Health Care Policies: Week 6

Chapter 11:

Health Care Quality

Policy and Law

Chapter Overview

• Discuss licensure and accreditation in the context of health

care quality

• Describe the scope and causes of medical errors

• Describe the meaning and evolution of the medical

professional standard of care

• Identify and explain certain state-level legal theories under

which health care professionals and entities can be held liable

for medical negligence

Chapter Overview

• Explain how federal employee benefits law often preempts

medical negligence lawsuits against insurers and managed care

organizations

• Describe recent efforts to measure and incentivize high quality

health care

Quality Control Through

Licensing and Accreditation

• Licensing of health care professionals and institutions

is an important function of state law, as it filters out

those who may not have the requisite knowledge or

skills to practice medicine

• State licensure laws define the qualifications required

to become licensed and the standards that must be

met for purposes of maintaining and renewing

licenses

Quality Control Through

Licensing and Accreditation

• Important as the licensing function is, historically it has been

used in the promotion of health care quality in only the

bluntest sense. This is because the only method by which to

promote quality through licensure is the granting or denial of

the license to practice medicine—no real middle ground

• However, private professional and industry ethical and

practice standards also exist, though their effect on day-to-day

quality is debatable

• Also, state licensing schemes were designed not with health

care quality per se in mind, but rather with an eye toward

protecting the medical professions from unscrupulous or

incompetent providers and bad publicity

Quality Control Through

Licensing and Accreditation

• Finally, licensure plays an important role in defining

the permissible “scope of practice” of the various

types of health care providers.

• It is one thing for state legislators to define the

meaning of practice for various broad medical fields,

but quite another for legislators to define, for

example, the lawful activities of doctors as compared

to physician assistants as compared to nurses.

Medical Errors

• Although medical errors are not a new

problem, framing the issue as a public health

problem is a relatively new phenomenon.

• Overall, more people die each year from

medical errors than from motor vehicle

accidents, breast cancer, or AIDS.

Medical Errors

• Causes of medical errors may include: failure to

complete an intended medical course of action,

implementing the wrong course of action, using

faulty equipment or products in effectuating a course

of action, failing to stay abreast of one’s field of

medical practice, health professional inattentiveness,

the fact that optimal treatments for many illnesses are

not yet known, and the culture of medicine itself.

Medical Errors

• Policy makers have begun shifting their attention to

medical error reforms that are less reactive and more

centered on error prevention and patient safety

improvements.

• Two primary objectives of these reforms: to redesign

health care delivery methods and structures to limit

the likelihood of human error, and to prepare in

advance for the inevitable errors that will occur in

health care delivery regardless of the amount and

types of precautions taken.

Promoting Health Care Quality Through

the Standard of Care

• The professional standard of care is the legal standard used in medical negligence cases to determine whether health professionals and entities have adequately discharged their responsibility to provide reasonable care to their patients.

• A patient seeking to hold a health professional responsible for substandard care or treatment must demonstrate (1) the appropriate standard of care, (2) a breach of that standard by the defendant, (3) measurable damages, and (4) a causal link between the defendant’s breach and the patient’s injury.

Promoting Health Care Quality Through

the Standard of Care

• The standard has its origins in 18th century English common law.

• Courts in England established that a patient looking to hold a physician legally accountable for substandard care had to prove either that the doctor violated the customs of his own profession as determined by others within the profession (i.e., the “professional custom rule”) or that the testimony provided on behalf of a patient as to whether a physician’s actions met the standard of care could only come from physicians who practiced within the same or similar locality as the physician on trial (i.e., the “locality rule”)

Promoting Health Care Quality Through

the Standard of Care

• Over time, the standard was updated by courts:

• Generally, courts now consider a range of relevant evidence

in addition to custom and today determine whether a health

professional’s treatment of a particular patient rose to the

standard of care is whether it was reasonable given the

“totality of circumstances”

• Furthermore, a physician’s actions are now measured

objectively against those of a reasonably prudent and

competent practitioner under similar circumstances, not

against the actions of physicians who practice within a

particular defendant’s locality.

Tort Liability of Hospitals, Insurers, and

Managed Care Organizations

• Vicarious liability: where one party can be held

legally accountable for the actions of another party

based solely on the type of relationship existing

between the two parties.

• Vicarious liability is premised on principles of

“agency” law, under which one party to a relationship

effectively serves as an agent of another party.

Tort Liability of Hospitals, Insurers, and

Managed Care Organizations

• The general rule is that employers are not vicariously

liable for the improper actions of independent

contractors; however, courts have developed

exceptions to this rule—e.g., actual agency and

apparent agency—that are more concerned with the

scope of a relationship than with the formal

characterization of the relationship as determined by

the parties.

Tort Liability of Hospitals, Insurers, and

Managed Care Organizations

• Corporate liability: holds entities accountable for

their own “institutional” acts or omissions when their

negligence causes or contributes to an injury.

• Several general areas give rise to litigation around

entities’ direct quality of care duties to patients:

failure to screen out incompetent providers; failure to

maintain high quality practice standards; failure to

take adequate action against clinicians whose

practices fall below accepted standards; and failure to

maintain proper equipment and supplies.

Federal Preemption of State Liability Laws

Under ERISA

• ERISA was established in 1974 to protect the

employee pension system from employer

fraud.

• However, the law was drafted in such a way as

to extend to all employee benefits offered by

ERISA-covered employers, including health

benefits.

Federal Preemption of State Liability Laws

Under ERISA

• ERISA implicates two different types of preemption:

– “Conflict preemption” occurs when specific

provisions of state law clearly conflict with federal

law, in which case the state law is superseded.

– “Field preemption” occurs when courts interpret

federal law to occupy an entire field of law (e.g.,

employee benefit law), irrespective of whether

there are any conflicting state law provisions.

Federal Preemption of State Liability Laws

Under ERISA

• ERISA’s conflict preemption provisions (the

preemption clause, the insurance saving

clause, and the deemer clause) are more

sweeping than any other federal preemption

provisions and have engendered an enormous

amount of litigation.

Federal Preemption of State Liability Laws

Under ERISA

• The U.S. Supreme Court has interpreted ERISA’s

field preemption provisions to be the exclusive

remedy for negligent administration of an employee

benefit plan covered by ERISA.

– This means that all other state remedies generally

available to individuals to remedy corporate

negligence are preempted (and thus not available)

to employees whose health benefits are provided

through an ERISA-covered plan.

Measuring and Incentivizing Health Care

Quality

• As the single largest payer in the U.S. health system,

Medicare is a major national driver of policy in other

markets (both public and private). Therefore, how

the Medicare program addresses issues pertaining to

quality is not only important to Medicare

beneficiaries and providers, but also to other

purchasers/insurers whose policies and procedures

are often driven by Medicare policy

Measuring and Incentivizing Health Care

Quality

• All payment systems (public and private) tend to

incentivize something, whether indiscriminant

increases in the volume of treatments and services or

indiscriminant reductions in volume.

• Whatever the payment arrangement, the challenge is

to promote both quality and value while also

apportioning financial risk appropriately.

Measuring and Incentivizing Health Care

Quality

• Congress has passed a series of laws (including the

ACA) designed to move the Medicare program from

a passive purchaser of volume-based health care to an

active purchaser of high quality, high value health

care

• The ACA’s vision for improving quality focuses on:

quality measure development; quality measurement

(including payment incentives); public reporting; and

value-based purchasing

Measuring and Incentivizing Health Care

Quality

• The ACA also requires the development of a National

Quality Strategy to improve the delivery of health

care services, patient health outcomes, and population

health.