Cobb County-Kennestone Hospital Authority v. Prince

• Decision Date: 26 September 1978
• Docket Number: No. 33446,33446
• Parties: COBB COUNTY KENNESTONE HOSPITAL AUTHORITY v. PRINCE et al.
• Court: Georgia Supreme Court

Page 581

249 S.E.2d 581

242 Ga. 139

COBB COUNTY KENNESTONE HOSPITAL AUTHORITY v. PRINCE et al.

No. 33446.

Supreme Court of Georgia.

Argued April 11, 1978.

Decided Sept. 7, 1978.

Rehearing Denied Sept. 26, 1978.

Jones, Bird & Howell, Jack Spalding Schroder, Jr., Dow N. Kirkpatrick, II, Atlanta, Holcomb & McDuff, Frank D. Holcomb, Marietta, Clinton A. Harkins, Athens, Barnes & Browning, Roy E. Barnes, Marietta, for appellant.

J. Milton Grubbs, Jr., Adele Platt Grubbs, Marietta, for appellees.

Erwin, Epting, Gibson & McLeod, Larry V. McLeod, Athens, Jay H. Hedgepeth, Chicago, Ill., Hansell, Post, Brandon & Dorsey, Trammell E. Vickery, Atlanta, amicus curiae.

BOWLES, Justice.

This is an appeal from an order of the Superior Court of Cobb County which declared a resolution of the Cobb County Kennestone Hospital Authority void and continued in effect a temporary injunction.

Appellant, defendant below, is a hospital authority organized under the Hospital Authorities Law (Code Ann. § 88-1801 et seq., and operates the Kennestone Hospital in Cobb County, Georgia. The appellees, plaintiffs below, are three neurologists and two neurosurgeons licensed by the State of Georgia to practice medicine pursuant to Code Ann. § 84-901, et seq., and are members of the medical staff of the Kennestone Hospital. As members of the hospital's medical staff, each of the appellees agreed in writing "to abide by the by-laws of the medical staff and such rules and regulations as may be from time to time enacted."

In October of 1975, the appellees began discussing among themselves the possibility of forming a group to purchase a computer assisted tomoscope (C.A.T.), hereinafter referred to as a brain scanner. ¹ On October 14, 1975, representatives of this group met with representatives of the administrative staff of the Kennestone Hospital. At this meeting, appellees proposed that they be allowed to lease space within the hospital in order to operate the equipment which they proposed to purchase. ² At an executive session of the Hospital Authority held on October 16, 1975, it was brought to the Authority's attention that a request had been received from appellees for permission to rent space in the hospital for the purpose of installing a brain scanner. The Authority elected to uphold their policy of not renting space to private, for-profit enterprises, and, therefore, denied the appellees' request. At that meeting the Authority did, however, indicate that consideration would be given the hospital providing these services if the need was apparent.

On October 28, 1975, appellees met with members of the Kennestone Hospital Administration and members of the appellant Hospital Authority, at which time it was explained to appellees that the hospital was prohibited from leasing space to for-profit entities for the private practice of medicine. ³ At that meeting a counter-proposal was made that appellees purchase the brain scanner and lease it to the hospital, allowing the hospital to exercise full managerial control over the operation of the equipment. ⁴ Appellees elected to reject appellant's counter-proposal and instead decided to go ahead with the purchase of the brain scanner and to place the equipment at a location outside the hospital complex.

At the Hospital Authority's executive session of November 20, 1975, the Authority elected to initiate administrative procedures necessary to gain approval from local and state planning agencies for the purchase of a brain and body scanner, and on December 12, 1975, the Administration of the Kennestone Hospital issued a memorandum to all medical staff members announcing its intent to acquire a total body C.A.T. scanner. ⁵

Thereafter, the appellees finalized negotiations with the EMI Company for the purchase of a CT 1010 brain scanner and on February 4, 1976, submitted their formal offer to EMI for its purchase. The scanner was delivered to appellees in December of 1976 but was not made operational until February of 1977. At the Hospital Authority's executive session of March 18, 1976, the purchase of an EMI CT 5005 whole body scanner was approved. At that meeting the Authority further made clear that "upon such time as (their) scanner is made operational and consistent with existing policies established by the Authority, patients will not be allowed to go outside the hospital for treatment services offered in the hospital."

On January 20, 1977, the Hospital Authority passed the following resolution which is the subject of this lawsuit: "It is the general policy of Kennestone Hospital that if a treatment, procedure, diagnostic test or other service is ordered for a patient of Kennestone Hospital, And that procedure, test or service is routinely offered by the Hospital, then the patient will receive that service within the confines of the Hospital complex." ⁶

When appellees' scanner became operational in February of 1977, the hospital, not routinely offering this same service within its own facility, allowed appellees to transport in-patients from the hospital to appellees' facility for testing. See footnote 6. As was the custom for any in-patient temporarily leaving the hospital, the patient was requested to sign a form releasing the hospital from liability for any injury which occurred as a result of their leaving for such testing. This practice continued until May of 1977, when the hospital's brain and body scanner became operational. Thereafter, patients transferred from the hospital to appellees' facility for brain scans were informed of the hospital's policy of January 20, 1977, and requested to sign a special release form. ⁷

On June 17, 1977, appellees were notified in writing by the Hospital Authority of their violation of hospital policy, ⁸ and informed appellees that continued violations would result in the reconsideration of their medical staff privileges at Kennestone Hospital which had previously been granted by the Authority.

Shortly thereafter, appellees filed suit against the appellant Hospital Authority in three separate counts seeking declaratory judgment, injunctive relief and damages arising out of the Hospital Authority's adoption of the January 20, 1977 resolution. In particular, appellees alleged that said resolution was void and of no effect in that it was arbitrary and unreasonable. A temporary restraining order was issued which enjoined the appellant Hospital Authority from enforcing the resolution and revoking or reconsidering appellees' privileges to practice medicine at the hospital.

Following hearing, the trial court continued in effect the temporary restraining order and declared the Hospital Authority's resolution void as discriminatory and unreasonable in that said resolution limited the medical discretion of the physician in the exercise of his medical skills. Appellant Hospital Authority appeals. We reverse.

1. This appeal represents a classic confrontation between two entities who play major roles in the health and welfare of the citizens of our state. The relationship which exists between hospital and physician is delicate, each one exercising exclusive as well as concentric areas of responsibility in the treatment and diagnosis of patients. In addition to the roles played by these two entities in providing this essential health service, the state has the duty of monitoring this function in order to protect the health and welfare of its citizens. "(T)he preservation of public health is one of the duties devolving on the State as the sovereign power, and the discharge of this duty is accomplished by means of the exercise of the inherent police power of the sovereign." Hughes v. State Bd. of Medical Examiners, 162 Ga. 246, 256, 134 S.E. 42, 46 (1926); Yeargin v. Hamilton Memorial Hospital, 225 Ga. 661, 171 S.E.2d 136 (1969). As such, the legislature has seen fit to endow both physician and hospital with certain rights and restrictions in order to protect our citizens in the exercise of this essential health function.

By statute, the physician is the only one empowered to practice medicine. Code Ann. § 84-901 et seq. Without his medical skills a hospital would cease to exist. On the other hand, the hospital provides the physician with a place to practice his art of healing and provides the equipment necessary to put his skills in motion. In providing for the health and welfare of the community, the legislature created hospital authorities in order to promulgate rules and regulations, "necessary and convenient to carry out and effectuate" their purposes. Code Ann. § 88-1801 et seq. This court has, in the past, noted that, "(T)he Hospital Authorities Law is replete with safeguards and controls on the operation of the hospital to insure that the public interest in the hospital . . . is protected." Bradfield v. Hospital Authority, 226 Ga. 575, 584, 176 S.E.2d 92, 99 (1970).

Part of the responsibilities of a hospital authority is to insure that an adequate, competent medical staff serves the patients within the hospital. "It is generally agreed that the managing authorities of a hospital, under the power to adopt reasonable rules and regulations for the government and operation thereof, may, in the absence of any statutory restriction, prescribe the qualifications of physicians or surgeons for admission to practice therein." Yeargin v. Hamilton Memorial Hospital, 229 Ga. 870(3), 195 S.E.2d 8, 10 (1972); Dunbar v. Hospital Authority of Gwinnett County, 227 Ga. 534(1), 182 S.E.2d 89 (1971). It naturally follows that a hospital authority has the power to revoke the staff privileges of a physician who the Authority finds to be incompetent or who fails to comply with the reasonable rules and regulations as promulgated by the Authority. Yeargin, supra. Much of what the Hospital Authority regulates affects, to some degree, the physician's exercise of his medical judgment. The decision of what brand of thermometer, what type of syringe or, in this...