Chapter 8: Organizational Ethics and Law

Respondeat Superior

"Let the Master Answer." A legal doctrine holding employers liable for the wrongful acts of their employees who were negligent while acting within the course and scope of their employment.

Vicarious liability

Doctrine similar to respondeat superior, whereby an employer is answerable for the torts committed by employees

What is a typical health care organization incorporated under state law as?

Either a freestanding for-profit or not-for-profit corporation. The corporation has a governing body that has ultimate responsibility for the decisions made in the organization.

How is the authority of a corporation expressed?

In the law under which the corporation is chartered and in the corporation's articles of incorporation. Members have express and implied corporate authority.

Thomas v. Sisters of Charity of the Incarnate Word

Patient fell three stories to his death after he became locked out of the hospital roof and sat on a ledge in an apparent attempt to attract someone to get assistance. Court found that the fire exit configuration that allowed the patient access to the roof created an unreasonable risk of harm that was in fact the cause of his death. Lack of signage also violated hospital policy requiring that the roof should have been marked as a restricted area.

Ultra Vires Acts

a governing body can be held liable for acting beyond its scope of authority, which is either express (in its articles of incorporation) or implied in law.

Taylor v. Kennestone Hospital

a hospital and its governing body where determined to be immune from liability under the federal Health Care Quality Improvement Act of 1986 for claims arising out of their decision to deny a physician's application to renew his medical staff privileges. A peer-review board found that reasonable investigation had found evidence of the physician's history of sexual harassment problems, that he stopped seeing patients at the hospital, and that he sought psychiatric treatment.

What is an example of unethical conduct for health care organizations?

advertising misleading information in an effort to encourage public confidence in the quality of care they provide and fraudulent reimbursement schemes

What do organizational duties and responsibilities of health care organizations include?

an appointment of a CEO, medical staff appointments and supervision, allocation of scarce resources, compliance with rules and regulations, compliance with Joint Commission standards, provision of timely treatment, and provision of a safe environment

Express Corporate Authority

authority specially delegated by statute. Health care corporations derive authority to act from the laws of the state in which they are incorporated

Darling v. Charleston Community Memorial Hospital (1965)

benchmark case in the health care field that had a major impact on the liability of health care organizations. The court enunciated a "corporate negligence doctrine," under which hospitals have a duty to provide adequately trained medical and nursing staff

Mehlman v. Powell

court held that a hospital may be found vicariously liable for the negligence of an emergency department physician who was not a hospital employee, but who worked in the emergency department in the capacity of an independent contractor. Reasoned that the hospital had control over billing procedures, maintained an emergency department in the main hospital, and represented to the patient that the members of the emergency department were its employees

Hoxie v. Ohio State Medical Board

determined that a physician had made false statements concerning his criminal history when he stated in a deposition that he had never been arrested. There was sufficient evidence presented to support permanent revocation of his license to practice medicine. Certified records held by the state of California indicated that the physician had been arrested or detained by the LA Police department multiple times in the 70s and 80s for possessing marijuana, driving under the influence of alcohol and/or drugs, and for driving with a suspended license.

Family and Medical Leave Act of 1993 (FMLA)

enacted to grant temporary medical leave to employees up to a total of 12 work weeks of unpaid leave during any 12-month period for such things as the birth and care of an employee's child, the care of an immediate family member with a serious health condition, or the inability to work because of a serious health condition. After the leave, the employee's job (or equivalent job with equivalent pay), benefits, and other terms and conditions of employment must be restored.

Independent Contractor

established when the principal has no right of control over the manner in which the agent's work is to be performed. He or she is therefore responsible for his or her own negligent acts

Thompson v. Nason Hospital

liability extends to non-employees who act as a hospital's ostensible agents. Pennsylvania court recognized that hospitals are more than mere conduits through which health care professionals are brought into contact with patients. Hospitals owe some nondelegable duties directly to their patients independent of the negligence of their employees, such as duties to use reasonable care in the maintenance of safe and adequate facilities and equipment, select and retain only competent physicians, oversee all persons who practice medicine within their walls as to patient care, and formulate, adopt, and enforce adequate rules and policies to ensure quality care for their patients.

corporate negligence

occurs when a health care corporation fails to perform those duties it owes directly to a patient or to anyone else to whom a duty may extend.

What kind of culture are organizations expected to maintain?

one that supports patient safety and an environment that fosters respect and trust, integrity and honesty, compassionate care, privacy, confidentiality, communication between the patient and caregivers, and education

Shea v. Esensten

patient died after suffering a heart attack, patient had recently visited his primary care phsyician and presented symptoms of cardiac problem (also had a family history of cardiac trouble), physician did not refer the patient to a cardiologist. Patient's widow sued the health management organization for failing to disclose the financial incentive system it provided to its physicians to minimize referrals to specialists.

What does an organization's code of ethics do?

provides guidelines for behavior that help carry out an organization's mission, vision, and values. Build trust, increase awareness of ethical issues, guide decision making, and encourage staff to seek advice and report misconduct.

Conflict of interest

situations where a person has the opportunity to promote self-interests that could have a detrimental effect on an organization with which he or she has a special relationship (employee, board member)

Implied Corporate Authority

the authority to perform any and all acts necessary to exercise a corporation's expressly conferred authority and to accomplish the purposes for which it was created. Generally arises when there is a need for corporate powers not specifically granted in the articles of incorporation.

What happens if a duty is breached and a patient is injured as a result of that breach?

the organization can be held culpable under the theory of corporate negligence.

What does organizational ethics often collide with?

the practice and professional codes of ethics. The principles of autonomy, beneficence, and justice, and the ability to practice what is right according to such principles often collide when organizations have to, for example, ration scarce resources