McMillan v. Anchorage Community Hosp., 2521

• Decision Date: 25 June 1982
• Docket Number: No. 2521,5415 and 5485,2521
• Citation: 646 P.2d 857
• Parties: Robert McMILLAN, Appellant and Cross-Appellee, v. ANCHORAGE COMMUNITY HOSPITAL, a nonprofit corporation, Appellee and Cross-Appellant.
• Court: Alaska Supreme Court

Page 857

646 P.2d 857

Robert McMILLAN, Appellant and Cross-Appellee, v. ANCHORAGE COMMUNITY HOSPITAL, a nonprofit corporation Appellee and Cross-Appellant.

No. 2521, 5415 and 5485.

Supreme Court of Alaska.

June 25, 1982.

David C. Crosby and Charles A. Goldmark, Wickwire, Lewis, Goldmark & Schorr, Seattle, Wash., and Michael J. Frank, Baily & Mason, Anchorage, for appellant and cross-appellee.

Brian J. Brundin and Timothy R. Byrnes, Hughes, Thorsness, Gantz, Powell & Brundin, Anchorage, for appellee and cross-appellant.

Before RABINOWITZ, C. J., CONNOR, BURKE and COMPTON, JJ., and DIMOND, Senior Justice. ^*

OPINION

DIMOND, Senior Justice.

This appeal concerns the suspension of a doctor's staff privileges at Anchorage Community Hospital (hospital). Dr. Robert McMillan, an anesthesiologist, received medical staff privileges at the hospital in 1973. His privileges were summarily suspended in 1975 because his activities and professional conduct were deemed to be disruptive of the operations of the hospital.

The primary contention raised by McMillan on appeal is that the hospital improperly used summary suspension procedures to remove his staff privileges. McMillan argues that, according to the provisions of the medical staff bylaws and the requirements of due process, summary suspension is not proper unless there is an immediate threat to patient care or safety. He claims that the hospital's grounds for suspension of his privileges, even if true, are not sufficient to meet the standards for summary suspension.

The medical staff of the hospital consists of physicians who have been granted permission by the hospital to use its facilities. The medical staff is organized into a self-governing body with bylaws adopted from a model set of bylaws promulgated by the Joint Commission on Accreditation of Hospitals. The hospital has approved the bylaws, and the Board of Trustees of the hospital exercises final authority over staff appointment, reappointment and revocation of privileges. Certain members of the medical staff, the Board of Trustees and the chief executive officer of the hospital have the power to initiate procedures which can lead to the removal of staff privileges.

Article VII of the medical staff bylaws of the hospital governs procedures for corrective action against a physician with staff privileges. Article VII, section 1, and article VII, section 2, are the two types of corrective action procedures at issue in this appeal. ¹

Under section 1, corrective action first requires a series of informal investigations and hearings. If they result in a recommendation of reduction, suspension or revocation of privileges, or expulsion from the medical staff, the affected practitioner is entitled to a formal hearing before an ad hoc committee of the medical staff and an appeal from the committee's decision to the Board of Trustees. Only after completion of these procedures can the physician's privileges be reduced, suspended or revoked.

Section 2 allows summary suspension of staff privileges when such action is immediately necessary in the best interests of patient care. After summary suspension of privileges under this section, the affected practitioner may seek a hearing before the executive committee of the medical staff and, if the result of that hearing is unfavorable, may appeal it to the Board of Trustees.

McMillan's privileges were suspended on September 18, 1975, by Ernest Webb, the chief executive officer of the hospital. Webb sent a letter to McMillan's home informing him that Webb had summarily suspended his staff privileges pursuant to the provisions of article VII, section 2, of the medical staff bylaws. McMillan was out of the state taking board certification examinations at the time and did not receive the notice until September 29, 1975. The letter contained notification that McMillan was entitled to request a hearing by the executive committee of the medical staff within ten days of receipt of the notice.

Upon McMillan's request for a hearing, he was sent a letter notifying him that a hearing was set for October 9, 1975. The letter also notified him that the reason for the suspension was his disruptive behavior. ² At McMillan's request the hearing date was postponed to November 5, 6 and 7, 1975. The hearing was held before an ad hoc committee. Two of the three members of that committee and the hearing officer were not affiliated with the hospital. The remaining committee member was a doctor on the medical staff. Both parties were represented by counsel. Witnesses were sworn and McMillan had an opportunity to cross-examine the hospital's witnesses and to present witnesses in his own behalf.

At the hearing, the hospital made no claim that McMillan's suspension was related to medical incompetence. Instead, the hospital summarily suspended McMillan on the ground that his longstanding attitude and actions were continually disruptive of hospital operations, and that this disruption resulted in a diminished quality of overall patient care.

The charge of disruptiveness was based on a series of problems and incidents occurring from 1973 through 1975 between McMillan and the nursing staff, other staff physicians, a nurse anesthetist, and the relatives of several patients. The evidence presented at the hearing tended to establish that McMillan had a disruptive influence. McMillan himself acknowledged that he knew he had an abrasive effect on some people at the hospital. Webb and Dr. Ivy, the chief of staff, testified that because of the cooperation necessary among members of an operating room staff, disruptive activities such as these were not in the best interests of patient care. This conclusion was corroborated by other physicians who testified at the hearings. However, there was no claim by the hospital, nor was there any evidence given to support a claim, that McMillan's activities or conduct resulted in any immediate threat to a particular patient.

The hospital maintained that there was an immediate need to remove McMillan's staff privileges because it did not want him to return to the hospital after his absence in September 1975. Webb testified that things had gone well while McMillan was gone. He was concerned that operating room procedures would become materially worse than they were before McMillan left if the procedure outlined in article VII section 1(a), of the bylaws was used, and McMillan was working in the operating room while the committee investigations were going on. ³ The chief of staff and the chief of surgery agreed with this assessment.

On November 14, 1975, the hearing committee unanimously upheld the suspension. McMillan appealed this decision to the Board of Trustees, which "affirmed the decision of the Hearing Committee in all respects" on June 10, 1976.

McMillan then filed a complaint in superior court, claiming that the action of the hospital in summarily suspending his privileges was a breach of contract (meaning a breach of the medical staff bylaws) and a violation of his procedural and substantive due process rights. He sought reinstatement and damages for both the breach of contract and the due process violations.

Upon stipulation of the parties (stipulation of June 3, 1977), it was agreed that the hearing before the superior court would be treated as an appeal from an administrative agency pursuant to former Appellate Rule 45. The questions for review were stipulated to be:

(1) whether the defendant (hospital) breached any applicable contract by its conduct alleged in the complaint and

(2) whether the defendant's conduct was arbitrary, capricious or unreasonable, or in violation of the principles of procedural due process.

If the court determined that McMillan was entitled to damages, the amount of damages would be decided at a jury trial "at which both parties (would be) entitled to present relevant evidence not limited to the record." ⁴ On May 17, 1978, the late Judge Kalamarides issued his memorandum of decision. He noted that McMillan's suspension hearing must conform to due process standards, and held that McMillan had been denied due process because the bias of the doctor who was one of the committee members had denied him a hearing before an impartial tribunal. On that basis, the superior court remanded McMillan's dismissal to the hospital for another hearing pursuant to the bylaws.

With respect to the contract issue, the superior court held that "the fundamental relationship existing between the hospital and its staff (was) one of contract." However, it held that the contract had not been breached by summary suspension. It concluded that the choice of a pre- or post-suspension hearing involved a factual determination by the administration of the hospital concerning "the best interest of patient care," and it declined "to set standards for situations in which pre- or post-suspension hearing should be the appropriate proceedings." On remand, the court left it up to the hospital to decide whether to hold the hearing in accordance with the pre- or post-suspension provisions.

Pursuant to the superior court's order, the second post-suspension hearing was held on September 6 and 7, 1978. The three members of the hearing committee and the hearing officer were all new, and none were connected with the hospital. McMillan was again given the opportunity for an evidentiary hearing with representation of counsel. The transcript of the first hearing was introduced into evidence in the second hearing. There were also two days of live testimony.

On September 12, 1978, the second committee unanimously upheld the summary suspension of McMillan's staff privileges. This decision was appealed to the Board of Trustees, which concluded on March 22, 1979, that the suspension was proper because the situation created by McMillan's disruptive behavior warranted summary action in the best interests of patient care.

After this decision, the hospital made a motion...