PERSPECTIVE: LEGAL ASPECTS OF HEALTH CARE DELIVERY

Health care administration is the management of health care professionals in health care settings to provide optimal care. Today, health care administration is observed through the lens of private, for-profit health care settings such as health care corporations with governing bodies, a CEO, and individual staff members. Yet, the government has always played a significant role in the administration of health care services. Policies implemented by state and federal governments continually reshape how the health care system is regulated. The responsibilities of the federal and state governments in administrating health services have evolved. The traditional role of the government has focused on public health services such as sanitation, disease control, and environmental and occupational hazard protection. The administration of health services by state and local governments has evolved. Today services include preventative health services, maternal and child health services, mental health services, and primary care.

Health care professionals are a medium for delivering health care services to their local communities. In part, the management of health care has become needed and subject to increased regulation. Organized health care delivery is administered by hospitals, nursing facilities, health clinics, and group practices. These health care settings can operate as a sole proprietorship, partnership, and or corporation. The organization of a health care organization such as a hospital can include a medical director who acts as a liaison between the governing body and management, departmental chairpersons who oversee their respective departments, and an executive committee.

The duties owed by a corporation include holding meetings, making policy, and maintaining financial responsibility. The Sarbanes-Oxley Act of 2002 encourages self-regulation within corporations. The Act requires identifying conflicts of interests within the corporation, examining the incentives, a code of ethics among health professionals, and complying with financial reporting requirements. There is also a duty of avoiding corporate malfeasance as established in Darling v. Charleston Community Memorial Hospital (1965). The plaintiff, in this case, brought a claim against Charleston Community Memorial, a not-for-profit health care organization, for negligence in providing health care services which resulted in the plaintiff losing one of his limbs. The original claim was against the doctor and the hospital. However, the plaintiff settled out of court with the doctor. This court case was litigated, and the jury rendered a verdict in favor of the plaintiff. The defendant conceded he owed the plaintiff a standard of care that includes “the degree of skill in the care as would have been exercised by institutions of like kind and character in the County at the time.”  

Also noted by the plaintiff are some of the regulations promulgated by the Illinois Department of Health under the Hospital Licensing Act, such as:

(a) The board shall employ competent, well-qualified personnel in adequate numbers to carry out the functions of the hospital.

(b) The board shall be responsible for proper work standards of professional work in the hospital and require that the medical staff conform with reasonable standards of competency.

(c) The governing body is legally and morally responsible for the conduct of the hospital…such as adopt[ing] bylaws per legal requirements and appoint[ing] members of the medical staff.

(d) The medical staff is responsible for the quality of medical care rendered to patients in the hospital. Maintaining high standards of medical care will depend upon the character of the medical staff and the effectiveness of its organization…[1].

Overall, the plaintiff argued that the hospital corporation was required to maintain standards of care as imposed by law. However, the prevailing issue became whether there was vicarious liability between the hospital and its employees. The Appeals Court affirmed the lower court’s verdict. Subsequently, the Supreme Court of Illinois addressed the doctrine of respondeat superior-whether the principal can be held liable for the actions of its employees, such as the circumstance of this case between the hospital and their medical staff. The outcome of the case established the rule of law that a hospital was vicariously liable as a corporate entity for the negligence of its medical staff even though there was no wrongful conduct on the part of the hospital. In Mehlman v. Powell, the court held a hospital that employed a physician as an independent contractor could be vicariously liable, even though the precedent was independent contractors do not pose a risk of liability.  

The evolution of the delivery of health services from a one dimension public entity to more complex private entities has spurred the need to impose more regulations to ensure compliance with standards set by the government in establishing quality care.

[1] 211 N.E. 2d 253 (Ill. 1965).