Community Memorial Hospital, Medical Staff Settle Lawsuit Over Staff Rights

Community Memorial Hospital in Ventura and its medical staff have reached a settlement in a lawsuit brought by doctors against the hospital for "allegedly undercutting their rights as a self-governing branch of the medical center," the Los Angeles Times reports (Kelley, Los Angeles Times, 8/18).

Physicians at the hospital filed a lawsuit in April 2003 over allegations that hospital administrators tried to influence a staff election in November 2002, adopted an 18-page code of conduct intended to silence opposition, implemented a conflict-of-interest policy to disqualify certain physicians from leadership positions and illegally allowed physicians to practice at the hospital without a review by the staff.

In September 2003, the board of Community Memorial voted to change some of the more controversial elements of the code of conduct and conflict of interest policy, but the lawsuit continued. In October 2003, CEO Michael Bakst resigned from his position at the request of the hospital board in an effort to begin resolving issues between the hospital and its physicians (California Healthline, 10/3/03).

On Tuesday, the hospital and the medical staff announced the settlement, which was approved last week by hospital trustees and the executive committee of the medical staff. Medical staff members are expected to ratify the settlement next month (Los Angeles Times, 8/18). The settlement will become final when the medical staff changes its bylaws to include new policies governing physician conduct and conflicts of interest (Wilson, Ventura County Star, 8/18).

In the announcement, the hospital and medical staff stated, "The medical staff has full confidence in the board's leadership, and the board recognizes the medical staff's indispensable role in fulfilling CMH's mission" (Los Angeles Times, 8/18). Hospital officials said they must now work to regain patient volume lost when doctors began withdrawing admissions last year. New hospital administrator Gary Wilde said CMH revenue decreased by $720,000 in the last year because of lower admissions (Ventura County Star, 8/18).

In the settlement, trustees agreed that medical staff bylaws could not be changed unilaterally by hospital administrators and promised to "comply with staff bylaws," according to the Times. The hospital also agreed to increase funding for the medical staff; return $250,000 in medical staff dues, allowing the funds to be used to hire a lawyer, even to sue the hospital; and not to "unreasonably withhold" approval of new medical staff bylaws. The medical staff agreed not to pursue incorporation as a separate entity for at least two years (Los Angeles Times, 8/18). In addition, the medical staff will draft a new conflict-of-interest policy that will be overseen by the staff and not the hospital board. The staff will regain control of its bank account and will be allowed to select its own leaders. The settlement establishes a system for resolving future conflicts through methods such as mediation and judicial review (Ventura County Star, 8/18).

"We're very happy with what we've achieved," John Hill, president of the medical staff, said, adding, "This settlement allows the medical staff to continue to be the prime entity to determine medical policies. And (trustees) have agreed to not unreasonably withhold their blessing." Hill also said two key elements for resolving the dispute were a Superior Court judge's ruling last year that the medical staff represented a legal entity with the ability to file suit against the hospital and the trustees' decision to replace Bakst (Los Angeles Times, 8/18).

Wilde said the settlement is a "win-win" for doctors, hospital trustees and the hospital administration. He added, "It gets back to how a typical, well-run hospital works together. Everything in the document I can live with and support" (Ventura County Star, 8/18).

Jack Lewin, CEO of the California Medical Association, said, "It took professionalism and courage to stand for the rights of physicians against the raw power of a wrong-headed hospital administration. This is a significant victory for quality of care and patients."

According to the Times, the lawsuit resulted in a bill that would define a self-governing medical staff, create a framework for resolving disputes with hospital administrators and permit medical staff members to sue to block hospital interference in medical staff business. The bill, sponsored by Sen. Sheila Kuehl (D-Santa Monica), has passed both chambers of the Legislature and is being considered for amendments by a joint committee before going to the governor (Los Angeles Times, 8/18).