• Aaron need not despair

    Aaron’s post on the professional liability risks of ACOs seemed a little bleak. My perspective:

    1. Liability risks rightly fall on whomever makes the decisions. Responsibility follows authority.
    2. Hospitals typically deny liability related to a non-employed doc, claiming they don’t control them (the doc is not the “agent” of the hospital).
    3. For hospital-employed docs, without a doubt the hospital is also at risk. Employers always are responsible for the torts of their employees committed within the scope of employment.
    4. If an ACO is coordinating care and making medical decisions, of course they may be liable.
    5. No additional cases of malpractice are created; the “agency” rule just adds an additional defendant, the ACO.
    6. The ERISA shield was an accident, not real policy. It inappropriately protected some HMOs who were controlling aspects of medical care in the 1990s. The PPACA finally enacted many provisions from the Patients Bill of Rights from that time.


    • Kevin
      ERISA shield and Patients Bill of RIghts unrelated, yes? Sentence 6 jumbles the two.

      • The ERISA shield directly led to calls for legislation like the Patients Bill of Rights – injured patients could not have a day in court and democrats in Congress tried to pass a law that protected them. Many of those ideas from the 1990s ended up in PPACA

        • ERISA still strong though. Despite some chinks in the armor, doesnt reading of ERISA hold fedreal preemption over local issues PBoR might raise? How does ACA change things?

    • That ACO participants must ““act together to manage and coordinate care” isn’t a defect of ACOs; it’s the reason for their existence. As someone on the front lines of the revolution in health care, I can assure readers that ACO liability for medical mistakes is not a major concern for physicians. What is a major concern is hospitals, the most inefficient and costly of the providers, who, mistakenly, have been given the central role in the development of ACOs. What hospitals want to do is bring back to in-patient services all the services that have been transferred to more efficient and less costly outpatient services. And if hospitals must integrate the physicians into the hospital to do so (by acquiring physician practices and employing and controlling physicians), it’s the price worth paying. Worth paying for the hospitals, not patients, and not for the improvement or sustainability of our health care system.

      • The idea of an ACO is that the hospital no longer gets paid by service, but per capita, so they no longer have an incentive to sell a treatment that is more expensive, but no more effective.

        I suspect hospitals need to be in part of the loop because healthcare risk is so skewed. The top 5% of spenders account for nearly 50% of all healthcare spending, according to Aaron’s chart of 3/2/2012. An ACO has to be big enough to absorb the risk of a really expensive problem. If hospitals aren’t included, then the ACO will have to pay the hospital, say for open-heart surgery. Given that one of the problems with healthcare cost inflation is that the insurance companies aren’t effective at bargaining hospital prices down, why should we think physician groups will be?

    • Thanks Kevin. This seemed overblown. Slightly, well entirely, OT, but do you have references for the FDA drug approval process? When a drug or therapy is in the process of achieving FDA approval just what does this really mean? Can a drug company release its drug w/o the approval of the FDA? Are they just looking to get that approval to avoid legal risks? Thanks.


      • Prescription drugs for human use need FDA approval before being sold in the US. Device regulation is less strict, and varies with the type of device.

    • “No additional cases of malpractice are created; the “agency” rule just adds an additional defendant, the ACO.”

      This is a joke, right?

      The decision on whether to file a malpractice suit has just as much to do with how much money the defendant has as it does regarding the facts of the malpractice itself.

      Big pockets draw lawsuits, period.

      Are you denying this fundamental truth? Do you really believe that if the same malpractice case involves an individual doctor vs an ACO that the lawsuit risk is the same? LOL you are naive.

      For the same slip and fall case, Wal-mart gets sued a lot more than the mom and pop stores because thats where the deep pockets are.

      A medical doctor’s individual malpractice insurance usually carries a 500k-1million dollar limit. You add an ACO to the mix, with liability insurance in the hundreds of millions and I guarantee you the shark lawyers will be going for the blood in the water.

    • From what I remember in my MHA Health Law course, vicarious liability pretty much means that #2 can’t happen in reality anymore. If a reasonable person (patient) is seen by a physician (independent or employed), then said person believes that physician to be an agent of the hospital and has been recognized as such in a court of law.


      • It is still a litigated question in many (most) states, even NH.

        But if you are right (that apparent agency rules the day), then plaintiffs already have a big $ defendant (hospital) and the original post on JAMA isn’t really big news. Which was my main point – Aaron need not despair.