H E A LT H C A R E A D M I N IST R AT I O N G E O R G E D. P O Z G A R, M B A, C H E

S E C O N D E D I T I O N L E GA L A N D E T H I C A L E S S E N T I A L S o f H E A LT H C A R E A D M I N IST R AT I O N G E O R G E D. P O Z G A R, M B A, C H E A U T H O R, S P E A K E R, C O N S U L T A N T G P H E A L T H C A R E A N N A P O L I S, M A R Y L A N D L E G A L R E V I E W N I N A S A N T U C C I, J D

World Headquarters Jones & Bartlett Learning 5 Wall Street Burlington, MA 01803 978-443-5000 info@jblearning.com www.jblearning.com Jones & Bartlett Learning books and products are available through most bookstores and online booksellers. To contact Jones & Bartlett Learning directly, call 800-832-0034, fax 978-443-8000, or visit our website, www.jblearning.com. Substantial discounts on bulk quantities of Jones & Bartlett Learning publications are available to corporations, professional associations, and other qualified organizations. For details and specific discount information, contact the special sales department at Jones & Bartlett Learning via the above contact information or send an email to specialsales@jblearning.com. Copyright 2014 by Jones & Bartlett Learning, LLC, an Ascend Learning Company All rights reserved. No part of the material protected by this copyright may be reproduced or utilized in any form, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the copyright owner. The content, statements, views, and opinions herein are the sole expression of the respective authors and not that of Jones & Bartlett Learning, LLC. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not constitute or imply its endorsement or recommendation by Jones & Bartlett Learning, LLC and such reference shall not be used for advertising or product endorsement purposes. All trademarks displayed are the trademarks of the parties noted herein. Legal and Ethical Essentials of Health Care Administration, Second Edition is an independent publication and has not been authorized, sponsored, or otherwise approved by the owners of the trademarks or service marks referenced in this product. There may be images in this book that feature models; these models do not necessarily endorse, represent, or participate in the activities represented in the images. Any screenshots in this product are for educational and instructive purposes only. Any individuals and scenarios featured in the case studies throughout this product may be real or fictitious, but are used for instructional purposes only. This publication is designed to provide accurate and authoritative information in regard to the Subject Matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the service of a competent professional person should be sought. Production Credits Publisher: Michael Brown Managing Editor: Maro Gartside Editorial Assistant: Sean Fabery Editorial Assistant: Chloe Falivene Associate Production Editor: Rebekah Linga Senior Marketing Manager: Sophie Fleck Teague Manufacturing and Inventory Control Supervisor: Amy Bacus Composition: Aptara, Inc. Cover Design: Michael O Donnell Cover Image credit: Top: Jerric Ramos/ShutterStock, Inc.; Bottom: istockphoto/thinkstock Printing and Binding: Edwards Brothers Malloy Cover Printing: Edwards Brothers Malloy Library of Congress Cataloging-in-Publication Data Pozgar, George D. Legal and ethical essentials of health care administration / George D. Pozgar. 2nd ed. p. ; cm. Rev. ed. of: Legal essentials of health care administration / George D. Pozgar ; legal review, Nina M. Santucci. c2009. Related ed. of: Legal aspects of health care administration / George D. Pozgar ; legal review, Nina M. Santucci. 11th ed. c2012. Includes bibliographical references and index. ISBN-13: 978-1-4496-9434-0 (pbk.) ISBN-10: 1-4496-9434-9 (pbk.) I. Pozgar, George D. Legal essentials of health care administration. II. Pozgar, George D. Legal aspects of health care administration. III. Title. [DNLM: 1. Delivery of Health Care legislation & jurisprudence United States. 2. Delivery of Health Care ethics United States. 3. Legislation, Medical United States. W 32.5 AA1] KF3821 344.7304'1 dc23 2013010477 6048 Printed in the United States of America 17 16 15 14 13 10 9 8 7 6 5 4 3 2 1

Dedication Mary Ann Pozgar-Berkebile My Sister Precious moments when she took my hand, And said, Let s Dance. At that moment, I knew from her touch, How much she loved me.

Contents Epigraph... viii Preface...ix About the Book Layout...x Acknowledgments...xii Chapter 1 Government, Law, and Ethics...1 Learning Objectives...1 Government Organization...2 Sources of Law...7 Government Ethics...9 Chapter 2 Healthcare Ethics... 13 Learning Objectives...14 Ethics Overview...14 Morality...14 Ethical Theories...15 Principles of Ethics...16 Virtues and Values...19 Spirituality and Religion...26 Secular Ethics...28 Situational Ethics...29 Reasoning and Decision-Making...29 Summary Thoughts...30 Chapter 3 Reflections on the Past... 33 Learning Objectives...33 Early Hindu and Egyptian Hospitals...34 Greek and Roman Hospitals...34 Hospitals of the Early Christian Era...35 Islamic Hospitals...35 Early Military Hospitals...36 Medieval Hospitals...36 The Dark Age of Hospitals...37 Hospitals of the Renaissance...37 Hospitals of the 18th Century...38 Early Hospitals in the United States...38 Late 19th-Century Renaissance...39 20th-Century Progress...42 Health Care in the 21st Century...43 The Challenge Ahead...44 Chapter 4 Tort Law... 47 Learning Objectives...48 Negligence...48 Intentional Torts...57 Products Liability...63 Chapter 5 Criminal Aspects of Health Care... 67 Learning Objectives...67 Criminal Procedure...68 Healthcare Fraud...69 Patient Abuse...75 Criminal Negligence...75 Murder...78 Theft...79 Chapter 6 Contracts... 81 Learning Objectives...81 What Is a Contract?...82 iv

Contents v Types of Contracts...82 Elements of a Contract...82 Breach of Contract...83 Corporate Contracts...83 Partnerships...83 Agents...83 Independent Contractor...84 Legality of Object...84 Conditions...84 Performance...85 Nonperformance Defenses...85 Remedies...85 Employment Contracts...86 Exclusive Contracts...88 Noncompetitive Contract Clauses...89 Transfer Agreements...89 Insurance Contract...90 Chapter 7 Civil Procedure and Trial Practice... 91 Learning Objectives...91 Pleadings...92 Discovery...93 Motions...94 Pretrial Conference...95 Notice of Trial...95 Memorandum of Law...96 The Court...96 The Jury...96 Subpoenas...97 Burden of Proof...97 Res Ipsa Loquitur...97 Opening Statements...98 Examination of Witnesses...98 Evidence......99 Defenses Against Plaintiff s Claims......102 Closing Statements...106 Judge s Charge...106 Jury Deliberation...107 Awarding Damages...107 Appeals...110 Execution of Judgments...110 Chapter 8 Corporate Structure and Legal Issues... 111 Learning Objectives...111 Authority of Healthcare Corporations...112 Corporate Committee Structure...113 Organizational Ethics...115 Corporate Negligence...118 Doctrine of Respondeat Superior...120 Independent Contractor...121 Duties of Healthcare Corporations...121 CEO/Administrator...130 Medical Staff...131 Corporate Reorganization...131 Chapter 9 Medical Staff Organization and Physician Liability... 133 Learning Objectives...133 Medical Staff Ethics...134 Medical Staff Organization...134 Medical Staff Privileges...135 Common Medical Errors...139 Physician Patient Relationship...156 Chapter 10 Nursing and the Law... 159 Learning Objectives...160 Scope of Practice...160 Nursing Diagnosis...160 Nurse Licensure...160 Classification of Nurse Staff...161 Advance Practice Nurses...164 Legal Risks of Nurses...166 Chapter 11 Hospital Departments and Allied Health Professionals... 177 Learning Objectives...177 Professional Ethics...178 Chiropractor...178 Emergency Department...178 Laboratory...184 Medical Assistant...185 Nutritional Services...186 Paramedic...186 Pharmacy...187 Physical Therapy...191 Physician Assistant...192 Podiatrist...192 Respiratory Therapist...192 Certification of Health Professionals...193 Licensing Health Professionals...193 Professional Misconduct...194 Helpful Advice for Caregivers...195 Chapter 12 Patient Rights and Responsibilities... 197 Learning Objectives...197 Patient Rights...197 Patient Responsibilities...205 Chapter 13 Patient Consent... 207 Learning Objectives...207 Informed Consent...208 Information to Be Disclosed...210 Assessing Decision-Making Capacity...211

vi Contents Adequacy of Consent...211 Verbal Consent...211 Written Consent...212 Consent for Routine Procedures...212 Consent for Specific Procedures...212 Implied Consent...213 Statutory Consent...213 Judicial Consent...213 Who May Consent...213 Right to Refuse Treatment...216 Defenses for Failure to Provide Consent...217 Ethics and Informed Consent...218 Chapter 14 Procreation and Ethical Dilemmas... 219 Learning Objectives...219 Abortion...220 Sterilization...229 Artificial Insemination...230 Surrogacy...231 Wrongful Birth, Life, and Conception...231 Chapter 15 End-of-Life Issues... 235 Learning Objectives...235 Patient Autonomy and Case Law...236 Legislative Response...239 Preservation of Life with Limits...239 Euthanasia...239 Advance Directives...243 Futility of Treatment...247 Withholding and Withdrawal of Treatment...247 Do-Not-Resuscitate Orders...248 Ethics Committee...248 Autopsy...250 Organ Donation...250 Research, Experimentation, and Clinical Trials...251 Human Genetics...253 Stem Cell Research...253 Chapter 16 AIDS... 255 Learning Objectives...256 Spread of AIDS...256 Confidentiality...258 Discrimination...259 Negligence...260 Reporting Requirements...261 AIDS Emergency Act...261 Occupational Safety and Health Act...261 AIDS Education...262 Chapter 17 Legal Reporting Requirements... 263 Learning Objectives...263 Child Abuse...263 Elder Abuse and Neglect...265 Births and Deaths...266 Communicable Diseases...266 Adverse Drug Reactions...266 Hospital-Acquired Infections...266 Physician Competency...267 Incident Reporting...268 Chapter 18 Medical Records... 271 Learning Objectives...272 Managing Information...272 Contents of the Medical Record...273 Ownership and Release of Records...273 Documentation of Treatment...274 Retention of Records...274 Electronic Records...274 Medical Record Battleground...275 Legal Importance of Records...275 Illegible Handwriting...277 Timely Completion of Records...277 Confidential and Privileged Communications...277 HIPAA...278 Charting Some Helpful Advice...278 Chapter 19 National Health Insurance and Managed Care... 281 Learning Objectives...281 National Health Insurance...281 Managed Care...285 PPACA and State Law...289 Chapter 20 Professional Liability Insurance... 291 Learning Objectives...291 Insurance Policy...292 Liability of the Professional...293 Medical Liability Insurance...294 Self-Insurance...294 Trustee Coverage...294 Mandated Medical Staff Insurance Coverage...294 Investigation and Settlement of Claims...295 Chapter 21 Labor Relations... 297 Learning Objectives...297 U.S. Department of Labor...297 National Labor Relations Act...298 Norris-LaGuardia Act...299 Labor-Management Reporting and Disclosure Act...299 Fair Labor Standards Act...300 Civil Rights Act...300 Occupational Safety and Health Act...300 Rehabilitation Act...301 Family and Medical Leave Act...302 State Labor Laws...302

Contents vii Labor Rights...303 Management Rights...303 Patient Rights During Labor Disputes...304 Affirmative Action Plan...304 Injunctions...305 Administering a Collective Bargaining Agreement...305 Discrimination in the Workplace...305 Chapter 22 Employment at Will and Discharge... 309 Learning Objectives...309 Employment at Will...310 Public Policy Issues...311 Retaliatory Discharge...312 Fairness: The Ultimate Test...313 Termination...313 Constructive Discharge...315 Effective Hiring Practices...316 Clear Communications...317 Chapter 23 Employee Rights and Responsibilities... 319 Learning Objectives...319 Employee Rights...319 Employee Responsibilities...323 Helpful Advice...326 Caregiver s Pledge...326 Chapter 24 Tort Reform... 327 Learning Objectives...327 Arbitration and Mediation...327 Structured Awards...328 Pretrial Screening Panels...328 Collateral Source Rule...328 Contingency Fee Limitations...328 Countersuits and Frivolous Claims...328 Joint and Several Liability...329 Malpractice Caps...329 No-Fault System...329 Regulation of Insurance Practices...329 Physician Participation in Tort Reform...329 Chapter 25 Culture of Safety... 331 Learning Objectives...331 Developing a Culture of Safety...332 Improve Communications...334 Evaluating Safe Patient Care...336 CQI Approach to Performance Improvement...339 Implementation of Best Practices...340 Risk Management...340 Failure Mode Effects Analysis...341 Sentinel Events...341 Chapter 26 World Wide Search... 343 Learning Objectives...343 Searching the Web...344 Legal Websites...345 Ethics Websites...346 Government Websites...347 Best Practices...350 Hospital and Physician Finders...351 International Medical Websites...353 Chapter 27 Journey to Excellence... 355 Learning Objectives...355 Ideas for Getting Started...356 Adopt a Hospital...360 Funding Your Dreams...360 Baldrige Performance Excellence Program...361 Glossary... 363 Case Index... 369 Subject Index... 373

Epigraph In civilized life, law floats in a sea of ethics. Earl Warren, Chief Justice of the United States (1891 1974) I consider ethics, as well as religion, as supplements to law in the government of man. Thomas Jefferson, President of the United States (1743 1826) In law a man is guilty when he violates the rights of others. In ethics he is guilty if he only thinks of doing so. Immanuel Kant, Philosopher (1724 1804) It is curious curious that physical courage should be so common in the world, and moral courage so rare. Mark Twain, American Author and Humorist (1835 1910) viii

Preface He has achieved success who has lived well, laughed often and loved much; who has gained the respect of intelligent men and the love of little children; who has filled his niche and accomplished his task; who has left the world better than he found it, whether by an improved poppy, a perfect poem, or a rescued soul; who has never lacked appreciation of earth s beauty or failed to express it; who has always looked for the best in others and given them the best he had; whose life was an inspiration; whose memory a benediction. Bessie Stanley Legal and Ethical Essentials of Health Care Administration, Second Edition has become more than an abridged version of Legal Aspects of Health Care Administration, Eleventh Edition. The content has been updated and fully expanded to bring excitement into the learning process. This Second Edition delivers to the reader a comprehensive updated review of both health law and ethics. The substantive material in the Second Edition has been carefully selected based on the common legal and ethical issues the practitioner will face during his or her career. Although this book is mandatory reading for many students enrolled in health management and patient care courses, it is particularly valuable as a supplemental reading in the curricula of many healthcare programs. The Second Edition is also an invaluable desk reference for those in managerial positions and professionals providing direct patient care. The author s unique experience in health care includes consulting and surveying more than 1,000 hospitals and ambulatory sites from Alaska to Puerto Rico, as well as his experience as administrator, educator, consultant, and speaker. Every attempt has been made to arm the student with the knowledge gained through his extensive healthcare experiences. As a result of his background, one of the unique features of this book is that in each chapter the focus on the various issues includes more than merely definitions or descriptions of words. There is an infusion of life into the material by using cases that have been litigated or discussed in the press, as well as real-world events through reality checks experienced by healthcare professionals. In that way, the law and ethics spring to life and inspire dynamic discussion and excitement in the learning process, thus creating an atmosphere of interest and participation, which is conducive to learning. The study of Legal and Ethical Essentials of Health Care Administration, Second Edition affords health professionals with the opportunity to apply the concepts learned to what they will face on a daily basis in a practical way. It details the actions healthcare providers can take to help prevent the wide variety of harmful events that occur in patient care settings. Although there will always be a next time for human error, the reader who synthetizes the contents in this book and understands its lessons will better understand how failures can turn to success and the pain of past mistakes can turn to hope. ix

About the Book Layout Legal and Ethical Essentials of Health Care Administration, Second Edition lays a strong foundation in both health law and ethics. Chapter 1 begins with an introduction to government organization, sources of law, and government ethics and Chapter 2 progresses to a discussion of ethical theories, principles, virtues and values, and related topics. Chapter 3 provides an overview of the historical development of hospitals as influenced by medical progress, allowing the reader to look at their successes and failures through the centuries, and then drawing conclusions about what can be done to avoid repeating the failures of the past. In Chapter 4, the reader is introduced to negligent and intentional torts, progressing to criminal acts in Chapter 5, and contract law in Chapter 6 as they relate to health care. The reader is then introduced to civil procedure and trial practice in Chapter 7. The journey continues with a discussion of legal issues involving corporations in Chapter 8, medical staff organization and physician liability in Chapter 9, nursing and the law in Chapter 10, and a discussion of various hospital departments and allied health professionals in Chapter 11. The first 11 chapters provide a solid basis for a more complete understanding of the following remaining chapters: Chapter 12 provides an overview of patient rights and responsibilities; Chapter 13 patient consent; Chapter 14 procreation and ethical issues; Chapter 15 end-oflife issues; Chapter 16 AIDS; Chapter 17 legal reporting requirements; Chapter 18 medical records; Chapter 19 national health insurance and managed care; Chapter 20 professional liability insurance; Chapter 21 labor relations; Chapter 22 employment at will and discharge; Chapter 23 employee rights and responsibilities; Chapter 24 tort reform; Chapter 25 culture of safety; Chapter 26 world wide search; Chapter 27 the journey to excellence; and a glossary of common legal and ethics vocabulary. The practical application of ethics in the healthcare setting is accomplished by interspersing the thoughts of great minds through Quotes, applicable Newspaper Clippings, provider and organizational experiences through Reality Checks designated by a symbol, and patient experiences through legal rulings and summaries through Case Law. When reviewing the various cases in this book, the reader should consider both the ethical and legal implications of a dilemma and how they intertwine with one another. It is important to recognize that the decisions in the cases described are generally governed both by applicable state and federal statutes and common-law principles. When reviewing a case, the reader must keep in mind that the case law and statutes of one state are not binding in another state. There is no one magic legal or ethics book that can possibly compress the plethora of issues that have bombarded the healthcare industry into one book. This book is merely a beginning of the study of legal and ethical issues and is an adventure that all caregivers should take. Although there is always much more that could be discussed on any one topic, the good student will understand that this book provides a solid foundation for practical everyday use as well as further study. Each life is like a novel. Filled with moments of happiness, sadness, crisis, defeat, and triumph. When the last page has been written, will you be happy or saddened by what you read? Author Unknown x

About the Book Layout xi The reader is presented in the Second Edition with realworld life experiences that bring the reader through a journey of learning that provides an effective transitional stage from the classroom to the reality of the everyday work environment. When people consider matters of law and ethics they are usually considering matters of freedom in regard to personal choices, one s obligations to other sentient beings, or judgments about human character and the right to choose. The author s objective is to equip the reader with the background knowledge necessary to understand that legal and ethical behavior begins with understanding that we have alternatives and choices in our behavior. To make good decisions, we must first understand that they will be only as good as our knowledge of what is right and what is wrong. This book is not an indictment of any profession or organization. There is a deluge of ethical issues in every aspect of human existence. Although cultural differences, politics, and religion influence who we are, it is all of life s experiences that affect who we will become. If we are compassionate it is most likely compassionate people have influenced us. Author's Note: This book is not a definitive treatise but is a portrait of the ever-evolving story of health care through the study of law and ethics. It is educational in nature and should not be considered a substitute for legal advice on any particular issue. Moreover, each chapter presents an overview, rather than an exhaustive treatment, of the various topics discussed. The author, legal reviewers, and/or publisher cannot be responsible for any errors or omissions, including: additions to, interpretations of, and/or changes in the regulations presented in this book.

Acknowledgments The author especially acknowledges the staff at Jones & Bartlett Learning whose guidance and assistance was so important in making this Second Edition a reality. Special thanks to Mike Brown, Publisher at Jones & Bartlett Learning, who has once again been truly an amazing leader and mentor over the years. I would like to thank Chloe Falivene, Editorial Assistant, who worked diligently and tirelessly with me on this Second Edition. I would also like to thank the other Jones & Bartlett staff, including Rebekah Linga, Associate Production Editor; Sean Fabery, Editorial Assistant; and Sophie Teague, Senior Marketing Manager; who have also worked with me on this Second Edition. Thanks for allowing me to leave behind this legacy of writing. I am grateful to the very special people in the more than 1,000 hospitals and ambulatory sites from Alaska to Puerto Rico with whom I have consulted, surveyed, and provided education over many years. Their shared experiences have served to remind me of the importance to make this book more valuable in the classroom and as a reference for practicing healthcare professionals. To my students in healthcare law and ethics classes at the New School for Social Research, Molloy College, Long Island University C.W. Post Campus, Saint Francis College, and Saint Joseph s College; my intern from Brown University; my resident in hospital administration from The George Washington University; and those I have instructed through the years at various seminars, I will always be indebted for your inspiration. Many thanks are also extended to all those special people at the National Library of Medicine and the Library of Congress for their guidance over the years in locating research materials. xii