Building Better Bylaws

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In a roundabout way, Mark R. Neaman, president and chief executive officer of Evanston Northwestern Healthcare, owes one of his major successes to medical staff bylaws.

At the helm of the three-hospital system in suburban Chicago, Neaman has no direct control over what the bylaws say or how they are enforced. But an amendment to those bylaws that mandated all physicians get on board with Evanston Northwestern’s electronic medical record initiative was key to the project’s success.

“Our CEO had to write the $55 million check, and he was putting his career on the line” by advocating for early adoption of the then-new technology, says Arnold Wagner, Jr., M.D., an obstetrician/gynecologist who was president of the professional staff when the bylaws were amended. “Early on in the process, he said, ‘This is either a career-defining step or a career-limiting step.’ And it worked out to be the former.”

Indeed, Evanston Northwestern won a prestigious national award in 2004 in recognition of its sweeping EMR rollout, with more than 6,000 physicians and other staffers trained in 18 months. But for many hospital executives, the medical staff bylaws document is not so fortuitous. A hospital’s bylaws must govern practicing physicians and establish criteria for medical staff membership to help the facility win accreditation from The Joint Commission. Typically, bylaws are adopted by the hospital’s medical staff and approved by the board of directors. The power dynamics—whether bylaws constitute a contract between the hospital and the medical staff—vary from one state to the next.

Historically, CEOs rarely needed to bother themselves with bylaws because physicians and hospitals operated in lockstep. But those days are gone in many hospital markets where financial pressures have turned physicians and hospitals into competitors trying to grab the same dollar. Today, hospital CEOs must stay on top of medical staff bylaws—even though they have no direct authority over them.

“Any hospital that has not had its medical staff bylaws updated in the last five years should do it, because the issues change so frequently they could get in trouble,” says Dan Mulholland, a partner in Horty Springer & Mattern, a healthcare law firm in Pittsburgh, Pa.

Medical staff bylaws must be revised to reflect changing Joint Commission standards; they also must be written in a way that allows both hospitals and physicians to operate successfully. “If there is language in them that can hamstring a hospital’s ability to fulfill its mission, that can really tie a hospital up,” Mulholland says.

He cites two examples:
  • If a hospital wishes to enter into an exclusive relationship with, for example, a radiology group, other radiologists on the medical staff may look to the bylaws to prohibit the move.
  • If the bylaws outline a lengthy due process mechanism for physicians accused of providing poor patient care, the hospital and other members of the medical staff can be embroiled in what Mulholland calls a “nightmarish Dickensian ordeal,” courtesy of the bylaws.
Joseph M. Heyman, M.D., a member of the American Medical Association’s board of trustees, says as disputes between hospitals and doctors have grown more frequent, bylaws have become a larger priority for the AMA.

“The whole idea of having medical staff bylaws is to emphasize the independence and the clinical decision-making ability of the medical staff as opposed to the hospital board or hospital administration,” says Heyman, a gynecologist in Amesbury, Mass., who serves on The Joint Commission board of commissioners.

Although administrators cannot dictate the contents of medical staff bylaws, they can support medical staff leaders in keeping them updated. At Evanston Northwestern, Wagner says the medical staff leadership and hospital administration were equally enthusiastic about a systemwide EMR initiative, but both parties knew that if many physicians balked, the effort would stall.

“All along the way, we expected that we were going to mandate participation and training, but it was going to be mandate-by-cajoling,” he says. “Then finally somebody decided, ‘Why don’t we mandate it by the bylaws?’ That was a genius idea.”

The amendment, he says, provided cover for department chairs responsible for insisting that physicians underwent the training and began using the EMR system. “It gave some horsepower behind individual chairmen of the departments so they could stand up to their members and say, ‘You didn’t get trained; you’re not practicing,’” he says.

Mulholland coaches hospital administrators to remember—and to remind their medical staff members—that they need each other to be successful. Well-crafted medical staff bylaws create a framework for that to happen. “To paraphrase Ben Franklin, you’ve got to hang together or you will hang separately.”

Lola Butcher is a Springfield, Mo.-based freelance writer and a frequent contributor to HealthLeaders magazine.

Bylaws: Why Should CEOs Care?

By the time they hit the court system, disputes between hospitals and physicians often come down to a disagreement about where ultimate power resides: medical staff bylaws or the hospital board of directors.

Two cases in point are tracked by the AMA’s Litigation Center:

Frustrations in Florida
Lawnwood Regional Medical Center and Heart Institute, an HCA Inc. hospital in St. Lucie County, Fla., has been slugging it out with its medical staff over a bylaws disagreement for years.

At the urging of hospital supporters, the Florida legislature in 2003 passed the St. Lucie County Hospital Governance Law that said “…in the event of a conflict between bylaws of a hospital corporation’s board of directors and a hospital’s medical staff bylaws, the hospital board’s bylaws shall prevail with respect to medical staff privileges, quality assurance, peer review and contracts for hospital-based services.” Shortly thereafter, the lawsuits started flying. In March 2006, an appellate court ruled in favor of the medical staff’s argument that the governance law was unconstitutional. The hospital’s appeal of that decision is pending.

Dispute in Arkansas
The so-called “economic credentialing” policy at Baptist Health Medical Center in Little Rock, Ark., is at the heart of a long-running legal dispute there. In 2003, parent Baptist Health, the largest hospital system in Arkansas, adopted a conflict of interest policy that requires medical staff members to disclose direct or indirect ownership interest in competing hospitals—and renders physicians who invest in competing hospitals ineligible for clinical privileges at any Baptist Health hospital.

Six cardiologists who have ownership interests in Arkansas Heart Hospital, a competitor to Baptist Health Medical Center, sued for an injunction to keep the hospital from terminating their medical staff privileges. The injunction was granted but ultimately went to the Arkansas Supreme Court, which affirmed it two years later. The case has been sent back to a lower court for trial, where it is pending.

—Lola Butcher




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