Hi, everybody, welcome to module seven.
This week, we talk about liability
and we think about the evolution from charitable immunity
in the early days of almshouses,
standalone hospitals to the multi-institutional,
really complex systems we have today.
Whereas tort liability was once unheard of in healthcare
in the last 50 years has become
really one of the most dramatic areas of the law.
There'll be slides next week to review.
I encourage you to check out those review slides.
Make sure you caught everything in this module.
Let's review a couple of topics we've discussed previously
and kind of integrate them into this topic.
First, managed care organizations.
Generally, a type of healthcare organization
that manages and coordinates healthcare services
for its members in order to control healthcare costs,
improve the quality of care, keep the patient healthy.
Managed care organizations,
I'm using in a really general sense.
They're typically health insurance companies,
healthcare provider organizations
or those that contract with healthcare providers,
hospitals, doctors,
to provide healthcare systems to their members.
Think networks.
MCOs use a variety of strategies
to try to manage healthcare costs,
utilization management,
provider networks to seize management,
preventative care.
They're often used by employers,
government programs, Medicare, Medicaid,
and they provide healthcare benefits
to their employees and beneficiaries.
While MCOs have been successful
in controlling healthcare costs,
they've also faced some criticism
for limiting patient choice
and compromising quality of care.
So if you're not familiar with MCOs,
you probably are, but if you're not,
just think about these big systems of care
that we have right now.
So we discussed liability in the past couple weeks,
and liability refers to the legal responsibility
that persons, entities or organizations
face the actions of the employees or agents,
whether intentional,
reckless or unintentional.
This means that if an employee
or an agent of an organization
engages in conduct that harms others,
the organization may be held responsible for those damages,
even if the organization
didn't really participate in the conduct.
It's based on the idea that the entity
controls its employees or agents.
Corporate liability, you'll see in the reading this week,
refers to that legal responsibility
that a corporation may face
for actions of employees or agents,
whether intentional or unintentional,
can arise from a variety of legal claims
such as environmental law, employment law,
securities law, product liability.
Under corporate liability,
the corporation itself may be held liable
for damages caused by actions of employees or agents,
regardless whether those were made
in the scope of their employment or agency.
So this is kind of new.
We consider separately respondeat superior.
So respondeat superior is this idea
that the principal or employer
is held liable for the employees or agents,
even if the principal or employer
did not participate directly
into the actions that caused the harm.
The key factor in determining liability
is whether the employee was acting
within the scope of their employment or agency
when the actions were taken.
And respondeat superior is an important concept
'cause it helps ensure employees and principals
are held accountable for the actions
of their employees or agents.
Provides a way for victims to seek compensation
for harm caused by those actions
and serve as a deterrent, right?
For others.
They might be more likely to take steps
to prevent wrongful actions
if they know they can be held liable.
We talked about independent contractors a little bit,
but you'll see that in this week's materials,
the distinction between employees
and independent contractors is important
when we're thinking about liability.
Generally, an employer is responsible
for the actions of the employees
under the idea or the doctrine of respondeat superior
because it's in the scope of their employment.
Employers generally do not have the same level of control
over what are called independent contractors.
And so, they're typically not held liable
for the actions of those independent contractors.
So you need to consider what that means
and how that impacts
healthcare situations and relationships.
Very complicated when you think
about these big systems, right?
So you'll see that in the materials this week.
We talked about ERISA.
ERISA will come back this week
and we'll go a little bit deeper.
Employee Retirement Income Security Act from 1974
protected employees' rights and benefits
related to their retirement plans and benefit plans,
including insurance, disability, life insurance.
ERISA really set minimum standards
for employees' benefit plans
so that they had certain features and benefits
across the nation.
ERISA also established procedures
for participants to file claims,
do an appeal process to denial of benefits.
ERISA applies to most private sector employers
that offer employee benefit plans,
as well as those plans sponsored by union
and some government entities.
It does not apply to government-sponsored plans
like social security or religious-based plans like a church,
if you work for a system that's part of the church.
ERISA is important as you probably remember
because it provides protections
for employees' retirement and benefit plans.
It does many things,
retirement savings by setting minimum standards
for how retirement plans work like 401(k)
to ensure that employees' retirement savings
are managed and invested properly.
It requires plan fiduciaries
to act in the best interest of plan participates
and manage those plan assets prudently.
It helps participants makes informed decisions
about their benefits,
ensures they understand how plans work.
Creates a uniform framework for employee benefit plans,
means the employers can offer consistent benefits
to their employees regardless of where they work.
It makes it easier for employers
to administer these benefit plans,
understand the benefits
and provides participants with legal remedies
if they believe their rights on the plan have been violated.
So this includes the right to sue for benefits,
appeal of denial of benefits.
ERISA has faced some pretty tough criticism over the years.
Some argue the law has really not kept up
with the changes since 1974.
This includes the rights for suing for appeals
and denial of benefits,
and that the law has really not kept up
with changes in the economy and the workforce.
It doesn't provide sufficient protections
for those in the gig economy,
those who work for small businesses.
Some critics argue that ERISA's legal remedies
are really insufficient at this point
and that participants face really challenges
in obtaining benefits on the law
and they can't really get through that legal process.
So this week, we overlay this historic idea
of healthcare being part of this charitable system
and really under this charitable immunity,
it was this doctrine that this was provided by churches
and nonprofit organizations,
and therefore they're protected
from liability from their actions
because they were doing this charitable good
for the community.
Concept was really strong 100 years ago
as a way to encourage
nonprofits, churches,
to do this work,
provide these social services without fear of being sued,
without repercussions for things going wrong.
They couldn't be held liable
for anything that happened really,
negligence or other wrongful acts,
unless there was this real gross negligence
or willful misconduct,
that standard of intentional.
So
in the last 100 years,
as this really changed and modified
and systems became more complicated,
this charitable immunity doctrine slowly went away.
Application was really limited.
There was a lot of criticism
that it protected nonprofit and religious organizations
at the expense of victims
who were sometimes obviously very badly hurt
either through reckless or negligent conduct.
And they weren't holding these organizations
accountable for their actions.
So slowly, most states replaced
these charitable immunity laws
or limited them over the last 100 years.
So we think about that,
we think about these statutes
and the degree of protection they added.
But you have to think about that
in the context of these really complicated institutions
being built that we're no longer
just a small hospital, a small town.
Now we have healthcare systems
that might include both providers and insurance.
They might cover, not just municipalities,
but counties or whole states or across the country,
and what does that mean?
So now that we have the basics,
I think we can think about that a little bit deeper.
You also have a writing assignment due this week.
Don't forget, if you need an extension, please reach out.
Otherwise, I'll see you in the discussion forum
to think about liability
in terms of huge systems
and how that works.