Healthcare Class Actions: Bad Doctor or Bad System? - By: Ches Crosbie

Two massive pathology scandals have injured thousands and brought national attention, for the last two years, to healthcare malpractice in Atlantic Canada.

One malpractice scandal involved the work of a single pathologist at a regional hospital serving a catchment of 50,000 people in Miramichi, New Brunswick. The other malpractice scandal involved the work of an entire pathology department at a university affiliated provincial reference laboratory in St. John's, Newfoundland and Labrador, serving a provincial population of 500,000, and has been called the greatest healthcare scandal in Canada since tainted blood. Each scandal provoked class proceedings and commissions of inquiry.

Who should a plaintiff sue as party defendant: hospital authority, doctor, or both? The answer may depend on whether the case is primarily a "bad doctor" case or a case of the whole system gone bad. Hospitals are creatures of systems and obviously the "bad doctor" and "bad system" models exist on a spectrum.

A comparison of the Miramichi and Eastern Health cases will clarify the "bad doctor" and "bad system" models.

In 1993 the New Brunswick government decided to close down the two community hospitals servicing the Miramichi area, and build a new regional hospital at Miramichi. A CEO was hired and tasked with recruitment of medical staff. He placed advertisements and received a sole application for a staff position in surgical pathology, that of Dr. Menon.

The application was referred to the hospital Credentials Committee. This committee did not have a pathology peer of Dr. Menon on its membership to assist in evaluation of competency, but approved his application for privileges for a one year contract. The hospital CEO ignored the probationary restriction and offered Dr. Menon a position without restriction as to term. The appointment did not go through either the Medical Advisory Committee or the Board of Directors, as required by by-laws. Chronic problems ensued with turnaround time, absenteeism, resistance to quality assurance, minor and major errors in diagnosis, and deficient reports. College action in February 2007 finally terminated Dr. Menon's conduct of surgical pathology at Miramichi after a tenure of 12 years.

Government referred out 23,998 cases performed by Dr. Menon during his tenure. 22% of the total reviewed had a partial or complete change in findings. 370 cases had a complete change in findings, of which 101 involved cancer. About 17,000 patients had their specimens retested and are potential claimants for mental distress damages.

The Miramichi case involves the conduct of surgical pathology by a lone pathologist. By contrast, the Eastern Health case involves the conduct of a sensitive and sophisticated immunohistochemical test by the entire academic pathology staff of a provincial reference laboratory affiliated with a university medical school. Testing of hormone receptors in breast cancer specimens is done to determine whether cell nuclei stain positive for these receptors; if so drugs such as tamoxifen can be given to cut the cancer cells off from needed growth factors. Tamoxifen reduces the risk of 10 year recurrence by 50% (odds ratio of 2.0 or double the risk without tamoxifen), other drugs by a greater degree.

Hormone receptor testing (ER/PR testing) began at Eastern Health in 1997 and lamentably, there was no quality assurance in place and the testing was set up for failure from the start. ER/PR testing was shut down as of August 2005. The ultimate false negative rate after retesting 1,088 specimens at Mount Sinai is over 49%.

The action against Eastern Health was certified a class action in an oral judgment delivered at close of hearings in May 2007 and revelations contained in answers to interrogatories precipitated the public inquiry.

The systemic nature of the problems lying at the root of the testing failures has been described by Commissioner Cameron in her report:

"The high rate of conversions was caused by the lack of quality assurance processes in the IHC laboratory.... The procedures and protocols within Eastern Health for ER/PR testing during the period from 1997 to 2005 were so deficient as to be practically non-existent."

Indeed world renowned expert Dr. Dabbs characterized the situation as a "recipe for disaster" and testified that the lab would have been shut down if inspected to standards prevailing in the United States.

The class proceeding against Eastern Health is set for mediation with Hon. George Adams, Q.C. at the end of October 2009. The broad class membership is 3,007 patients.

The central theme identified by Commissioner Cameron in the Eastern Health case, namely lack of quality assurance, is the central theme in the Miramichi debacle as well:

"It was self evident from the beginning that the matter of quality assurance and quality control was central to the problem under investigation."

Commissioner Creaghan's prescription for future change is equally applicable to Eastern Health:

"In the future, the laboratory ... must be operated under a culture of patient safety, rather than a policy of risk management in a situation where a problem arises."

A plaintiff desiring certification must persuade the case management judge that the unifying theme of the case is systemic error, not individual error. The failure of a whole department lends itself to the allegation of corporate and systemic failure. The plaintiff in the Eastern Health case judged that it was not necessary to name individual doctors, and indeed doing so lends ammunition to the case against certification owing to the potential for detracting from corporate and systemic failures. The defendant Eastern Health did not take third party proceedings against the doctors responsible, and the reason may be that to sue so many of its own employees would be disruptive to the corporation and to patient care, and might well cause a crisis of physician retention and recruitment in the province. Whether in the background, negotiations are occurring between the hospital authority and the physician defence organization, has not been publicly disclosed.

In a case such as the Miramichi case, the decision as to who to sue may be less clear. Systemic failures occurred no doubt, but the principal bad actor in the drama is a single doctor. The certification hearing has not yet taken place.

Likely common issues might be as follows: (a) did the First Defendant owe a duty to credential competent medical staff? (b) did the First Defendant breach that duty, and if so, when and how? (c) did the Second Defendant owe a duty of competence? (d) did the Second Defendant breach that duty, and if so, when and how?

There is an obvious thread of identity or commonality to the issues thus framed - competency and the duties of doctors to maintain it and of hospital authorities to require it. The plaintiff case would be that the doctor was not competent, and would not have caused the extensive damage he did cause if he had not been granted privileges.

In the Miramichi case the allegation is that the doctor was not competent to practice the spectrum of surgical pathology, and the hospital was negligent to credential him. The further allegation is not that the doctor was negligent in relation to each mistaken outcome, but that he owed directly to patients a duty of competency - a duty to possess the skill and knowledge requisite to surgical pathology - and the details of the negligence involved in any particular mistaken diagnosis - the details of how and in what respect the standard of care in making the diagnosis was breached - are irrelevant. This position has a certain logic and perhaps even elegance, and time will tell how it fares.

The Miramichi plaintiff initially elected to sue only the hospital authority, and successfully resisted a motion by the hospital defendant for an order to add Dr. Menon as a defendant. Soon thereafter, the plaintiff decided to add Dr. Menon as a defendant. Why?

Although pursuit of the hospital authority as sole defendant may help to preserve the focus and commonality of common issues, it can also create complications in the background which militate against possible settlement. Hospital insurers and defence organizations may have settled relationships and practices with the Canadian Medical Protective Association, the physician defence organization, which may be impeded when the principal bad actor is left out of the proceedings. In other words, framing the claim in a manner calculated to maximize chances of certification may undermine the practices which the physician and hospital defence organizations have developed in mutual working relationship to handle settlement in bad doctor cases.

The suggested practice point for plaintiffs in bad doctor cases is: open good lines of communication with defence counsel and explore the background issues which may bear on settlement before making a final decision on who the party defendants ought to be, considered in the setting of common issues likely to pass scrutiny at certification. There may be a fine balance between maximizing the prospect of certification and maximizing the prospect of settlement; access to justice depends on striking the right balance.

Copyright (c) 2009 Ches Crosbie

About the Author

Chesley F. Crosbie, Q.C. represents injured people in the fields of accident, malpractice, and class action law. For legal resources and commentary on current issues please visit his website at http://www.chescrosbie.com .

Article Directory Source: http://www.articlerich.com/profile/Ches-Crosbie/61552

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