James v. Jane

Decision Date06 June 1980
Docket Number780450,Nos. 780413,s. 780413
Citation282 S.E.2d 864,221 Va. 43
PartiesPaul S. JAMES v. John A. JANE, M. D. and Hans O. Riddervold, M. D. David L. LAWRENCE v. Michael W. HAKALA, Jr., M. D. Record
CourtVirginia Supreme Court

Thomas E. Albro, Charlottesville (Tremblay & Smith, Charlottesville, on briefs), for appellants.

Jack B. Russell, Richmond (Kimberly T. Henry, Browder, Russell, Little, Morris & Butcher, Richmond, on brief), for appellees.

The Association of Trial Lawyers of America (James A. Eichner, Richmond, on brief), amicus curiae, for appellants.

Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, POFF and COMPTON, JJ.

HARRISON, Justice.

Paul S. James sought to recover from Dr. John A. Jane and Dr. Hans O. Riddervold damages for personal injuries resulting from the alleged negligent acts of the defendants in connection with a myelogram performed on plaintiff while he was under their care during 1974.

David L. Lawrence sought to recover from Dr. Michael W. Hakala, Jr., damages for personal injuries resulting from the alleged negligent acts of the defendant in connection with an operation performed on him while he was under the care of Dr. Hakala during 1975.

All defendants filed pleas of immunity in response to the respective motions for judgment filed by James and Lawrence. The court below sustained the plea in each case. The plaintiffs have been awarded appeals, and the cases have been consolidated, the issues involved being identical.

The defendants are licensed to practice medicine, and each is a full-time member of the faculty of the Medical School of the University of Virginia. Dr. Jane was Chairman of the Department of Neurosurgery at the Medical School and Chief of Neurosurgery at the University of Virginia Hospital during the time of the alleged negligence. Dr. Riddervold was an Associate Professor of Radiology at the Medical School and a member of the hospital staff in the Radiology Department. Dr. Hakala was an Assistant Professor of Orthopedic Surgery and Rehabilitation, an Assistant Professor of Pediatrics in the Medical School, and an attending staff physician at the hospital.

The Medical School is one part of the University's Medical Center, which is composed of the Hospital, the Medical School and the Nursing School. The Center is under the supervision of the Vice President for Health Sciences, who in turn is under the authority of the President of the University. The President of the University has ultimate responsibility to the Rector and Board of Visitors, an agency of the Commonwealth of Virginia. Admittedly, the Medical Center, and in turn the Hospital, are agencies of the Commonwealth of Virginia.

The basic responsibilities of faculty members of the Medical School are teaching, research, and patient care. Dr. Jane as a department chairman, has the additional administrative responsibility of that office. All faculty members are members of the hospital staff, whose teaching responsibility includes supervision of residents, medical students, and nursing students. The defendants, as full-time faculty members, were not permitted to engage in the practice of medicine individually or outside the Medical Center unless it was done during their one month vacation period. The defendants' only compensation as faculty members was a fixed annual salary which covered their teaching responsibility and services rendered in patient care as Medical Center physicians. The compensation received by any particular physician was determined by the Dean of the Medical School upon recommendation of the chairman of the department to which the attending physician and faculty member was assigned. The ceiling for salaries of faculty members in the Medical Center is fixed by the Governor of Virginia and is determined by the academic rank of the individual.

The budget of the Medical School is approved by the Vice President for Health Sciences, by the President of the University of Virginia, and ultimately by the Rector and Board of Visitors. The salaries of faculty members are paid from the Medical School's budget which is prepared by the Dean and encompasses the entire operation of the Medical School as well as compensation for faculty members. The three defendants involved here receive no compensation for patient care other than their respective salaries from the University of Virginia. The amount of a faculty member's salary is determined at the beginning of each year, and this sum is paid to the faculty member involved regardless of the amount of money this physician earns for his particular department, or the amount of money earned by his department through fees for patient care.

The Medical Center's funds are derived largely from state appropriations made by the General Assembly, training and research grants, and revenue received from the professional care rendered patients by the faculty attending staff physicians. To facilitate the handling of revenues from patient care, the Clinic-Private Division (CPD) unit of the Medical Center was created. When a patient enters the hospital, a determination is made as to his financial responsibility. If a patient has insurance, or is otherwise financially able to pay, he is classified as a private patient. If he has no insurance and is unable to pay, he enters the hospital as a "staff patient." The state has established indigency standards, and those who do not meet that standard are admitted as private patients, charged directly for professional services rendered by a member of the attending staff, and billed through the CPD rather than through the hospital.

Witnesses testified that once a patient is admitted to the hospital, whether private or staff, the patient receives identical treatment and services. No member of the medical staff may refuse to see a patient because of his classification. Dr. Hakala testified that there was no difference in the treatment of private patients and staff patients, and that a staff patient has the right to request and receive the care of a particular attending physician. It was also testified however, that the attending physicians have the privilege to select the patients they will treat and are under no obligation to accept any individual or class of persons as patients. Residents and interns in training do not enjoy this privilege. Rather, they have the duty to treat any patient who is assigned to them for treatment.

While all attending physicians are required and encouraged to follow certain guidelines to the end that their professional services constitute "good medical practice," the attending physicians of patients exercise broad discretion in selecting the methods by which they care for them. Although an attending physician may consult with colleagues, the final decisions as to diagnosis and treatment are his or her own.

The classification of patients appears to be utilized primarily as a billing device. Almost every patient is taken care of by a member of the house staff, as well as by an attending physician, and this is true whether a patient is staff or private. Dr. Jane testified with reference to surgical duties and said that such duties are divided between the residents and the attending staff physicians. Specifically he said that the division was such that one month he might have the primary responsibility for doing the surgery with the help of his senior resident, and the next month the surgery would be done by the senior resident with his help. He said the rule applied to both staff and private patients.

It appears that although treatment received by staff and private patients is identical, private patients receive two bills, one from the hospital and one from the attending physician through the CPD billing system, whereas staff patients only receive a bill from the hospital. The money received from bills sent by the hospital is turned over to the Bursar of the University and is used to fund the hospital. The money received through the CPD bills from private patients is applied to payment of the total operating expenses of the Medical School. While the records of the Bursar reflect the amount of money generated by each of the CPD departments, and the individual physician's charges, receipts, and receivables, none of the funds received from the patients come directly back to any individual faculty member or to his respective department. The budget of the CPD is operated entirely from the fees received from private patients. In 1974, five and one-half percent (5 1/2%) was withheld to fund the CPD budget. Ten percent (10%) of total collections each month is allocated to a fund used in partial support of the attending physicians' (faculty members) retirement program in which the physicians become entitled to participate. The remaining CPD funds become a part of the Medical School's general budget which includes salaries for faculty physicians and staff members, supplies, and miscellaneous operating expenses. The amount of time spent in patient care by a faculty member varies greatly, and some physician-faculty members participate little in patient care, a fact which does not affect the amount of their compensation from the University.

Each department in the CPD formulates a schedule of fees for the various procedures performed by its attending physicians, and this is approved by a policy committee made up of elected department representatives. While the attending physicians seldom are involved in the collection process, in some instances when the fees are not paid, they are asked to recommend or decide on the final disposition of collection, and are privileged to compromise their bills or forgive them. All bills are sent in the name of the attending physician. It is noted that the physicians at the University of Virginia Clinic-Private Division are not required to purchase local revenue licenses in connection with their practices.

The respective allegations of negligence made in their ...

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