Most medical staff leaders are aware of their right to retain independent legal counsel, but unaware of the implications of that right as it relates to the ability of the medical staff to meet confidentially with an attorney and to maintain privileged attorney-client communications. Confidentiality alone compels the conclusion that there is a right to meet in executive session, a point often contested by administrators.
Many medical staff leaders are not familiar with the dispute resolution provisions of Business & Professions Code 2282.5 and the process by which a medical staff can go to court after reasonable efforts have been made to resolve differences with a hospital governing board. Even fewer leaders appreciate the importance of the statement of legislative intent that precedes Business & Professions Code 2282.5. The relationship between medical staffs and hospitals is determined to be one of "mutual accountability, interdependence and responsibility of the medical staff and the hospital governing board for the proper performance of their respective obligations." In other words, the governing board must be accountable to the medical staff for the proper performance of its responsibilities in the same way the medical staff must be accountable to the board for the proper performance of medical staff responsibilities. This extraordinarily important language is often overlooked.
When medical staff leaders are not fully conversant with the rights and powers of the medical staff, hospital opposition to self-governance can succeed by simply telling medical staff leaders that they have no power. This message is frequently communicated both by hospital leaders and by attorneys hired by the hospital to provide legal services to the medical staff. In essence, the message is that the hospital's "ultimate authority" trumps whatever the medical staff might wish to do, so it's pointless for the staff to do anything!
Opposition to self-governance also succeeds in the absence of medical staff cohesiveness. Hospital administrators have long known that the easiest way to control a medical staff is through a strategy of "divide and conquer." A common method of controlling the medical staff is to establish relationships with a few key medical staff members, who are told that their "help" is needed by an administration simply trying to "get things done." In the past, hospital-sponsored leadership retreats have been a fertile area for developing such relationships.
More powerful still are the economic ties that a hospital administration can establish with medical staff members, not just in the realm of exclusive contracts and medical directorships, but also in terms of preferential treatment in staffing and equipment purchases, operating room scheduling, or patient flow from hospital-controlled IPAs. For-profit institutions have extended this strategy even further by encouraging medical staff members to invest in the hospital itself, thereby enabling them to argue that medical staff self-governance will cause economic injury to the member. It's not easy to vote against one's own economic interest, so these strategies are often successful in fragmenting the medical staff and developing medical staff opposition to self-governance.
Opposition to self-governance also succeeds when a medical staff lacks sufficient economic resources and sufficient will to engage in protracted battles. For example, consider something as simple as implementing amendments to medical staff bylaws. When those amendments articulate principles of self-governance, hospital administrators and boards of directors often oppose them. In such cases, the hospital's argument to the chief of staff has been: "Why don't you drop these amendments. You are wasting your money because we will prolong the controversy until you are out of resources." (This is, in fact, a real quote.)
Clearly, administrators know that while Business & Professions Code 2282.5 has a dispute resolution process that ultimately entitles a medical staff to go to court to defend its rights, that process is expensive and, in the absence of sufficient economic resources and sufficient will, medical staffs will be unable to complete the process.
Where Have Medical Staffs Prevailed?
Now let's look at the other side. There are many instances in which opposition to medical staff self-governance has failed. Some of these events have achieved recognition in California and, on occasion, throughout the nation.
In 2002, the Ventura case established the right of medical staffs to go to court to protect and preserve their authority and powers over quality of care issues, to protect their own medical staff treasury, and to ensure their ability to freely elect their own leaders.
During 2003 and 2004, the medical staff of Western Medical Center Santa Ana successfully opposed the acquisition of its hospital by one entity and then successfully negotiated an agreement with the corporation that ultimately acquired the hospital. That agreement, among other things, established the right of that medical staff to review and approve certain contracts with "related parties" that were linked economically to the hospital owner. The agreement further established the right of the medical staff to elect representatives to the governing body of the hospital, to participate in the selection of key administrative officials, to participate in decisions regarding the allocation of hospital resources, and to ensure adequate capitalization for the hospital. Thus, after the Ventura case established the rights of the medical staff over traditional areas related to quality care, the Western Medical Center case expanded the realm of medical staff interests to include economic issues that relate to quality of care.
The following year, the medical staff of Alvarado Medical Center in San Diego successfully established its right to participate in the selection of the hospital's purchaser. Following an Office of Inspector General order mandating Tenet Healthcare to sell the hospital as part of a settlement agreement in a criminal prosecution, the medical staff used 2282.5 to gain participation in the selection of the new owner. Thus, the medical staff's interest in economic issues affecting quality of care extended to the ultimate issue of who would own the hospital.
In all of these examples, the medical staffs in question were knowledgeable, cohesive and in possession of sufficient economic resources to maintain a battle for a protracted period of time. The last of these cases, Alvarado, illustrates an important lesson. There, no protracted battle was necessary. The mere fact that the medical staff demonstrated that it knew its rights and was prepared to fight for them, including going to court if necessary, was sufficient to produce a prompt resolution.
There are many other examples that have taken place below the radar, in which medical staffs have successfully negotiated disputes with hospitals and their governing boards. In each of those cases, the fact that the medical staff was knowledgeable, cohesive and adequately funded was instrumental in producing a resolution.
