Joyce Alston
Grand Canyon University: HTL-520 Legal Issues with Physicians
December 3, 2014
Tafford Oltz was a nurse anesthetist who brought an antitrust action against physician anesthesiologists and the St. Peter’s Community Hospital. This case study involved the violation of antitrust laws deriving from other anesthesiologist in the hospital who not accepted having to compete with Oltz because he was said to have charged rates that were lower and the majority of physicians wanted to use his service. The case study involved the violation of antitrust laws deriving from the law suit issued by Tafford Oltz. (Corrigan and Donaldson, 2000) Oltz was forced out of his position due to illegal competing techniques by other anesthesiology. The agreement Oltz had with St. Peter’s included an agreement with the hospital that Oltz would provide eighty-four percent of his the surgical services. Oltz made the agreement based on the fact that he would be the primary anesthetist during the term of the agreed contract. The hospital was located in a rural community that it served therefore the patient population may have caused a strain on the family to obtain her level of interest. The lawsuit revealed that the other hospital anesthesiologist conspired to and thee competing with the nurse anesthetist’s lower fees and, as a result, entered into an exclusive contract with the hospital on April 29, 1980, in order to squeeze the nurse anesthetist out of the market. This resulted in cancellation of the nurse anesthetist’s contract with the hospital. (Corrigan and Donaldson, 2000) There are many considerations that should be weighed in this case. As employment that has contractual obligations are an anesthesiologist is a physician or a nurse who is certified or licensed to care for a patient prior to, during and after a medical procedure. Typically, a sedative drug is administered prior to the procedure and the anesthesiologist ensures the safety of the patient by observing the patient for reactions to the drug that was administered. (Medical News Today, 2008)
An anesthesiologist's is not restricted to the typical surgical setting in a hospital. However, anesthesiologists have many options available to them therefore the salary of a anesthesiologist can be very competitive. In this case the Olitz gained to lose quite a substantial compensation when he was pressures or eliminated from workplace. The protection of patients' health information has been codified by the Health Insurance Portability and Accountability Act (HIPAA). The HIPAA regulations apply to all "covered entities," which includes anyone who transmits protected health information electronically or otherwise. Therefore, the entire health care system is subject to the HIPAA regulations. http://www.anesthesiazone.com/anesthesiologist-information.aspx In addition Oltz sued the anesthesiologists and hospital because they were found in violation of the Sherman Antitrust Act. However prior to the trial preceding’s, the anesthesiologists settled out of court for $462,500 before trial, while the case that was filed again the hospital continued to trial. Oltz was awarded $212,182 for lost in income and $209, 649 in future damages. (Medical News Today, 2008)
Both amount combined resulted in the total damage amount. Research studies indicated that were further considerations by the judge Smith in this case because Oltz wife was also identified as a anesthesiologist the judged felt there may have been a conspiracy between the two since they both had the same profession. .However in a court of appeals this evidence was not proven and the trial Judge Battin allowed the awarded amount for damages to Oltz. During the trial with the hospital the court excluded all damages after June 26, 1982. This was the date that had been documented as when the hospital revised the hospital contract agreement with the anesthesiology group. http://www.medicalnewstoday.com, 2010) The Clayton Act focuses on discriminatory pricing and mergers, regulates acquisitions that lessen competition, and supports and clarifies components of the Sherman Act. For pricing, the issue is whether pricing is set appropriately to reflect cost of manufacture, sale, or delivery, and not for the intent of achieving a monopoly. The Clayton Act gives the Federal Trade Commission authority to enforce Clayton against non-profit entities as well as for-profit ones.
Health care organizations must publish the standards of conduct they require as well as legal and ethical requirements. Areas of focus include document retention, privacy management, occupational safety, environmental compliance, and patient protection. (Medical News Today, 2008)
When hospitals find themselves in violation of the Sherman Antitrust Law it becomes responsible for harsh penalties. The Sherman Antitrust prevent monopolization is considered a federal offense. The primary areas of behaviors that are identified within antitrust laws include, predatory pricing, price discrimination, dealing exclusively and the refusal to supply someone or an organization. In this case the anti-trust law that is in violation is what is considered a predatory pricing violation. (Pozgar, 2012). Predatory pricing is when a company lowers their prices to a level that competition is forced out of business and then they raise their prices above the market level. If a firm owns at least 70 percent of the market share they may be deemed a monopoly. Some penalties result in federal felony charges. Any person or institution that is found in violation of the Sherman Act can face criminal prosecution by the Department of Justice. The penalties amount can be as much as $350,000 for individuals found in violation and penalties can be as much as $10 million dollars. With this consideration in mind in relations to this case the damages that were initially awarded by the initial judge Smith would be comparable if a single individual was sued for constrict. Some past federal cases have also fined higher than the illustrations just provided. (Oltz v. St. Peter’s Community Hospital, 1994)
In conclusion, while this case was appeal and the initial damages were withdrawn. After the appeal was one after finding Dr. Oltz wife innocent of coercion. There should be on-going considerations into observing the legal guidance’s to avoid violation anti-trust statutes. The federal government requires firm compliance in order to assure that hospitals meet regulatory requirements. However, it is vitally important that physician have attorneys and legal entities confirm contractual agreements with hospitals and healthcare facilities to ensure they are clear grounds of violation in the event the contract is not honored.
References Kohn, L.T., Corrigan, J.M., and Donaldson, M.S. (Eds.) (2000). To Err is Human: Building a
Safer Health System. Washington, D.C.: The National Academies Press.
Medical News Today. (2008, October 22). Washington Post examines CMS "never events" reimbursement policy. http://www.medicalnewstoday.com/articles/126375.php
Oltz v. St. Peter’s Community Hospital, 19 F.3d 1312 (9th Cir. 1994)
Pozgar, Legal Aspects of Healthcare Administration (11th edition). Sudbury, MA: Jones & Bartlett Learning, LLC. (2012).
http://www.anesthesiazone.com/anesthesiologist-information.aspx
