know whether they’re getting the drug
or not).
 After successful completion of the trials, then companies file a new drug application
(NDA) with the FDA. At this point, there is about a 70% chance of approval, and the
average wait is about 2 years. After approval, the drug can be marketed.
 After the drug is released, off-label uses may develop (e.g., Viagra).
  Phase IV trials: continuing tests conducted after approval to test safety and perhaps
examine off-label uses.
o There is growing criticism of the FDA, particularly because many FDA employees have
relationships with drug companies.
 United States v. Rutherford
o Facts: Several terminally cancer patients challenged an FDA decision to deny them the drug
Laetrile. The drug hadn’t been approved and constituted a “new drug.” The Commissioner
argued that the name Laetrile was vaguely defined and could mean many things. The court,
however, held that terms like “safety” and “effectiveness” don’t mean anything to terminal
cancer patients.
o Rule: No implicit exemption for drugs used by terminally ill is necessary to attain congressional
objectives or to avert an unreasonable reading of the terms safe and effective.
o Rule: Only when a literal construction of a statute yields results so manifestly unreasonable that
they could not fairly be attributed to congressional design will an exception to statutory language
be judicially implied.
o Rule: The FDA Commissioner has power to determine the safety and efficacy standards of all
drugs, including the terminally ill.
o Analysis: The Congressional record makes clear that they were concerned about giving
unapproved drugs even to terminally ill patients. A drug is effective within the meaning of the
statute if there is general recognition among experts, founded on substantial evidence, that the
drug in fact produces the results claimed for it under prescribed conditions. If there should be an
exception, it’s for Congress to decide.
o New Drug: A new drug includes any drug not generally recognized, among experts qualified by
scientific training and experience to evaluate the safety and effectiveness of drugs, as safe and
effective for use under the conditions prescribed, recommended, or suggested in the labeling.
o Notes
 Under current federal regulations, patients with serious or life-threatening illnesses may
be given access to certain types of investigational new drugs under some circumstances.
 Orphan Drug Act
 Companies are encouraged to develop and market drugs for rare illnesses, where
the relatively small number of person affected might otherwise not constitute a
sufficient market to sustain the research and development costs of providing
treatment.
 NIH Revitalization Act
 Requires researchers to include women and minorities in NIH-funded research
and, where applicable, to include sufficient numbers to determine whether the
studied drug is as effective in these groups. This law came about because women
and minorities were being excluded from drug studies.
 Off label usage: Are able to distribute articles from learned journals concerning other
uses.
 Drug labeling
 Discusses package inserts and the “learned intermediary doctrine.” The “learned
intermediary doctrine” has shielded drug companies from liability under the
theory that the physician is expected to be a “learned intermediary” between the
co. and the patient in protecting the patient and providing information about the
drug to the patient. The validity of this doctrine has been called into question,
particularly with direct-to-consumer advertising by drug companies. It’s hard for
physicians to keep up with all the drugs coming onto the market. Traditionally the
drug company’s obligation has been to warn the physician. Then the physician
was to warn the patient. So there was no obligation for the drug company to
provide warnings to patients.
  Retail Pharmacists
 Generally don’t have a duty to warn about the side effects of drugs.
 OBRA’ 90
 The courts haven’t used this law much to enforce liability against pharmacists.
 Medical marijuana
 May a state allow its residents to use marijuana for medical purposes when the
federal government does not allow the use of medical marijuana? The 9th Cir.
has held that the use of medical marijuana is non-economic and too attenuated
from interstate commerce to be subject to the interstate commerce power. Nelson
says the 9th Cir. Is the most liberal. Gonzales v. Reich, (545 US 1) the Supreme
Court said federal government could ban the use of medical marijuana even if it
was just for personal use. Wickard v. Filburn wheat case were farmer grew for
own use but court held still could be regulated because still may affect the market
such as prices. Marijuana is a schedule 1, meaning it has no legitimate therapeutic
use. This is controversial. Claims of reducing nausea, treatment for glaucoma.
 The Treatment Relationship: Confidentiality, Consent, and Conflicts of Interest
 The Fiduciary Nature of the treatment relationship
o The presence of a fiduciary duty alters ordinary contract norms. Thus, contracts with fiduciary
elements aren’t ordinary contracts.
 Confidentiality of Medical Information
 The Duty to Maintain Confidentiality
 Doe v. Marselle
o Facts: Doe had HIV and told her nurse and Doctor. The nurse had sons that were drug users and
knew of Doe. Marselles, the nurse, told three people that Doe was infected with HIV. Doe
brought suit against Flores and Marselle, but the charges against Flores were struck down. The
question was what mens rea did the physician have to have to violate the disclosure laws?
o Rule: A willful violation of the confidentiality statute requires only a knowing disclosure of
confidential human immunodeficiency virus related information.
o Analysis: “HIV information may be released only when the moving party demonstrates a clear
and imminent danger to the health of another or the public health and further demonstrates a
compelling need for the test results that cannot be accomplished by other means.” Forcing the
patient to prove that the doctor intended to injure the patient is a huge burden that doesn’t
accomplish the goals of the law. “It is difficult to presume a definition of willful that would make
permissible the unauthorized disclosure of a person’s HIV-related information except in the
extreme situation where the person disclosing the information actually intends to injure the
person.”
 Notes
o Several courts have found that individuals have a constitutionally protect interest in maintaining
the privacy of their medical information.
o Most states provide a private cause of action against licenses health care providers who
impermissibly disclose confidential information obtained in the course of the treatment
relationship to third parties.
o Generally, a physician-patient relationship must be formed before the duty to maintain
confidences arises.
 Most states provide a private COA against licensed health care providers who
impermissibly disclose confidential information obtained in the course of the treatment
relationship to third parties. The COA may be under tort or contract, depending on the
jurisdiction. If it’s in tort, then it may subject to tort reform requirements.
 If the claim arises in contract, plaintiffs will have the benefit of the generally longer
statute of limitations.
  Plaintiffs in contract suits need prove only that the physician failed to honor the
degree of confidentiality that was promised.
o Physicians may be held liable for disclosures made by other person who are presumed at least to
be under their control and direction.
 The duty to maintain confidentiality generally includes the obligation to have in place
policies and procedures designed to reduce the risk of accidental or intentional
disclosures.
o HIPAA
 Gave the HHS Sec. authority to regulate some aspects of medical privacy if Congress
failed to enact privacy regulations.
 Imposes an obligation to maintain the confidentiality of individually identifiable health
information on certain “covered entities”, which include health plans, health care
clearinghouse, and health care providers who transmit health information in electronic
form during certain transactions.
 These entities must:
 (1) adopt internal procedures to protect the privacy of protected health
information
 (2) train employees regarding privacy procedures
 (3) designate a privacy officer
 (4) secure patient records that contain protected information
 (5) ensure that agreements with other entities include terms requiring the
protection of privacy.
 Patients must be given an opportunity to agree or object to or to authorize other types of
disclosures.
 No private COA for HIPAA violation.
o The significance of HIPAA
 First, federal rules may establish a floor that “evens out” the basic level of protection
across states.
 Second, federal rules impose obligations on specified health care entities rather than
focusing solely on physicians or other licenses health care providers.
 Third, the federal rules explicitly permit states to enact more protective rules so long as
they do not conflict with federal law.
 Initial constitutional challenges to HIPAA have failed
o Federal Rules of Evidence
 Confidentiality of patient physician communications is often also protected under the
rules.
 Prohibits the discovery of protected information.
 Only the patient generally has the power to waive the privilege.
 The FRE doesn’t contain a patient-physician privilege.
o Waiver
 Statutes protecting the confidentiality of patient information often contain a general rule
of confidentiality and then list situations under which that confidentiality can be
breached.
o Medical Records
 Included in confidentiality. But what standards should be used for electronic records?
o Patient Access to Medical Records
 Health care providers are generally deemed to own patient medical records.
 Patients are given a right of access to those records under federal and state law within
certain limits.
 A patient may be denied access where a “licensed health care professional has
determined, in the exercise of professional judgment, that the access requested is
 reasonably likely to endanger the life or physical safety of the individual or another
person.”
 The Duty to Breach Confidentiality
 Health care providers sometimes have not only a common law or statutory authority to
breach confidentiality; they also have the duty to do so.
o Structure of Statutory Obligations
 The statute will typically establish (1) who has the duty to disclose information; (2) the
events or information that must be disclosed; (3) to whom the information must be
disclosed; and (4) the immunities or liabilities associated with the disclosure obligation.
 Generally apply to physicians, nurses, nursing home staff members, social workers.
o Types of disclosure duties
 Most disclosure obligations are associated with the risk of harm to others through
criminal activity or the transmission of disease.
 States also require physicians and others to report gunshot or knife wounds to police.
 States also require health care providers to report information about individuals who have
been diagnosed with certain contagious or transmissible diseases.
o Disclose to whom?
 Some disclosures are made directly to law enforcement personnel.
 Contagious or transmissible disease reports are most often directed to state public health
authorities.
 Bradshaw v. Daniel
o Facts: Daniel was treating a husband for Rocky Mountain spotted fever, which ultimately killed
him. However, he never informed the wife of the disease and she died one week later from the
same disease. The son filed suit, arguing that the doctor had a duty to disclose the fever to the
wife. Doctor Prater, testifying for Bradshaw, testified that it was a breach of duty not to tell the
wife. Daniels lost and was forced to pay $50K.
o Rule: A patient-physician relationship is not necessary for the maintenance of an action based on
negligence. A physician may owe a duty to a nonpatient third party for injuries caused by the
physician’s negligence, if the injuries suffered and the manner in which the occurred were
reasonably foreseeable.
o Rule: A doctor is under the affirmative duty to act to prevent another from sustaining harm only
when certain socially recognized relations exist which constitute the basis for such legal duty.
o Analysis: All the doctor had to do was warn about ticks and that she may contract the disease.
Kind of a weird case because the disease wasn’t contagious. Here, the disease wasn’t contagious,
but the court said this didn’t matter because Wife was an “identifiable third person in the
patient’s immediate family” who was subject to foreseeable risks “emanating from a patient’s
illness.”
o “Duty” is not sacrosanct in itself, but is only an expression of the sum total of those
considerations of policy which lead the law to say that the plaintiff is entitled to protection.”
 Notes
o Malfeasance v. nonfeasance
 Creating a risk of harm versus failing to protect others from a risk of harm created by
another.
 As a general rule, nonfeasance does not constitute actionable negligence. The special
relationship is the exception to this principle.
o Once the duty is established, the court must determine its scope. The scope of the duty is
determined in large part by the nature of the risk and the physician’s ability to reduce the risk
reasonably.
o When does the special relationship exist?
  Contagious diseases: Includes failure to diagnose and failure to warn others about risk of
transmission. Rocky Mt fever technically isn’t contagious, but the clustering effect makes
Rocky Mt fever like a contagious disease.
 What about genetic conditions?
 Mental illness: Duty to warn specifically identifiable third parties of a patient’s threat.
 Other courts have narrowed this by holding that there is NO special relationship
without an ability by the physician to CONTROL the patient’s conduct.
 Courts also focus on “foreseeable and identifiable” third parties (see CB 197).
Some have imposed a duty even when the risk is more generalized (such as a duty
to call the police).
 NOTE: If the duty to disclose is to the patient, then it doesn’t matter whether the
injured third parties were foreseeable.
 Driving impairments: typically, a provider (or pharmacy) can discharge any duty owed
here by informing the patient of the dangers of driving. This avoids problems with
breaching confidentiality to warn others. If a state statute requires physicians to report
certain driving impairments, physicians CAN be held liable for injuries to third parties.
 Mull v. String*******
o Facts: Mull was suing a hospital in Mobile for a burn that was allegedly caused by a heating
pad. Mull’s attorney sent Dr. String, the treating doctor, for his medical opinion of Mull’s injury.
The letter also included a form requesting that Dr. String not disclose the information to anyone
else. String then unilaterally sent the opinion the hospital and its attorneys. Mull sued arguing a
breach of fiduciary duty and implied contract. Mull argued that String couldn’t make an extra-
judicial disclosure of information. String argued that he suit against the hospital constituted a
waiver. The lower courts granted MSJ for String.
o Rule: Alabama recognizes causes of action for breach of fiduciary duty and breach of implied
contract resulting from a physician’s unauthorized disclosure of information acquired during the
physician-patient relationship
o Rule: There is an exception the fiduciary duty when the letter or report on the diagnosis and
prognosis of the patient’s injuries is legally discoverable by the defendant hospital.
o Analysis: This exception doesn’t include information acquired by the doctor during the
physician-patient relationship. String was the doctor that treated Mull, BUT the suit was against
the hospital. String was just giving his medical opinion, and couldn’t have disclosed confidential
information. BUT, String wasn’t allowed to disclose information to anyone else besides the
hospital or defendant (he apparently made verbal disclosures to other people). This part is
reversed.
o When a patient sues a defendant other than his or her physician, and the information acquired by
the physician as a result of the physician-patient relationship would be legally discoverable by
the defendant in that litigation, then the patient will be deemed to have waived any right to
proceed against the physician for the physician’s disclosure of this information to that defendant
or that defendant’s attorney.
o Nelson: What does this mean for ex parte communications between an attorney and other
treating physicians?
 Mull seems to allow this since the material would ultimately be discoverable.
 BUT, Nelson says to be careful with this.
 Horne v. Patton**********
o Facts: Horne sued Patton, arguing that he violated his duty by disclosing his medical condition
to his employer. The initial suits were dismissed. Three counts: (1) breach of fiduciary duty, (2)
breach of contract, and (3) an invasion of privacy.
o Rule: Alabama allows a cause of action for all three counts.
 o Rule: Alabama requires that information obtained by a physician in the course of a doctor-
patient relationship be maintained in confidence, unless public interest or the private interest of
the patient demands otherwise
o Rule: The unauthorized disclosure of a person’s medical record constitutes an invasion of this
right of privacy.
o Analysis: This is the first case in AL holding that a duty to not disclose exists. An implied
contract arises where there are circumstances which, according to the ordinary course of dealing
and the common understanding of men, show a mutual intent to contract. As an implied
condition of that contract, this Court is of the opinion that the doctor warrants that any
confidential information gained through the relationship will not be released without the patient’s
permission.
 Informed Consent
o General Principles
 Informed consent assumes that there is valid consent to the procedure itself.
 The idea is to protect and encourage patient autonomy and we do this by requiring the
physician to make disclosures of information. Disclose nature of permission, risks, and
alternatives. Some of the early cases dealing with informed consent treated it as battery.
Lack of consent was held to vitiate consent. Often medical malpractice and informed
consent go together. Traditionally, courts have treated custom as conclusive in med mal
cases. Treated as negligence.
 How do you decide if there is a breach of duty? Majority of courts hold that it should be
determined based on the custom of the profession.
 Professional standard: What other physicians would customarily disclose to their patients.
This doesn’t really square with autonomy.
 Two types of causation:
 Counter-factual-You have to prove something that didn’t happen. If the plaintiff
would have been informed, they wouldn’t have consented.
 Factual-The adverse outcome resulted from the medical procedure.
 Expert testimony-Must you have expert testimony to prove counter-factual causation?
Maybe not. Probably need it for factual causation.
 Valid consent-consent to perform a particular medical procedure. If you don’t get
consent, it’s a battery. Do you need expert testimony to establish a battery? No. You can
get nominal damages.
 Two approaches:
 (a) Professional Standard
 (b) Prudent patient standard-Looks at what patients want to know and what
would be material to their decision.
 It is believed that requiring physicians to provide more information to their patients will
help to redress the power imbalance problems created by the inequality of knowledge.
 Patient-Centered Medicine
o In 1961 the majority of doctors didn’t like to tell patients about a cancer diagnosis. However, by
the late 1970’s the majority know decided that it wanted to tell patients about cancer diagnosis.
o By giving patients more information, it enables them to help in the medical decisions.
o Distinguish informed consent from valid consent.
 Valid consent: this concept has been around a very long time in the common law, and it
refers simply to obtaining the patient’s consent to perform treatment. Failure to obtain
valid consent would mean that treatment would be a battery.
 Informed consent: the provider must inform the patient about the risks of treatment,
alternatives to treatment, the possibility of non-treatment, and the nature of the procedure.
Requiring informed consent is a relatively new development in the law.
 Rethinking Informed Consent
 o Idealists think informed consent is the greatest thing ever: patients need to know as much as
possible so that they can make their own decisions, so doctors need to empower them to do so.
o Realists (mostly doctors) think patients don’t really need to know all this, and they really want
doctors to make the decision for them.
o The informed consent “gap” - the difference between the law on the books and the law in
practice. Sure, informed consent is required, but oftentimes patients sign “informed consent”
forms that they don’t understand (an empty and meaningless ritual). Also, physicians have the
law “in the mind” (i.e., IC as imagined, feared, and caricatured by doctors).
 Notes
o “The radically different climate of physician-patient decision-making cannot be implemented by
judicial, legislative, or administrative orders.”
o There’s been a move away from calling it “informed consent” to “shared decision-making”
o Informed Consent in Practice
 Empirical studies often case doubt on the efficacy of the practice of informed consent.
 Few patients understood or remember what they had been told about their medical
condition and treatment options.
 Patients are often sick during the decision making process, or don’t have the educational
level to actually understand what they are being told.
o Information that is harmful: Genetics and HIV
 How many people would want to know that they have a genetic condition that may kill
them later in life?
 One method would be to explain what might happen before the test is administered.
 What if one family member wants testing but the others do not?
o Do patients want decisional autonomy?
 Many patients just want informed consent and don’t actually want to make the decision.
o Individual autonomy as a cultural norm
 Perhaps informed consent is an American-only phenomenon because of the American
idealization of the notion of individual autonomy.
o Informed Consent Standards
 The traditional rule, as it developed, applied the malpractice approach. Malpractice is a
little different from other areas of tort law. In traditional torts, customs are relevant, but
not determinative in normal torts.
 Malpractice law said that custom is binding. It’s determinative. To get past MSJ, a
plaintiff has to have expert testimony.
 BUT, in 1972, two cases said that the traditional malpractice standard doesn’t apply.
Custom is relevant, but not determinative.
o There are 4 different informed consent standards
 Professional malpractice (majority position)
 Required to disclose to patient that information that would have been disclosed by
the reasonable, minimally competent physician.
 “Material risk” or “Reasonable patient” standard
 Disclosure of risks that a reasonable person would consider to be material in
making a medical treatment decision
 Subjective patient standard
 Fiduciary standard
 Establishing lack of informed consent (Nelson says these are VERY hard to win):
o 1. DUTY: this arises out of the physician-patient relationship. P doesn’t have to show that there
was malpractice in the treatment (i.e., not in accordance with the customary standards of the
profession).
 o 2. BREACH: have to show nondisclosure of the risk in the procedure, i.e., that the physician
violated the applicable standard of disclosure. There are two approaches:
 (1) Professional Standard (majority rule): i.e., customs of the profession—what do
doctors actually do? P generally proves this through expert testimony. There are,
however, a couple of exceptions:
 (a) Common Knowledge: where an ordinary lay person can determine it is
negligence (sometimes overlaps with res ipsa loquitur).
 Ex: leaving an instrument in a patient; amputating the wrong arm.
 (b) Res Ipsa Loquitur
 (2) Prudent Patient Standard (Canterbury minority rule): this obviates the need for
experts on the issue of BREACH of the standard of care (but P will need experts on other
issues). Doc must disclose whatever would be material to a reasonable patient’s decision
in P’s circumstances.
 This standard is a little less predictable for doctors.
o 3. CAUSATION: That the undisclosed risk materialized (e.g., risk of paralysis and patient is
paralyzed as a result of the procedure—ordinarily, experts would establish this, even in a
prudent-patient jurisdiction).
 Nelson says: you also have to establish counter-factual CIF, i.e., that the patient would
NOT have undergone the procedure had the patient been properly informed. Most Js use
an objective standard here. This is the toughest element to establish.
o 4. DAMAGES: has to be more than a mere offense to a patient’s personal autonomy.
 The Compelling Disclosure Standards
 Canterbury v. Spence
o Facts: Canterbury underwent a laminectomy to correct some of his back problems. Dr. Spence
spoke with the mother beforehand and warned her of the risks, but Canterbury didn’t sign the
release until after the surgery. He was recovery fine until hospital personnel failed to help him
out of his bed. He fell and suffered partial paralysis, including bowel problems. Four years after
the operation he sued the doctor for lack of consent and the hospital for the negligent post-
operation problems. All charges were dismissed in MSJ.
o Rules: Prudent Patient Standard (NELSON LOVES THIS)
 (1) A part of the physician’s overall obligation to the patient involves a duty of
reasonable disclosure of the choices with respect to proposed therapy and the dangers
inherently and potentially involved. Dr. doesn’t have to disclose commonly known risks
 (2) The standard measuring performance of that duty by physicians is conduct which is
reasonable under the circumstances.
 (3) All risks potentially affecting the decision of a patient must be unmasked.
 (4) A risk is material when a reasonable person, in what the physician knows or should
know to be the patient’s position, would be likely to attach significance to the risk or
cluster of risks in deciding whether or not to forego the proposed therapy. Topics should
include:
 (a) Inherent and potential hazards of the proposed treatment;
 (b) The result likely if the patient remains untreated;
 (c) Alternatives, if any, to the proposed treatment/procedure;
 (5) Two-fold causation requirement.
 (a) First, an unrevealed risk that should have been made known must materialize;
otherwise, the omission is legally without consequence;
 (b) Second, counter-factual: Dr should have informed (i.e., material risk) and
patient would not have gone ahead with procedure if Dr had disclosed.
 (6) Experts: Under Canterbury an expert is still needed in failure to disclose cases
because the plaintiff must establish that this is a risk known to the Dr but not a risk that
 falls under common knowledge, because if it is common knowledge, then no duty to
disclose.
 Experts are NOT needed to establish:
o Physician’s failure to disclose particular risk information
o Patient’s lack of knowledge of the risk
o Adverse consequences following treatment
o The materiality of a risk to a patient’s decision on treatment OR to the
reasonably expectable effect of risk disclosure on the decision
o Analysis: The court adopted the prudent patient standard for failure to disclose claims. It
criticized the customary standard because the court was skeptical about whether a custom even
exists relating to disclosure/non-disclosure (e.g., docs may engage in a “conspiracy of silence”).
 Culbertson v. Mernitz
o Facts: Mernitz is the doc that performed surgery on plaintiff to correct a bladder problem. The
Doc informed plaintiff of the risks, including death, but failed to mention the possibility that the
cervix could become fused to the wall of the vagina. After the surgery, that’s exactly what
happened. Plaintiff went to another Doc to correct the problem, but that required a total
hysterectomy and a re-suspension of the bladder. After the suit was filed, a panel said that failure
to talk of the cervix fusion wasn’t a failure to disclose. What role does expert testimony play in
informed consent cases?
o Rule: A physician should only be required to do that which he is trained to do, namely, conduct
himself as a reasonably prudent person physician in taking a history, performing a physical
examination, ordering appropriate test, reaching a diagnosis, prescribing a course of treatment,
and in discussing with the patient the medical facts of the proposed procedure, including the risks
inherent in either accepting or rejecting the proposed course of treatment.
o Rule: Except in those cases where deviation from the standard of care is a matter commonly
known by lay persons, expert medical testimony is necessary to establish whether a physicians
has or has not complied with the standard of a reasonably prudent physician.
o Analysis: The plaintiff must have an expert come forward and prove that a prudent physician
would disclose the possibility of the cervix fusion.
o The professional standard would incorporate the concern about patient autonomy. That’s now the
expectation with this standard.
o Causation: Proving the counter-factual causation is the hard part in a jury case. You’re
attempting to prove something that didn’t happen. Objective standard. Must be proved under
either “prudent patient” or “professional standard” theories.
o Expert testimony: Expert testimony is going to be required for both standards, in reality.
 Notes
o The Implications of Canterbury’s Patient-Centered or Material Risk Standard
 A lot of physicians don’t like the prudent-patient standard because they think it is too
uncertain. Basically, it sounds like mind reading.
 Texas has established “safe harbors” for physicians. A Medical Disclosure Panel
determines what disclosures are necessary beforehand.
o The Professional Disclosure Standard
 The professional judgment standard is the majority rule. In some states where the courts
adopted the prudent patient standard, legislatures reinstated the professional judgment
standard.
o The Subjective Patient-Centered Disclosure Standard
 The scope of disclosure—even under the prudent patient standard—is objective in most
Jurisdictions. This can be softened by taking into account the particular circumstances.
o Expert Testimony under the Material Risk and the Professional Disclosure Standards
 o Points out that prudent patient Js still require experts for whether a risk was a known risk, and
experts may be required for certain issues of causation.
o Who’s Duty? Disclosure as a “Professional” Rather Than “Institutional” Obligation
 Institutions (e.g., hospitals) don’t have a duty to obtain IC. Doctors have the duty to
obtain IC. The underlying assumption is that hospitals shouldn’t be too involved in the
physician-patient relationship.
o Informed Consent and Battery
 Emphasizes the distinction between valid consent and informed consent. If consent was
NOT valid, then plaintiff has a cause of action for battery. A cause of action for battery
has advantages, e.g., no requirement of experts. If the consent was valid but not informed,
then the plaintiff may bring negligence cause of action for lack of informed consent.
 A valid consent claim means you didn’t get consent at all. This would be a battery.
o Extension Doctrine
 Courts are split. If you anticipate the problem, you may still need to get informed consent
ahead of time. It’s always best to discuss possibilities with patients.
 Limiting Liability for Failure to Disclose
 Rizzo v. Schiller
o Facts: Rizzo was admitted to the hospital on 11/7/89 at 9am to deliver her baby. Schiller was
called and the baby was delivered using forceps. That night Rizzo was having trouble delivering
the baby and the doctor told Rizzo that she was going to use forceps. Before Rizzo could reply,
the forceps were inside her. The baby had a subdural hematoma, caused by the forceps and had
cerebral palsy. The parents brought a negligence and lack of informed consent claim. A motion
to strike was successful against the informed consent claim and a jury returned a verdict in favor
of Schiller for the negligence. An expert testified that the baby could have been delivered
without forceps, and, absent an emergency situation, the mother should be allowed to choose.
o Rule: The Doc owes a duty to make a reasonable disclosure to the patient of all significant facts
under the circumstances. This duty is limited to those disclosures that a reasonable medical
practitioner would provide under the same or similar circumstances.
o Rule: Informed consent requires more than simply securing the patient’s signature on a
generalized consent form.
o Analysis: The patient signed a “generalized” consent form, which doesn’t work for specific
procedures. The failure to attain informed consent is tantamount to no consent. There is also
enough evidence of causation to submit the case to a jury. Reversed.
 Notes
o Informed Consent and competence
 Docs must secure consent from someone who has the legal capacity to give it. This may
pose a problem for the treatment of minors.
o The Limits of the Duty to Inform
 Five General limitations to the duty to disclose
 Common knowledge
o There is no duty to disclose risks “of which persons of average
sophistication are aware.”
 Patient Knowledge
o The patient cannot recover for the physician’s failure to disclose a risk
already known by the patient.
 Emergencies
o There is no duty to disclose information in an emergency situation where
the patient is not competent, immediate treatment is required to prevent
more serious harm, and no substitute decision make is available
 Therapeutic Privilege
 o There is no duty to disclose information where the disclosure process
would “foreclose rational decision” or “pose psychological damage” to the
patient.
 Waiver
o Although there are few court decisions on the issue, the disclosure
doctrine’s grounding in autonomy suggests that patients should be able to
refuse information offered by the physician.
 The defendant generally ahs the burden of proving that an exception to the duty to inform
is present.
o The consent process and the use of forms
 Idealists like the idea of a conversation between doctor and patient, rather than a
standardized form. Docs, on the other hand, like a standardized form to cover their bases.
The problem, shown in Rizzo, is that the form may be too generalized.
o Informed consent forms in hospitals
 The hospitals don’t have to obtain the informed consent; it’s the doctor’s job to do that.
Either way, hospitals often go ahead and get the forms signed.
o Forms and Assumption of Risk
 An informed consent form is essentially a written documentation of the patient’s
assumption of the disclose risks, assumed in order to achieve a procedure’s potential
benefits.
 Patients ordinarily are not permitted, however, to assume the risk that a procedure will be
negligently recommended or performed; they assume only the risks that are non-
negligently produced.
o Contributory Negligence
 “For patients to exercise ordinary care, they must tell the truth and give complete and
accurate information about personal, family, and medical histories to a doctor to the
extent possible in response to the doctor’s requests for information when the requested
information is material to a doctor’s duty as prescribed by the informed consent statute
and that a patient’s breach of that duty might, under certain circumstances, constituted
contributory negligence.”
o Alternative Treatments
 Under the professional malpractice standard, a physician must disclose treatment
alternatives if the reasonable, competent physician would have done so.
 Does the informed consent apply to placebos?
o Truman v. Thomas
 A question of informed refusal. A patient on several occasions was told to have a pap
smear. The patient repeatedly turned it down and eventually died from cervical cancer.
 The Court held that the physician had the duty to the patient to disclose the risks from not
having the procedure. This is quite a burden. This is one of the last big expansions by the
CA court.
 Fiduciary Obligations, Conflicts of Interest, and Novel Disclosure Obligations
 Autonomy and Privacy: Protecting patients from their physicians
o Recognizes that the physician-patient relationship has been characterized as a fiduciary
relationship, but points out that the full implications of the fiduciary relationship have not been
established.
o Duty of loyalty; no self-dealing or misappropriation of entrustor’s property or knowledge; etc.
o Remedies for breach of fiduciary duty: void transaction; disgorge profits, compensation, etc.
 Moore v. Regents of the University of California
o Facts: Moore underwent treatment for hairy leukemia in October 1976. As part of this treatment,
doctors became aware that his blood, bone marrow, and spleen contained properties that would
make them very valuable for research purposes. Later in the month his spleen was removed to
 stop the progression of the leukemia. Moore always signed consent forms but was never made
aware that the materials from his body might be used for medical research. Moore returned
several times between Nov 1976 and Sept 1983. The cell line from Moore was patented and
could be worth as much as $3B. The court ultimately dismissed his conversion claim but
sustained as to disclosure obligations.
o Rule: Three principles
 First, a person of adult years and in sound mind has the right, in the exercise of control
over his own body, to determine whether or not to submit to lawful medical treatment
 Second, the patient’s consent to treatment, to be effective, must be an informed consent
 Third, in soliciting the patient’s consent, a physician has a fiduciary duty to disclose all
information material to the patient’s decision.
o Rule: “A Doc who is seeking a patient’s consent for a medical procedure must, in order to
satisfy his fiduciary duty and to obtain the patient’s informed consent, disclose personal interest
unrelated to the patient’s health, whether research or economic, that may affect his medical
judgment.”
o Analysis: The patient has a right to know whether the Doc has a financial stake in the patient.
The Doc already has a duty to disclose a financial interest that he/she may have in referring a
patient to another organization. In addition, the doctor has a duty to disclose a medical
experiment that may performed on a patient. Revered as to disclosure.
 Howard v. University of Medicine and Dentistry of NJ
o Facts: Howard had back injuries from two car accidents. He was suffering from cervical stenosis
and herniated discs. Howard met with Dr. Heary a few times and ultimately returned with his
wife. Heary contends that he made them aware of the risks, while Howard says that Heary held
himself out as Board Certified and as having completed of 60 of the surgical procedures. The
surgery was unsuccessful and left Howard a quadriplegic. Howard wants to sue fraud, on the
basis that the doctor misrepresented himself.
o Howard was only 90 minutes away from the Mayo Clinic; I bet he’s pissed that he didn’t go
there.
o Rule: A medical “battery” exists where a doctor performs a surgery without consent, rendering
the surgery an unauthorized touching.
o Rule: There is fraud-based COA that results from a doctor-patient relationship.
 While there is no general rule to disclose, a COA can exist for fraudulently disclosure of
experience.
o Analysis: A physicians qualifications can affect the validity of informed consent. The plaintiffs
claim is basically a lack of informed consent based on misrepresentations about the doctor’s
qualifications.
o Proximate Cause Analysis:
 The first inquiry should be, assuming a misrepresentation about experience, whether the
more limited experience or credentials possessed by defendant would have substantially
increased plaintiff’s risk of paralysis from undergoing the procedure.
 Counter-Factual: The second inquiry would be whether that substantially increased risk
would cause a reasonably prudent person not to consent to undergo the procedure.
o If a doctor misrepresents his credentials, the plaintiff must show:
 (1) That a reasonable person would find that physician experience was material in
determining the medical risk of the procedure;
 (2) That a reasonable person in plaintiff’s position informed of doctor’s
misrepresentations about his experience would not have consented.
 (3) In causation, plaintiff must show that the limited experience or credentials possessed
by the doctor could have substantially increased the risk that the plaintiff actually
suffered (this requires experts), and whether this substantially increased risk would cause
a reasonable person not to undergo the procedure.
  (4) Finally, plaintiff must show that the doctor’s misrepresentations actually materialized,
i.e., caused the specific risk that plaintiff suffered.
o The plaintiff must prove that the additional undisclosed risk posed by defendant’s true level of
qualifications and experience increased plaintiff’s risk of paralysis from the procedure.
o The general rule is that a doctor doesn’t have to disclose his/her experience.
 Notes
o The theoretical application of fiduciary theories to remedy economic conflicts of interest
 No one supposes that doctors must disclose the distorting effects of fee-for-service
reimbursement, which might result in harms from unnecessary treatment.
 Courts have been very reluctant to impose a duty on doctors to disclose these incentives.
o Discussing the costs of care
 There is virtually no legal or ethical guidance on whether Docs should tell patients how
much treatment options cost.
 Going to the doctor is the only time you do something without knowing how much it
costs ahead of time.
o Financial Disclosure Claims in the Courts
 Neade v. Portes (Ill. 2000): Patient’s estate wanted to bring a breach of fiduciary duty
claim saying that Doc had a duty to disclose his participation in a risk-sharing
arrangement with HMO that arguably gave Doc an incentive not to refer Patient for a
heart test (Patient died of a heart attack at age 37). The court disallowed the fiduciary
duty claim, saying that it was largely duplicative of the medical malpractice claim. Why?
Because plaintiff would have to prove that the Doc breached the standard of care in
failing to disclose the info.
 However, the court said that evidence of the financial incentives could be relevant
on issues relating to interest and bias IF the physician testified in the malpractice
trial.
o Institutional Disclosure Obligations Under Fiduciary Law
 Institutions don’t generally have to disclose duties imposed on physicians.
 Some statutes impose a duty on doctors to disclose any investment or ownership interest
in facilities to which they refer their patients. Also, kickbacks and incentives to doctors
from drug companies for prescribing their drugs are illegal.
o Other Financial Conflicts
 Experience and Success Rates
 Should health care providers have a duty to disclose their own “scorecards” to
patients?
 Johnson v. Kokemoor (Wis. 1996): Plaintiff had aneurism and went to the Doc.
Doc said she needed surgery and that he could do it. He misled her as to his
experience. Plaintiff claimed physician should have explained that more
experienced surgeons have lower mortality rate and then explain how much
experience he had. This is a leading case on physician disclosure of
credentials/experience.
 Abuse of Drugs and Alcohol
 Would a patient want to know that a Doc had previous substance abuse problems.
 Infection with HIV
 NJ requires surgeons to disclose to patients whether the surgeon is HIV positive.
This raises interesting problems with the ADA, which would seem to suggest that
unless an HIV physician poses a “significant risk” to the health or safety of
others, disclosure ought not to be required. Ala. Code §22-11a-63(e)-Related to
infected healthcare workers.
 Human Experimentation and Research
o General Principles
  Therapeutic misperception: most patients that participate in the trial think there is some
benefit regardless of what the doctor tells them.
 Medical research is commonly described as a multi-billion dollar activity, with “an
estimated 20M Americans taking part in more than 41K clinical trials and uncounted
more federally funded experiments.”
 IRB: Must go through this board regardless.
 The newest trend is to outsource IRB’s
 Human subject research is generally considered to be ethical if:
 (1) The participants consent,
 (2) The risks to the subjects are minimized,
 (3) The selection of the subjects is equitable (ok, you were selected to see whether
this will kill you or not),
 (4) The anticipated benefits outweigh the risks to the subjects (this does not mean
the financial benefits to Dr outweigh the risks to the patient),
 (5) Data is monitored to protect patient safety,
 (6) The subject’s privacy is protected.
 Patient’s think they are getting top-notch care, but the treatment may actually be riskier.
In addition, the patients might not even be getting the treatment, but a placebo instead.
 Two types of research:
 1. Therapeutic: provides the possibility of some benefit to the subject, and thus
the level of risk allowable may be greater because it could be offset by benefit.
 2. Non-Therapeutic: no benefit for the subject and thus the research cannot
proceed unless the risks are minimal.
 Two central concerns to research:
 The experimental treatment is often not done for the patient’s immediate benefit.
 How well informed are the patients, and how freely do they make their decisions?
 Nuremberg Code: This was enacted in response to the gruesome research experiments
that the Nazis performed.
 Tuskegee Study: researchers studied the effects of untreated syphilis in a group of black
men. The researchers told the men that they were being treated, but, in reality, were not.
 Why informed consent? Human experimentation and the ethics of autonomy
o Nuremberg Code: It’s most memorable command was that, in medical research, “the voluntary
consent of the human subject is absolutely essential.”
 The code focused as much on the experiment itself, on the welfare of the subject, and on
the conduct of the researcher as it did on the need for the subject’s consent.
o The standard model of informed consent
 Institutional Review Boards
 Provide peer review of proposed experiments
 It focuses on the subject’s state of mind more than on the experiment itself.
 It’s a subjective oriented informed consent.
o The standard model in hard cases
 Prisoners can be easily coerced into participating by prison staff and therefore
regulations require some safeguards to protect them. Also, even if there’s no coercion,
many prisoners think participation will help them gain parole.
 Terminally ill may have lost hope and thus may be more willing to participate in risky
studies because it may give them hope that they will be saved. Thus, they must be
protected, but at the same time, research needs to be done on these people.
 Children are susceptible to unethical treatment because informed consent comes from
the parent and the parent may be induced by money. Again, they must be protected, but at
the same time, research needs to be done on them.
  Likewise, mentally incompetent people cannot give consent and thus informed consent
may be in the hands of another who could be induced by money.
 Grimes v. Kennedy Krieger Institute, Inc.
o Facts: Kennedy is a prestigious research group at Johns Hopkins. KK decided to conduct an
experiment where lead-based paint was partially removed from apartments. Then these
apartments were rented to families with children (mostly low income and minorities) over a two
year period to measure the effects of lead dust on the children’s blood. The parents were never
fully informed that their children would be the canary in the mine. The IRB at the hospital
approved the experiment. The District Court granted KK MSJ.
o The Study: They set up five groups of 25 houses each. Three groups were to have different
levels of incomplete lead abatement procedures. One of the other groups was completely abated,
and the final group was modern housing that didn’t require any lead abatement. The residents of
these three housing groups with incomplete lead abatement were low-income families with small
children. Research institute wanted to monitor the kids to determine how effective the lead
abatement procedures were—basically, they were going to monitor the amount of lead in the
kids’ blood. So, they had an incentive to keep the kids there through the duration of the study
(because if the kids left early it would ruin the experiment).
o The Incentives: Research institute gave incentives to parents to continue in the study (e.g., $5
and food stamps). They arguably designed the consent form to hide that they were purposely
exposing the kids to lead. The form said that participants would get free blood tests and be
informed of the results.
o Rule: Parental consent, no matter how informed, is insufficient to warrant intentionally and
unnecessarily placing children in potentially hazardous nontherapeutic research surroundings.
o Rule: Researcher owe a duty of care to research study subjects, the lack of which constitutes an
actionable breach of duty.
o Rule: A human subject is entitled to all material information. The parents should have been told
that the children need to stay in the home to make the experiment effective and the children
should have been informed about the possibility of the accumulation of lead in the blood.
o Rule: Otherwise healthy children should not be the subjects of nontherapeutic experimentation
or research that has the potential to be harmful to the children.
o Analysis: The IRB partially misconceived its role in helping the researchers avoid federal
regulation, rather than look of for the patient’s safety.
o The IRB’s are not designed to be sufficiently objective to consider the ethical situations
concerning the experiments.
o Regardless of consent, however, researches have duties independent of contract:
 (1) To protect subjects from unreasonable harm
 (2) To completely and promptly inform subjects of potential hazards existing from time
to time (because of the “profound trust” that subjects have in researchers).
o Four conclusions:
 (1) Parents can’t consent to non-therapeutic research where there is a risk of harm to the
child.
 (2) Informed consent arrangements for non-therapeutic research CAN be contracts.
 (3) These contracts can create special relationships with duties.
 (4) A special relationship normally exists between researchers and human subjects. But
this is for the trier of fact to determine case-by-case. This special relationship can be
created, for example, by the Nuremberg Code or by government regulations.
o On Motion the Reconsider
 The court addressed what is considered “any risk” because that determines whether or not
parental consent matters.
 “Any risk” means any articulable risk beyond the minimal kind of risk that is inherently
in any endeavor.
 Notes
o What is research? A systematic investigation, including research development, testing, and
evaluation, designed to develop or contribute to generalizable knowledge.
o A human subject is “a living individual about whom the investigator conducting research obtains
(1) data through intervention or interaction with the individual, or (2) identifiable private
information.
o Human subject research is generally considered to be ethical so long as (1) the participants
consent, (2) the risks to subjects are minimized, (3) the selection of subjects is equitable, (4) the
anticipated benefits outweigh the risks to the subjects, (5) data is monitored to protect patient
safety, and (6) subject’s privacy is protected.
o IRB
 Must contain at least one member unaffiliated with the institution.
 Members may not participate in the decision if they have a conflict of interest.
o Informed consent
 Federal law prohibits research sponsors from requiring waivers of liability for negligence.
o In Washington University v. Catalona, the court found that fully informed tissue donors retained
no ownership rights to their biological materials.
o Emergency Research
 FDA regulations now permit research experimentation on patients who have not
consented, personally or through surrogates, in certain circumstances.
 Under the rule, an independent physician and an IRB must agree that the clinical trial
concerns a life-threatening condition and that there is no proven, available treatment; that
obtaining consent is not feasible; that the research cannot be carried out in another
manner; and that the risks and benefits of the experimental procedure are reasonable
under the circumstances.
 Medical Liability
 Nelson Chart
Lawyer Amt and Type Legal Social Factors Evidentiary
of Contact Definition-Std Stumbles-Exp
of Care Witnesses
Iatrogenic Pool of Stock of Pool of Resolution of Outcomes
Event Adverse Potential Claims Filed Disputes
Events Claims
Doc/Hospital Quality of Statute of Balance of Verdict + Compensation;
Care Limitations potential Settlement Deterrence;
payoff w/ cost
of pursuing
claim

 Medical Mistakes and Quality

 Making Medical Errors in “Medical Treasures”
o Medical treatment evolved from a social contractual perspective. Patients would submit to
doctors on the assumption that doctors would do their best to treat them.
o This is an unrealistic standard that doctors would practice perfect medicine. The problem arises
because doctors don’t want to admit fallibility.
 Error in Medicine
o Nearly 100K people die each year partly as a result of iatrogenic injury, the equivalent of three
jumbo jet crashes every two days.
 o A patient can receive 1.7 errors per day per activity. However, when a patient receives 178
activities per day, that number shows that 99% of what doctors do is medically correct.
o However, 99% isn’t good enough.
o “If we had to live with 99.9%, we would have: 2 unsafe place landings per day at O’Hare, 16K
pieces of lost mail every hour, 32K bank checks deducted from the wrong bank account every
hour.”
o Slips v. Mistakes
 Skill-based errors are “slips.” These are unconscious glitches in automatic activity.
 Rule-based and knowledge-based errors are errors of conscious thought and are termed
“mistakes.”
 Notes
o The extent of medical error: Using a broad set of studies, researchers found that U.S. patients
only receive about 55% of the care recommended by various guidelines.
o Conceptual Distinctions: Roughly 1/3 of malpractice claims are for diagnostic errors, a third are
for surgical errors, and a third are for improper medical treatment.
o The Patient’s Perspective: In one law office, 56% of inquiries about malpractice over a ten-year
period were prompted by the doctor’s referring unpaid bills to a collection agency, and 60% of
the potential clients were told by a nurse that malpractice had occurred.
 Measuring the Malpractice System
 Notes
o Prior to 1960, only one in seven doctors had been sued in their entire career. Today, claims are
filed about one in seven doctors each year.
o When malpractice complaints go to trial, plaintiffs win only 20-30% of the time.
 Approaches to improving quality of care
 The necessary and proper role on regulation to assure the quality of health care
o Professional Self-Regulation
 First, professionals are educated and socialized to assure the quality of their own work.
 Second, professional informally review the quality of the work of their colleagues.
 Third, professionals and institutions sponsor and administer certification and
accreditation programs aimed at assuring the quality of their peers.
 Finally, professionals practicing within institutions police the quality of their associated
through medical staff privileges and quality assurance programs.
o Certification: Board and specialty board certified. Certification is done through the professions
(e.g., MDs, specialists, etc.) and simply ensures that a doctor has the necessary education and
training and has passed the exam. Certification is a structural analysis and only shows that a
doctor has met the minimal standards. Hospital privileges are often conditioned on certification.
o Peer Review (formal and informal): Can begin with application for hospital /staff privileges. Can
also involve looking at a doctor’s actions (e.g., the tissue committee may look to see if the
removal of that tissue or organ was necessary). Medical review committees focus on the process
(was the proper procedure/process followed), and want to determine that the right course of
treatment was taken and the acts were conducted within the prevailing standards.
o The Market as a quality control mechanism
 Professionals that deliver bad services will see a decline in demand for their work. These
doctors will then improve their services in order to recapture their market share.
 The problem is that consumers need information to make decisions.
 Researchers argue that primary care physicians will refer their patients to good
specialists. However, this isn’t the case very often. The doctor will refer based on
friendship, staff privileges, or relationships with pharmaceutical companies.
o Regulatory approaches to quality assessment
  At one end of the spectrum, programs could focus of auditing performance and providing
feedback. TO the extent that practitioners or institutions are unaware of problems in their
care deliver process, merely noting those problems may suffice to bring improvement.
 At the other end of the spectrum, a variety of sanctions exist to restrain professionals who
exhibit severe problems. The traditional medical licensure board sanctions of suspension
or revocation temporarily or permanently remove the physician from practice.
o Notes
 The Health Care Quality Improvement Act of 1986 established a databank for things such
as malpractice settlements, loss of privileges, disciplinary proceedings, etc. Hospitals are
supposed to check the databank before they grant privileges to staff. This isn’t available
to the public, but a plaintiff in malpractice suit might be able to establish the hospital was
negligent because they didn’t check the databank.
 Total Quality Mgmt: Troyen Brennan argues that the entire legal regime is antithetical to
the philosophy of Total Quality Mgmt. (or Continuous Quality Improvement). TQM
focuses on systems. It doesn’t blame individuals for error—instead, it tries to improve the
system. Brennan argues that the malpractice regime discourages disclosure of error and
encourages doctors to cover things up.
 B. PHYSICIAN LIABILITY
 1. The Custom-Based Standard of Care
o Malpractice law is unique in the area of torts. Traditionally, custom is determinative of the
standard of care. Experts testify what the custom is, and the jury determines whether doctor
complied with the custom of the profession.
o This is very different from other tort standards, which utilize a standard of reasonableness.
Custom is only relevant evidence of reasonableness—but it is not determinative. See T.J.
Hooper. If custom were determinative of the standard of care in B’ham, then it would be
reasonable to enter an intersection after a traffic light turns red.
o Some argue that courts today are giving less deference to custom in malpractice.
o Two problems with custom:
 Difference in what is done and what is accepted: e.g., it’s customary in B’ham to run red
lights, but it’s not accepted in court.
 There may be NO custom: or there may be a number of options in a given situation. See
Dartmouth Atlas, Wennberg study.
 McCourt v. Abernathy (Rejection of Error in Judgment Rule)
o Facts: Patient was injured while working with horses—she hurt her shoulder and had pricked her
finger. She went to see Doctor Abernathy on March 9. He knew about the finger and shoulder,
but only treated the shoulder with pain medicine. On March 13, Patient went to ER with more
pain and difficulty breathing, and finger was very swollen and oozing pus. She saw Doctor
Clyde. Clyde only gave her pain medicine (no antibiotics). On March 14, she went back to the
ER. Abernathy saw her that night and prescribed a mild oral antibiotic. ER doc admitted her that
night. On the morning of March 15, both Abernathy and Clyde saw her while making rounds.
They called internal med doc, but didn’t say it was urgent. Internal med doc saw her, diagnosed
sepsis, and immediately put her in the ICU on IV antibiotics. But it was too late—patient died
from flesh-eating bacteria on the 19th.
o Procedure: Patient’s family sued Doctors Abernathy and Clyde, and a jury awarded both
compensatory and punitive. P’s experts testified that the doctors’ conduct in this case clearly
violated the customary standard of care. Abernathy should have put her on antibiotics on the 9th,
and Clyde should have put her on antibiotics and order tests on the 13th. A & C should have
ordered aggressive observation and consulted with another doc on the 14th. The experts did NOT
testify that docs missed the diagnosis.
o The main issue on appeal related to the jury instruction. Ds wanted a mistake-in-diagnosis or
error-in-judgment instruction to the jury, i.e., a physician is NOT liable for a mistake in
 diagnosis or error in judgment if he acts w/in the appropriate standard of care. Basically, this was
a good faith standard.
 But the court rejected this as possibly confusing the jury. It puts TOO much emphasis on
good faith (how could a P prove this?).
 See the court’s enunciation of the standard of care—at first glance it sounds like a
reasonableness standard but other parts reveal it is a customary standard.
o Rule: A physician must exercise the degree of skill and care of a competent practitioner in the
physician’s field of medicine. What would an ordinary careful and prudent physician have done
under the same or similar circumstances?
o Damages: The other issue on appeal was that Ds contended the punitive damage awards were
grossly excessive. But the court rejected this also. There was evidence of a “conscious lack of
due care.” Also, there was evidence that medical records had been altered.
 Notes
o Some states allow an error-in-judgment instruction. McCourt doesn’t say, however, that courts
can’t give some form of an error-in-judgment instruction.
 Locke v. Pachtman
o Facts: Resident broke off 1.5 cm of a needle in Patient during surgery and couldn’t find it.
Attending Physician was out of the room when Resident broke off the needle. Patient eventually
got another Surgeon to remove the needle, and she sued Resident and Attendant. The trial court
granted a directed verdict for Ds, and the Mich. S. Ct. aff’d.
o P alleged two acts of negligence: (1) the needle was too small; (2) Resident negligently used the
needle. The problem with P’s case, however, is that she didn’t prove the standard of care.
o P’s expert gave conflicting testimony. Basically, Expert didn’t “pull the trigger.” First, she
testified that needle breaks were an inherent risk of surgery. Then, she testified how needle
breaks could occur and that incorrect technique usually caused it. But Expert didn’t testify either
as to what the customary standard of care was or that Resident violated it. Expert also said she
couldn’t give an opinion as to whether the needle was too small.
o P tried to get around this by using Resident’s admissions: “I knew the needle was too small,” etc.
Thus, P contended that Expert’s testimony PLUS the admissions were enough to get it to the
jury. P also contended res ipsa. But the court rejected ALL of these arguments.
o Rule: The appropriate standard of care relating to the use of needles is beyond the common
knowledge of the jury—thus, there MUST be expert testimony to establish the customary
standard of care.
o The court rejected P’s arguments relating to Resident’s statements. The court distinguished
Orozco, where patient overheard doc say “Oops, I cut in the wrong place” and patient eventually
lost a testicle. Orozco held that this stmt. was enough for the jury to determine the appropriate
standard of care. What distinguished Orozco from this case is that the standard of care here is not
accessible to the jury w/o expert testimony. Orozco involved injury to another part of the body—
NOT the area of the incision. The jury doesn’t need an expert to know that doctor messed up, but
here, P’s injury was in the same location.
o Levin’s dissent: Resident’s statements were enough (so does Nelson).
 Notes
o Nelson says: The only way you could use res ipsa here is to provide a basis through expert
testimony that needle breaks normally don’t occur in surgery.
 The Role of the Jury in Modern Malpractice Law
o For more than a century, courts have given physicians the power to set their own standard of
care.
o Medical malpractice is different from other cases: Medical customs are not merely admissible;
they define the physician’s legal standard of care.
o Gradually, courts are abandoning the custom-based standard of care.
 Variations in the Standard of Care
o Physicians are judged by the standard of care that is established by prevailing practice and
professional consensus.
o But, it’s hard for someone to find a “clear way” of doing things amongst doctors.
 Jones v. Chidester
o Facts: Jones went in for foot surgery and a tourniquet was applied to stop the blood flow. After
the surgery, Jones was experiencing problems and went to see a neurosurgeon that diagnosed
him with nerve damage (drop foot). Jones sued Chidester claiming malpractice, and both sides
presented experts concerning the acceptability of the procedure performed. When considering
experts, is the doctrine “considerable number” or “respectable and reputed?”
o Rule: A Doc has an absolute defense to a claim of negligence when (1) it is determined that the
prescribed treatment or procedure has been approved by one group of medical experts even
though an alternate school of thought recommends another approach, or (2) it is agreed among
experts that alternative treatment and practices are acceptable.
o Rule: There must be a considerable number of physicians, recognized and respected in their
field, sufficient to create another “school of thought.”
 Some states have a “respectable minority” requirement.
o Analysis: The fact that a treatment is “recognized and respected” doesn’t work. There must be a
significant number of physicians that adopt it. You’ve got to have both things. The court refused
to set a number.
o The expert should get on the stand and inform the jury of the other procedure. Once the expert
shows that other experts agree with the alternate procedure, then the jury can be instructed on the
two schools of thought.
 Chapel v. Allison
o Facts: Chapel was injured when he broke his leg. He went to see Dr. Allison, who put a long
cast on his leg to fix the injury. When the cast came off, Chapel was suffering from osteotomy,
or bow-legged deformity. Allison was a general practitioner that had been Allison’s Doc for 20
years. Chapel sued and brought an orthopedics expert that said that Chapel wouldn’t have the
knowledge to fix the leg. The court ordered a directed verdict. Did the “Same Locality” rule
apply in determining the standard of care?
o Rule: A non-board certified practitioner is held to the standard of care of a “reasonably
competent general practitioner acting in the same or similar community in the US in the same or
similar circumstances.”
o Rule: “Same locality rule”: Doc must exercise that care which is usually exercised by a Doc of
good standing of the same system or school of practice in which he resides. There were two
aspects to this standard:
 (1) Substantive—docs must practice in accordance with the custom of the doctors’
community;
 (2) Procedural—under a very strict locality rule, this meant that a doctor from the
particular community had to testify regarding the local custom. But later cases expanded
this to a same or similar locality (either within the state or the nation).
o Analysis: “Similar circumstances” permits consideration by the trier of fact of legitimate local
factors affecting the ordinary standard of care including the knowledge and experience of the
general practitioner, commensurate with the skill of other competent physicians of similar
training and experience, with respect to the type of illness or injury he confronts and the
resources, facilities and options available to him at the time.
o Different standards were suggested:
 1. Plaintiff: impose a duty on the Doc to consult or refer to a specialist
 2. Defendant: restrict standard to that of a Doc practicing in same or similar communities
within the state
  3. Trial Lawyers: basically advocated a national standard of care, but under similar
circumstances
 4. Hospital Assn.: strict locality rule (to protect rural hospitals). Helps keep doctors in the
area.
 5. Med. Assn.: expand GP standard to same or similar locality in the nation, but apply
national specialist standard to GP who holds himself out as a specialist
 Notes
o Experimentation
 Does the “considerable number” requirement hurt experimentation? With that type of
treatment, there usually aren’t many others trying it as well.
 Three types of treatment:
 Therapeutic treatment, whereby the patient is treated with one of the normal and
approved procedures.
 Therapeutic experiments, whereby the patient is treated with new methods and
techniques for primarily therapeutic purposes
 Research experiments, whereby persons, either patients or test subjects, are
treated with new methods and drugs for purely scientific purposes.
 Consent is likely to remove liability, unless of course the procedure itself was improperly
performed.
o Unorthodox Medicine
 In one case, a Doc attempted to treat cancer with nutritional methods.
 “We see no reason why a patient should not be allowed to make an informed decision to
go outside currently approved medical methods in search of an unconventional
treatment.”
 But the court held that a Doc can be disciplined in engaging in unprofessional conduct
even thought the patient is fully informed.
o Locality Rules
 The problem with the locality rule was that it was difficult to find an expert to testify
locally. No one wanted to “rat” each other out.
o The specialization dimension of the standard of care
 Normally, if Doc holds himself out—explicitly or implicitly—as a specialist, the
specialist standard will apply. But what about sub-specialties, e.g., a pediatric
cardiologist? What about doctors-in-training, e.g., residents?
 “Failure to recognize limits of one’s own competence”
 The custom-based standard is adjusted according to the physician’s specialty.
 If a M.D. is in a residency program training to be a specialist, then the courts typically
hold them to the standard of a regular Doc. The idea is that if they can practice the
specialty yet, why be held to that standard.
 The impact of economic constraints
o Should the standard of care be different for HMO patients vs. fee-for-service patients? The
argument is that a patient under an HMO plan contracts for different expectations due to cost-
containment techniques, and this should be taken into account. But the problem with this is that
doctors don’t want to raise this as a defense (“I didn’t recommend this test for Patient because I
wanted to have a bigger share of the HMO bonus at the end of the year. I’m sorry that Patient
died, but at least my kids had good Christmas gifts.”)
o This issue hasn’t really been addressed by the courts.
o Most courts won’t admit evidence of financial incentives.
 Qualification and Examination of Medical Experts
 Thompson v. Carter
o Facts: Thompson sued Dr. Carter alleging that she developed Stevens Johnson Syndrome as a
result of being prescribed bactrim. The lower court issued a directed verdict. Could Thompson
 use a pharmacist to talk the physician’s standard of care even though he himself isn’t a Doc? The
pharmacist has extensive credentials. The lower court found that the pharmacist could testify as
to the drug bactrim, but not the Doc’s standard of care.
o Rule: The expert does not have to possess a medical degree to testify to the Doc’s standard of
care. What is necessary is that the witness possesses medical knowledge, however obtained.
o Analysis: A witness may qualify as an expert based on his knowledge, skill, experience, training,
education, or a combination thereof.
o BUT, this does not mean that every pharmacologist is qualified to testify as an expert to establish
the physician’s standard of care.
 Trower v. Jones
o Facts: Dr. Jones accidentally misdiagnosed Trower as having gastroenteritis, when she in fact
had pelvic inflammatory disease. The pelvic disease was diagnosed by a different doctor and
resulted in the left fallopian tube and ovary removed. Trower’s expert was grilled on cross about
the 700 cases he had worked on for his business. He testified that he paid money and always
testified for the plaintiff.
o Rule: Experts can now render opinions without prior disclosure of the underlying facts or data
upon which those opinions are based.
o Rule: Experts can now render opinions based upon certain inadmissible evidence.
o Rule: On cross, the attorney can question the expert about how often he testifies and how much
he makes.
o Analysis: The fact that an expert makes money and testifies very often is probative. The jury is
attempting to determine the validity of the witness.
 Notes
o An AL case refused to admit expert opinions from a pharmacist and toxicologist.
o The Geographic Dimension
 Where the jurisdiction follows a local or state-wide standard of care, it is not generally
necessary for the expert to actually live and practice in that location.
o Hired Guns
 The general rule is that experts may be impeached as “hired guns” for plaintiffs.
o Ala. Code 6-5-548: This governs expert testimony in malpractice cases. There are separate rules
for non-specialists and specialists:
 For non-specialists, the expert must be a “similarly situated” provider—this requires
licensure, training and experience in the same discipline, and practice in same discipline
w/in a year of the alleged malpractice (this basically eliminates “traveling experts”).
 For specialists, the same requirements apply PLUS certified by an appropriate Bd. in the
same specialty. See Johnson v. Price, 743 So. 2d 436 (Ala. 1999) (CB 334) (refusing to
allow a board certified general surgeon to testify against an osteopath with certification
from the Am. Osteopathic Bd. of Surgery).
o Some states have cracked down on expert witnesses with a variety of measures: requiring the
expert (1) to reside in or near the state; (2) to have been in active practice in recent years; (3) to
practice in the same or overlapping specialty, or to have performed the same type of procedure,
in recent years, and/or; (4) to be licensed in the same professional category
 Daubert v. Merrell Dow Pharm
o Facts: Two kids sued after being born with birth defects. They claimed that the defects resulted
from their mother’s ingestion of Bendectin. Merrell produced an expert that was well qualified
and said that the drug doesn’t cause defects. Daubert then produced 8 experts that contradicted
the Merrell Doc. The Daubert experts based their testimony on animal testing. Under Frye, the
old standard used to be whether the expert opinion was “generally accepted.” The lower court
granted MSJ for Merrell.
 o Rule: Instead, the trier of fact should determine whether the expert is proposing to testify to (1)
scientific knowledge that (2) will assist the trier of fact to understand or determine a fact in issue.
 This involves a determination of whether the methodology underlying the testimony is
scientifically valid and can be properly applied to the facts at issue.
o Analysis: In order to qualify as “scientific knowledge”, an inference or assertion must be derived
by the scientific method.
o The court should consider the following factors in making this determination (a non-exhaustive
list of factors):
 1. Can it be and has it been tested?
 2. Has it been subjected to peer review and publication?
 3. What is the known or potential rate of error, and do standards exist that control the
technique’s operation?
 4. General acceptance?
 Notes
o In Kumho, the court clarified that Daubert also applies to “technical or other specialized
knowledge,” and so it sustained a trail court’s decisions to exclude as unreliable the proffered
testimony of an expert on tire failure, in a case claiming that a manufacturing defect caused a tire
to blow out.
o Alabama still follows Frye, but Ala. has modified and broadened it. It applies beyond scientific
knowledge to methods and procedures.
o Frye deferred to collective opinion of the scientific community, whereas Daubert asks judges
themselves to determine what constitutes “good science,” employing factors such as those
mentioned in the opinion.
o Epidemiological Evidence: Epidemiological evidence doesn’t come up much in malpractice.
Epidemiological evidence is problematic because causation is very difficult to establish. What
many courts have done is require a showing of a 200% increase in risk as a result of exposure to
a toxic substance. This showing will meet the preponderance standard.
 Stang v. Byington (older review)
o Facts: Stang had three pap smears in which the blood samples were not properly handled. The
three tests occurred over 8 months. The first test showed moderate blood abnormalities. The 2nd
test was an incomplete blood sample and the final third test reveled IV cervical cancer. The
defense’s expert testified that it didn’t matter; that cancer of that type couldn’t progress that fast.
Stang argued that her attorney should have been able to cross the expert regarding medical tests
and treatises used in the testimony. The court wouldn’t allow the experts to use the treatises as a
basis for their opinions, and wouldn’t allow the experts to read portions of the treatises to the
jury.
o Rule: Treatises and textbooks are hearsay when they are offered to prove the truth of the matter
asserted.
o Analysis: This is an old rule. They may be used for other purposes, e.g., impeachment,
contradiction, etc., but NOT as independent evidence. Experts can base their opinions on
textbooks, but they can’t say that it’s based on textbooks, etc.
 Notes
o Learned Treatises: The FRE reject this approach. FRE 803(18) allows testimony, either in direct
or cross, from learned treatises, guidelines, etc., that an expert acknowledges are reliable. But the
FRE doesn’t allow the sources to be received as exhibits—they may only be read into evidence.
The jury can’t take it to the jury room.
 Some courts have allowed this type of evidence to establish the standard of care. For
example, most courts have held that the PDR (a compilation of package inserts) may
provide evidence of the std. of care.
 Generally, you have to show the authoritative nature of the source to use it as evidence.
  One of the problems with relying on a treatise or guideline to establish the standard of
care is that it leaves the door open for the other side to show why it doesn’t apply in this
particular case.
o Practice guidelines: These could be useful, particularly to Ds. But they’re usually phrased so as
not to be very helpful in malpractice actions (e.g., “this is optimal treatment, but not necessarily
required”).
 JCAHO maintains an Accreditation Manual for Hospitals: Nelson says look at this if
you’re suing a hospital under a theory of administrative negligence, etc.
 Be aware of practice guidelines
 Duquette v. Superior Court
o Facts: A one year child had a dermoid tumor on the spine, and the Doc and the hospital were
sued after the surgery for failure to property treat and failure to diagnose. Defense counsel talked
with the treating physicians without the plaintiff’s permission. It’s a patient/doctor privilege
question. May the defendants engage in ex parte communications with the plaintiffs treating
physicians without consent?
o Rule: When a plaintiff places a particular medical condition at issue by means of a claim or
affirmative defense, then the patient doctor privilege will be deemed waived with respect to that
particular medical condition.
 BUT, the holder of the privilege waives only his right to object to discovery of pertinent
medical information.
o Rule: So, unless the defense works through applicable discovery under FRCP, ex parte
communications are prohibited.
o Analysis: The doctor may be under considerable pressure to talk. His malpractice insurer may be
the same company for the defendant. The Doc may also breach his code of ethics by talking
about the patient.
o Notes
 Although a malpractice plaintiff waives her right to confidentiality in the medical records
and treatment relationship at issue in the litigation, that waiver does not extend to any
treatment the plaintiff might have ever received, even by the same doctor.
 When ex parte communications by the defense with the plaintiffs attorney occur,
sometimes the court has bared the defense from using witnesses that were improperly
contacted.
 Three sources of confidentiality and evidentiary privilege for defendants in malpractice
cases:
 (1) peer review confidentiality statutes
 (2) the attorney-client communication privilege
 (3) the lawyer’s work product privilege.
 Section 6-5-548(e) reads:
o “The purpose of this section is to establish a relative standard of care for health care providers. A
health care provider may testify as an expert witness in any action for injury or damages against
another health care provider based on a breach of the standard of care only if he or she is a
‘similarly situated health care provider’ as defined above. It is the intent of the Legislature that
in the event the defendant health care provider is certified by an appropriate American board or
in a particular specialty and is practicing that specialty at the time of the alleged breach of the
standard of care, a health care provider may testify as an expert witness with respect to an
alleged breach of the standard of care in any action for injury, damages or wrongful death
against another health care provider only if he or she is certified by the same American board in
the same specialty.”
 Section 6-5-548 — Burden of proof; reasonable care as similarly situated health care provider; no
evidence admitted of medical liability insurance.
 o (a) In any action for injury or damages or wrongful death, whether in contract or in tort, against a
health care provider for breach of the standard of care, the plaintiff shall have the burden of
proving by substantial evidence that the health care provider failed to exercise such reasonable
care, skill, and diligence as other similarly situated health care providers in the same general line
of practice ordinarily have and exercise in a like case.
o (b) Notwithstanding any provision of the Alabama Rules of Evidence to the contrary, if the
health care provider whose breach of the standard of care is claimed to have created the cause of
action is not certified by an appropriate American board as being a specialist, is not trained and
experienced in a medical specialty, or does not hold himself or herself out as a specialist, a
"similarly situated health care provider" is one who meets all of the following qualifications:
 (1) Is licensed by the appropriate regulatory board or agency of this or some other state.
 (2) Is trained and experienced in the same discipline or school of practice.
 (3) Has practiced in the same discipline or school of practice during the year preceding
the date that the alleged breach of the standard of care occurred.
o (c) Notwithstanding any provision of the Alabama Rules of Evidence to the contrary, if the
health care provider whose breach of the standard of care is claimed to have created the cause of
action is certified by an appropriate American board as a specialist, is trained and experienced in
a medical specialty, and holds himself or herself out as a specialist, a "similarly situated health
care provider" is one who meets all of the following requirements:
 (1) Is licensed by the appropriate regulatory board or agency of this or some other state.
 (2) Is trained and experienced in the same specialty.
 (3) Is certified by an appropriate American board in the same specialty.
 (4) Has practiced in this specialty during the year preceding the date that the alleged
breach of the standard of care occurred.
o (d) Notwithstanding any provision of the Alabama Rules of Evidence to the contrary, no
evidence shall be admitted or received, whether of a substantive nature or for impeachment
purposes, concerning the medical liability insurance, or medical insurance carrier, or any interest
in an insurer that insures medical or other professional liability, of any witness presenting
testimony as a "similarly situated health care provider" under the provisions of this section or of
any defendant. The limits of liability insurance coverage available to a health care provider shall
not be discoverable in any action for injury or damages or wrongful death, whether in contract or
tort, against a health care provider for an alleged breach of the standard of care.
o (e) The purpose of this section is to establish a relative standard of care for health care providers.
A health care provider may testify as an expert witness in any action for injury or damages
against another health care provider based on a breach of the standard of care only if he or she is
a "similarly situated health care provider" as defined above. It is the intent of the Legislature that
in the event the defendant health care provider is certified by an appropriate American board or
in a particular specialty and is practicing that specialty at the time of the alleged breach of the
standard of care, a health care provider may testify as an expert witness with respect to an
alleged breach of the standard of care in any action for injury, damages, or wrongful death
against another health care provider only if he or she is certified by the same American board in
the same specialty.
 Johnson v. Price
o Facts: Doc Price was an O.D. and performed surgery on Johnson, which ultimately caused his
death. Price relied on an affidavit that said that he had not deviated from the standard of care.
Johnson provided a M.D. affidavit from a general surgeon certified by the Am. Board of Surgery
that Price had deviated from the standard of care. The court didn’t allow the M.D.’s affidavit
because he was not a “similarly situated health care provider”.
o Rule: In AL the only instance in which a court can consider the expert testimony of another
health -care provider is an instance in which the expert witness is certified by the very same
organization that certified the defendant health-care provider
 o Analysis: Dr. Price is certified by the American Osteopathic Board of Surgery, and Dr. Kirchner
is certified by the American Board of Surgery. These are clearly not the same organization. The
fact that they may have the same purpose, that they may certify providers for the same
procedures, or that they may require the same qualifications would be irrelevant.
 Supplemental Cases
 Ex Parte Waddail
o Facts: A 12-year old child was brought to the emergency room at Elba Hospital with diabetes
problems. Doc Roberts saw the child and eventually had him transported to the AL medical
center. On the way to the Center, the child went into respiratory distress and died. The mom sued
the Doc arguing that he negligently failed to stabilize the child. At trial the mom had Dr.
Longmore testify about the standard of care. The MSJ for the Doc was granted because she
hadn’t presented “substantial evidence of proximate cause.”
o Rule: A three-step test for determining whether an expert is qualified to testify in a case brought
under the Act. A court must determine (1) the standard of care the plaintiff alleges the defendant
breached; (2) whether the defendant who is alleged to have breached the standard of care is a
specialist in the area of care in which the breach is alleged to have occurred; and (3) whether the
expert is qualified under the criteria set out in the relevant statute.
o Rule: A “specialist” as one who “is certified by an appropriate American board as a specialist, is
trained and experienced in a medical specialty, or holds himself out as a specialist.”
o Analysis: Dr. Roberts is not a “specialist”. As previously stated, § 6-5-548(c) defines a
“specialist” as one who is board-certified in a specialty, who is trained and experienced in a
medical specialty, and who holds himself or herself out as a specialist. The Doc can testify
because he is similarly situated. The lower court applied subsection (e), when subsection (b)
applied.
o Section 6-5-548(b)
 “In any action for injury or damages or wrongful death, whether in contract or in tort,
against a heath care provider for breach of the standard of care, the plaintiff shall have the
burden of proving by substantial evidence that the health care provider failed to exercise
such reasonable care, skill, and diligence as other similarly situated health care providers
in the same general line of practice ordinarily have and exercise in a like case.”
 A “similarly situated health care provider,” under subsection (b), is one who (1) is
licensed by the appropriate regulatory board or agency of this or some other state; (2) is
trained and experienced in the same discipline or school of practice; and (3) has practiced
in the same discipline or school of practice during the year preceding the date that the
alleged breach of the standard of care occurred.
 Holcomb v. Carraway
o Facts: Starting in 1984, Holcomb became a patient of Carraway, and several other Docs. She
constantly complained of pain in her left breast, but the Docs never found anything. Carraway,
and several other Docs examined the x-rays, examinations, and reached the conclusion that it
wasn’t a problem. In 1999, Holcomb was having hip pain and a mass was determined on her
right hip. She was diagnosed with cancer and died in 2005. The husband sued for failure to
detect, diagnose and loss of consortium.
o Rule: The plaintiff in a medical-malpractice action must prove by substantial evidence that the
defendant health-care provider “failed to exercise such reasonable care, skill, and diligence as
other similarly situated health care providers in the same general line of practice ordinarily have
and exercise in a like case.”
o Rule: When the proffered expert witness meets the requirements of a “similarly situated health
care provider,” a trial court retains the discretion provided in Rule 702, Ala. R. Evid., to
determine whether a witness’s testimony will assist the trier of fact.
o Analysis: A plaintiff ordinarily must present expert medical testimony; however such expert
testimony is allowed only from a “similarly situated health care provider.” The court found that
 Carraway was a specialist in surgery; however, the expert testimony offered by the plaintiff was
not a specialist in the same field. Just because the doctor meets the requirement of a similarly
situated health care provider doesn’t mean that he gets to testify. Even thought the expert witness
was a radiologist, he hadn’t practice in a long time.
o If the defendant is a nonspecialist, § 6-5-548(b) defines a “similarly situated health care
provider” as one who meets all of the following qualifications:
 (1) Is licensed by the appropriate regulatory board or agency of this or some other state.
 (2) Is trained and experienced in the same discipline or school of practice.
 (3) Has practiced in the same discipline or school of practice during the year preceding
the date that the alleged breach of the standard of care occurred.”
o If the defendant is a specialist, subsection (c) defines a “similarly situated health care provider”
as one who meets all of the following qualifications:
 (1) Is licensed by the appropriate regulatory board or agency of this or some other state.
 (2) Is trained and experienced in the same specialty.
 (3) Is certified by an appropriate American board in the same specialty.
 (4) Has practiced in this specialty during the year preceding the date that the alleged
breach of the standard of care occurred.”
 Ex Parte Communications
o Alabama does not have a physician-patient privilege.
o Limits of insurance liability for doctors cannot be discoverable in AL. But, probably could find
out who the physicians were insured by.
 Romine v. Medicenters of America
o Facts: A patient was bedridden and suffering severe problems as a result of a Berry aneurysm.
After the patient died, the executrix sued for medical malpractice. The defense put on Dr.
Bornowski, who said that the appropriate steps were taken. The plaintiff then questioned the Dr.
about his previous conversations with the defense attorney and whether they violated doctor-
patient confidentiality. The plaintiff argued that the deposition couldn’t be entered into evidence.
o Rule: As a general proposition no party to litigation has anything resembling a proprietary right
to any witness's evidence. Absent a privilege no party is entitled to restrict an opponent's access
to a witness, however partial or important to him, by insisting upon some notion of allegiance.
o Rule: An expert witness may give opinion testimony based upon either facts of which he has
personal knowledge or facts which are assumed in a hypothetical question. In either event, the
facts known to the expert or hypothesized must be facts in evidence.
o Analysis: The court affirmed the verdict, holding that the doctor-patient privilege wasn’t
breached, and that doctors may testify to their medical opinion.
 Zaden v. Elkus
o Facts: Zaden has hip problems and a surgery is performed to attempt to fix a nerve in the hip.
Turns out it was cut in half. Zaden sued Elkus for transecting the nerve. During the Salmon
(treated Zaden at Healthsouth) deposition, he doesn’t want to say anything. An attorney for
Christian & Small was at the deposition for Salmon.
o Rule: FRE 403 can be used to keep doctors from disclosing confidential information in
depositions.
o Analysis: The court held that ex parte communications with the treating physicians were fine.
 Alternate Theories of Liability
 Res Ipsa and Negligence per se
 Locke v. Pachtman
o Facts: A long needle broke off in a patient. The court held that there was insufficient expert
testimony for the case to go to trial based on breach of duty of care.
o Rule: Four factors are necessary for Res Ispa:
  (1) Event must be of a kind that ordinarily does not occur in the absence of someone’s
negligence;
 (2) It must be caused by an agency or instrumentality within the exclusive control of the
defendant;
 (3) It must not have been due to any voluntary action or contribution on the part of the
plaintiff;
 (4) Evidence of the true explanation of the event must be more readily accessible to
defendant than to plaintiff.
o Analysis: Plaintiff tried to argue that the fact that the need wasn’t removed was res ipsa
negligence. “A bad result will not itself be sufficient to satisfy condition (1).” Need expert
testimony to establish res ipsa.
 Notes
o “You don’t need a weatherman to tell you which way the wind blows.”
o Three levels of doctrinal categories:
 The “common knowledge” rule allows the jury to make simple factual findings from its
own experience and knowledge base. It allows some facts to be found even though there
are gaps in the supporting evidence, but it usually does not allow a finding of negligence
without any expert testimony at all.
 Res Ipasa is a stringer rule because it does allow this result, in proper circumstances.
 Negligence per se is stronger still; it can result in a judge directing a verdict of negligence
as a matter of law.
o Alabama cases: Baker v. Chastain, 389 So. 2d 932 (Ala. 1980) (see CB 358 n.2); Ex parte
Health South, 851 So. 2d 33 (Ala. 2002) (describing situations where expert testimony is not
required); Breaux v. Thurston, 888 So. 2d 1208 (Ala. 2004) (reversing verdict against doctor
because of error in jury instruction—common knowledge allows case to go to the jury, but the
jury instruction basically didn’t permit the jury to find that the doctor was not negligent, i.e., that
doctor abided by hospital policy in refusing to be involved in count to make sure no clamps were
left in woman after surgery).
o What is the effect of using res ipsa? Some courts simply allow the case to go to the jury, while
other courts instruct the jury to find negligence.
 Ordinary Negligence
o Argues that liability should be imposed regardless of medical custom or contrary to known
medical custom.
 Helling v. Carey
o Facts: Helling was suffering from an eye pressure problem that caused her to initially begin
losing her vision in 1959. By 1968, when the Docs first ran the test and discovered the pressure
problem, she had lost peripheral vision and only had central vision 5 degrees vertical and 10
degrees horizontal. Testimony indicated that the test wasn’t required for the standards of the
profession to be met. The trial court entered a verdict for the defendants.
o Rule: Reasonableness requires routine testing of all patients for glaucoma because the tests are
inexpensive, harmless, and simple.
o Analysis: The test apparently cost little money. It was usually conducted on individuals over 40
years old. “Courts must in the end say what is required; there are precautions so imperative that
even their universal disregard will not excuse their omission.”
o Courts have the final say in determining the standard of care, so custom is not determinative of
the standard of care.
 Notes
o Technology: Doctors are increasingly using new medical devices as a reason to avoid liability.
The argument goes something like this: “St. Vincent has the new blood machine, and if we don’t
get it, we may be held liable if someone is injured as a result of not having it.”
  Washington v. Washington Hosp. Ctr. (D.C. 1990): A brain-damaged woman received
$4.5M because the hospital failed to acquire a newer, better machine for monitoring
oxygen levels during surgery. The kicker was an internal memo where the chief
anesthesiologist had told the hospital it needed to acquire one of the machines.
o The Hand Formula: Burden; Liability; Probability = B < LP
o Nelson says that liability insurance is a tiny percentage. So Nelson says that medical malpractice
cases do not make the cost of healthcare increase. Defensive medicine does make healthcare go
up. Tort reform would limit cost increases but not making defensive medicine necessary.
 Breach of Contract
 Sullivan v. O’Connor
o Facts: Sullivan was a stripper that obtained a $13.5K verdict against a Doc that performed a
nose job. The surgery was only supposed to cost $622, but the nose ended up looking worse. The
jury awarded Sullivan the money based on a breach of contract claim.
o Rule: where damages for pain and suffering and mental anguish are reasonably foreseeable at
the time of the contract, the plaintiff should be able to recover them.
o Analysis: We are focusing on the reliance of the promise in this case. The Doc promised a better
looking nose and couldn’t deliver. Doctors can seldom make such promises in the first place.
 Why plaintiffs sue under breach of contract rather than medical malpractice:
o (1) contract claims may have a longer statute of limitations
o (2) contract claims may not have to have expert witnesses
o (3) contract claims may avoid malpractice reform statutes (but most statutes cover both K and
tort claims)
o (4) contract claims may avoid doctrines of sovereign or charitable immunity (but this is not much
of an issue anymore).
 Notes
o Courts are hostile to breach of contract actions. The standard of proof in these cases is “clear and
convincing evidence” and some courts lower the damages to reliance rather than expectation.
o Most surgeons avoid these disputes by including in the signed informed consent form a statement
that specifically denies any guarantee of results and asserts only that the surgeon will use his
professional skills in the accepted manner.
o Fraud: in one CA case, a prosecutor obtained a 2nd degree murder conviction for a faith healer
who attempted to treat eye cancer of a child.
o Implied warranties generally do not apply to professional services, but products. However, there
may exist a claim for medical drugs and devices.
 Vicarious Liability
 Franklin v. Gupta
o Facts: Franklin was a fattie that went into surgery for carpal tunnel syndrome. During the
anesthesia, the anesthesiologist went to work on another patient. The nurse decided to use a
brachial block instead of regular anesthesia. The patient had trouble breathing and eventually had
to be intubated. The lower court ruled for Gupta and against the anesthesiologist, nurse and
hospital.
o Rule: Captain of the ship doctrine says that because of doctor’s status as the “captain of the
ship” the jury could find him vicariously liable (i.e., control in law). (OLD LAW)
o Rule: The “borrowed servant rule” says that where the evidence suffices to support a finding that
the surgeon in fact had or exercised the right to control the details of another person’s work or
conduct in the operating room and the other elements of the rule are satisfied, the trier of fact
may find that the surgeon was the “special employer” and is therefore liable for the negligence of
the borrowed servant.
o Analysis: The plaintiff was trying to hold him liable in law because he wasn’t liable in fact. Two
theories for why it’s no longer needed: (1) modern specialization means that Surgeon may not
 have a right to control all employees associated with the surgery; (2) with the curtailment of
immunity for hospitals, it is no longer necessary to expand a surgeon’s liability. BUT, there was
no evidence that Gupta was liable under either doctrine.
 Notes
o Most jurisdictions hold hospitals liable, too. The borrowed servant doctrine doesn’t insulate
hospitals UNLESS the doctor instructs the nurse to do an act that is not within the general scope
of duty.
 Strict Liability
 Helling v. Carey
o Facts: The eye case from previously
o Analysis: The concurring opinion would have imposed strict liability in the case. “If the activity
involved is one which can be defined with sufficient precision, that definition can serve as an
accounting unit to which the costs of the activity may be allocated with some certainty and
precision.”
 Notes
o Defining Compensable Events: The difficulty with a no-fault compensable system (an
administrative system for compensation) is defining exactly which events trigger compensation.
It is very difficult to avoid fault-based definitions.
 The theory behind an administrative system is that it will reduce the costs of the litigation
system and pass on the benefits to consumers, patients, etc.
 Another problem with no-fault: it undermines deterrence (there’s less incentive to avoid
negligence). Nelson says the only real justification for the current system is that it deters
negligent (or worse) conduct.
 But the other side of the argument is that the current system isn’t working very well to
deter negligent conduct. Doctors may view malpractice suits as random—in which case
they won’t alter their conduct. Or they may engage in “bad” defensive medicine (e.g., too
many tests, or refusing to practice in a particular field or area).
 Another consideration: Under a no-fault system, there would be a much larger number of
claims. In the current system, very few of the actual claims are pursued.
 Products Liability
 Brown v. Superior Court
o Facts: A suit was brought against drug companies because their drug contained DES, which
injured babies in uterus. The plaintiffs alleged that the defendants knew the drug could cause
cancer to the babies.
o Rule: There are three types of products liability: manufacturing defects, defective design, and
failure to warn.
o Rule: There is no product liability for design defects or failure to warn unless manufacturer
knew or reasonably should have known that the design was defective or that the warnings were
inadequate.
o Analysis: The focus under Rstmt 402(a) focuses on the product, and not the manufacturer.
o § 402A: Special Liability of the Seller of Product for Physical Harm to User or Consumer
 (1) One who sells any product in a defective condition unreasonably dangerous to the
user or consumer or to his property is subject to liability for physical harm thereby caused
to the ultimate user or consumer, or to his property, if
 (a) the seller is engaged in the business of selling such a product, and
 (b) it is expected to and does reach the user or consumer without substantial
change in the condition in which it is sold.
 (2) The rule stated in Subsection (1) applies although
 (a) the seller has exercised all possible care in the preparation and sale of his
product, and
  (b) the user or consumer has not bought the product from or entered into any
contractual relation with the seller.
o Three approaches to Cmt. k:
 1. True strict liability: This rejects cmt. k and imposes liability regardless of fault for
manufacturing, design, or failure to warn
 2. True cmt. k: this imposes negligence standard for design defect and failure to warn.
California adopted this (as have a majority of jurisdictions). The court reasoned that this
was the best decision to further the public interest in the development of new drugs and in
lowering the costs of drugs. Strict liability would cause these costs to skyrocket.
 3. Limited form of cmt. k: this limits cmt. k to drugs that are “unavoidably dangerous”—
so, it applies strict liability to all three types of products liability UNLESS the court
determines that the drug at issue was “unavoidably dangerous.” If the drug qualifies as
“unavoidably dangerous,” then the negligence standard of cmt. k applies. The California
Court of Appeal adopted this in Kearl (three-part test):
 (1) Whether, when distributed, the product was intended to confer an
exceptionally important benefit that made its availability highly desirable;
 (2) Whether the then-existing risk posed by the product was both “substantial”
and “unavoidable”; and
 (3) Whether the interest in availability (again measured as of the time of
distribution) outweighs the interest in promoting enhanced accountability through
strict liability design defect review.
 The court rejected this because it concluded that it was too unpredictable.
 NOTES
o Medical Devices: Most courts also refuse to apply SL to medical “devices” as well (e.g.,
pacemakers, implants, etc.).
o The Kearl Rule: Some courts agree with the Kearl approach
o Hospital and Physician Liability: No SL for design and warning defects, but SL for
manufacturing defects.
 But most courts are reluctant to impose SL on hospitals and doctors for products that are
used as an incident of providing a medical service.
 Ala. differs on this: Skelton v. Druid City Hosp., 459 So. 2d 818 (Ala.) (needle break
similar to Locke; court applied UCC warranty liability (“fitness for a particular
purpose”))
o Restatement 3rd (not majority rule)
 A medical product is subject to design defect liability only if “the foreseeable risks of
harm are sufficiently great in relation to the foreseeable therapeutic benefits such that
health care providers … would not prescribe the drug or medical device to any class of
patients.”
o Blood Shield Statutes: Almost all states have statutes declaring that blood products are not
subject to strict products liability (these also cover tissue and organ transplants). But companies
that manufacture blood products may not be covered by the statutory exemptions.
o Federal Preemption: The FDA regulates both drugs and devices. Most jurisdictions hold FDA
compliance as evidence of reasonable care. A few states say this gives a presumption of
reasonableness.
 Drug Labels: FDA warning requirements are generally not exclusive (i.e., manufacturer
can give more warnings).
 Medical Devices: FDA regulation is unclear as to whether it preempts in the area of
medical devices (i.e., does compliance with FDA requirements preclude suits against
manufacturers of medical devices?)
 Rule: There is no implied preemption of FDA law over state law.
o “Learned intermediary doctrine”
  Exceptions: OTC drugs purchased directly by consumers; mass vaccines; prescription
drugs that are commonly available just for the asking (e.g., birth control pills)
 Who do you have to warn?
 Traditional Rule: You warn the health care provider.
o Off-label uses: If physician is using a drug for an off-label purpose, does a drug co. have a duty
to warn regarding off-label uses? If they are promoting the off-label use, they will have a duty to
warn.
o Drug companies may have an obligation to disclose information directly to doctors through drug
reps (“detail men”) rather than merely disclosing it through “Dear Dr.” letters. Also, detail men
could be a source of drug co. liability where a detail man minimizes the significance of official
warnings (e.g., “the FDA made us state that, but it’s really not a problem”).
 Causation and Affirmative Defenses
 Causation
 Herskovits v. Group Health Cooperative of Puget Sound
o Facts: Plaintiff was complaining of lung problems in 1974 and was ultimately diagnosed with
lung cancer in spring of 1975. The cancer was removed and no chemo or radiation was used.
Plaintiff died 20 months later. The wife brought suit arguing that if he had been diagnosed
earlier, he would have lived. The Doc argued that he would have died regardless. The trial court
granted MSJ for Doc.
o Rule: Once a plaintiff has demonstrated that the defendant’s acts or omissions have increased the
risk of harm to another, such evidence furnishes a basis for the jury to make a determination
about whether the increased risk was a substantial factor in the resultant harm.
o Rule: Concerning duty, a person who negligently renders aid and consequently increases the risk
of harm to those he is trying to assist is liable for damages he causes.
o Analysis: The Doc’s were arguing that unless he had an initial survival rate over 51%, then it
shouldn’t go to a jury. The court said that the causation was for the jury to decide.
o In a normal “tort” case, P must prove causation by 51% (more probable than not). But this type
of case is distinguishable from normal cases. The general rule is that “the act complained of
“probably” or “more likely than not” cause the subsequent disability.
 Notes
o Fear of Death or Disease: Fabio (Minn. 1993) held that a delayed diagnosis of cancer was not
actionable where chemotherapy successfully brought the cancer into remission, even though
patient might prove that the delay shortened her life expectancy by increasing the odds that
cancer would recur. This is distinguished from Fein because Fein involved an actual, present
medical injury.
 Fein (Cal. 1985) allowed recovery for shortened life expectancy and increased risk of
disease caused by misdiagnosis of a heart attack.
 Medical monitoring: Limits damages to the costs of monitoring future health problems
caused by increased risk of disease (no actual, present injury required).
 Negligent Infliction of Emotional Distress: Jurisdictions that allow NIED usually require
severe emotional injury and a special relationship between the plaintiff and defendant. In
the medical context, the doctor-patient relationship is usually “special”—and distress is
usually severe in cases of fear of cancer and fear of AIDS.
 For example, patients who learn after surgery that the operating doctor was HIV positive.
In the absence of actual physical injury (e.g., patient contracted HIV), most courts require
proof of “actual exposure”—which isn’t entirely clear, but Nelson thinks it means that
something actually happened during the surgery that could have exposed P to HIV. (It’s a
pretty tough standard.) Nelson told us about a Hawaiian case where these guys were
unloading a truck and HIV-positive blood that wasn’t packed properly spilled all over
their hands. The court allowed the case to go forward.
  Another scenario involves false positives (i.e., a false positive to an HIV test). Some
courts require some physical harm (i.e., physical “impact”) (e.g., from unnecessary
treatment resulting from the false positive) but other courts don’t impose a requirement of
physical injury.
o Most jurisdictions have accepted some form of the “loss of chance” doctrine, but AL has NOT.
See Williams v. Spring Hill Memorial Hosp., 646 So. 2d 1373 (Ala. 1994). Patient was rendered
paraplegic. Allegation was the paralysis could have been improved by steroid treatment. Ala.
Supreme Court agreed that plaintiff had not produced substantial evidence that the treatment
more probably that not made the paralysis worse. The case went out on summary judgment.
 Statute of Limitations
 AL Law
o 2 year SOL; six month discovery rule; 4 year statute of repose.
 Cunningham v. Huffman
o Facts: Cunningham had an intrauterine device (IUD) placed inside her in 1977. In 1980, another
one was inserted. One of the IUD’s was removed in 1981 but the other one remained inside until
1989. When the suit was brought it was barred by a 4 year SOL. Huffman wanted the
“continuous course of treatment” doctrine to be adopted.
o Rule: Under the medical malpractice statute, the requirement of an occurrence may include “a
continuous negligent course of treatment for a specific condition.” The treatment must continue
to be negligent.
o Rule: Once the treatment by the negligent physician is discontinued, the SOL begins to run,
regardless of whether the patient is aware of the negligence at the end of the treatment.
o Analysis: The legislature didn’t mean to limit the negligence statute to one incident. The
negligent act may also be alleged against a multispecialty clinic.
 Notes
o Three tolling rules: Continuous treatment; fraudulent concealment, and “discovery rule.”
Cunningham illustrates the two versions of the continuous treatment exception. Cunningham
adopted the non-conventional version.
 Fraudulent concealment tolls the statute if the physician knows about the injury but does
not tell the patient.
 The discovery rule applies where neither the patient not the doctor are aware of the
mistake, such as when a Doc leaves a foreign object in the body.
o Nelson says most jurisdictions have a SOL of about 2 years, accompanied by a discovery rule
(i.e., a separate SOL in certain circumstances that runs from the date P discovers the
injury/malpractice). Then, most jurisdictions have a 3- or 4-year statute of repose, which bars all
claims, regardless of whether the plaintiff has discovered the malpractice.
 Many jurisdictions also have a fraudulent concealment exception—which gives the
plaintiff an even longer SOL where the doctor fraudulently conceals the malpractice from
the plaintiff.
 Ala. Code 6-5-482: 2-yr. SOL, subject to discovery rule of additional 6 mos., and a 4-yr.
statute of repose. In Jones (Ala. 1993), the court refused to adopt the continuing
treatment rule, but the court left open the door to adopt the continuing negligent treatment
rule. Nelson says Alabama’s discovery rule is the shortest he’s seen.
 Affirmative Defenses
 Schneider v. Revici
o Facts: Revici was treating Schneider for breast cancer with noninvasive procedures. When the
cancer grew and spread to the left breast, plaintiff underwent a double mastectomy and sued the
Doc for fraud and medical malpractice. The only question before the court was a waiver of
liability for medical malpractice.
o Rule: Where a patient voluntarily agrees to undergo an experimental and inherently dangerous
surgical procedure, the parties may covenant to exempt the physician from liability for those
 injuries which are found to be the consequences of the non-negligent, proper performance of the
procedure.
o Rule: The word of the covenant not to sue must be “clear and unequivocal.”
o Analysis: The form was labeled “consent for medical care.” It also didn’t make clear that the
patient was waiving the future right to sue. The jury should have been allowed to consider
express assumption of the risk.
o Types of Assumption of Risk
 Express Assumption of the risk resulted from an advance agreement that the defendant
need not use reasonable care for the plaintiff’s benefit.
 Implied assumption of the risk was founded on plaintiff’s unreasonable and voluntary
consent to the risk of harm from defendant’s conduct with full understanding the possible
harm.
 Comparative negligence meant that assumption of risk was no longer a total bar to
recovery, but simply diminished the amount of damages recoverable.
 Notes
o So, the consent form that P signed wasn’t a covenant not to sue, but it was enough to get the
issue of express A/R to the jury.
o In the experimental treatment context, it is pretty well established that a patient can expressly
A/R of the treatment (conditional, of course, on full disclosure).
o Waivers of Liability: Generally, advance releases or waivers of the right to sue for malpractice
are unenforceable as against public policy. But one exception is with releases AMA (leaving a
hospital “against medical advice”).
 At common law, courts distinguished between releases and covenants not to sue. A
release extinguished a COA, so the plaintiff would NOT be able to sue any other joint
tortfeasor. A covenant not to sue, however, would allow the plaintiff to sue other
defendants. Most jurisdictions don’t make this distinction anymore.
o Contributory Fault and Mitigation of Damages:
 (1) Comparative Negligence: This could reduce a plaintiff’s damages. For example, if
the plaintiff gives the defendant an incomplete medical history, the jury might reduce the
plaintiff’s damages. Distinguish this from the egg-shell skull rule.
 (2) Egg-shell Skull Rule (take Patient as you find him): This deals with the plaintiff’s
negligence in causing the preexisting condition for which the defendant gave treatment.
Generally, patients cannot be found at fault for their behavior leading up to their medical
condition. For example, if the plaintiff is a cardiac patient, the Doc can’t say plaintiff was
contributorily or comparatively negligent simply because of the preexisting conditions,
e.g., plaintiff was a slob and ate greasy burgers three times a day.
 (3) Duty to Mitigate Damages: This deals with the plaintiff’s negligence AFTER the
Doc’s negligence. For example, Doc gives negligent treatment to the plaintiff, but the
plaintiff doesn’t follow up properly. This conduct should NOT serve as a mitigation of
Doc’s fault—instead, it should reduce the plaintiff’s damages. In a comparative
negligence jurisdiction, this wouldn’t make too much of a difference. But it would in a
contributory negligence jurisdiction (like Ala.), it would make a difference.
 Also, the duty to mitigate generally does NOT require a patient to submit to risky
surgery or medication to correct a negligent injury, even if medically advised.
One exception is a blood transfusion (e.g., a Jehovah’s Witness who refuses a
blood transfusion to correct negligent treatment can bear some of the tort
liability).
o Good Samaritan statutes: Most states have “Good Samaritan” statutes. Some of these apply
beyond “accident”-type situations, e.g., in a hospital or doctor’s office, where a true “volunteer”
responds to an emergency situation (e.g., a doctor w/o a duty to treat responds to a “code blue” at
 a hospital). Nelson says you have to look at the specific statute because there is a lot of variation.
Some states have several statutes and some statutes might apply even in the hospital setting.
o Hospital immunity: There has been a shift in both charitable and sovereign immunity beginning
at the end of WWII. This was done by case law and statute but there are remnants of this. Nelson
says Mass. puts a $10,000 limit on damages asserted against a charitable institution. In other
jurisdictions, there is case law that there might be deferential treatment between paying and non-
paying. Meaning they might be liable to paying but not non-paying.
o Federal Tort Claims Act waived sovereign immunity. If you sue a military physician (and he
is active duty service), Feres doctrine applies and there cannot be a medical malpractice action.
However, family members of active duty personnel who are treated at military hospital are NOT
barred. When you sue a military physician, the U.S. government will be substituted as defendant.
Many states have abolished sovereign immunity but have statutes requiring notice of claim. In
Alabama, sovereign immunity is provided for in the constitution. So you cannot sue UAB or
South Alabama; you can only sue the doctors.
 Arbitration and Waiver of Liability
 Madden v. Kaiser Foundational Hospital
o Facts: Madden contracted serum hepatitis and suffered a cut bladder during a hysterectomy
procedure. The insurance agency had in 1971 changes its policy to forced arbitration. The
company sent a brochure to all holders informing them of the plan. Madden contends that he was
away from work and never informed of the change. Can an insurance company change its policy
to forced arbitration after the fact?
o Rule: An agent or other fiduciary who contracts for medical treatment on behalf of his
beneficiary retains the authority to enter into an agreement providing for arbitration of claims for
medical malpractice.
o Analysis: There was no adhesion contract and no violation by not having a right to a jury trial.
The parties had equal bargaining power.
 Notes
o Arbitration is not used that much in medical malpractice claims, but HMOs are increasingly
trying to use it. California widely uses arbitration for malpractice claims.
o Many Ds (especially in Ala.) don’t want arbitration. Why? Because Ps win about 50% more
often in arbitration than they do in jury trials, but generally the awards are smaller. More
arbitration likely would mean more claims.
o Another consideration is the cost of arbitration—the parties have to PAY the arbitrators.
Remember, aside from the filing fee, the civil justice system is essentially free.
o Distinguish arbitration from mediation: In mediation, the parties go through a non-binding
process (in contrast to arbitration, which is binding).
o Also distinguish screening panels: in some states, screening panels are mandatory but not
binding.
o Cites an Oklahoma decision that reached the opposite result from Madden. Oklahoma held the
provision violated public policy. Also, arbitration provisions signed at the point of treatment are
more controversial—they may or may not be upheld.
 ***Engalla v. The Permanente Med. Group: The court held that defendant abused the
arbitration process where the defendant intentionally delayed the process so that the
plaintiff would die and get less damages.
o Altering Tort Law by Contract: Could an HMO alter the standard of care to gross negligence?
No one has tried it yet.
 Damages and Settlement
 Fein v. Permanente Medical Group
o Facts: Fein was an attorney that had chest pains misdiagnosed as muscle spasms instead of a
heart attack. As a result, some muscle tissue died and Fein’s life expectancy was shortened by 10
 to 15 years. The jury awarded Fein $25k for lost wages, $63k for future medicals, $700k for lost
future wages, and $500k for non-economic damages.
o Rule: A plaintiff may be awarded damages for lost work income as a result of his life being
shortened.
o Analysis: The collateral source rule says that the defendant can introduce evidence of the
plaintiff’s receipt of collateral funds, and that the plaintiff can introduce evidence of premiums
the plaintiff paid. The court went on to allow the future earnings to be paid out in a lump sum,
rather than in periodic payments as the statute mandated. I guess this was because under periodic
payments, Fein may die before receiving the funds.
o MICRA
 Cap on non-economic damages at $250K
 Limitations on the attorney’s contingency fees
 Periodic payout for future damages over $50K
 The collateral source rule.
 Roberts v. Stevens Clinic Hospital
o Facts: The child died after his bowel was punctured in a routine surgery to solve diarrhea
problems. The family presented a “day-in-the-life” video of the child which the court allowed in.
The family was also awarded $10M in compensatory damages for the loss of their 2-year old
son.
o Rule: The method for determining damages for the loss of a life is not the “value of the life.” In
that circumstance, no jury award could be considered excessive.
o Analysis: The court didn’t like the closing argument that asked the jury to value the life. The
court used remittitur to reduce the verdict to $3M.
 Notes
o Hedonic damages are for the loss of enjoyment of life.
 These are usually awarded where the plaintiff is severely injured but not killed. These
damages are rarely awarded if the plaintiff is killed.
o Birth damages
 If a doctor fails to identify or avoid a birth defect, a claim can result for the expenses and
anguish of living life with a severe handicap.
 If a sterilization procedure fails, an action can result for the expenses of raising a normal,
healthy child, as well as for any harms attendant to pregnancy and childbirth.
 Wrongful life actions are the child’s own claims for the suffering and expenses of being
alive
 Wrongful birth actions are the parents’ claims for having to raise a handicapped child.
 Emotional distress damages for having a child are not allowed in many states because the
joys of having a child are thought to outweigh the anguish of having one.
o The size of awards
 “If they can walk through the door don’t take the case.”
o Settlement
 How can a lawyer ethically drop a case once there is no longer a possibility of
settlement?
 (1) Have an agreement with the client that the case is being taken on for purposes of
settlement only; (2) Seek the judge’s permission to withdraw.
 Bleday v. OUM Group
o Facts: Bleday was pissed that his insurer settled a case for $10K without his permission. His
name was going to be in a medical databank for Docs involved in malpractice cases. Bleday
argued that he did nothing wrong and that his insurance premiums will go up as a result. OUM
admitted that they settled simply to avoid the costs of going to trial with the suit.
 o Rule: A “deems expedient” provision in an insurance contract cannot be interpreted to convey to
an insurance company an absolute right to settle a claim within the policy limits if such
settlement was contrary to the intent and expectation of the parties.
o Analysis: But Bleday didn’t adequately plead a COA for bad faith. Every contract that is entered
into requires good faith, and the “deems expedient” provision cannot contract around that right.
 Notes
o Some courts have held that once the defendant’s lawyer finds out that the Doc and the insurer at
odds, the lawyer must allow the Doc to get another attorney and withdraw from the case.
o Secrecy
 Docs can avoid having their name reported to the malpractice databank by: (1) stipulating
that payment will come from an institutional defendant such as a hospital or medical
clinic rather than the doctor; (2) stipulating that the doctor is not at fault; and (3)
presenting an uncontested motion to seal the court records for cause.
o
 Institutional Liability
o Two types of liability for hospitals
 Vicarious (respondeat superior): the institution is held liable for acts of negligence by
member physicians, based on the physician’s relationship with the institution. In this
situation, Ps may try to get around this by:
 (1) Facts & Circumstances: Patient argues that the facts & circumstances show
that doctor really was an employee of the hospital.
 (2) Ostensible agency/apparent authority: Patient argues that the hospital
represented in some manner that doctor was its agent. Courts are more willing to
buy this theory where a P came to a hospital for treatment, and the hospital then
referred the patient to a physician (mostly happens in ER situations). Courts are
less likely to buy this where a physician with staff privileges admitted P to a
hospital.
 (3) Inherent Function: These are services that a hospital has to provide in order to
function as a hospital. Example: radiologist.
 (4) Non-delegable duty: This argument is that, e.g., because a law requires a
hospital to have an ER, the hospital can’t insulate itself from liability by hiring
independent contractors.
 (5) Enterprise liability: This is interrelated with non-delegable duty
 Direct: depends on showing some wrongdoing by the institutions management with
respect to physician competence and patient care.
 Requires a finding of fault; vicarious liability doesn’t.
o Hospitals are responsible for the acts of their employees. Thus, hospitals generally are liable for
negligence by nurses. Nelson says the modern trend is to hold BOTH hospitals and doctors liable
for a nurse’s negligence (under a sort of borrowed servant doctrine).
 Hospital Liability
 Schloendorff v. Society of New York Hospital
o Facts: A woman that entered a charitable hospital paid $7 dollars because she was able to do so.
Her stomach pains turned out to be a fibroid tumor which was surgically removed from her. She
developed gangrene and some of her fingers had to be removed. She sued the hospital even
though the Docs didn’t get a salary and it had almost no money.
o Rule: A charitable hospital is not liable of the negligence of physicians and nurses treating
patients.
o Rule: But, a hospital is liable to strangers-persons other than patients-for the torts of its
employees committed within the line of their employment.
 o Analysis: There are two reasons: Implied waiver exempts the hospital from liability because it is
understood that the patient is accepting a benefit from the charity; the Doc that works at the
hospital is an independent contractor that is personally liable for his wrongdoings to a patient.
The actual wrong was a trespass committed by the Doc. And the Doc is an independent
contractor that the hospital isn’t liable for. The hospital was not liable for the Docs actions.
o Famous Quote: “Every human being of adult years and sound mind has a right to determine
what shall be done with his own body; and a surgeon who performs an operation without his
patient’s consent commits an assault, for which he is liable in damages.”
 Notes
o The charitable immunity has been subjected to a number of exceptions.
 General Rule is that a hospital can be held liable for the actions of a nurse or Doctor (but
maybe not resident).
 Hospitals, much like Docs, can simply purchase insurance
 Some states limit awards to charitable hospitals to $10K to $500K.
o Governmental Immunity
 Federal Government: Governmental immunity has been largely waived, particularly
after the Fed. Tort Claims Act following WWII. The major exception is the Feres
doctrine, which says that if a gov’t physician injures an active duty military personnel,
there is NO liability. But military dependents/family members can sue.
 Veterans’ Administration Hospitals: Basically has a no-fault compensation scheme
 States: Most states have abolished sovereign immunity. Alabama’s constitution still has
sovereign immunity, so Ps can’t sue UAB Hosp., but Ps can sue individual doctors or
county hospitals ($100k cap on county hospitals).
 Discretionary Function Exception: Some decisions are considered to be part of a
discretionary function—so they can’t be subject to suit. Ex: when UA’s pres. fired Mike
Price for his date with Destiny.
 Adamski v. Tacoma General Hospital
o Facts: Adams broke his finger while playing basketball and the bone was protruding from the
skin. Adams pushed it back in and continued playing basketball. He went to the hospital where it
was cleaned and bandaged up. He later had a problem with the bone but it turned out alright.
Later, he sued the hospital and the hospital argued that the Doc was an independent contractor
for which it wasn’t liable.
o Rule: If there is a “significant relationship” between the Doc and the hospital, the hospital may
be liable under respondeat superior. All the “facts and circumstances” must be examined.
o Analysis: There were a number of factors that pointed towards the employee relationship:
 Hospital was responsible for billing patients, and would collect bills.
 Hospital guaranteed $10k per month to Docs.
 After $10k, Docs got 85% of all fees.
 Docs must be members of Hospital’s staff and can’t have private practices.
 Hospital must consent before Docs can hire other doctors
o Nelson says this either works under vicarious liability as (1) facts and circumstance or (2)
ostensible liability.
 Notes
o How can the hospital be responsible for the actions of the Doc without illegally practicing
medicine? It seems like a hard concept to reconcile.
o Captain of the ship doctrine (pretty much gone)
 Occurs when a hospital employee’s negligent acts are directed or supervised by a
physician who is not an agent of the hospital; then, the independent physician can be
found to have temporarily “borrowed” the hospital’s employee.
o Indemnification Agreements
  They affect which of several joint tortfeasors can seek contribution or indemnification
from the others.
o Ostensible agency
 Docs could have been the ostensible agents of hospital. This depends on whether the
hospital committed an act or omitted to act in some way that led the patient to a
reasonable belief he is being treated by the hospital by one of its employees.
 Rstmt 2d (Agency) § 267: Requires representation and reliance—“One who represents
that another is his servant or other agent and thereby causes a third person justifiably to
rely upon the care or skill of such apparent agent is subject to liability to the third person
for harm caused by the lack of care or skill of the one appearing to be a servant or other
agent as if he were such.”
 Nelson calls it a “holding out” and a “looking to.”
 Darling v. Charleston Community Memorial Hospital ****
o Facts: Darling had a broken leg from a football game. The cast was put on the leg too tightly,
which resulted in the leg eventually being amputated. Darling argued that the hospital had a duty
to ensure that the Doc acted in an appropriate manner, and that the nurses failed to monitor his
condition.
o Rule: The hospital had to assume certain responsibilities for the care of the patient.
o Analysis: Once the problem with the leg was discovered, it became the nurse’s duty to inform
the attending Doc, and if he failed to act, to advise the hospital so that appropriate action could
be taken.
 Johnson v. Misericordia Community Hospital
o Facts: Johnson went to have a pin removed from his hip. During the process one of his nerves
was touched, resulting in a paralytic state in one of his hips. The Doc that treated him had been
admitted for privileges at the hospital with little or no background check. He had lied on his
resume about where he had practiced before and the hospital never took the time to check.
o Rule: The hospital owes a duty of care in selecting its staff.
o Rule: The hospital has a duty to take reasonable steps to (1) insure that its medical staff is
qualified for the privileges granted and/or (2) to evaluate the care provided.
o Analysis: The hospital should at least:
 Get info from docs peers
 Determine if doc is currently licensed
 Inquire whether doc has been involved in any adverse malpractice actions
o Hospital will be charged with requiring to find the info that an ordinary prudent patient would
have sought. Someone needs to do the leg work.
o Health Care Quality Improvement Act: this establishes a centralized data bank that collects
info about (1) disciplinary actions from all states, (2) malpractice settlements, and (3) negative
hospital privileges determinations. But the databank is NOT open to the public (or to plaintiffs’
lawyers).
 Notes
o Darling is recognized as extending direct corporate liability to substandard medical care
rendered by independent contractors.
o Hospitals thus can be found liable for some act of negligence on their part with respect to patient
care decisions made by independent doctors; vicarious liability, on the other hand, attaches
regardless of the degree of hospital care but only when doctors are actual or apparent agents.
o Duty to supervise and Nursing Negligence- There are two forms of hospital negligence:
 Negligent selection and retention: This is fairly non-controversial. It entails reviewing
physician’s competency and performance history before admission to the medical staff
and a periodic review thereafter.
 Negligent supervision: This assumes contemporaneous supervision of daily treatment
decisions as they are made. Usually, these are cases of gross negligence in which the
 departure from medical standards is so blatant that it is possible to attribute to hospital
administrators constructive knowledge of the error in progress.
 One route for attributing this knowledge is through nurses under the logic that, at
some point, nurses should object or call to a supervisor’s attention treatment that
is going extremely bad.
 Because nurses are hospital employees, this theory essentially holds hospitals
vicariously liable for nurses’ failure to speak up or intervene.
o Informed Consent Liability: One form of physician supervision for which courts have been
especially reluctant to impose hospital liability is the duty to obtain informed consent.
 On might suppose that is easily falls within the hospital’s administrative functions to
ensure that patients have signed the proper paperwork before major operations especially
since nurses play such an important role in informed consent.
 Most courts however hold that informed consent is solely the responsibility of the doctor
because of the delicate considerations of what exactly to tell the patient and when are
matters particularly calling for the exercise of medical judgment.
o Hospital Customs: Most courts hold hospitals to a national standard of care in selecting medical
staff members. This is true at least in selecting staff members, says Nelson.
o Duty to screen applicants is a non-delegable duty. In other words, the hospital cannot say well
we relied on the decision of a medical staff committee. This doesn’t work for two reasons
 Although medical staff members are independent contractors in their medical status as
practicing doctors, they are agents of the hospital in their administrative status while
sitting on medical staff committees. Therefore, ordinary respondeat superior applies to
their committee mistakes.
 The duty to screen medical staff members is considered nondelegable.
o Enterprise Liability: it happened inside the hospital, so it should be liable.
o Medical Staff Committees are agents of the hospital.
 Managed Care Liability
 Boyd v. Albert Einstein Medical Center
o Facts: Boyd had breast cancer and was receiving treatment through an HMO. Later, the wife
began experiencing chest pains, and was diagnosed with Tietze’s syndrome. The wife continued
to complain of chest pains, vomiting, and other discomforts. She was found dead in her bathroom
by her husband with a heart attack. The husband sued the HMO arguing that they negligently
allowed incompetent physicians to work for them.
o Rule: Because the decedent was required to follow the mandates of HMO and did not directly
seek the attention of the specialist, there is an inference that appellant looked to the institution for
care and not solely to the physicians.
o Notes: There is a plausible level of liability against the HMO in ostensible agency.
 Under a staff model HMO, the HMO would be liable under respondeat superior.
 Some places self-insure. Samford does. Once you get away from the staff-model HMO,
it’s hard to argue respondeat superior.
 Wickline v. State
o Facts: Wickline was treated under Medi-Cal and sued the state, but not her physician, for
negligently causing her premature discharge from the hospital resulting in complications that led
to amputation of her right leg. Wickline alleged that her premature discharge was the fault of
Medi-Cal’s erroneous withholding of its authorization for her continued hospitalization.
o Rule: Third party payors of health care services CAN be held legally accountable when
medically inappropriate decisions result from defects in the design or implementation of cost
containment mechanism as for example when appeals made on a patient’s behalf for medical or
hospital care are arbitrarily ignored or unreasonably disregarded or overridden.
 o Rule: A physician who complies without protest with the limitations imposed by a third party
payor, when his medical judgment dictates otherwise, cannot avoid his ultimate responsibility for
his patient’s care.
o Analysis: But the Docs agreed in this case that the decision to discharge after 4 days was
appropriate.
o Prospective Utilization Review
 Authority for the rendering of health care services must be obtained before medical care
is rendered. Its purpose is to promote the well recognized public interest in controlling
health care costs by reducing unnecessary services while still intending to assure that
appropriate medical and hospital services are provided to the patient in need.
 Notes
o Managed care is a term that applies broadly to a wide variety of arrangements that restrict the
generosity of traditional health insurance.
 Managed care restricts choice of physicians through networks and gatekeepers
 It alters discrete treatment decision through utilization review and prior authorization
requirements
 Creates cost-constrained financial incentives through capitation payments and risk-
sharing pools
o HMO Immunity-In a few jurisdictions, HMOs are immune from suit for negligent treatment, in
some states by statute and in one state by court decision. Nelson says there is a statute in
Alabama that says you cannot sue an HMO.
o There are two basic types of HMOS.
 IPA
 PPO
o HMO Direct Liability-Nelson says this has been more controversial.
 Duty of care in selection of physicians-Nelson says this fits very nicely. Especially if the
HMO has a screening process to select physicians. This is similar to what hospitals might
do.
 Duty of care in the contemporaneous supervision of physicians-Nelson says there is a
good deal more supervision by HMOs than by hospitals.
o Ostensible agency theory-this is one way to hold the plan liable. ERISA doesn’t seem to preclude
this.
o Nelson says if the underlying claim is malpractice and you want to hold the HMO liable for not
properly screening the doctors, you are probably okay and not preempted by ERISA.
o Nelson says abandonment has not been used with managed care. The book points out that very
few cases are brought against HMOs. Some of this is because of ERISA and uncertainty about
what ERISA preempts.
o You sue under ERISA for denial of benefits.
 ERISA
o Protects the pensions (but also health insurance) of employees. ERISA preempts state law
actions relating to employee benefit plans.
o Saves state laws regulating insurance. This wouldn’t be preempted
o If the employer is self-insured, this is deemed to not be insurance. There is a strong incentive for
a company to self-insure.
 Nelson on ERISA
o 1. State regulation-insurance regulated primarily by the states
 Under McCarran-Ferguson Act, Federal Government was not involved in regulation of
insurance. Nelson says insurance is generally very heavily regulated by the states.
o 2. Federal Regulation
 There are federal laws that do affect insurance and in some instances preempt states laws
  ERISA preempts state laws regulating pensions and laws relating to other
employee benefits (including health insurance coverage)
 COBRA 1986-employees who lose their jobs entitled continuation of coverage
under employees group health plan up to 36 months ay employee’s expense. So
you continue with group coverage and group rates.
 HIPAA-does have some portability provisions: certificate of creditable coverage
so employees only have to satisfy preexisting condition restriction once. If you
have already satisfied the pre-existing condition waiting period once, you don’t
have to do it again.
o ERISA’s CONCEPTUAL FRAMEWORK
 Preempts state laws relating to employee benefit plans
 Insurance savings clause-Limits preemption: State laws regulating insurance are saved
from preemption. Then the question is what is an insurance regulation?
 Deemer clause-self insured funds not deemed insurance. Therefore not subject to state
laws regulating insurance. This is important because a lot of big employers are self-
insured and they do this to avoid state regulation.
 Complete Preemption gives jurisdiction to federal courts. Cases can be removed from
state court.
 Limits remedies-No punitive or consequential damages
 Limited to cost of benefit due (or provision of benefit due) plus costs and
attorney’s fees.
o Any willing provider-you can’t be selective deciding which physicians you take if the doctor is
qualified. Everyone that says we are willing to meet the terms of conditions of the plan has to be
included.
 The supreme court held that AWP statutes were laws regulating insurance and thus saved
from preemption. States laws applicable to plaintiff HMOs. Affirmed.
 Law must be specifically directed at insurance.
 The law must substantially effect risk pooling.
 Aetna Health Inc. v. Davila
o Facts: Two people sued arguing that they were improperly denied medical benefits under their
insurance plan. One person was denied Vioxx and the other was discharged from the hospital
prematurely. Does ERISA preempt their tort COAs?
o Rule: Any state-law COA that duplicates, supplements, or supplants the ERISA civil
enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy
exclusive and is therefore preempted.
o Analysis: The court found that the claims were preempted by ERISA.
o If decision made by a physician, it will probably be redressable through malpractice suit against
physician under state tort law.
o If decision made by plan administrator, it will most likely be preempted. Decision not to cover is
not a pure eligibility decision because clinical factors are taken into consideration. After Davila,
if the physician is making the decision (not the plan administrator) then you can sue the
physician for malpractice and maybe get the plan for vicarious liability.
o If the decision is made by the plan administrator, it is probably preempted. Nelson say this is
odd. There are a lot of people that want to scrap this and start over. Nelson says the cleanest this
is to just sue the doctor and not the HMO.
 Notes
o ERISA Preemption
 Damages under ERISA-Under ERISA, patients who are wrongly denied health insurance
benefits can recover compensation only for the costs of treatment but not for
consequential damage, pain and suffering and wrongful death or punitive damages.
  ERISA terminology-An ERISA plan exists any time an employer pays for health
insurance.
 Which claims are pre-empted? ERISA clearly does not apply to a malpractice claim
against only the treating physician for medical mistake that is unaffected by health
insurance. In short, courts must distinguish between tort claim based on insurance
coverage decisions, which are preempted, and medical malpractice liability which is not
preempted.
 STOPPED

 Medical Malpractice Reform

 Fein v. Permanente Medical Group
o Facts: The jury awarded $500K for non-economic damages, and the court lowered the amount to
$250K.
o Rule: A $250K limit on non-economic damages does not violate DP as long as it is rationally
related to a legitimate governmental interest.
o Analysis: The MICRA legislation didn’t limit economic, pecuniary damages for lost past wages
and medical expenses. Laws that limit pecuniary and non-pecuniary damages is going to be
unconstitutional.
o Notes: Alabama’s damage cap was declared unconstitutional. ($400,000 for non-economic
damages). There was a $1 million wrongful death cap that was also declared unconstitutional.
More likely that a cap would be declared unconstitutional if it was just related to malpractice.
 Legislation on Medical Malpractice: Further Developments and a Preliminary Report Card
o Three common complaints:
 Too many lawsuits are encouraged
 Reformers argue that the system pays too much in many cases
 Judges and juries make poor decisions on fault.
 1970’s
o Insurance Reforms
 Premiums collected from “claims made” policies, as the name implies, need cover only
claims brought during the policy year. This means that expected claims can be much
more accurately forecasted, as the long trail is considerably shortened.
o Tort Reforms
 Arbitration was used to lower the costs of litigation. Almost all states permit voluntary
arbitration.
 Attorney’s fees also curtailed under two forms: regulation of awards in percentage terms
and by judicial review.
 Certificates of merit were required by some states from attorneys to show that the claim
was meritorious.
 Pretrial screening panels: such panels offer either a voluntary or a mandatory process for
informally hearing a case prior to it coming to trial; the goal is to weed out frivolous
cases and speed settlement of meritorious ones.
 States changed statutes of limitations
o Reforms addressing the sizes of awards
 One is restricting the ability of claimants to list a specific dollar amount sought in the ad
damnum clauses of their initial complaint.
  Another type of cap is on total awards, that is, the entire amount that can be collected
against one type of defendant or all defendants. IN has a $500K cap.
 Collateral source rule: mandatory offsets call for either the judge or the jury under the
judge’s instructions to subtract any payments from health insurance and the like from the
liability award.
 “Structured” awards: the idea is to make periodic payment of damages, eather than the
traditional lump sum payment.
o Reforms addressing the likelihood of winning
 Expert witness requirements
 Informed consent limits
 Professional standard of care reasserted
 Res ipsa restrictions
 1980’s
o Two notable developments
 Concerns severely deformed newborns: these laws seek to remove cases of severe
neurological birth injuries from the tort law and liability insurance system into a purely
social insurance scheme. This is one version of a “no fault” approach, which trades an
easier finding of responsibility for a far more structure approach to damages.
 The National Childhood Vaccine Injury Act authorized a “no fault” system to handle
victims of vaccine-related accidents. Calls for compensation to children injured, but
limits the amount.
 Various methods of reform:
o (1) Damages caps
 (a) MICRA-Nelson says this is the gold standard for tort reformers ($250,000 for non-
economic damages-not adjusted for inflation). A number of states imitate the MICRA
cap. Elements of MICRA:
 (i) Total caps-Caps that limit both economic and non-economic damages.
Louisiana is an example ($500,000—it was later amended to exclude future health
care costs from the cap). Under Louisiana cap, the doctor’s primary insurer is
responsible for the first $100,000 and the patient compensation fund covers the
next $400,000. Wisconsin adopted a patient compensation fund. The PCF is run
by the state and they access healthcare providers. This keeps the liability of the
primary insurer pretty low. Idea that liability of primary insurer would be fixed
and there is stability in having the state pick up the rest of the tab? Less concern
that the state would exit the market. Virginia has a total cap but the statute
provides for increases over time. Nelson says the cap has to be pretty severe in
order to have an impact.
 (ii) Collateral source offset. This can be mandatory or permissive, depending on
the jurisdiction.
 Defense can show that the insurance paid for it and plaintiff can introduce
evidence of amount of premiums paid.
 (iii) Mandatory periodic payout (structured payout)-
 (iv) Contingency fee limitations-The higher the damages, the lower the
percentages. This can have a significant effect on lawyers. Lawyers might decide
not to do any more malpractice work.
 Fein case upheld the constitutionality of MICRA. All of the key provisions of
MICRA have been upheld. Now the claim is that California is the success story.
California premiums have not gone up as much as other states.
o More reforms:
o Joint underwriting associations formed in the 1970s. These are risk pools that the insurers
contribute to.
 o Patient Compensation Funds-usually funded by assessing providers. Kicks in when the damages
are above the primary level of coverage.
 SYLLABUS CHANGES
o 332-361 Monday
 Also add: Zaden v. Elkus 881 so. 2d 993; Romine v. Medicenter America 476 so. 2d 51
o Wed: 361-406
o Mon: 406-436
o Wed: 436-479
o Mon: 479-503
o Wed: 503-524
 TUESDAY 6-9pm
 20 short answers and 2 shorter hypos