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Hospital management firm found liable in botched spine surgeries

Copyright © 2015 Albuquerque Journal

One of the country’s biggest hospital management firms breached its duty to prevent the risk of harm to dozens of patients of an Alamogordo hospital who were unwittingly subjected to experimental procedures to alleviate back pain, according to a new court ruling.

The opinion by U.S. Bankruptcy Judge Robert H. Jacobvitz paves the way for the former patients of Dr. Christian Schlicht to seek damages from Quorum Health Resources, which provided top executives for Gerald Champion Regional Medical Center of Alamogordo.

The plaintiffs, most of whom live in southern New Mexico, received injections of bone cement or had other back procedures they say left them debilitated and with pain, disability and in some cases, partial paralysis.

Schlicht was an anesthesiologist, not an orthopedic surgeon. He touted the procedure as a minimally invasive alternative to disc fusion that would relieve chronic back pain and “turn the clock back by decades.”

The ruling by Jacobvitz marks the first time a judge has weighed the evidence in the case.

The litigation was derailed in 2011 when the 99-bed hospital filed for bankruptcy protection, citing the volume of lawsuits filed by former patients.

It’s also believed to be the first decision in New Mexico on whether a hospital management firm, along with a hospital and doctors, owes a direct duty to patients. Quorum Health Resources had a duty to the claimants, and it breached that duty, the judge wrote in his 93-page ruling.

“Patients have an interest in receiving safe and effective healthcare from the physicians who treat them at the hospital. Hospital management companies play an active role in achieving that goal,” Jacobvitz wrote.

But his ruling appeared to limit the types of duties that a management company has to patients, compared to the duties of the hospital it manages.

Follow-up court proceedings in the 4-year-old case will determine how much, if anything, the 101 patients and their spouses named as plaintiffs might receive.

“While there is little doubt negligence occurred, the Court must focus on the role and responsibility of a hospital management company in deciding whether and to what extent Quorum should be held accountable for what happened,” the ruling says.

Quorum denied it owed any duty to patients. Its insurance companies have balked at settling the case out of court.

The company is the last remaining defendant among those sued for malpractice and negligence in the matter. The plaintiffs in 2012 entered a partial settlement of about $33 million, which included payments from the hospital, which emerged from bankruptcy in 2012.

Though bone cement is commonly used in some medical treatments, Schlicht teamed up with another hospital physician in 2007 to begin injecting the cement into patients’ spinal disc spaces.

Using the cement for that purpose was experimental, the judge found, and is not supported by medical literature.

In many patients, the injected cement has traveled or splintered, causing pressure on nerves and other complications.

Removal of the substance has been considered too dangerous for many patients to undergo.

Schlicht, who left the hospital in 2008 because he didn’t receive a bonus, has been living in Colorado.

Plaintiffs’ attorneys during an 11-day trial last fall contended that Quorum, based in Brentwood, Tenn., breached its duty to Schlicht’s patients in numerous ways during Schlicht’s two years at the hospital.

But the judge found no merit to at least six of their examples, in particular discounting the argument that the company improperly sacrificed patient safety for financial gain.

Jacobvitz found that a breach did occur when an interim hospital CEO in July 2007 failed to properly investigate a “major red flag” raised by a Texas neurosurgeon who alleged Schlicht was performing “experimental surgery.” That allegation came months before many of the plaintiffs in the case underwent the spine procedure.

“Dr. (David) Masel’s allegation that Dr. Schlicht was improperly performing ‘experimental surgery’ on patients at the Hospital was highly unusual, and an explosive accusation,” the judge said in his ruling. “The accusation was made significantly more serious by the fact that it was made by Dr. Schlicht’s proctor. A proctor was charged with assessing Schlicht’s performance based on review of his patients’ charts.”

The CEO should have had medical staff evaluate the issues and should have informed the volunteer governing board, the judge ruled.

After conducting his own review, the CEO dismissed Dr. Masel’s experimental surgery assertion as the byproduct of a business dispute between Masel and Schlicht, the judge ruled.

The CEO’s response to the allegations was “inadequate,” the ruling said, and therefore Quorum had not conformed to the standard of care in the community.

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