In another assertion that hospitals can employ physicians, a state supreme court earlier this month shot down a physician's argument that his hospital contract wasn't enforceable because of century-old laws.
The Kansas Supreme Court ruled 8-0 that Kansas law prohibiting the "corporate practice of medicine" doesn't prevent a licensed hospital from employing physicians. It ordered the physician, Marlon Weiss, M.D., to pay $50,000 to his former employer, 637-bed St. Francis Regional Medical Center in Wichita, Kan., for breaching his contract in 1991.
In the second year of a five-year contract with a group practice owned by St. Francis, Dr. Weiss moved out of state to take a position elsewhere. St. Francis sued.
"This is one of a growing number of examples where similar doctrines are being used in battles concerning contract enforcement," said Douglas Mancino, an attorney in the Los Angeles office of McDermott, Will & Emery, who's an expert in this area.
Laws forbidding corporations from practicing medicine arose late in the last century because fears were emerging that industries might treat patients with only their own interests in mind. About 20 states have statutes or common law barring the corporate practice of medicine, Mr. Mancino said.
Experts argue that hospitals will have confrontations with such laws more often as integrated delivery systems develop.
In its March 4 decision in St. Francis v. Weiss, the Kansas Supreme Court wrote that, "Without physicians, nurses and medical technicians, a hospital cannot achieve that for which it is created and licensed-to treat the sick and injured. To conclude that a hospital must do so without employing physicians is not only illogical but ignores reality."
In upholding St. Francis' right to employ physicians, the court concurred with an earlier ruling by Sedgwick County (Kan.) District Court.
"The significance of the case is that the court recognized the healthcare world as it is," said Samuel Henderson, St. Francis' general counsel. "As a result, maybe other states will do away with their legal fictions."