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45 of 279 DOCUMENTS

Copyright (c) 1995 Albany Law Review

Albany Law Review

Winter, 1995

58 Alb. L. Rev. 843

LENGTH: 15645 words

COMMENT: HEALTH CARE QUALITY REVOLUTION: LEGAL LANDMINES FOR HOSPITALS AND THERISE OF THE CRITICAL PATHWAY*

NAME: Karen A. Butler, R.N.

BIO: * The author would like to thank Professor Dale Moore for her valuable assistance in developing this Comment,as well as Tim and Mary Beth for their tireless patience and support.

LEXISNEXIS SUMMARY:... It will affect the health of all Americans, yet was initiated with no clinical studies or evidence of likely success. ...

In 1993, JCAHO fully incorporated the concepts of TQM into the accreditation process, possibly relegating the processof quality assurance in the health care setting to a place solely in history. ... Allowing a physician to utilize her conformity to a practice guideline as an affirmative defense to a malpractice action could potentially increase the qualityof care for patients, while decreasing costs. ... A hospital that actively develops and implements a critical pathway islikely to be liable if the guideline is developed negligently, leading to injury of a patient. ... The pathway should clearlystate that all health care decisions will be made by the patient with the advice of her physician and that no medications,treatments, or procedures will be carried out except by the order of the patient's own physician who is not an employeeor agent of the hospital. ...

TEXT: [*843]

I. Introduction

United States hospitals are on the threshold of a revolution. n1 This revolution will affect almost every hospital of respectable size, yet it is occurring with almost no challenge and very little press coverage. It will affect the health of allAmericans, yet was initiated with no clinical studies or evidence of likely success. n2 It may cost millions of dollars andyield no benefit, or it may cost little and yield enormous savings in money, time, and even lives, yet the averageAmerican has never heard of it. The quality revolution has begun. In 1992, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), n3 the most powerful accreditation organization for hospitals in the United States,instituted a transition requiring hospitals to adopt a system of quality control called total quality management (TQM). n4

TQM is a system of quality improvement that [*844] has achieved widespread acceptance and success in Japan. n5During the 1980s, the philosophy of quality management was applied in the United States by such companies as Xerox,Ford, and AT&T. n6 Innovative health care administrators believed that applying quality improvement techniques in thehospital setting would not only improve quality but would also decrease cost. n7 In 1987, Hospital Corporation of America n8 developed and began implementation of a TQM system in many of its hospitals. n9 Following the JCAHOmandate, it is now estimated that 3100 hospitals nationwide have TQM programs. n10 One of the most overlooked andpotentially revolutionary "tools" of TQM is the critical pathway. n11 The critical pathway is a roadmap that suggests acourse of treatment for the patient in a hospital setting, based on a diagnosis. n12 It is, in effect, a "cookbook" approachto medicine. Each pathway is specific and detailed, and any deviation from the pathway is tracked and documented.Potentially, use of pathways could improve the quality of health care while controlling [*845] cost. Conversely, poorly

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researched and developed pathways could institutionalize a lower level of care and/or actually increase costs. n13 Either way, the critical pathway is an unprecedented attempt by hospitals to control the specific clinical decisions made byphysicians in the day-to-day treatment and care of their patients. This Comment will discuss the duty of hospitals toprovide quality care to their patients, and will explore past and future quality trends. The focus will be on one of thetools of quality management that is likely to have a profound effect on the way medicine is practiced today and in the

future, the critical pathway. The legal implications of this quality tool will be addressed, as the Comment is intended toassist health law practitioners in advising their clients involved in implementing TQM principles and critical pathways.Before delving into the specifics of the critical pathway, the reader will be aided by a brief introduction to the entirehealth care quality assurance system.

II. Quality of Care in Hospitals

A. History Physicians, especially surgeons, emerged in the nineteenth and early twentieth centuries as the leaders in the movement

to improve the quality of care rendered in United States hospitals. Starting in 1917, the American College of Surgeons(ACS) established minimum standards for hospitals and instituted a voluntary system of surveying hospitals for compliance with these standards. n14 The importance of these standards increased when, in 1946, Congress passed theHill-Burton Act to provide funds for the states to build hospitals. n15 The receipt of funds was conditioned on the states

having hospital licensing laws.n16

Congress incorporated the ACS standards into a model licensing law.n17

Shortlythereafter, each state developed its own hospital licensing statute, n18 and though each state's licensing requirementsdiffered somewhat, the core provisions were based on the model licensing law, which provided for the adoption of staff bylaws, physician appointment procedures, classification of staff mem- [*846] bership, departmentalization, andperiodic meetings to review clinical work. n19 In 1951, the work of the ACS was taken over by a private, non-profit,independent organization formed for the purpose of accrediting hospitals in the United States, the Joint Commission onAccreditation of Hospitals (now called the Joint Commission on Accreditation of Healthcare Organizations). n20

Members of JCAHO are the American College of Physicians, the American College of Surgeons, the American DentalAssociation, the American Hospital Association, and the American Medical Association. n21 Hospitals seeking tomaintain accreditation from JCAHO are visited by a survey team every three years. n22 The team typically consists of aphysician, a nurse, and a hospital administrator. n23 The survey team evaluates all aspects of a hospital to determinecompliance with the extensive and detailed standards outlined in the JCAHO manual. n24 For the past four decades,JCAHO has wielded enormous influence over the organization and management of hospitals. For example, theDepartment of Health and Human Services has determined that hospitals successfully meeting the JCAHO standards of accreditation are deemed to be in compliance with the Medicare conditions of participation. n25 Participation in theMedicare program is essential to hospital survival, so it is an economic necessity for any sizable hospital to maintainJCAHO accreditation. n26 In addition, many courts have allowed the standards of JCAHO to be introduced as evidenceof the appropriate medical standard of care. n27 One commentator has suggested that the power of JCAHO is the power of the [*847] medical profession over hospital corporate structure. n28 Three of the five medical organizationscontrolling the JCAHO are physician associations. n29 Thus, in effect, physicians gained control of the hospitalcorporation and "ensured costless and unrestricted use of these capital-intensive facilities." n30 Notwithstanding thepolitics of who has been responsible for quality assurance in hospitals, three factors have traditionally and continuallyhad the greatest influence on quality of care: credentialing of the medicalstaff, tort liability, and quality assurance.

B. Credentialing JCAHO standards require that all physicians and health care professionals be evaluated by hospital credentialing

committees.n31

Although ultimate credentialing responsibilities rest with the hospital's governing body, the actualcredentialing decisions are made by the medical staff. n32 The medical staff of the hospital makes recommendations tothe board concerning who will be granted privileges at the hospital, what procedures each physician will be allowed toperform, and whether a physician's privileges will be renewed. n33 JCAHO requires that the medical staff have a set of bylaws which are contained in a "document that describes the organization, roles, and responsibilities of the medicalstaff." n34 JCAHO further requires these medical bylaws to be detailed and cover every aspect of the medical staff'sgoverning activities, including credentialing. n35 Most states have enacted credentialing requirements which closelymirror JCAHO requirements, including the requirements of bylaws and medical peer review. n36 [*848]

C. Corporate Liability

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Prior to 1965, recovery of tort damages from hospitals for the acts of physicians was limited. n37 The hospital could beheld liable for the acts of its employees under the doctrine of respondeat superior. n38 However, it was difficult for plaintiffs to recover from hospitals under this theory for the negligent acts of physicians, as most physicians wereindependent contractors and not hospital employees. n39 In 1965, the remedies available against hospitals wereexpanded. In the landmark case of Darling v. Charleston Memorial Community Hospital, n40 the hospital defendant was

found liable under a new theory.n41

The court determined that Charleston Memorial owed a duty to its patients, as acorporation, for the quality of the physicians allowed to practice in the hospital. n42 Under this corporate liability theory,a hospital is not vicariously liable for the bad acts of others, but is liable for its own bad act - the breach of its own dutyto the patient to adequately monitor the quality of care and competence of health care professionals in the hospital. n43

The corporate liability theory was further developed in Thompson v. Nason Hospital, n44 in which the court found that ahospital has a duty to use reasonable care in a number of areas: (1) to maintain safe and adequate facilities; (2) to selectand retain competent physicians; (3) to oversee all health care professionals practicing within its walls; and (4) toformulate, adopt, and enforce adequate policies [*849] to ensure quality care for its patients. n45 Though the corporatenegligence theory of hospital liability is an emerging trend, n46 it remains a minority view. n47 In recent years, courtshave found hospitals vicariously liable for the negligent acts of physicians who are not hospital employees under thetheory of apparent authority, also called "ostensible agency." n48 Under this theory, liability is only imposed when thehospital acts in such a way that the patient is led to believe that the physician is an agent of the hospital. n49

D. Quality Assurance In addition to credentialing procedures, until 1992, JCAHO required hospitals seeking accreditation to establish a

system of quality assurance. n50 Quality assurance has been called the system of quality by inspection. n51 In this model,quality is assessed by procedures that determine when quality is missing. Hospitals determine this by evaluatingemployees at regular intervals and by tracking and investigating complaints, mistakes, and unusual events. Quality ismonitored at the unit level, usually within one department, instead of interdepartmentally. n52 Specific, measurablestandards for quality assessment are developed, and quality assurance activities frequently consist of retrospectivereview of patient charts by a quality assurance manager individually or in a committee. n53 Accreditation by the JCAHOis itself a quality assurance activity, comprised of inspectors sweeping into a hospital and picking apart medical recordsand hospital standards to be sure the hospital is meeting [*850] every part of its code. n54 Quality assurance activitieshave been closely linked with the peer review activities necessary for credentialing and delineation of duties.Specifically, JCAHO requires that results of quality assurance such as infection control, utilization review, and incidentreports be used in the evaluation process for credentialing. n55 As in other industries, hospitals discovered that quality by

inspection - the "Bad Apples" approach - was expensive, perceived as punitive, and did not really improve quality.n56

The quality by inspection model assumes that people are the cause of poor quality, and that quality can improve bychanging people's behavior with punishment. n57 However, this "Bad Apples" approach typically triggers the "my-apple-is-just-fine-thank-you" defensive response. n58 When people are measured by the punitive "Bad Apples" approach, theytend to try to beat the system, not improve the quality of the services they render. n59 Thus, because the quality assuranceapproach has been criticized as punitive, vague, and ineffective, in 1992 JCAHO began a process requiring hospitals todevelop a system of quality management based on TQM principles. n60

E. The Future Donald Berwick theorized that the entire "Bad Apples" approach to health care management - the search for outliers -

encouraged persons working within the system to respond in one of three ways: kill the messenger, distort the data, and(if all else fails) turn somebody else in. n61 As an alternative to quality assurance, Berwick proposed a customer-focusedsystem of management that attempts to improve quality by improving the process, not by punishing the workers. This isthe system of TQM, n62 developed shortly after World War II by W. Edwards Deming. n63 Deming's ideas about qualitywere rejected by American industry, but were quickly and successfully [*851] embraced by the Japanese. n64 The TQMphilosophy emphasizes quality control and responsiveness to customer needs. n65 In TQM, it is assumed that everyone isacting in good faith to do a good job. The motto of TQM is "fix the process, not the people!" n66 TQM managers work toimprove the system, thereby improving the performance of the average worker, not just the exceptionally good or badworkers addressed by the quality assurance model. n67 Under the TQM paradigm, improving quality means improvingthe process: the process is identified, broken down, and analyzed at every step as the manager identifies areas that canbe improved. n68 For example, health care providers use performance indicators to focus attention on quality concerns,allowing them to evaluate their progress towards higher quality care by comparing their performance standards againstothers. The goal of the TQM system is to use these statistics to improve quality by continually improving the process.

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Because a defensive response is counterproductive to this goal, the TQM manager is not a disciplinarian or watchdog,but enables the work force to do the best job that it can. n69 In the 1980s, Xerox, as well as many other AmericanCompanies, rediscovered Deming's teachings and began to apply the concept of TQM to their own industrial processeswith mixed success. n70 In 1993, JCAHO fully incorporated the concepts of TQM into the accreditation process, n71

possibly relegating the process of quality assurance in the health care setting to a place solely in history. A recent survey

estimates that at least 3100 hospitals in the United States have developed TQM programs.n72

The future of quality man[*852] agement in hospitals will fall into three main areas: practice guidelines, performance indicators, and criticalpathways. Performance indicators and critical pathways, two tools of TQM, n73 have the potential of changing thecredentialing process, expanding hospital liability, and even affecting the practice of medicine in American hospitals.Practice guidelines and performance indicators will be examined briefly to lend context to the focus upon the criticalpathway.

1. Practice Guidelines Practice guidelines have been developed by such diverse groups as physicians, hospital executive officers and trustees,

federal and state governments, private research organizations, and third-party payers. n74 For example, the Departmentof Health and Human Services, through the Agency for Health Care Policy and Research, has developed clinicalpractice guidelines for pain management, cataracts, depression, and urinary incontinence. n75 In 1991, it was estimatedthat more than fifty organizations were developing clinical practice guidelines. n76 Physician organizations alone havedeveloped hundreds of guidelines. There are several reasons for the increased interest in guidelines, some of which areexplored below.

a. Cost The statistics regarding the cost of health care are staggering. The total cost of health care in the United States tripled

between 1980 and 1992. n77 Spending on health care is estimated to reach $ 1 trillion this year, totaling fifteen percent of the entire United States economy. n78 Even with proposed health care reforms, health care costs are expected to continueto rise, leveling off at 17.3% of the gross domestic product by the year 2000. n79 Any gains in cost-containment may beeliminated by the year 2040 when, according to the [*853] United States Census Bureau, seventy-six millionAmericans will reach the age of sixty-five or older. n80 Persons over the age of sixty-five comprised thirteen percent of the population as of 1993, yet "they fill[ed forty] percent of all hospital beds and consumed twice as much prescriptionmedication as all other age groups combined." n81 Any attempt to limit health care for the elderly will become moredifficult, if not impossible, as the elderly baby-boomers set health care priorities via the political influence their sheer numbers afford. n82 The causes of the explosion in health care spending are as complex as the health care system itself.n83 An aging population, proliferation of technology, AIDS, and drug abuse have all added to the cost of health care. n84

An additional cause of out-of-control health care costs is the performance of unnecessary treatment. n85 It has beenestimated that billions of dollars are spent annually in this country for tests and treatments that are of questionable, or even negligible, value. n86 An example of this unnecessary spending is indicated in a report released in May 1994 by theWashington-based Public Citizens Health Research Group, which estimated that nearly fifty percent of the 421,000cesarean sections done in the United States in 1992 were unnecessary. n87 In 1991, the costs of unnecessary cesareansections in this country totaled an estimated $ 1.3 billion. n88 Eliminating wasteful and/or unnecessary procedures by theuse of clinical practice guidelines could go far in reducing the cost of health care.

b. Quality of Care Clinical practice guidelines developed carefully, based on current research, could also improve quality of care. Practice

guidelines could have the general effect of raising the quality of medical care by causing medical procedures to be usedmore judiciously. For example, it has been estimated that thirty percent of coronary angiogra [*854] phies n89 areunnecessary. n90 In white females located in the north central portion of the United States, as many as forty percent of coronary angiographies may be inappropriate. n91 However, underuse was found in studies of black males, where at leastfifty percent more angiographies should have been performed. n92 In another study it was found that many deaths frommyocardial infarction were unnecessary. n93 A significant number of these deaths were caused because practitionersfailed to administer a life-saving thrombolytic drug n94 within the first two hours of the attack, when it has the greatestpotential effect. n95 Clinical practice guidelines were recently developed to assist hospital emergency room physicians torecognize those patients who are candidates for thrombolytic therapy, facilitating the administration of the drug duringthe critical period. n96 Potential benefits of clinical guidelines relating to quality include better technical care (less

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iatrogenesis n97 and negligence), less overuse and underuse, a higher art of care, and greater patient satisfaction. n98

Conversely, clinical practice guidelines could adversely affect quality of care. For example, it is estimated that it takesapproximately two years for a guideline to be developed and disseminated to practi- [*855] tioners. n99 In some fields,medical advances are rapid, rendering guidelines outdated before they are generally available. Such was the case inSweden, where a fifteen-year-old clinical guideline program was abandoned after the guidelines fell behind medical

advances.n100

Physicians have expressed concern with practice guidelines in areas other than responsiveness. For example, educators fear that guidelines may discourage young physicians from developing skills in clinical reasoning.n101 Researchers argue that guidelines discourage innovation, based upon the fear that research grants will not be awardedfor the investigation of treatments not already appearing in clinical guidelines. n102 Finally, guidelines designed toaddress the needs of society (such as cost) but not the needs of the individual may represent health care "rationing." n103

c. Medical Malpractice In a medical malpractice action, the plaintiff has the burden of showing that the defendant owed a duty to the plaintiff,

that the defendant breached that duty, and that the breach was the cause of the plaintiffs injury. n104 Breach of thedefendant's duty is demonstrated by showing that the defendant deviated from the applicable standard of care. n105 Thestandard of care for a physician requires the exercise of a reasonable degree of care and skill at the same level of expertise as that expected of other members of the profession under the same or similar circumstances. n106 A specialistis held to the standard of care and skill of the average member of the profession practicing the specialty. n107 Because theapplicable standard of care lies outside the scope of knowledge of the average lay person, the standard must beestablished by expert testimony. n108 After listening to each party's [*856] experts, the jury must then determine whichstandard, presented by which expert, is applicable to the situation at hand. n109 The testimony of experts is complex,technical, and often incomplete. n110 As such, it may be beyond the scope of the juror's understanding. n111 Because juriesmay not fully understand the medical testimony, they consider not only the qualifications of the expert but also factorssuch as appearance, voice, and overall demeanor when giving weight to the expert's opinion. n112 Recently, two authorshave suggested that where practice guidelines exist, courts should take judicial notice of the applicable guideline as thedefining standard, thereby removing the standard of care question from the jury. n113 Instead of expert testimony, thejudge would instruct the jury on the applicable standard of care. n114 One barrier to this solution, however, is that thetaking of judicial notice may occur only when the accuracy of medical practice guidelines may not reasonably bequestioned. n115 Since guidelines are often contradictory and vary in their reliability, n116 it may be impossible to say thattheir accuracy is beyond question. In addition, a clinical practice guideline used as a "mandatory" standard of care couldhave the undesirable effect of "stifling creativity and blocking the dissemination of new medical technology." n117

Physicians might adhere to a guideline's recommendation despite the existence of a more appropriate treatment.n118

Allowing a physician to utilize her conformity to a practice guideline as an affirmative defense to a malpractice actioncould potentially increase the quality of care for patients, while decreasing costs. n119 The state of Maine has been theleader in utilizing clinical [*857] practice guidelines as an affirmative defense. n120 Its Medical Liability DemonstrationProject established "risk management" boards to develop practice guidelines in the areas of anesthesiology, emergencymedicine, radiology, and obstetrics and gynecology. n121 The stated intent of the legislation is to develop practicestandards, consistent with appropriate standards of care, which will avoid malpractice claims and increase thedefensibility of malpractice claims. n122 These standards can be used affirmatively as a defense by the physician. n123 If the physician followed the standard, the physician is relieved of liability. n124 However, if the physician deviated fromthe standard, she can choose not to introduce the standard into evidence. n125 The Maine statute does not allow theplaintiff to use the guidelines to establish liability, n126 encouraging physicians to deviate from those standards when it isbest for the patient. This protection for physicians fosters the use of guidelines without stifling creativity or inhibitingmedical innovation. Because one of the goals of the legislation is to decrease costs of malpractice litigation,

physicians are allowed to use the affirmative defense at the pretrial screening stage to prevent the case from ever goingto trial. n127

2. Performance Indicators In addition to practice guidelines, the future of quality control in the hospital will revolve around the TQM movement,

featuring the collection of vast quantities of performance data, including performance indicators. As part of its agendafor change, the JCAHO announced a commitment to the development of performance indicators in its 1992 manual. n128

These indicators would be part of a [*858] data base allowing a hospital to compare its performance with other hospitals. n129 A similar data-collection project currently exists in Maryland. The Maryland Hospital Association'sQuality Indicator Project collects data from hundreds of hospital participants, tracking statistics on a variety of

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indicators including surgical infections, cesarean sections, and unplanned returns to critical care. n130 The data iscollected and a report given to each participating hospital. n131 Hospitals can compare their statistics to other hospitals of similar size and locale. n132 This data, previously unavailable to hospitals, raises issues of liability under the doctrine of corporate negligence. n133 If the collected data indicates the existence of quality concerns (i.e., a higher-than-averagemortality rate for a particular procedure), the hospital in question should address that concern. n134 Data based on patient

outcomes, however, may create an illusion of quality problems in community hospitals where a smaller patient samplemakes statistical conclusions questionable. n135 The mere generation of data will not necessarily improve quality. Ideally,the data would be used to identify areas of concern, and efforts would be made to improve quality in those areas. That isnot necessarily the case, however. For example, since 1987 the Health Care Financing Administration has producedcopious amounts of statistics analyzing mortality rates for Medicare patients in United [*859] States hospitals. n136 Thisvoluminous and potentially useful information is countered by even more paperwork generated by hospitals trying todefend themselves from possible liability. n137 This defensive reaction to performance indicators will not improvemedical care, but will add to health care costs.

III. Critical Pathways Critical pathways, like performance indicators, are tools of TQM. n138 A critical pathway defines the sequence of events

that must occur to move a patient "toward the desired outcomes within a defined period of time." n139 Critical pathwaysare specific: they describe what will happen to a patient every day that the patient is in the hospital. This specificityincludes not only traditional nursing functions, but also medication and treatments that can be ordered only by aphysician. n140

A. Illustrative Critical Paths and Their Formulation To understand the critical pathway and the implications inherent in its use, it is necessary to analyze several pathways

and the ways in which they were developed. n141

1. Johns Hopkins Hospital Johns Hopkins Hospital has developed a pathway for the patient undergoing a radical, retropubic prostatectomy

(removal of the prostate gland). n142 According to the pathway for the pre-operative day, the patient is expected to havethe following procedures and medications: (1) no food or drink after midnight; (2) an intravenous line inserted to infusea solution of dextrose, half-strength normal saline and potassium; (3) an enema or other bowel preparation; (4) sedation;

(5) a lower extremity check; (6) being out of bed to the extent [*860] the patient desires; (7) the washing of theoperative area with antiseptic solution; (8) care of the urinary meatus; (9) collection of vital signs once per shift(temperature, pulse, respirations, and blood pressure); (10) anti-embolic (support) hose; (11) foot exercise; (12) pre-operative teaching; (13) home assessment; (14) consultation with the anesthesia department; (15) bloodwork, urinalysis,urine culture, EKG (cardiogram), chest x-ray, and MRI. n143 Many of these procedures can be ordered only by aphysician as a matter of state law, including laboratory and diagnostic tests, sedation, and an enema. n144 It is not clear,however, that this pathway was developed by physicians. Johns Hopkins reports that pathways are developed by staff nurses with "intense nurse/physician collaboration." n145 Johns Hopkins identifies ten steps to developing a criticalpathway: (1) identify the patient population; (2) recruit consultants; (3) collaborate with physicians; (4) collect data suchas length of stay, nursing diagnoses, and patient satisfaction; (5) incorporate the data into a critical pathway format; (6)submit a draft of the critical pathway to the consultants for review; (7) revise the pathway until it is accepted by allconsultants; (8) present it to the appropriate hospital committee for content and format approval; (9) incorporate anycommittee-mandated changes to the final product; and finally, (10) pilot the new critical pathway for three months. n146

Johns Hopkins reports that physician involvement is crucial and that final approval takes place in a physician committee(e.g., the Department of Surgery's Clinical Practice Committee). n147 However, as noted above, n148 it is not clear fromthese steps what role the physician is to play. Furthermore, Johns Hopkins does not reference any research or literatureused to develop the critical pathway. For example, no authority is cited to support the necessity or benefit of the fifteenprocedures, medications, and events which constitute the critical pathway for the pre-operative day's treatment. Thisomission may represent either an actual lack of research or a belief that such research is not an important part of thepathway development process. [*861]

2. University Hospitals of Cleveland University Hospitals of Cleveland has developed a pathway for the patient who is chronically dependent on a

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ventilator. n149 They report that this path was developed, in part, because of the enormous cost of caring for this patientpopulation. n150 The pathway was developed after a "retrospective chart review of [twelve] ventilator-dependentpatients," n151 and based on projected reimbursement by third-party payers to the hospital for patients in this group. n152

Neither additional research nor the use of physician corroboration is mentioned in the report describing the developmentof the pathway. However, the pathway does include a meeting with the patient's physician so the pathway can be

tailored to the individual's needs.n153

While this pathway is specific, it is more discretionary than the Johns Hopkinsmodel. For example, it advises the user to "assess" the need for bloodwork or to "consider" stopping hypnotics. n154

3. Aurora Presbyterian Hospital Aurora Presbyterian Hospital has developed a critical pathway for the asthmatic patient. n155 Like the path developed by

University Hospitals of Cleveland, this pathway is also based on projected reimbursement by third-party payers for thispatient population; in this case the payment is estimated to cover four days of hospitalization. n156 This pathway wasdeveloped after "brainstorming sessions [*862] with bedside clinicians." n157 It was determined that clinicians needed"structure for making clinical decisions that would move a patient toward discharge." n158 It is not clear if "clinicians"are doctors, nurses, or both. This critical pathway is very specific and heavy on procedures and treatments n159 that canbe prescribed only by a physician. n160 These include arterial blood gas analysis, sputum cultures, n161 intravenous andoral administrations of aminophylline, n162 medicated nebulizer treatments, n163 and chest x-rays. n164 There is no mentionof physician involvement at any level in developing this pathway, nor is there any reference to research or deference toany nationally recognized standard for asthma treatment. Again, it must be assumed that either research was not done or that it was not considered a vital part of the process.

4. Commercial Pathways Not surprisingly, entrepreneurs have jumped on the critical pathway bandwagon. For example, the Center for Health

Education of Arvada, Colorado offers a set of twenty prepared critical pathways for $ 499 (plus postage). n165 Thesepathways cover diagnoses as diverse as stroke, vaginal delivery, and total hip replacement. n166 Promoters of thepathways claim they were developed by a team consisting of physicians, registered nurses, and other healthpractitioners, based on "generally accepted practices in the medical industry." n167 The pathways are specific and detailmany procedures, treatments, and medications n168 which can only be ordered by a physician. n169 [*863] The use of anyof these pathways raises several legal questions. For example, if the hospital staff develops pathways without physicianinvolvement, is the hospital engaged in the practice of medicine? Even if the pathway is developed with the aid of physicians, is the hospital interfering in the relationship between patient and physician? Can the hospital be held liable if it develops a pathway without adequate research, or develops a pathway and fails to use it or fails to monitor physiciancompliance with it? Will use of the pathway create an impression that the physician is an agent of the hospital?Lastly,may a hospital use a quality tool such as a pathway as a way to control physician behavior and decrease costs? Inaddition to these questions, there are certainly other issues that will develop as pathways become more prevalent in thehospital system. The next section will attempt to address some of these issues.

B. Legal Implications of the Critical Pathway The legal problems inherent in the use of the critical pathway fall roughly into two groups: interference with the

physician-patient relationship and liability issues.

1. Interference with the Physician-Patient Relationship Critical pathways represent a deviation from the traditional model of health care, in which the physician is granted

autonomy in making treatment decisions for the patient. n170 Critical pathways designate a treatment regimen in adetailed, specific style to a physician for a particular patient, based on a medical diagnosis, for the purpose of improvingquality and decreasing cost.

a. Corporate Practice Doctrine Under the corporate liability doctrine, a licensed physician may not accept direction or instructions in diagnosing or

treating ailments from a corporation or an individual who is not licensed to practice medicine. n171 A hospital, therefore,is powerless to command or forbid any act by doctors in the practice of their profession. n172 This doctrine wasdeveloped in a series of cases in the first half of this century, a period in which leaders in the medical profession [*864]

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were afraid that physicians working for corporations would be under corporate control at the expense of physicianautonomy. n173 The basis of the doctrine is that in all states, physicians must be licensed to practice medicine. Further,since hospital corporations are not natural persons, they are ineligible for licensure as a result of their failure to meet thestatutory requirements of a medical degree, good character, and passing a licensing examination. n174 The doctrine isalive and well in all but two states, Nebraska and Missouri. n175 The corporate practice doctrine may be applicable to

cases in which a corporation (the hospital) and non-physicians (nurses) are involved in actual decision makingconcerning procedures and treatments that must be ordered by a physician. Lay administrators controlling physicianbehavior, by issuing detailed binding directives, violate the fundamental notions of the corporate practice doctrine. n176

Detailed, nondiscretionary directives create a direct treatment relationship between the corporation and the patient, n177

misleading the patient about the true qualifications of the person directing her care - the very situation the corporatepractice doctrine was developed to prevent. n178 The corporate practice doctrine would apply to any treatment directivesdeveloped by nonphysicians that are not completely discretionary.

b. Tortious Interference An individual or corporation interfering in a contractual relationship may be liable for damages under the tortious

interference doctrine. The tortious interference doctrine has been applied when actions of a corporation, such as ahospital or insurer, interfere in the physician-patient relationship. n179 The tort applies to direct interference, n180 whether professional or nonprofessional, in current physician-patient relationships. n181 Mandatory directives constitute tortiousinterference where there is displacement of physician authority. n182 For example, it is not interference for an insurancecom- [*865] pany to require patients to get a second opinion before elective surgery, so long as there is no requirementthat the consultant's opinion must be followed. n183 Conversely, standing orders that are initiated without a physicianorder could be interference. n184 Nonspecific, retrospective review of a physician's actions (for example, peer review) isnot tortious interference. n185 The tortious interference doctrine could readily be applied to the development andimplementation of critical pathways. Binding, nondiscretionary critical pathways - even if developed by physicians -could constitute tortious interference with the physician-patient relationship. Purely discretionary critical pathwayssuggesting the attending physician order all of the procedures, tests, and medications contained therein, would not.

c. Economic Credentialing Economic credentialing is a process which considers the economic impact of a physician's practice on the hospital as

part of the credentialing evaluation process. n186 In Knapp v. Palos Community Hospital, n187 a group of physiciansalleged wrongful curtailment of medical privileges. n188 The appellate court reversed the lower court's decision to grant atemporary restraining order against the defendant hospital after the hospital denied the plaintiffs' reappointments to themedical staff. n189 The plaintiffs, a group of internists, had their privileges suspended for, inter alia, inappropriate use of lung scans, excessive use of diagnostic tests, pacemakers, and pulmonary angiograms. n190 The court noted that theplaintiffs' medical practice resulted in hospitalizations that were fifty percent longer and thirty-one percent costlier thanthose of other staff members. n191 The court held that the hospital quality assurance committee did not violate thehospital bylaws by denying the physicians privileges. n192 How [*866] ever, the court focused its discussion on thequality of care, not the cost. n193 It is unclear if denying a physician privileges based on purely economic reasons wouldbe a violation of hospital bylaws. n194 However, because critical pathways are considered a "quality tool" and not a toolfor cost containment, denying privileges because of refusal to use pathways or because of frequent deviation from themwould probably not be considered a form of economic credentialing.

2. Hospital Liability

Hospitals that develop guidelines will be held to the standards those guidelines endorse.n195

As hospitals gain the legaland managerial tools to control the behavior of previously autonomous physicians, their exposure to liability mayincrease in three ways. First, the hospital may be liable for negligently instituting a deficient standard. n196 Second, thehospital may be liable if physicians deviate from the critical pathway and the hospital is found to have failed to use thepathway to monitor physician practice. n197 Finally, the hospital may be held liable if its guidelines result in a reasonableappearance that the physician is an agent of the hospital. n198

a. Adopting a Guideline A hospital has a duty to use reasonable care when formulating policies, procedures, and rules by which its professional

and nonprofessional staff are governed. n199 A hospital that actively develops and implements a critical pathway is likely

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to be liable if the guideline is [*867] developed negligently, leading to injury of a patient. n200 In Air Shields v. Spears,n201 the defendant hospital was found liable when the plaintiff, an infant, developed blindness after exposure to highdoses of oxygen in an incubator. n202 The court found that the evidence was sufficient to show that policy and proceduresregarding the administration of oxygen were negligently maintained, as there was at least some indication in theliterature of the period that high doses of oxygen could cause blindness in premature infants. n203 Similarly, hospitals that

do not use reasonable care in developing critical pathways could be liable if use of a pathway is the proximate cause of patient injury. Presumably, an institution that assumes the physician's role by promulgating a plan of care would be heldto the same standard as a practicing physician. The issue therefore would be whether the hospital exercised the degreeof care and skill as would be expected of the qualified practitioner, taking into account the advances in the profession.Therefore, hospitals that choose to develop guidelines should be prepared to demonstrate that they used reasonable carein developing and updating them. Authorities relied on should be documented and every step in the pathway justified byreferences to accepted standards. In addition, hospitals adopting guidelines will be measured by the standards theychoose and adopt. For example, in Haber v. Cross County Hospital, n204 a New York hospital was found negligent whena patient fell out of bed and was injured. n205 Normally, a hospital would not be held liable for failing to place siderailson beds absent a specific physician order. n206 In this case, however, the hospital had adopted a policy that all patientsover the age of fifty were to have the siderails on their beds erected. n207 The court held that the hospital's failure to abideby its own rules was evidence of negligence. n208 It is imperative that a hospital developing and implementing a criticalpathway incorporate into the document specific and detailed caveats explaining the purpose of the guideline and

limitations of its use.n209

Critical pathways look "suspiciously like standards of care," [*868] and a jury does not havethe expertise to distinguish a mere quality tool from an industry standard. n210

b. Monitoring Physician Practice Courts have also recognized that hospitals have a duty to enforce and monitor the policies and procedures they choose

to adopt. In Penn Tanker Co. v. United States, n211 the defendant hospital had developed a policy of preoperative care.n212 The court found the hospital liable for negligently failing to enforce its own policy. n213 Developing specific criticalpathways and tracking compliance with the pathways will generate data regarding physician performance, which will beapplicable to monitoring physician competence. n214 As previously stated, hospitals have a duty to their patients tomonitor physician competence. n215 Plaintiffs could argue that physician noncompliance with critical pathways put thehospital on notice of quality concerns regarding the specific physician. If a hospital fails to monitor the data generatedand fails to pursue quality issues indicated by the data, the hospital may be found liable under the corporate negligencedoctrine. n216

c. Ostensible Agency In situations where hospital behavior causes a patient to believe that the physician is an agent or employee of the

hospital, the hospital may be found vicariously liable for the negligent acts of the physician. n217 In Kashishian v. Port,n218 the court held that a hospital may be vicariously liable for the negligent acts of physicians who are independentcontractors, in this case, a cardiologist. n219 The court iden [*869] tified three elements which must be present to find"apparent agency." n220 First, the hospital must have acted in a manner that would lead a reasonable person to believethat the negligent physician was an agent of the hospital. n221 Second, if it is alleged that the physician acted in a manner that created the appearance of authority, the hospital must have had knowledge of and acquiesced to the acts of thephysician that created the appearance of authority. n222 Finally, the plaintiff must have acted in reliance on thephysician's or the hospital's conduct consistent with ordinary care and prudence. n223 Critical pathways are developed bythe hospital, through committees of physicians and/or nurses. n224 Pathways are printed on a form with the hospitalname. n225 When a patient is admitted to the hospital, she is often given a copy of the pathway. n226 This is done to botheducate the patient and increase patient awareness of expected outcomes and goals on a daily basis. n227 Sharing thepathway with the patient gives her a sense of being an integral part of the health care team. n228 However, sharing apathway with a patient that depicts a patient-specific plan of care with the hospital's name at the top may lead a patientto reasonably believe that the physician is acting as an agent of the hospital with apparent authority. The hospital couldbe found liable for the negligent acts of the physician by creating the appearance of agency.

IV. Conclusion The process by which hospitals ensure that their patients receive quality care is changing. The future of measuring and

improving quality of care in hospitals promises a proliferation of TQM tools, including performance indicators, practice

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guidelines, and, particularly, critical pathways. As this revolution occurs, it must be recognized that the utilization of critical pathways represents a marked deviation from the traditional role of the hospital - that of an entity separate fromthe physician-patient relationship. As these institu- [*870] tions assert more control over the practice of medicinewithin their walls, the legal implications of critical pathways must be borne in mind. When attorneys advise hospitalsdeveloping critical pathways, they should consider the following principles: pathways should be developed primarily by

physicians; they should be discretionary and not mandatory; physicians involved in the development of pathwaysshould base the pathway on sound medical research, as hospitals may be liable if pathways are developed negligently;once a pathway is in place, the hospital may be liable if a physician's deviation from the pathway is not addressed;physicians must document why they deviated from or did not use a particular protocol; the pathway should containcaveats specifically limiting its purpose and use; copies of critical pathways given to patients should not contain thename of the hospital; and the pathway should clearly state that it is only a representation of a common pattern of treatment and acknowledge that all patients are different and that courses of treatment will vary. The pathway shouldclearly state that all health care decisions will be made by the patient with the advice of her physician and that nomedications, treatments, or procedures will be carried out except by the order of the patient's own physician who is notan employee or agent of the hospital. Critical pathways are a tool of the TQM process, an approach that is nowmandated by JCAHO. However, JCAHO has not mandated the use of pathways. Implementing critical pathways shouldbe done carefully, thoughtfully, and only with the full cooperation and enthusiasm of the medical staff.

Legal Topics:For related research and practice materials, see the following legal topics:Healthcare LawActions Against FacilitiesGeneral OverviewHealthcare LawBusiness Administration &OrganizationAccreditationHealthcare LawBusiness Administration & OrganizationPeer ReviewStatutes

FOOTNOTES:

n1. The nineties may be known as the decade of the quality revolution in all of American business, not just the health care industry. SeePaula Phillips Carson & Kerry D. Carson, Deming Versus Traditional Management Theorists on Goal Setting: Can Both Be Right?, 36 Bus.Horizons 79 (1993).

n2. See David Blumenthal, M.D., Total Quality Management and Physicians' Clinical Decisions, 269 JAMA 2775, 2775 (1993).

n3. For a discussion of the history and function of JCAHO, see infra text accompanying notes 20-30.

n4. JCAHO, Accreditation Manual for Hospitals at ix (1992) [hereinafter 1992 Accreditation Manual] (disseminating JCAHO'srequirements). The concept of TQM was introduced into the JCAHO accreditation manual in 1992 but did not become mandatory until 1993.See id.; JCAHO, Accreditation Manual for Hospitals at ix (1993) [hereinafter 1993 Accreditation Manual]; infra text accompanying notes62-70 (describing TQM). JCAHO's requirements are mandatory in practice because of the vast power the organization holds over hospitalsvia the accreditation and reaccreditation processes. See infra notes 25-27 and accompanying text (detailing the powerful relationshipbetween JCAHO accreditation and the legal standard of medical care, as well as the Medicare eligibility of hospitals). JCAHO refers to theconcept of TQM as "continuous quality improvement" (CQI). 1992 Accreditation Manual, supra, at ix. The two terms are considered

synonymous. John D. Blum, Hospitals, New Medical Practice Guidelines, CQI, and Potential Liability Outcomes, 36 St. Louis U. L.J. 913,922 (1992).

n5. Donald M. Berwick, M.D., Continuous Improvement as an Ideal in Health Care, 320 New Eng. J. Med. 53, 54 (1989).

n6. Id. In 1991, the American Express Company, IBM, Proctor and Gamble, Ford, Motorola, and Xerox issued an open letter to academicleaders of America urging the teaching of TQM's principles at our colleges and universities. An Open Letter: TQM on the Campus, Harv.Bus. Rev., Nov.-Dec. 1991, at 94. The letter in part stated:

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We are absolutely convinced that TQM is a fundamentally better way to conduct business and is necessary for the economic well-being of America. TQM results in higher-quality, lower-cost products and services that respond faster to the needs of the customer. Quality results arecontinually improved through understanding and perfecting the systems by which organizations operate. This systems approach meanscloser ties between our suppliers and customers, both inside and outside our companies. TQM involves everyone in the organization inachieving superior results, so that each person takes pride in maximizing his or her contribution to customer satisfaction and business health.Results from TQM at our companies range from halving product-development cycle time to a 75% improvement in "things gone wrong" inshipped products to a $ 1.5 billion savings in scrap and rework over a five-year period. Id.

n7. Berwick, supra note 5, at 55.

n8. The Hospital Corporation of America owns and manages 270 hospitals nationwide. Mary Walton, Deming Management at Work 15(1990).

n9. Id. at 85.

n10. Blumenthal, supra note 2, at 2775.

n11. TQM utilizes a variety of tools including diagrams, charts, indicators, benchmarking, and protocols to assess performance and identifyroot causes of poor quality. Joseph V. Truhe, Jr., Quality Assessment in the "90s: Legal Implications for Hospitals, 26 J. Health & Hosp. L.171, 172 (1993). The adoption of critical pathways will generate data that was previously unavailable to hospitals. See id. The developmentand implementation of pathways will impact credentialing and hospital and physician malpractice, as well as the nature of medical practiceitself. See id. at 179; see also Robert H. Brook, M.D., Practice Guidelines and PracticingMedicine: Are They Compatible?, 262 JAMA 3027,3030 (1989).

n12. Laura E. Ferguson, Steps to Developing a Critical Pathway, 17 Nursing Admin. Q. 58, 58 (1993).

n13. See Brook, supra note 11, at 3030.

n14. Timothy S. Jost, The Joint Commission on Accreditation of Hospitals: Private Regulation of Health Care and the Public Interest, 24B.C. L. Rev. 835, 847-48 (1983).

n15. 42 U.S.C. 291-291o (1988).

n16. Daniel M. Mulholland III, The Corporate Responsibility of the Community Hospital, 17 U. Tol. L. Rev. 343, 344 (1986).

n17. 42 U.S.C. 291-291o; John D. Blum, Economic Credentialing: A New Twist in Hospital Appraisal Processes, 12 J. Legal Med. 427, 432(1991).

n18. Blum, supra note 17, at 432.

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n19. Id.

n20. Jost, supra note 14, at 849-52; see Blum, supra note 17, at 432.

n21. 1993 Accreditation Manual, supra note 4, at 226.

n22. Blum, supra note 17, at 467-69.

n23. Id.

n24. See id.

n25. 42 U.S.C. 1395bb (Supp. V 1993); 42 C.F.R. 488.5 (1993). A hospital may also qualify as a provider by state survey agency review. 42U.S.C. 1395aa; 42 C.F.R. 488.10. Hospitals that are not accredited must be surveyed annually. Id. 488.20. The state agency will determine if the hospital is in compliance with the Medicare conditions of participation for hospitals. 42 U.S.C. 1395aa; 42 C.F.R. 488.10. Institutionsaccredited by the American Osteopathic Association are also deemed to meet the Medicare conditions of participation. 42 U.S.C. 1395bb; 42C.F.R. 488.5.

n26. David H. Rutchik, Note, The Emerging Trend of Corporate Liability: Courts' Uneven Treatment of Hospital Standards LeavesHospitals Uncertain and Exposed, 47 Vand. L. Rev. 535, 556 n.177 (1994).

n27. See, e.g., Sheffield v. Zilis, 316 S.E.2d 493, 494 (Ga. Ct. App. 1984); Niven v. Siqueira, 487 N.E.2d 937, 939-40 (Ill. 1985); Darling v.Charleston Community Memorial Hosp., 211 N.E.2d 253, 256-57 (Ill. 1965), cert. denied, 383 U.S. 946 (1966); Taylor v. Hill, 464 A.2d938, 941 (Me. 1983); Pedroza v. Bryant, 677 P.2d 166, 171 (Wash. 1984).

n28. See Mulholland, supra note 16, at 363.

n29. See Janet Miller Rowland, Enforcing Hospital Responsibility Through Self-Evaluation and Review Committee Confidentiality, 9 J.Legal Med. 377, 389 (1988); supra text accompanying note 21.

n30. Mark A. Hall, Institutional Control of Physician Behavior: Legal Barriers to Health Care Cost Containment, 137 U. Pa. L. Rev. 431,446. (1988).

n31. Blum, supra note 17, at 428, 431.

n32. Id. at 434.

n33. Id. Because it is almost impossible to practice medicine without hospital affiliation, a denial of medical privileges at a hospital can bedevastating to the career of a physician. Credentialing disputes are frequent for this reason. Challenges to credentialing decisions have rested

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on, inter alia, theories of due process, equal rights, and antitrust. Id. at 438.

n34. 1993 Accreditation Manual, supra note 4, at 58, 229.

n35. Id. at 58; see also Blum, supra note 17, at 433.


n37. See, e.g., Pedroza v. Bryant, 677 P.2d 166 (Wash. 1984) (discussing hospital liability in general); Claire Grandpre Combs, Comment,Hospital Vicarious Liability for the Negligence of Independent Contractors and Staff Physicians: Criticisms of Ostensible Agency Doctrinein Ohio, 56 U. Cin. L. Rev. 711, 711 (1987).

n38. See, e.g., Seneris v. Haas, 291 P.2d 915, 927 (Cal. 1955) (allowing suit against a hospital for the acts of its employee, an anesthetist);Simmons v. Saint Clair Memorial Hosp., 444 A.2d 870, 873-74 (Pa. 1984) (describing the determination of an actual agency relationshipbetween a physician and a hospital to be governed by general agency principles).

n39. See, e.g., Heins v. Synkonis, 227 N.W.2d 247, 249 (Mich. 1975) (finding the mere usage of the hospital's facilities by a physician to beinsufficient to establish the hospital's vicarious liability); Cooper v. Curry, 589 P.2d 201, 203 (N.M. 1978) (describing staff privileges asmerely an accommodation of physicians, not the creation of an agency relationship leading to the hospital's vicarious liability); Schloendorff v. Society of N.Y. Hosp., 105 N.E. 92, 93 (N.Y. 1914) (stating the nonemployee physician is an "independent contractor " of thehospital); Diane Janulis & Alan D. Hornstein, Damned if You Do, Damned if You Don't: Hospitals' Liability for Physicians' Malpractice, 64Neb. L. Rev. 689, 694-96 (1985); Arthur F. Southwick, Hospital Liability: Two Theories Have Been Merged, 4 J. Legal Med. 1, 5-7 (1983).

n40. 211 N.E.2d 253 (Ill. 1965); cert. denied, 383 U.S. 946 (1966).

n41. Id. at 257.

n42. Id.

n43. Miller Rowland, supra note 29, at 392; see, e.g., Elam v. College Park Hosp., 183 Cal. Rptr. 156 (Ct. App. 1982).

n44. 591 A.2d 703 (Pa. 1991).

n45. Id. at 707 (interpreting Chandler Gen. Hosp., Inc. v. Purvis, 181 S.E.2d 77 (Ga. 1971) (based upon the duty of safety); Johnson v.Misericordia Community Hosp., 301 N.W.2d 156 (Wis. 1981) (duty to ensure competent medical staff); Darling v. Charleston CommunityMemorial Hosp., 211 N.E.2d 253 (Ill. 1965) (duty to oversee all staff practicing medicine within its walls), cert. denied, 383 U.S. 946(1966); Wood v. Samaritan Inst., 161 P.2d 556 (Cal. 1945) (duty of quality assurance)).

n46. See, e.g., Rutchik, supra note 26.

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n47. Chisinga v. LaBella, 543 So. 2d 209, 213 (Fla. 1989) (listing 17 jurisdictions that have adopted the corporate negligence doctrine); 1National Health Lawyers Ass'n, Health Law Practice Guide 1-7 to -10 (1994) (listing 19 jurisdictions that have adopted the corporatenegligence doctrine).

n48. Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255, 258 (Ky. 1985).

n49. Id.; Kashishian v. Port, 481 N.W.2d 277, 278 (Wis. 1992); Sharshmith v. Hill, 764 P.2d 667, 671-73 (Wyo. 1988).


n51. Id.

n52. Roger Rowan, Financial Implications of TQM, Health Sys. Rev., Mar.-Apr. 1992, at 44, 48.

n53. Berwick, supra note 5, at 55. An example of such a committee is the Mortality and Morbidity Committee. Id.

n54. Delores Fanucci et al., Quantum Leap into Continuous Quality Improvement, Nursing Mgmt., June 1993, at 28, 28.

N55. Blum, supra note 17, at 435.


n57. Id.

n58. Id. at 53. "Practically no system of measurement - at least none that measures people's performance - is robust enough to survive thefear of those who are measured." Id.

n59. Id.

n60. 1992 Accreditation Manual, supra note 4, at xii-xiv.


n62. See supra note 4 and accompanying text.

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n63. Phillips Carson & Carson, supra note 1, at 79.

n64. Id. The TQM philosophy has been credited with transforming Japan into a formidable economic giant. Id.


n66. See Walton, supra note 8, at 20. Deming believed in the 85/15 rule: 85% of all errors can be ascribed to the system itself, while only15% of the errors are the fault of an individual worker. Id.


n68. See Walton, supra note 8, at 20.

n69. Id.

n70. Recent surveys show that the popularity of the TQM movement is waning. Paul Taylor, Faith in the Religion of Quality Is Starting ToWaver - Despite Its Successes, Not Everyone Is Convinced by TQM Theory, Fin. Times, Oct. 21, 1992, at 2. A survey by Arthur D. Little,Inc. of 500 American manufacturing and service companies found that only one-third of them felt that TQM had a "significant impact" ontheir business. Id. at 3. A similar study of British companies revealed that 80% of companies utilizing TQM concepts failed to find anybenefit. Id. Ironically, just as American companies are implementing TQM concepts, the Japanese are returning to more traditional qualityassurance activities. Phillips Carson & Carson, supra note 1, at 79.

n71. 1993 Accreditation Manual, supra note 4, at xiv, 140-44.

n72. Blumenthal, supra note 2, at 2775.

n73. Truhe, supra note 11, at 172.

n74. 1992 Accreditation Manual, supra note 4, at ix; Stephen M. Mertz, Clinical Practice Guidelines: Policy Issues and Legal Implications,19 Joint Commission J. on Quality Improvement 306, 306 (1993).

n75. Agency for Health Care Policy & Research, U.S. Dep't of Health & Human Servs., Acute Pain Management (1992); Agency for HealthCare Policy & Research, U.S. Dep't of Health < Human Servs., Cataracts in Adults (1993)> Agency for Health Care Policy < Research, U.S.Dep't of Health & Human Servs., Depression in Primary Care (1993)> 1 Agency for Health Care Policy & Research, U.S. Dep't of Health &Human Servs., Urinary Incontinence in Adults (1992).

n76. Mertz, supra note 74, at 307.

n77. Tom Morganthau, The Clinton Solution, Newsweek, Sept. 20, 1993, at 30, 32-33.

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n78. Edwin Chen, Dole, Gingrich Take Cautious Aim at Medicare, L.A. Times, Jan. 31, 1995, at A1; Morganthau, supra note 77, at 33.

n79. Morganthau, supra note 77, at 33.

n80. Melinda Beck, The Gray Nineties, Newsweek, Oct. 4, 1993, at 65, 65.

n81. Id.

n82. E.g., id. at 66

n83. Clark C. Havighurst, The Professional Paradigm of Medical Care: Obstacle to Decentralization, 30 Jurimetrics J. 415, 416-19 (1990).

n84. Id. at 418.

n85. James B. Couch, Employers' Role in Improving Medical Care Value, 14 Seton Hall Legis. J. 65, 66 (1990).

n86. Id.

n87. Sheryl Stolberg, Cesarean Birth Rate Leveling Off, L.A. Times, May 19, 1994, at B4.

n88. Id. The American College of Obstetricians and Gynecologists disputes these findings, claiming that there is no "ideal rate" for cesareansections. Id.

n89. A coronary angiograph is a radiographic visualization of the coronary arteries. Richard Sloane, M.D., The Sloane-Dorland AnnotatedMedical-Legal Dictionary 36 (1987).

n90. Brook, supra note 11, at 3030.

n91. Id.

n92. Id.

n93. Id.

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n94. A thrombolytic drug breaks up or dissolves blood clots in the cardiovascular system. Stedman's Medical Dictionary 1449, 1450(William H.L. Dornette ed., 5th Unabridged Lawyers' ed. 1982).

n95. Brook, supra note 11, at 3030.

n96. Claude Lenfant, M.D., From the National Institute of Health, 271 JAMA 738, 738 (1994). It is estimated that 1.25 million persons havea myocardial infarction in the United States every year, resulting in approximately 500,000 deaths. Id. Fifty percent of these deaths occur inthe first hour after symptom onset. Id. In patients receiving thrombolytic therapy the overall mortality rate is 8.7%, while the mortality ratefor patients who receive thrombolytic therapy within the first hour is only 1.2%. Id. In addition, patients who receive a thrombolytic agent inthe first hour demonstrate, on average, a 50% reduction in the size of the myocardial infarction. Id.

n97. An iatrogenic injury is "any adverse condition in a patient occurring as the result of treatment by a physician or surgeon." Sloane, supranote 89, at 363.

n98. Marilyn J. Field, Overview: Prospects and Options for Local and National Guidelines in the Courts, 19 Joint Commission J. on QualityImprovement 313, 316 (1993); see also Richard E. Leahy, Rational Health Policy and the Legal Standard of Care: A Call for JudicialDeference to Medical Practice Guidelines, 77 Cal. L. Rev. 1483, 1491 (1989).

n99. Steven H. Woolf, M.D., Practice Guidelines: A New Reality in Medicine (pt. 3), 153 Archives Internal Med. 2646, 2649 (1993).

n100. Id.

n101. Id. at 2650.

n102. Id.

n103. Id. Health care rationing is a system of health care distribution that allots a fixed quantity of services to every person, whilecontrolling cost by denying access to other services. Nancy K. Stade, The Use of Quality-of-Life Measures To Ration Health Care: Revivinga Rejected Proposal, 93 Colum. L. Rev. 1985, 1985 (1993).

n104. Leahy, supra note 98, at 1495-96.

n105. Id. at 1495.

n106. Id.

n107. Id.

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n108. Id. at 1496.

n109. Id. at 1496-97.

n110. Id. at 1496.

n111. Id. at 1497.

n112. Id.

n113. Franklin M. Zweig & Hazel A. Witte, Assisting Judges in Screening Medical Practice Guidelines for Health Care Litigation, 19 JointCommission J. on Quality Improvement 342 (1993).

n114. Leahy, supra note 98, at 1528.

n115. Fed. R. Evid. 201(b).

n116. See Field, supra note 98.

n117. Ed Hirshfeld, Use of Practice Parameters as Standards of Care and in Health Care Reform: A View from the American MedicalAssociation, 19 Joint Commission J. on Quality Improvement 322, 323 (1993); see supra note 99 and accompanying text.

n118. Hirshfeld, supra note 117, at 326.

n119. Id. The now-foundering Clinton Health Plan, proposed in the 103d Congress, called for the creation and dissemination of clinicalpractice guidelines. Health Security Act, H.R. 3600, 103d Cong., 1st Sess. 5006 (1993). These guidelines would be used in a pilot programto evaluate the use of guidelines as an affirmative defense in medical malpractice actions. Id. 5312. The health care plan sponsored byRepresentative William M. Thomas and supported by Senator Robert Dole would afford a presumption of reasonable care to defendantphysicians who followed a medical guideline. H.R. 3704, 103d Cong., 1st Sess. (1993); see also Barry A. Gold, Healthcare Reform. WhatAre the Opportunities? What Are the Risks?, Mutual Interests, Apr. 1994, at 2 (discussing various health care proposals and their implications on medical malpractice litigation).

n120. Me. Rev. Stat. Ann. tit. 24, 2971-2979 (West Supp. 1994).

n121. Id. 2972.1.

n122. Id. 2973.

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n123. Id. 2975.1.

n124. Id.

n125. Id.

n126. Id.

n127. Gordon H. Smith, A Case Study in Progress: Practice Guidelines and the Affirmative Defense in Maine, 19 Joint Commission J. onQuality Improvement 355, 360 (1993).

n128. 1992 Accreditation Manual, supra note 4, at ix. Performance indicators are a tool of TQM. See, e.g., Truhe, supra note 11.

n129. 1992 Accreditation Manual, supra note 4, at ix.


n131. Id.

n132. Id. The Joint Commission has asked for volunteers to test the first 10 indicators that have been developed: five for anesthesia and fivefor obstetrics. Elizabeth Gardner, Indicator System Accepting All Test Pilots, Modern Healthcare, June 21, 1993, at 32. A report generatedby the indicator monitoring system is sent to each hospital. Id. For example, a report is sent to the participating hospital showing its rate of successful vaginal deliveries following cesarean sections. Id. at 33. Hospitals want their rate of such deliveries to be at or above average. Seesupra text accompanying note 87. The hospital's rates are graphed against the rates of all hospitals in the project. Gardner, supra, at 33. Aspresently structured, JCAHO provides no breakdown of the information by hospital size, region or location (urban versus rural), thusdecreasing the usefulness of the information. Id. In addition, participation in the project is difficult. Id. For example, the obstetricalindicators require a review of both mothers' and babies' charts for 100% of all types of deliveries done at the hospital. Id. Most hospitals findthis collection of data burdensome. Id. JCAHO plans to make the indicator system mandatory by 1996, with a projected 36 indicators. Id.Many hospitals are already required to compile similar data for one or more state agencies. Id. at 32. For these reasons, several state hospitalassociations have filed protests against mandatory reporting. Id. at 33.

n133. See supra part II.C.


n135. Id.

n136. See Berwick, supra note 5, at 53.

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n137. Id.


n139. Dorothy Nyberg & Penny Marschke, Critical Pathways: Tools for Continuous Quality Improvement, 17 Nursing Admin. Q. 62, 63(1993).

n140. Id. at 64-65.

n141. Critical pathways represent identification and breakdown of the "process," an important component in the TQM system of management. Deming described this study of the "process" as "profound knowledge." Tim Stevens, Management Today Does Not KnowWhat Its Job Is, 243 Industry Week 20, 23-24 (1994). Profound knowledge includes appreciation of the system and knowledge of variationwithin the system. Id. It remains to be seen if the process of caring for a sick human being can be as readily identified and broken down asthe process of manufacturing a photocopier. Perhaps it can.

n142. Nyberg & Marschke, supra note 139, at 64-65.

n143. Id.

n144. See, e.g., N.Y. Educ. Law 6522 (McKinney 1985).

n145. Ferguson, supra note 12, at 59.

n146. Id.

n147. Id. at 59-60.

n148. See supra text accompanying note 145.

n149. Kathryn Sabo Thompson et al., Building a Critical Path for Ventilator Dependency, Am. J. Nursing, July 1991, at 28, 29.

n150. Id.

n151. Id. at 31.

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n152. Id. at 29. Currently Medicare reimburses hospitals based on a "single, preset amount for each patient admitted according to thepatient's diagnosis, age, and condition." Hall, supra note 30, at 433 n.1. These criteria are divided into "diagnosis-related groups" (DRGs). Id.This system of reimbursement replaced the traditional "fee-for-service" method in which hospitals basically received a blank check for health care expenditures. Id. at 438. Through the DRG system, the government sought to control health care expenditures by payinghospitals a set rate for each diagnosis without regard to the actual expenses incurred by the individual patient. Id. at 435-36. The DRGsystem creates a strong incentive for hospitals to economize; therefore, hospitals have an interest in controlling physicians' treatmentdecisions regarding, for example, how long the patient will be hospitalized or what laboratory studies will be conducted. See id. at 434.Inherent in the DRG system is an assumption by the federal government that hospitals have the ability and authority to control the decisionsmade by the physicians caring for patients within its walls. See id.

n153. Sabo Thompson et al., supra note 149, at 31.

n154. Id. at 30.

n155. Linda Wilson Woodyard & Jan E. Sheetz, Critical Pathway Patient Outcomes: The Missing Standard, 8 J. Nursing Care Quality 51,55 (1993).

n156. Id.

n157. Id. at 54.

n158. Id.

n159. Id. at 55.


n161. A sputum culture is a process in which material is coughed up from the lungs or bronchial tubes and is analyzed to determine if bacteria are present. See Stedman's Medical Dictionary, supra note 94, at 344, 1324.

n162. Aminophylline is a drug used to obtain bronchial or arterial relaxation. Sloane, supra note 89, at 22.

n163. A nebulizer is a spray with medication placed into a receptacle which, when squeezed, sprays the medication into either the nose or throat. Id. at 475.

n164. See Wilson Woodyard & Sheetz, supra note 155, at 55.

n165. Center of Health Educ., Critical Path News (1993) (unpublished advertisement, on file with the Albany Law Review).

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n166. Id.

n167. Id.

n168. Id.


n170. Hall, supra note 30, at 451.

n171. See id. Since the 1970s, several states have enacted legislation specifically providing that the corporate practice doctrine should notapply to health management organizations. E.g., Arnold J. Rosoff, The Business of Medicine: Problems with the Corporate PracticeDoctrine, 17 Cumb. L. Rev. 485, 495 (1987).

n172. Rosane v. Senger, 149 P.2d 372, 374 (Colo. 1944).

n173. See Hall, supra note 30, at 452 n.75.

n174. Dr. Allison, Dentist, Inc. v. Allison, 196 N.E. 799, 800 (Ill. 1935).

n175. See Sager v. Lewin, 106 S.W. 581, 583 (Mo. Ct. App. 1907); State Electro-Medical Inst. v. State, 103 N.W. 1078, 1079 (Neb. 1905).

n176. See Rosoff, supra note 171, at 501.


n178. See id. at 462.

n179. See id. at 470-71.

n180. Lawler v. Eugene Wuesthoff Memorial Hosp. Ass'n, 497 So. 2d 1261, 1263 (Fla. Dist. Ct. App. 1986).


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n182. See id. at 462.

n183. See id. at 468; see also Benell v. City of Virginia, 104 N.W.2d 633, 637 (Minn. 1960) (finding valid a hospital resolution that requireda physician to consult with the hospital radiologist before prescribing x-ray therapy because the final decision was left with the physician).

n184. See Hall, supra note 30, at 461-63.

n185. Id.

n186. Blum, supra note 17, at 428-29.

n187. 465 N.E.2d 554 (Ill. App. Ct. 1984), appeal denied, 537 N.E.2d 810 (Ill.), cert. denied, 493 U.S. 847 (1989).

n188. Id. at 556.

n189. Id. at 565.

n190. Id. at 560.

n191. Id.

n192. Id. at 563-65.

n193. See id.

n194. See supra text accompanying notes 34-35.


n196. Id.

n197. Id.; Truhe, supra note 11, at 179.

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n198. See Baptist Memorial Hosp. Sys. v. Smith, 822 S.W.2d 67, 74 (Tex. Ct. App. 1991).

n199. See Air Shields, Inc. v. Spears, 590 S.W.2d 574, 581 (Tex. Civ. App. 1979). Third-party payers (private insurers) have been heldliable in cases in which clinical guidelines developed by the insurer have caused injury to the patient. Wilson v. Blue Cross, 271 Cal. Rptr.876 (Ct. App. 1990). This extension of liability to third-party payers attempting to control physician behavior could be applicable to privatehospitals that promulgate guidelines in an attempt to control costs by controlling the decisions of their medical staff. Hospitals, like third-party payers, may be held liable if it can be proven that they were [or should have been] aware of new scientific information that outdated the guideline and they did not alter the guideline accordingly. In addition, if payors [or hospitals] provide inducements or penalties that unduly influence physician decisionmaking and medical judgment, they may be held either solely or jointly liable in a malpractice case. Mertz, supra note 74, at 310.


n201. 590 S.W.2d 574.

n202. Id. at 581.

n203. Id.

n204. 340 N.E.2d 734 (N.Y. 1975).

n205. Id.

n206. Id.

n207. Id.

n208. Id.


n210. Id. Individually developed, institution-specific guidelines will not be accepted as a "standard of care" in a medical malpractice caseunless the institution and/or authors are particularly prestigious within the profession. Eleanor D. Kinney & Marilyn M. Wilder, MedicalStandard Setting in the Current Malpractice Environment: Problems and Possibilities, 22 U.C. Davis L. Rev. 421, 448 (1989). Conversely,institution-specific guidelines may be crucial evidence for the plaintiff in showing that the defendant physician or hospital were negligent innot following the institutional guideline. Id. at 449.

n211. 310 F. Supp. 613 (S.D. Tex. 1970).

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n212. Id. at 618.

n213. Id.

n214. Truhe, supra note 11, at 179

n215. Id.

n216. Id.; see supra part II.C.

n217. Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255 (Ky. 1985); Brownsville Medical Ctr. v. Gracia, 704 S.W.2d 68 (Tex. Ct. App. 1985);Kashishian v. Port, 481 N.W.2d 277 (Wis. 1992).

n218. 481 N.W.2d 277.

n219. Id. at 278.

n220. Id. at 282.

n221. Id. at 282-83.

n222. Id. at 283.

n223. Id.

n224. Ferguson, supra note 12, at 59.

n225. See id. at 61.

n226. Kathleen S. Rohrer et al., Staff Preparation for Managed Care, 17 Nursing Admin. Q. 74, 78 (1993).

n227. Id.

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n228. Id.

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