Mateo-Woodburn v. Fresno Community Hospital

Brief Fact Summary. A hospital’s system of regulating anesthesiologists was challenged as violating the rights of the doctor.

Synopsis of Rule of Law. A hospital may have an exclusive arrangement with one or more doctors to regulate departmental staffing.

Facts. Before 1985, Fresno Community Hospital (Defendant) had an “open” system of staffing for its anesthesiologists.  In other words, the various doctors established their schedules among themselves.  FCH (Defendant) became concerned that the system the thirteen staff anesthesiologists were using was resulting in resources being used inefficiently and in in some cases, substandard patient care.  To reduce this problem, FCH (Defendant) signed an exclusive contract with Dr. Hass, (Defendant), giving Hass (Defendant) the right to regulate the hours of any doctor it may wish to subcontract with.  Believing that the subcontract infringed on their professional freedom, six of the anesthesiologists (Plaintiff) refused to sign the subcontract offered by Hass (Defendant).  A trial court entered a preliminary injunction against the contract but, after a hearing, dissolved the injunction and dismissed.  An appeal was taken.

Issue. May a hospital have an exclusive arrangement with one or more doctors to regulate departmental staffing?

Held. (Brown, J.)  Yes.  A hospital may have an exclusive arrangement with one or more doctors to regulate departmental staffing.  To provide a set of medical services, a hospital may decide to enter into an exclusive contract.  This decision is not subject to judicial review, so long as the decision was rationally based on a legitimate concern with providing medical services.  In this case, FCH (Defendant) was concerned with insufficient provision of anesthesia services by its unregulated anesthesiologists.  The contract with Dr. Hass, P.C. (Defendant), was a response to this legitimate concern with no basis for judicial review.  Affirmed.

Discussion. Sudden increases in costs are a major issue in medicine today.  Many believe that contracting services is an answer to this problem.  However, others believe this as anticompetitive and therefore, antithetical to minimizing costs.