Climate Change Project

Table of Contents



Medical Business Organizations

Corporate Practice of Medicine

Physicians Working for Non-physicians

Real Concern Is Billing By A Non-physician

Concerns About Professional Judgment

Cases From 1920 Read Like the Headlines

Banned In Most States

Missouri Is Very Lax

Physician Practices - Pre-1990

Shaped by Corporate Practice Laws

Sole Proprietorships


Mostly Small

Some Large Group

First Organized As Partnerships

Then As Professional Corporations

Impact of Corporate Bans

Physicians Do Not Work for Hospitals

Contracts Governed by Medical Staff Bylaws

Sham of "Buying" Practices

Physicians Contract With Most Institutions

Charade of Captive Physician Groups

Managed Care Companies Contact With Group

Group Enforces Managed Care Company's Rules

Physicians Can Be As Ruthless As Anyone

Where Do Physicians Get Business?

Just Like Lawyers Outside of Texas

No Referral or Finders Fees

Unlike Lawyers, Docs Generally Do Not Pay Them

Goodwill, No Grief on Peer Review

Now Patients Are Controlled by Managed Care Organizations

Relationships With Hospitals

Was Unethical to Own a Hospital

Conflict of Interest

Exception for Small Towns

Changed When Hospitals Made Money

Characteristic of Medical Ethics

Lawyer Ethics Are Also Pretty Flexible

HCA Was The Model - Interesting Times

Now Shaped by Stark and Fraud and Abuse

Cannot Pay Incentives for Referrals

Cannot Have Ownership Interests That Give the Doc an Incentive to Refer

History of Hospitals

From Hospital Deu to Chicago Hope

Religious Institutions

Started in Europe in the Middle Ages

Some of the Oldest Institutions in Continuous Operation

Run by Nursing Sisters

For the Poor

More Egalitarian in the United States

Nursing Only

Church Did Not Sanction Medical Care

Goal Was to Alleviate Suffering

Ease the Transition to Heaven

Most Died From Their Illnesses

Only the Very Sick Entered

Excellent Environment for Infectious Diseases

Did Not Really Change Until the 1800s

Reformation of Hospitals

Paralleled Changes in the Medical Profession

Began in the 1880s

Shift From Religious to Secular

Began in the Midwest and West

Not As Many Established Religious Hospitals

Today, Religious Orders Still Control A Majority of Hospitals

Hospital-Based Medicine

Started With Surgery

Medical Laboratories




Services and Sanitation Attract Patients

Internal Medicine

Obstetrics Patients

Post WW II Technology

Ventilators (Polio)

Electronic Monitors

Intensive Care

Shift From Hotel Services to Technology Oriented Nursing

Shift From Nuns to Paid Staff

Advantages of Nuns

Work Cheap

Work Long Hours

Well Organized and Disciplined

Keep Physicians In Line

Supply Plummets

Replaced With Paid Staff

Not Many Nuns Even In Religious Hospitals

Implications of Staffing Changes

Old Days

Charitable Immunity

No Independent Liability for Nurses

No Liability for Physicians

After Professionalization

Demise of Charitable Immunity

Liability for Nursing Staff

Negligent Selection and Retention Liability for Medical Staff

Joint Commission on Accreditation of Hospitals


Now Joint Commission on Accreditation of Health Care Organizations

American College of Surgeons and American Hospital Association

Split The Power In Hospitals

Medical Staff Controls Medical Staff

Administrators Control Everything Else

Enforced By Accreditation

Contemporary Hospital Organization

Classic Corporate Organizations


Board of Trustees Has Final Authority

Medical Staff Committees

Tied To Corporation by Bylaws

Headed by Medical Director

Constant Conflict of Interest/antitrust Issues

Hospital Economics - Old Days

Patients Are Necessary

More Patients Meant More Money

Docs Admit Patients

Insurance Was So Generous It Cross-subsidized Indigent Care

Hospitals Have High Fixed Costs

Capital Costs - Not Build on the Donations of the Faithful Anymore

Ancillary Services - Lab, Etc., Must Be up for Even One Patient

Nursing Can Be Cut Back, but Only by Closing Units

Pretty Hard to Get Excited About Malpractice Risks Unless You Can Fill Every Bed in the Hospital

Value of An Admitting Physician

Only 2 Cases a Day, Average Stay a Week

Each Case Is Worth $15,000 to the Hospital Over the Week

10 Beds Filled at Any One Time

Take a Month Off, Have a Few Slow Days, Say Only 400 Patients a Year.

$6,000,000 a Year

If You Are Sloppy, They Just Stay in the Hospital Longer.

Right to Die - Old Days

Technological Imperative

Every Day

Every Procedure

Every Increasing Stage of Intensive Care

Big Money

Just Making It Past Midnight Might Be Worth Another $2,000.

Medical Staff Privileges

Medical Staff Bylaws

Contract Between Physicians and Hospital

Not Like the Bylaws of a Business

Selection Criteria

Contractual Due Process For Termination

Negotiated Between Medical Staff and Hospital Board

State Actor Hospitals

Special Concerns About Due Process and Equal Protection

Cannot Delegate Some Decisions to Special Groups

Cannot Require Medical Society Membership

May Be Restricted on Requiring Board Certification

All Hospitals Must Follow General Anti-discrimination Laws

Review Criteria

Decision Rests With Board of Directors

Review Is Done by Medical Staff Committee

Increasing Pressure to Use Independent Reviewers

Medical Education

There Are Impostors

Medical Licenses

Verify With Every State

Problem With Liars

Postgraduate Training

Most Hospitals Require Board Certification

Board Certified Physicians Control The Process

Reduces Liability for Negligent Selection

Letter From Residencies

Evidence of Board Certification

"Board Eligible"

Other Hospitals

Every Hospital You Ever Applied to

Circumstances of Terminations

Withdrawn Applications

Should Check

Acceptable Grounds



Getting Along With Others


Independent Contractor Relationship

Negligent Selection

Negligent Supervision

Hospitals Are Attractive Targets

Scope of Privileges

Limited to Areas of Proven Expertise

Should Be Supervised When Expanding Privileges


Privileges Can Be Limited

Can Require Supervision

Can Refuse to Renew Privileges

Can Terminate Privileges

Can Do an Emergency Suspension

What Is the Impact of Adverse Privilege Determinations?

If Every One Uses the Same Criteria and Relies on Previous History, You Are Dead

Parallel Action

The National Practitioner Databank

National Clearing House

Why Have One?

Problem of Liars

Malpractice And Peer Review

Will It Be Opened up?

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