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Ethical and Malpractice Issues in Hospital Practice

Kenneth S. Pope

ABSTRACT: Ethical and malpractice issues arising in hospital practice are reviewed. Topics include (a) preparation and authorization to carry out clinical responsibilities, (b) personnel procedures, (c) financial and political forces influencing hospital policies, (d) billing procedures, (e) clinical procedures for responding to patients' needs, (f) confidentiality, (g) discrimination, (h) internship and training issues, (i) sexual abuse of patients, and (j) staff conflicts influencing patient care.

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For diverse reasons an increasing number of psychologists are practicing, at least part-time, within hospital settings. For some, hospital work is the most challenging and rewarding professional activity. For others, it is a clinical necessity: Their patients must occasionally be hospitalized, and unless there is continuity of care (i.e., the psychologist continues as primary therapist during hospitalization) the patient may be harmed. For still others, the hospital setting offers a unique opportunity to collaborate closely with a variety of other health practitioners. And for others, third-party payment sources, such as insurance companies and preferred provider organizations (PPOs), require hospital privileges as a prerequisite for reimbursement or membership. Blue Cross of California's Prudent Buyer Plan, for instance, only contracts with providers who have privileges at participating hospitals.

As psychologists become an increasingly vital and prominent component of hospitals' leadership, administration, treatment, and professional resources, the need for the profession to affirm—through behavior as well as words—its continuing commitment to the highest standards of care becomes paramount. The purpose of this article is to highlight some ethical and malpractice issues facing psychologists who practice in hospitals. The diversity of issues noted here may enable clinicians and administrators to avoid some major pitfalls.

A fundamental question confronting psychologists as we enter a hospital environment is: Can we do our jobs in this setting? One aspect of the answer to this question involves our own competence. Do our own individual education, training, and experience adequately prepare us to carry out our clinical responsibilities with this particular patient population? But an equally important aspect of the answer involves the nature of the setting itself. Does the hospital authorize, allow, and enable us as psychologists to assume the professional roles and to carry out the professional tasks that are necessary to fulfill our clinical responsibilities and ensure the welfare of our patients?

In some instances, policies and procedures may prevent us from functioning even in limited roles long identified with psychology. For example, Michele Licht, one of the plaintiff attorneys representing the psychologists in the CAPP v. Rank case, encountered an astounding appeals court ruling in that case (later superseded by the California Supreme Court's granting of review) that only physicians could diagnose and treat mental disorders with organic bases, thus eliminating the role of the neuropsychologist (Licht & Pope, 1989; see also Caudill & Pope, 1995).

Second, do we have justifiable confidence in the hospital's hiring procedures and supervision of its staff? Do administrators carefully and systematically check references, verify licenses, degrees, and internships, explore employment history, and otherwise ensure that those who work at the hospital are fully qualified to do their tasks? If a clinical or nonclinical worker begins behaving in a negligent, improper, or inept manner, are there adequate procedures to identify and remedy the problem and to ensure that patients do not suffer? In one prominent hospital, an inebriated former patient returned to shout wild accusations at a senior clinician with considerable supervisory responsibilities. The administrative and clinical staff quickly dismissed her charges—which included a variety of sexual and nonsexual dual relationships with patients—as clearly too bizarre to be credible, a function of the woman's hostility and pathology, and a slur on one of the hospital's most respected employees. However, the hospital was eventually forced to abandon its position during the course of a malpractice suit when other patients reported that they had complained more quietly about the therapist but that their complaints had not been investigated; when the clinician acknowledged the accuracy of documentation (credit card receipts) showing that his "clinical work" included visits to a local motel; when the employment record he submitted on his application form was found to have been fabricated; when a letter was found in the personnel department offering him the job before he had filled out the application form; and when it was discovered that he had spent both penitentiary and jail time during past decades for charges including rape and aggravated assault of women and child abuse involving young boys and girls. In another hospital, a clinician was granted admitting privileges and enjoyed a good reputation among his colleagues. Later it was discovered that not only was he not licensed, he had never earned an advanced degree. Psychologists practicing in hospitals must ensure that those hospitals avoid gross negligence in hiring and monitoring employees, and psychologists who hold administrative responsibilities in hospitals must be especially careful to avoid such negligence.

Responsible oversight has been much more difficult (and perhaps more rare) as hospitals have come to rely more on fee-for-service clinicians (e.g., independent contractors) to supplement or supplant clinical employees. Independent contractors may spend only a few irregularly scheduled hours per week at the hospital. The lack of sustained contact with administrative and clinical employees hinders careful direct and indirect supervision. Problems with clinicians' alcohol and drug abuse may be particularly difficult but important to detect. Pope, Tabachnick, and Keith-Spiegal (1987; see also Pope & Vasquez, 1998), for example, found that 5.9% of psychologists acknowledged conducting therapy sessions while under the influence of alcohol. The same survey found that 59.6% acknowledged working when too distressed to be effective.

A key issue is: Who creates and implements the process for credentials review, supervision, and so on? Unfortunately, nonpsychologists with virtually no awareness or understanding of psychological techniques, ethics, or standards of care may be charged with both the administrative and clinical supervision of psychologists. Thus an administrative physician who has never conducted psychotherapy may clinically supervise psychologists hired to provide psychotherapy, and a psychiatrist without appropriate training may supervise the administration, scoring, and interpretation of psychological and neuropsychological tests conducted by psychology interns.

Third, psychologists must be aware of the hard realities and the ethical and legal implications of the financial and political forces that shape a hospital's decisions regarding admission, resource allocation, length of stay, follow-up upon discharge, likelihood for readmission, and so on. Such forces have the potential to improve and reform our health care system or to corrupt and erode it.

The concept of a prospective payment system (PPS) based on diagnosis-related groups (DRGs) has intensified the pressure on clinicians who believe that funding procedures are in direct conflict with patient welfare. Psychologists must struggle with cruel ethical dilemmas if, for example, a patient with a particular diagnosis needs continuing hospitalization but a funding agency states that the patient has already stayed the "appropriate" number of days for someone with that diagnosis.

The president of the American Psychiatric Association has acknowledged the extreme degree to which financial forces have corrupted the ethics of his dual professions, medicine and psychiatry (Fink, 1989). He documented the ways in which "the ethics of the professions of medicine and psychiatry are inexplicably bound up with profit and loss statements and with money as the bottom line [and that current ethical codes] would make Hippocrates roll over in his grave" (p. 1100). These results may reflect the more general ways in which financial considerations have influenced public health (see, e.g., Garrett, 2000).

Fourth, hospitals understandably attempt to maximize their revenues. This may involve creative and occasionally questionable billing procedures (see, e.g., Kovacs,1987; Pope & Bajt, 1988; Pope & Vasquez, 1998). Psychologists need to ensure that their services are being billed properly and that they are not, in actuality or even in appearance, colluding in a process that is unethical or illegal. In one hospital, for example, a practitioner discovered that the billing department was changing the primary, secondary, and tertiary diagnoses of DSM Axes I and II cases so that the patient would qualify, though not ethically nor legally, for more favorable funding coverage. The changes occurred without the knowledge of the treating clinicians (Michael F. Enright, personal communication). As another example, a university medical center agreed to return more than one million dollars because of false or improper documentation of psychotherapy and other services (Kusserow, 1988).

Hospitals may also provide incentives and penalties designed to maximize revenues. Although not generally illegal, such contingencies may create an actual or apparent conflict of interest when clinicians choose certain treatment options that generate significantly more money for themselves and the organization but not best serve the clinical interests of their patients.

As one example, hospitals may reward therapists for maintaining a high census. A hospital may require that psychologists and other clinicians holding full privileges hospitalize at least 10 patients per year. A disinterested observer might wonder if a psychologist's decisions to hospitalize patients near the end of each annual period might be influenced to some degree by such a quota. The American Psychiatric Association's president cited more blatant practices within his profession, including

Payments to increase the length of stay of patients in hospitals . . . Fifty dollars for each admission. Fifty dollars if you talk a patient out of leaving the hospital. Fifty dollars if you interfere with a patient's leaving against medical advice. (Fink, 1989, p. 1101)

In addition, hospitals may subtly or blatantly encourage their clinical staff to hospitalize patients for as long as their insurance holds out, and then to "dump" them either through declaring them cured or by perfunctory referral to public agencies or self-help groups. The almost uncanny consensus among alcohol, cocaine, and other drug treatment programs of virtually every theoretical orientation and in every state that the ideal length of inpatient treatment is exactly 14, 21, or 28 days may have less to do with outcome research and clinical judgment than with the coverage provided by third-party payment sources.

Does the hospital attempt to maximize revenues by portraying the disorders it treats and the services it provides in a less than honest, accurate, and other than ethical manner? For example, would the hospital consider an advertising campaign in which characteristics common to adolescence are presented as pathognomonic symptoms that a teenager is in urgent need of hospitalization (with a heavy implication that if a parent does not call right now, the teenager may commit suicide or die of a drug overdose in the next few minutes and it will be the parent's fault)? Would the hospital advertise (without reference to the hospital's sponsorship) an "information line" or "help line" for a particular disorder in which callers are ostensibly to be provided education about the problem but are in actuality recruited into the hospital's program? Similarly, would the hospital advertise a "referral line" that would create the expectation that callers could find out about the range of resources in their community but would deliver a pitch for the hospital's services instead?

Psychologists must be particularly careful to avoid rationalizing the temptation to engage in unethical or illegal behavior by claiming that "everyone does it" or by pointing to abuses by other professions, despite the apparently increased toleration of such behavior in allied fields. The president of the Association of American Medical Colleges, for example, acknowledged that the "'premed syndrome' (cheating in medical school and dishonesty during residency training) and fraud in medical practice are well known" (Petersdorf, 1989, p. 119). A study of medical students found remarkably tolerant and lenient attitudes regarding Medicare and Medicaid fraud by physicians (Keenen, Brown, Pontell, & Geis, 1985). Fink (1989) highlighted a report by the Hastings Center that found "an increased incidence of fraud and greed in psychiatric practice" (p. 1100). Such findings are discouraging and may signal a need for improving our own training programs and methods of accountability.

Fifth, does the hospital provide clear, explicit, and sensible procedures regarding clinical aspects of patient care? Are these procedures consistent with the American Psychological Association's ethical principles and specialty guidelines?

Is it clear at all times who is responsible for patient management? Are the lines of clinical responsibility sufficiently clear so that no patient's needs slip between the cracks? Is the hospital prepared to respond safely, adequately, and therapeutically when patients become suicidal or homicidal? Research has supported the commonsense notion that procedures for intake, transfers between units, and so on, can profoundly affect, in predictable and systematic ways, not only the efficiency and effectiveness of treatment but even patient safety (Levenson & Pope, 1981). Psychologists who believe that hospital procedures do not adequately protect patient welfare and who attempt to intervene on behalf of the patients may pay a steep price. In a classic article, Simon (1978) described in vivid detail a psychologist's attempts to protect his patients' safety despite the Veterans Administration's apparent efforts to punish him or force him out of the system.

Sixth, does the hospital adequately safeguard each patient's confidentiality? Confidentiality seems to present pitfalls to many psychologists. In one national study of prominent senior psychologists, the protection or disclosure of confidential patient data formed by far the most frequent basis for their intentional violation of legal or ethical standards (Pope & Bajt, 1988). In another national study, 61.9% of psychologists reported unintentional violations of confidentiality (Pope et al., 1987). Maintaining appropriate confidentiality can be particularly difficult in hospital settings.

Many patients feel betrayed when records of their hospitalization for psychological disorders become part of their general medical record at a hospital and may in turn find their way into the hands of insurance reviewers and other third parties. One women was shocked to find her treatment mentioned on the employee relations bulletin board where she worked; management and the union, eager to cut both sick leave and the costs for their health care plan, had decided to post all utilizations by the employees. The information was supplied to them by the insurance company that provided their health plan.

In other cases, hospitals may not adequately monitor who attends case conferences, and discussions of a patient's condition may be overheard inadvertently by an inappropriate audience. Who participates in treatment planning, implementation, and review may be a particularly problematic issue in small towns. In one instance, hospital administration proposed a periodic case review of current patients to be conducted by staff psychologists (Michael F. Enright, personal communication). In this town of fewer than 10,000 people, the psychologists would have known many of the patients in a variety of other (i.e., social and business) roles. The patients had not given informed consent for this review. This confidentiality issue is not easily addressed. One solution would be for the administrator to agree to hire a psychologist from another community who did not know the population served by the hospital to visit the hospital once a month to review the cases, and to ensure that patients understood the review process.

In still other instances, hospitals may not provide adequate security for patients' charts and other documents. Too often charts with patient names clearly visible to passers-by may be left unattended in public or inadequately secured areas. One prominent teaching hospital with an APA-approved internship stacked records in an unlocked public hallway for several weeks so they could be conveniently accessible during a remodeling program. Psychologists have an obligation to ensure that patients are accorded due privacy and confidentiality and that they adequately understand who will have access to information about their treatment.

Seventh, does the hospital, whether intentionally or inadvertently, engage in discrimination? Are individuals from certain racial, ethnic, or cultural groups diplomatically referred elsewhere? Is the hospital prepared to respond effectively if those who might need services speak English as a second language or perhaps do not speak English at all? Are the hospital and its services accessible to those who use wheelchairs and to other individuals with special physical needs? Discrimination on the basis of sexual orientation may be an extremely difficult but essential issue to address. One national study of clinical and counseling psychologists found that almost one fourth of the sample treated homosexuality as pathological per se (see Pope & Vasquez, 1998).

Eighth, many hospitals function as training institutions. Unfortunately, both the institution and the trainee may engage in extensive rationalization to attempt to justify fraudulently presenting therapists as having qualifications or credentials that they do not possess. Upper level graduate students may be introduced to patients and the public as "Dr._____." Similarly, interns who are prohibited by the laws of their states and by formal ethical principles from presenting themselves as psychologists because they have not yet been licensed may be presented to patients and the public in a flagrantly deceptive manner. Patients have a clear right to know whether their therapist does or does not possess a doctorate in psychology and whether the therapist is a trainee or is licensed by the state for independent practice.

Are adequate precautions taken to ensure that the treatment needs of the patients are not unduly compromised by the training needs of interns and residents? Trainees are often assigned to a hospital unit for a predetermined length of time. It is crucial that the effects upon a given patient of losing a therapist (who may have become the patient's most important relationship during a hospital stay) are carefully and sensitively taken into account during treatment planning and monitoring. Such transitions can become exceptionally destructive when a hospital and a therapist struggle, often with threats of legal action, over whether a patient and the patient's records belong to the departing therapist or to the hospital.

Ninth, unfortunately no general survey of ethical and malpractice problem areas can omit the sexual victimization of patients by therapists, which is a major basis of ethical complaints, of licensing disciplinary actions, and of costs in malpractice suits involving psychologists (Pope, 1989; Pope & Vasquez, 1998). Half of the respondents to a survey of 1,320 therapists reported assessing or treating at least one patient who had been sexually involved with a prior therapist (Pope & Vetter, 1991). Diverse research approaches have produced evidence that such involvement tends to damage patients severely; for reviews of this research, see Bates an Brodsky (1989), Gabbard (1989a), Pope (1994), Pope and Bouhoutsos (1986), Pope, Sonne & Holroyd (1993), and the section "Published Research On Therapists' Sexual Attraction To Patients & Therapist-Patient Sex." It remains a significant professional responsibility for psychologists to work toward prevention of such unethical and damaging sex abuse (Pope, 1990a; 1994; Pope, Sonne & Holroyd, 1993). Avoiding negligence in screening and monitoring applicants for staff positions is crucial. It is important that hospital administrators thoughtfully consider not only the findings that "the recidivism rate for sexual misconduct is substantial" (APA Insurance Trust, 1990, p. 3), perhaps as high as 80% (California Department of Consumer Affairs, 1990), but also the questionable and potentially harmful nature of rehabilitation techniques that have not been independently, objectively, and adequately validated (Pope, 1990a, 1994). Finally, it is worth noting that statistical analysis of the combined data from all national studies of psychologists, psychiatrists, and social workers found that there was no significant difference among mental health professions in the rates in which they engaged in sexual relationships with patients (Pope, 1994).

Finally, what is the milieu of the hospital? Even if all the policies and procedures look good on paper, how well do the people who make up the organization work together? There is no shortage of turf issues between professions, of tensions between administrators and those who work under their auspices, of conflicts between those of different theoretical orientations or basic values, of competitive struggles for power or income or recognition. Works as early as Stanton and Schwartz's (1954) The Mental Hospital: A Study in Institutional Participation in Psychiatric Illness and Treatment delineate in vivid detail the almost countless ways in which inadequately acknowledged and addressed conflicts among helpers can sabotage even the best intentioned efforts to help. The late Alan K. Malyon, one of the pioneers of strategies to work directly with hospital staff around such issues, stressed the vital and unique role psychologists can play in identifying institutional dynamics and helping staff to make beneficial changes both in those dynamics and in staff's relationship to those dynamics (personal communication). Such efforts not only increase the effectiveness of psychologists in our more traditional clinical and counseling roles but also point the way to new and creative uses of our varied skills, unique training, and rich professional heritage.


[Note: The reference section has been expanded and updated since the original publication of this article.]

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