Warren v. Dinter: Should HMOs and ACOs be Accountable for Malpractice?

By KIP SULLIVAN, JD (10)

Three weeks ago I posted a comment here about a decision by the Minnesota Supreme Court in the case of Warren v. Dinter. In that case, the court held, by a 5-2 margin, that hospitalists (and, therefore, the hospitals they work for) can be sued for malpractice even if they were not in a treatment relationship with the patient. I took the position that that decision was the right one. (If you haven’t read my first article, I urge you to do so to understand the facts of the case.)

The ensuing discussion about my article focused primarily on which, if any, of the three health care professionals involved in the decision not to hospitalize Susan Warren were culpable. The question of whether other parties – the hospital, the chain that owned the hospital, Accountable Care Organizations (ACOs) established by the chain, and insurance companies – should be subject to liability received relatively little attention. Two who did comment explicitly on that issue made it clear they thought even asking about third-party culpability was verboten.

In this sequel to “Why did Susan Warren die?” I want to focus on the question, Shouldn’t third parties who make, veto or influence medical decisions be exposed to malpractice lawsuits? My answer is yes. If the answer is yes, then we must support the Warren v. Dinter decision. Imagine if the Minnesota Supreme Court had taken the opposite position. Imagine that the court decided that injured patients cannot sue third parties unless the employee of the third party (the doctor or nurse) who made the decision in question was in a treatment relationship with the patient. Is it not obvious that such a decision would slam the courthouse doors on all patients injured by employees working for insurance companies, hospitals, hospital-clinic chains, and ACOs who were not treating the patients? 

We do not need to know what role third parties played in Ms. Warren’s death in order to say yes to that question. We don’t need to know, for example, whether any, some or all of the three health care professionals involved in Warren’s case – the nurse practitioner at the Essentia clinic, her collaborating physician, or Dr. Richard Dinter (the hospitalist at the Fairview hospital) – bear none, some, or all of the blame. All we need to agree on is the truth of the following statement: If the Minnesota Supreme Court had ruled that Dr. Dinter could not be sued, that would mean that in all future malpractice cases in Minnesota, HMOs and other third parties that contributed to a patient’s death could not be sued as long as the third party could show their employees were not in a treatment relationship with the injured patient. Only doctors and nurses would be liable for malpractice.

Putting only doctors and nurses involved in patient care in the docket, and exempting third parties who meddle in the doctor-patient relationship, is unfair to doctors and nurses. And because it enables reckless behavior by third parties, it poses a threat to patients.

Two examples of what could happen

To illustrate the consequences of the opposite decision in Warren v Dinter, I’m going to present to you two sets of facts drawn from reports on two malpractice suits, one in Georgia and one in California. I ask you to imagine how these cases would have turned out if the negligent acts had occurred in Minnesota after the Minnesota Supreme Court issued an opinion in Warren v Dinter that sided with the defendants, that is, the court had decided that injured patients cannot sue doctors unless the patient can show the doctor had treated them.

I base my description of the Georgia case on the opening chapter of George Anders’ book, Health Against Wealth: HMOs and the Breakdown of Medical Trust.   I base my description of the California case on several sources, including a video of the plaintiff testifying before a California legislative committee and an opinion  published by a California appeals court. As you’ll see, the two cases are similar in important respects to Warren v Dinter. The most important similarity is that a doctor in all three cases made a life-or-death decision about a patient with septicemia without examining the patient. 

In the Georgia case, the plaintiffs, James and Lamona Adams, sued Kaiser Foundation Health Plan of Georgia and two of its employees because one of the employees, a nurse on a 24-hour Kaiser hotline, failed to tell them to get their very sick, six-month old son immediately to an emergency room. The boy’s symptoms included a high fever, panting and moaning. 

Instead, after consulting with a pediatrician, the nurse told the plaintiffs, who lived in a town south of Atlanta, to drive 42 miles to Scottish Rite, an in-network Kaiser hospital north of Atlanta. [1] Within a few miles of Scottish Rite, the boy lapsed into unconsciousness. The parents saw a blue “H” sign and followed the signs to Kennestone Hospital. By the time they got to Kennestone, the baby’s heart had stopped beating and his extremities had suffered insufficient blood supply for so long they had turned black. A few hours later the baby was transferred to Scottish Rite where he was diagnosed with meningococcemia.   A few days later surgeons amputated his hands and legs. 

In the California case, Dawnelle Barris (she later changed her last name to Keys) sued Los Angeles County, which owned Martin Luther King/Drew hospital, and Dr. Brian Thompson, a physician employed by Kaiser. The suit accused the defendants of negligence leading to the death of the plaintiff’s daughter Mychelle at the age of 18 months. Ms. Barris, whose family had Kaiser health insurance, called an ambulance when Mychelle began to vomit and have trouble breathing. The ambulance took her to MLK, which was the nearest hospital, by which time, according to the appeals court, “Mychelle had a temperature of 106.6 degrees, her pulse was 134, and her respiratory rate was 42. Her symptoms included diarrhea, five episodes of vomiting, shortness of breath, and lethargy.”

The doctor at MLK who examined her, Dr. Trach Phoung Dang, wanted to order a blood test. He called Dr. Thompson three times for permission to do the test, but Thompson refused. [2] Thompson said the blood work would have to be done at the Kaiser hospital. Dang noted in the medical chart, “Dr. Thompson at Kaiser did not want me to do any blood test.” According to the Los Angeles Times , “When [Mychelle’s] mother began to panic and demand better care, hospital security was called to escort her out of the building. By the time Mychelle reached Kaiser – four hours after entering King – she was near death. Her heart stopped 20 minutes after arriving at Kaiser.”

Both the Georgia and California cases went to trial. The juries returned verdicts in favor of the plaintiffs, along with enormous awards – $1.35 million in the Barris case (with 75 percent of the blame given to Dang and 25 percent to Thompson), and $46 million in the Adams case.

I’m not asking you if you agree with those juries. Nor am I asking you to predict the outcome of Warren v DInter. I’m asking, How would we feel if Georgia and California law had barred the Adamses and Ms. Barris from presenting their case to a jury? Would you not be upset? By what moral principle could we justify telling those plaintiffs, “No, you will not get to present your evidence to a jury because we have decided that doctors and their employers should not have to defend themselves in front of a jury if they can show the doctors made their life-and-death decisions without examining the patient?” That statement reads like something from an Orwell novel, or Catch-22, or Alice in Wonderland.

But that’s what would have happened to James and Lamona Adams and Ms. Barris in the scenario I have asked you to imagine – a scenario in which the malpractice occurred in Minnesota after the Minnesota Supreme Court issued a decision in Warren v Dinter that went the other way – that sided with Dr. Dinter and Fairview hospital.

If you agree with me that the HMOs and their doctors in the Georgia and California cases should not have been able to escape malpractice liability by claiming their doctor wasn’t treating the injured patient, on what grounds would you argue that non-HMO third parties – hospitals, hospital-clinic chains, and ACOs – should be allowed to escape liability with that defense?  

ACOs will trigger malpractice lawsuits

I can imagine some opponents of the Warren v Dinter decision arguing that it’s all right to expose doctors working for HMOs and PPOs to malpractice suits even if the doctors never treated the injured patients, but it’s not all right to do that to doctors working for hospitals, hospital-clinic chains, or ACOs.  After all, there is widespread agreement that HMOS and PPOs have been practicing medicine without a license for decades, and if that’s their business model, then by gum they should be accountable for malpractice along with doctors. 

The trouble with that argument is that the hospital industry is now mimicking the insurance industry. Whereas the insurance industry has been practicing medicine without a license for decades, substantial portions of the hospital industry are now “practicing insurance without a license,” and more plan to do so in the near future. As hospitals, chains and ACOs take on more and more insurance risk, we should expect them to behave like the insurance companies. Doctors working for insurance companies are no longer the only doctors exposed to financial incentives and other forms of pressure to deny services to patients. 

The primary mechanism by which insurance risk is being offloaded onto hospital-clinic chains these days is the “accountable care organization” (ACO) contract between chains and insurers. The ACO is not the only such mechanism (CMS’s Hospital Readmissions Reduction Program and Maryland’s “all-payer” program for controlling hospital costs are others), but it is the one that affects the most human beings and is, therefore, the one that will probably trigger the most accusations of malpractice. 

I am not alone in my prediction. Others have noted that ACOs will trigger malpractice lawsuits. Some, perhaps many, of those lawsuits will raise the question posed by the Adams and Barris lawsuits (and which the Warren v Dinter case may raise as well), to wit: Should the doctors who make medical decisions without examining the patients be the only ones sued, or are there third parties who should be cross-examined in front of a jury as well? 

I’ll close by reviewing one study (out of a small but growing body of literature) that indicates hospitals exposed to insurance risk, even to shared risk, act like insurance companies, and some of their actions may be harming patients. The study appeared in the April 2019 edition of Health Affairs. The article (which is behind a paywall) examined the behavior of eight Maryland hospitals that participated in the Total Patient Revenue (TPR) pilot, an experiment that ran from 2010 through 2013. The hospitals were not called ACOs, but they were exposed to a shared-risk payment scheme similar to the up- and downside risk-sharing to which many ACOs are exposed. The authors, Jesse Pine et al., examined hospital utilization in these eight hospitals over the period July 2010 through December 2013.

They reported a decline in hospital use among those eight hospitals over a mere three-and-a-half years that was breathtaking – arguably appalling. According the abstract: “Emergency department (ED) admission rates declined 12 percent, direct (non-ED) admissions fell 23 percent, ambulatory surgery center visits fell 45 percent, and outpatient clinic visits and services fell 40 percent.” In the text of the article, the authors stated, “[W]e also found evidence that most of the drop in inpatient admissions at TPR hospitals was offset by higher admissions at Maryland hospitals outside [the TPR]. Similarly, some outpatient services likely moved from TPR hospitals to other [providers] not affiliated with the TPR hospitals.” 

It appears the hospitals were chasing patients away in droves. What was the mechanism by which that was accomplished? Were hospitalists or other employees of those hospitals telling patients they hadn’t examined they weren’t sick enough to be hospitalized? Were they sending those patients miles away to other hospitals (as Dr. Baldwin, the Essentia doctor, testified she sometimes does when Fairview’s hospitalists disagree with her request for admissions)? The study was not designed to answer those questions. But if you were an attorney representing someone who was hurt because they were denied care at one of those hospitals, you would not be doing your job if you didn’t seek answers to those questions. 

This study, similar studies, and commentary by legal experts suggests we will see more malpractice suits against hospitals or chains that have taken on risk via ACO or kindred contracts, and that some of those suits will allege acts of malpractice like those proven in the Adams and Barris cases (and which may be proven in the Warren case). The rapid growth in ACO contracts and other methods of risk-shifting to hospitals and clinics reinforces that prognosis. That prognosis argues against limiting the Warren v Dinter decision just to HMOs and PPOs.

Moving beyond the lesser of two evils

The facts presented to the Minnesota Supreme Court in the Warren case forced the court to choose between the lesser of two evils: Exposing more doctors to the risk of malpractice suits versus slamming the courthouse doors on injured patients who deserve to present their case to a jury. In choosing the former, I believe the court made the right decision. 

It’s a sad commentary on the state of the American health care system that judges must choose between two such unattractive options. We should use a case like this as a teachable moment. We should ask how we got into this mess? Why are good doctors and nurses finding themselves in bad situations like those described in the Adams, Barris and Warren cases?

The short answer is the advent of managed care and the limitations on patient choice and the loss of physician and patient autonomy managed care has wrought. If it had been illegal in California and Georgia for Kaiser to create networks and require patients to stay within those networks, the unnecessary delays in care caused by Kaiser employee decisions almost certainly would not have occurred. Let us focus our anger on the usurpation of physician-patient decision-making authority by third parties and the use of networks that facilitate that usurpation.

I urge any of you who disagree with me about the wisdom of the Warren v Dinter decision to direct your anger at the defects in our health care system which, in my view, make the decision the right one. I offer this modest proposal: Let’s enact legislation that gets the insurance industry out of the practice of medicine, and the hospital industry out of the insurance business.

 [1] Kaiser’s contract with Scottish Rite hospital required the hospital to give Kaiser a discount of 10 percent on the first $5 million of business Kaiser steered to the hospital each year, and 15 percent on all business in excess of $5 million.

[2] I find Dr. Dang’s decision to ask Dr. Thompson for permission to do the blood test as perplexing as the “protocol” followed by the Essentia nurse practitioner and doctor in the Warren case. Judging from the testimony of that nurse and doctor, the protocol required them to get permission from hospitalists at Fairview hospital to admit patients there, and if they couldn’t get permission, they would often send patients to emergency departments at hospitals 25 to 30 miles away. Where did that “protocol” come from? Similarly, why was Dr. Dang under the impression that he needed Dr. Thompson’s permission to conduct a blood test?

10 thoughts on “Warren v. Dinter: Should HMOs and ACOs be Accountable for Malpractice?

  1. What a tragic case. Certainly, if a patient presented with “stomach” (abdominal??) pain, fever, chills, and a high white count, the very first thing I’d think about would be a surgical belly of some kind. The type of which would depend on at least a determination if she met the criteria for an appendicitis (lower right abdominal quadrant tenderness, guarding, etc.) or cholecystitis, bowel perforation, or any number of other maladies. From what I read here, a cursory root cause would be Ms. Simon’s negligence in not referring Ms. Warren to the ER- which was just yards away, apparently. Then there are the physicians. These symptoms aren’t consistent with diabetes, but they definitely are consistent with what I described above.

    If there ever was a case of “when you hear hoofbeats, don’t think zebras”, this was it. This was more of a case of “I hear hoofbeats- it must be a spider”.

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  2. The hospital systems are indeed acting like insurance companies, which are absolutely making medical decisions that are profoundly consequential. Sometimes disastrous. So, yes, I argue they should be held responsible for policy directives and influences that result in dire outcomes. And in the rare instance where there’s a smoking gun memo from a senior administrator/doc (e.g., “do nothing until fever goes gets to 104”), it’s a piece of cake to prove.

    The knob of the problem, I assume, it that in most cases it’s a clinician who makes the call/decision. So it’s hard to prove that his/her employer put direct pressure on her/him to make that specific call. As noted above, the case would be a slam dunk if the doc were commanded by the CMO or the risk manager to say…. “tell the pt to wait until the morning to see if the very high fever goes down” when reasonable clinicians would otherwise say…. get pt to the ED stat.

    So… it’s a question of the general pressure by management put on clinicians to act like insurance companies….and strongly favor doing as little as possible.

    If I were researching this, I’d love to have transcripts of dept meetings, emails, friendly chats among colleagues, discussion of cases, M&M conferences, and memos from the CFO to the MDs and RNs, etc. One might be able to find a pattern.

    If I were an attorney, I might know a hell of a lot more what to say or do than I’ve outlined here.

    1. I am not a lawyer but I played one on youtube and in the bowels of mediations. But that is irrelevant.

      From my view, the only persons who should be sued for shoddy work is the doc. They were supposed to be the guardians of sick people. They were supposed to care, learn, communicate, be intellectually responsible and critically thinking for their patients.

      They, also, were supposed to be servants in a culture of a cottage industry of personal care behind closed doors with the person they served. They were supposed to stand up to influences that put their patients at risk.

      Any doc who does not think like this should be sued daily. Any doc who joined an ACO, closed insurance system, or aligned with a hospital or insurance should be sued in triplicate.

      One of the reasons I dislike this post is that it assumes ACOs will survive, and it assumes they influence care. It also assumes that insurance plans practice medicine which they don’t unless the doc lets them. This post proves our contention; medicine is now for medicine and not for its chosen purpose.

      But, what do I know?

      1. I desperately hope Bob’s hopes come to reality. In the interim, we have hospitals and practices acting like insurance companies…influencing docs who don’t have Bob’s courage and spine. I agree these docs are sometimes obliged to not act in the best interest of their patients. A great pity.

        I hope Bob’s vision and expectations hold true. But I shall not hold my breath.

      2. Kip-

        I like the premise of your post, which is basically someone besides the physicians should be held accountable. Here is the problem: providing accountability is difficult without evidence. I completely agree that the insurance industry should get out of the practice of medicine and the hospital should get out of the insurance business, but forcing this issue will take legislation. If you have listened to a recent podcast I did, you will know that the insurers practicing medicine could have taken my medical license. (Most doctors are scared of this, though I had really good lawyers. 😊)

        Now as for your questions at the end, I would like to weigh in on those.

        Dr. Dang asked Dr. Thompson because there must have been some leverage that Dr. Thompson had over Dang. For example, maybe that is the physician who had to sign his J-1 visa paperwork each year, or maybe he had the power to fire him and Dr. Dang had high loan debt to pay off. I am not sure what it is, but there was likely something.

        And the nurse practitioner and doctor did not follow a “protocol”. I understand the testimony may have sounded this way, but it is not really accurate. Physicians in these situations don’t really operate on a protocol, that is a nurse practitioner and pa thing. Most physicians who are turned down for admission would have simply sent the patient to the ED anyway and figured “to hell with Dinter.” We don’t even know for a fact what information Dr. Dinter was given before many on this thread are placing blame.

        See that is a huge part of this case that gets overlooked – even though I agree that the hospital and ACO should be held accountable.

        Finally, as for an answer about why Dr. Dang believed he needed Dr. Thompson’s permission… this happens all the time. Physicians tend to be rule followers. They are not fire-yielding vigilante’s who do what they want. (Myself excluded of course, which should seem obvious by now.)

        It is really hard to be a vigilante (I am serious.) Out of 400 doctors in my community, only about 30 will talk to me in public. The rest are afraid they may be associated with the likes of someone who fights the system on behalf of patients and therefore, they (the employed physician) might lose their job.

        I have had countless calls from local docs telling me to shut my mouth… or that I would get myself into trouble. Physicians still seem to believe if they just follow the rules and do what they are told, things will be great. Instead, the physician suicide rate is soaring.

        Anyway, nice job on a tough subject.

      3. Niran.

        Thanks so much for these comments. It’s clear from your example of 30 brave docs vs 370 scardicats that the power of the insurance companies and hospitals is vast and deep. Brave docs are often lonely docs. Sigh.

      4. Why do you think docs are committing suicide or leaving the profession.

      5. Thanks, Niran. I’m very interested in hearing more from you about the resistance you get from doctors. My instant arm chair diagnosis is Stockholm Syndrome. I’m being only slightly facetious.

        As I indicated at the end of my essay, I too think the best solution to the fundamental problem I raised, and that we’re talking about on this thread (insurance companies practicing medicine and hospital chains practicing insurance) is legislation. Only legislation can undo the toxic side effects of managed care/value-based payment theology. These side effects include, in rough order of importance, harm to patients, physician burnout, consolidation of our entire health care system into a few cartels run by vastly overpaid CEOs, and rising costs.

        Our dysfunctional system attempts to address the worst of these outcomes, harm to patients, via malpractice suits like those brought by the Adamses and Dawnelle Barris (and, in a few cases, criminal prosecutions and investigations by state medical boards). That is a wasteful and inaccurate way to hold culpable people accountable. It puts too many good doctors through the stress of malpractice suits for outcomes they bear little or no blame for, and on the other hand it leaves many injured patients with no redress because they can’t convince a lawyer to take their case.

        (I might write another op-ed piece about an 80-year old MN man who was left to die from a dreadful infection by an HMO doctor. Two lawyers refused to take his case on behalf of his daughter, in part because the father was so old that damages could not be based on his lost wages. I never took the bar exam in MN, otherwise I would have taken the case for free just for the pleasure of forcing the HMO to cough up its contracts with its doctors and otherwise ferreting out the role the HMO played in the tragedy.)

        As for your theory of why Dr. Dang felt he had to get Dr. Thompson’s permission to get a blood test at Martin Luther King rather than Kaiser: We of course don’t know because the public record doesn’t tell us. But I think the cause was an informal rule — an informal protocol or expectation — created by Kaiser’s past behavior toward not just Dr. Dang but many other doctors in the Compton-LA area. Kaiser’s previous history of denying payment to MLK patients who went to “the wrong ER,” for example, strikes me as a far more likely explanation for Dr. Dang’s behavior than your green card thesis.

        The Fairview Hospital chain here in MN (that’s the one that owns the Hibbing hospital where Dr. Dinter works) has not yet achieved as much publicity for mistreating patients as Kaiser has, but they’re working very hard at it. They were among the first to subject their doctors to a payment regime much like the current MIPS program. Even worse, Fairview was in discussions with a scumbag outfit called Accretive (their CEO was an Ayn Rand freak) about creating ACOs in MN even before Obama signed the Affordable Care Act. Fairview signed a contract with Accretive shortly after the ACA was enacted. Within two years, Accretive had been exposed as a menace to patients and was driven out of MN by our Attorney General. http://www.startribune.com/accretive-banned-from-minnesota-for-at-least-2-years-to-pay-2-5m/164313776/

        Is this proof that Fairview (perhaps in cahoots with the Essentia chain for whom the nurse worked) created the “protocol” that the nurse testified to in Warren v Dinter? No, but it suggests the possibility. Do I hope Warren v Dinter goes to trial and Justin Dinter’s attorney explores this possibility? Yes. Win or lose, will I be glad Justin Dinter had at least the opportunity to explore this possibility. Absolutely! Would he have had this opportunity if the MN Supreme Court had ruled against him? Nope.

      6. Francine-

        Docs are committing suicide because they are so beaten down by the system. They thought they would be taking care of patients. Instead they are glorified data entry clerks who rarely get to do the right thing for their patient. It is demoralizing. For those who have spent decades training and paying off exorbitant student loans, it is often to hard to keep living in hell.

        Hope that helps.

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