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Medical Staffs and Hospital Boards Clash Over Control

After poor care and fraud, the worst sin of hospital governance is for a hospital board to go to war with its medical staff. It is, therefore, surprising how relatively often such battles arise. Recently, these factions not only squared off in court in Illinois, but they also took their quarrels to the State House in California.

A. Lo v. Provena

In Lo v. Provena, an appellate court in Illinois ruled that a hospital board could make credentialing decisions without the input of the hospital staff, so long as the board was not in violation of the hospital bylaws and only if those decisions are necessary to prevent imminent danger to an individual.

Provena Covenant Medical Center became concerned with the quality of care being provided by one of its surgeons, Dr. Lo, when a study revealed that Dr. Lo's patients had a much higher mortality rate than the national average. After meeting with the board, Dr. Lo consented to an "action plan," under which he would not perform surgeries unless supervised by another surgeon.

After performing some surgeries under supervision, Dr. Lo informed the board that the action plan was too onerous, and that he intended to ignore it. Alarmed, the President of the hospital sought a recommendation from the medical staff that Dr. Lo's privileges at the hospital should be suspended. However, each medical staff member approached by the President either expressed an unwillingness to become involved, or a desire to seek legal counsel, before making a recommendation. The hospital board then authorized the President to suspend Dr. Lo's clinical privileges.

Dr. Lo brought suit against the hospital, alleging that the summary suspension violated the hospital's bylaws. The bylaws allowed the hospital board to suspend the privileges of a physician upon the recommendation of the medical staff. Dr. Lo argued that, since the board did not receive such a recommendation, the suspension was inappropriate. The court disagreed.

Inasmuch as the board has the ultimate responsibility for the hospital's activities, the court believed that the board should be able to act in situations like this one, even without the input of the medical staff. Accordingly, the court interpreted the bylaws so that a recommendation of the medical staff was not a prerequisite to the suspension of a physician's privileges.

Dr. Lo, along with the American Medical Association and the Illinois State Medical Society, appealed the decision to Illinois' highest appellate court, but that court declined to hear the matter.

Dr. Lo's case has caused a considerable amount of concern. Some argue that the outcome leaves a medical decision - whether or not to credential a physician - in the hands of the hospital board, a group usually composed of a majority of laypersons. This, they argue, is an example of the impermissible corporate practice of medicine.

Additionally, some are concerned that the precedent set by this case will result in hospital boards making decisions without the benefit of all facts. This, they argue, could potentially deprive a physician of his or her privileges without appropriate process. Finally, the willingness of the court to defer to laymen in regard to a credentialing issue causes some to worry that other courts might allow a hospital to put money ahead of patient care. For example, some believe that the case will encourage hospitals to take away a doctor's privileges because the doctor has opened a competing ambulatory care center.

Others argue that, since it is the hospital board that bears the ultimate responsibility for the activities of the hospital, a hospital board should not be hamstrung by medical staffs that may be afraid, or otherwise unwilling, to take an unpopular step, such as suspending or revoking a physician's privileges.

B. New California Law

California recently enacted a statute that attempts to deal with some of the conflicts between medical staffs and hospital boards. That statute - SB 1325 - was signed into law by Governor Schwarzenegger on September 22 of this year. The law sets forth a medical staff's right to self-governance, including the right to establish rules and regulations relating to medical staff membership and privileges.

The legislative findings accompanying the statute reaffirm the final authority of the hospital board, but state that the board's authority can only be exercised with a reasonable and good faith belief that the medical staff has failed to fulfill a substantive responsibility in matters pertaining to patient care.

While this novel California law was enacted in response to doctors' concerns, it is curious that the outcome of Lo v. Provena would likely have been the same even if Illinois had a similar law, since the Provena hospital board appears to have acted with a good faith belief that the medical staff failed to fulfill its responsibility to suspend a doctor believed to be a danger to patients.


December 22, 2004




Rosen, Barry F.


Health Care