Health Care Law

One major area within health care law is MEDICAL MALPRACTICE, which is professional misconduct or lack of skill in providing medical treatment or services. The victims of medical malpractice seek compensation for their physical or emotional injuries, or both, through a NEGLIGENCE action.

A defendant physician may be found liable for medical malpractice if the plaintiff patient can establish that there was in fact a patient-physician relationship; that the physician breached (i.e., violated or departed from) the accepted standard of medical care in the treatment of the patient; that the patient suffered an injury for which he or she should be compensated; and that the physician's violation of the standard of care was the cause of the injury.

To protect themselves against the massive costs of such claims, physicians purchase malpractice insurance. Physicians' malpractice premiums total billions of dollars each year and add substantially to the cost of health care in the United States. In some specialties, such as obstetrics, 50 percent of the cost for medical services goes for the provider's malpractice premiums. Many physicians, faced with the rising tide of malpractice premiums, practice "defensive medicine" by ordering tests and procedures that might not be necessary, so that the records will show that they did all they could. Several studies have estimated the cost of defensive tests and procedures at tens of billions of dollars per year.

Medical malpractice liability can extend to hospitals and even to health maintenance organizations (HMOs). In the case of severe injuries, this can provide a plaintiff patient with an additional source of compensation. One complicating element is a historical doctrine that disallows the corporate practice of medicine—which in effect, and sometimes in actuality through statutes, prohibits the employment of physicians. In states that disallow the corporate practice of medicine, plaintiffs may not bring medical malpractice claims against HMOs or hospitals based on a physician's treatment because the doctors are not considered employees.

Because every state prohibits the practice of medicine without a license, and because a corporate or business entity may not obtain a license to practice medicine, the historical model provided that all physicians were independent contractors (i.e., separate economic entities), even in their role on the medical staff of a hospital. Without an explicit employer-employee relationship, the liability of a physician for malpractice most likely could not be imputed (i.e., passed along to) a hospital.

The legal theory of respondeat superior holds an employer liable for the negligent acts of an employee who acts within the scope of employment. Historically, as most physicians were not employees, this theory of liability was often defeated in medical malpractice suits. Today, however, most courts look beyond the title given to the relationship, and to the control that the hospital or health care organization exerts over the physician in question, to determine whether the relationship is more like that of an employer and employee (e.g., where the processes and treatment decisions are tightly prescribed by the organization, and liability may be imputed) or whether it is truly that of an INDEPENDENT CONTRACTOR and a client (e.g., where the physician acts alone to accomplish a particular end result, and liability may not be imputed).

The legal theory of ostensible agency can also attach liability to a hospital or health care organization for an individual physician's malpractice. No employer-employee relationship needs to be shown here. Ostensible agency liability is created where the principal (the hospital or health care organization) represents or creates the appearance to third persons that the physician is an agent of the principal, subject to the principal's control. This theory focuses on the reasonable expectations and beliefs of the patient, based on the conduct of the hospital or health care organization. The actual relationship of the physician and the hospital or organization is immaterial.

Most states have enacted legislation that modifies the common law action of medical malpractice, in an attempt to stem the rising tide of lawsuits. Restrictions on plaintiff patients include shorter STATUTES OF LIMITATIONS (i.e., times within which a lawsuit must be filed after injury) than those provided for in common law actions, and a required AFFIDAVIT from a physician expert witness, certifying that the applicable standard of care in the particular case was violated by the defendant physician and that the violation caused the plaintiff patient's injuries.

Even with legislation in these states, the costs of medical malpractice liability have increased, and, in some parts of the country, skyrocketed. Doctors in some areas claim that liability insurance is so high that they refuse to accept patients, move their practice to another state, or even retire early. Insurance companies that provide malpractice insurance claim that multi-million-dollar judgments in medical malpractice cases, coupled with lawsuits deemed frivolous by the companies, have been the root cause of the increase in rates.

Several states have considered and passed legislation under the pretext of major tort reform. California law provides a model by which several states have followed. In 1975, the California legislature enacted the Medical Injury Compensation Reform Act (MICRA), which capped non-economic damages—which include damages for pain and suffering, and even death—at $250,000. Many states that have followed California's lead have limited such damages to between $250,000 and $350,000. President GEORGE W. BUSH has called for major reform on a national level, requesting that Congress enact legislation that could create a national cap of $250,000 on non-economic damages in all medical malpractice cases. The majority of medical associations, including the AMERICAN MEDICAL ASSOCIATION, have lobbied Congress and state legislatures to pass this type of law. Other proposals include limiting the recovery of attorney's fees in medical malpractice cases, restricting the liability of a doctor who provides emergency care, and limiting the recovery of attorneys in medical malpractice cases.

These efforts are not without their critics. Skeptics point out that in some states, the cap on non-economic damages has not resulted in lower premiums on malpractice insurance, and that bad business practices of insurance companies have been as or more responsible for the rise in liability insurance premiums as the multi-million-dollar judgments. Without major insurance reform, say these critics, the local and national tort reform efforts will not provide what they promise.