Legal Aspects- Chapter 7

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Authority of Health Care Corporations

Authority of corporation by states statues, corporate by-laws

Express Corporate authority

Power specifically delegated by statute, Articles of Incorporation set forth the purpose of the corp's existence& the powers the corp is authorized to exercise to carry out its purpose

Implied Corporate Authority

The right to perform any and all acts necessary to exercise a corporation's expressly conferred authority. ie. governing body can enact new bylaws rules & regulations

Implied duty

Hospitals have implied duty to patients to select competent physicians who would be providing in-hospital care to their patients

CASE STUDY: Purcell & Tucson General Hospital v Zimbleman pg 94

Surgeon performed inappropriate surgery because of his misdiagnose of the patient's ailment. Prior malpractice suits against the surgeon revealed that the hospital had reason to know or have known the surgeon lacked the skill to treat Court held that the hospital had a clear duty to select competent physicians.. the hospital is negligent in not taking action

Ultra Vires Acts

A hospital can be held liable for acting beyond the scope of authority either express or implied law

Corporate Organization

an organized group in that its members interact and cooperate in the performance of certain tasks.

Committee structure

an organizational structure in which authority and responsibility are held by a group rather than an individual

Executive

Acts on behalf of the board, Liason between management & full board

Bylaws

The rules and regulations by which a corporation is governed; (Bylaws can be changed or amended).

Finance

the function of business that involves money management

Joint conference

Informal Liason between governing body, medical staff & admin

Nominating

Responsible for developing & recommending membership

Planning

Responsible for recommending the use & development of organizational resources

Patient care

Review quality of care rendered

Audit/Regulatory compliance

Assessing various function & control systems of organization

Safety

Assess Risk Manager & Emergency ( Safety Officer), monitors conditions and develops measures for ensuring safety for all individuals

CASE STUDY: Sarbanes-Oxley Act of 2002

Enacted as a response to the misconduct committed by executives in companies such as Enron resulting in investor losses
"Can't cook the books" and leave financials out

Doctrine of Respondeat Superior

Let the master answer; that is, the employer is legally responsible for the negligent actions of his or her employees. Vicarious liability

Independent Contractor

A form of legal relationship that eliminates liability on the principal for acts of an individual you hire.

Corporate Officer/Director

Officer/Director of a corporation is not personally liable for the torts ( any wrongdoing) of corporate employees

Corporate Negligence

Occurs when a health care corporation fails to perform those duties it owes directly to a patient or anyone else to whom a duty might extend. If such a duty is breached, corporation is held liable under corporate negligence

CASE STUDY: Darling v Charleston Community Memorial (1965) Pg 98 Corporate Negligence

Benchmark Case; Major impact on the liability of health care organizations. High school athlete suffered an
amputation because of complications, from cast treatment of a lower extremity fracture at a hospital. The doc had not treated a leg fracture in 3 yrs. Court held hospitals have a duty to provide adequately trained medical & nursing staff.

CASE STUDY: Elam v College Park Hospital ( 1982) Corporate Negligence

Reestablished Darling Case focused on the hospital's failure to recognize that an individual staff surgeon may not
have been competent to safely perform surgery.

Joint liability

Both the physician and hospital responsible for damages

CASE STUDY: Gonzales v Nork & Mercy Hospital
Negligence; joint liability

Hospital found negligent for failing to protect ; Gonzales was a young man injured in an auto accident in California
in 1967. Dr. Nork performed a laminectomy--the indication for which was questionable--that resulted in complications. Gonzales sued both Dr. Nork and Mercy Hospital.
California Superior Court ruled in its 1973 Gonzales v. Nork decision that the hospital should have known of Dr. Nork's substandard practice and taken steps to protect other patients. This case showed that the hospital board is held ultimately responsible for overseeing physician privilegesCalifornia Superior Court ruled in its 1973 Gonzales v. Nork decision that the hospital should have known of Dr. Nork's substandard practice and taken steps to protect other patients. This case showed that the hospital board is held ultimately responsible for overseeing physician privileges

Corporate Duties

Select CEO, comply with statutes.jt commission, timely treatment, avoid conflict of interest, adequate facilities, & insurance, financially scrupulous, provide satisfactory patient care, require competitive bidding,& provide safe work environment

CEO's roles, responsibilities, and liabilities

Implement, interpret policies & report to board

Medical staff responsibilities

Supervise med staff, make recommendations to Board & evaluate

Corporate Reorganization

process that eliminates factors that created financial distress and preserves the value of a business

Taxation

Profit/Non-profit

Avoid self-dealing/ conflict of interest

Stark amendment; if you are a physician & own a pharmacy you cant send your patients there

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