Ortis vs. St. Peters, Essay Example

This paper is based on the analysis of the case of Ortis vs. St. Peter’s Hospital. The facts of the cases will be summarized in light of the question ‘What the leaders of healthcare learn from this case regarding the negotiation of exclusive contracts?’ Before analyzing this case, the background of the case needs to be clear. This case is a part of Section 1 of the Sherman Act which relates to the unlawful conspiracies, the damages among the service providers of anesthesia, the domestic hospitals to eliminate competition and entry for them to deal in exclusives contracts.

The hospital St. Peter’s Community is one of the 2 hospitals in Helena and is open to the general public and is authorized for the performance of general surgery as well. In the trial it was stipulated that the hospital enjoys an 84% share of market in the services of general surgery in Helena (Justia Law, 2015).  In the bifurcated trail by a special verdict, the defendant hospital was found by the jury as responsible and liable for the damages estimated to be $421,831 (Justia Law, 2015). The court district rejected the appeal for judgment of the hospital. This couldn’t withstand the verdict for the liability issue of a new trials. As the damages awarded to the hospital were excessive, the court district ordered the damages on a new trial. The instructions of the jury were challenged by the defendant hospital, the special verdict of the jury on liability and the post-trial motion denial.

There is an increase in the hospitals for entering into contracts which are exclusive. These exclusive contracts are for the hospital with the physicians who operates the departments. Those physicians which are not a part of the exclusive contract are not allowed to perform the services mentioned. So, these physicians are being reduced or terminated as they are not in the exclusive contracts list. The contracts which are exclusive are also negotiable. There are five major critical problems that needs to be overlooked when negotiating in these contracts (Justia Law, 2015).  The significant problems are hospital politics, termination issues, services scope and the duties after termination.

The services scope is very essential as it needs to be completely defined what services the hospital will provide. The leaders of health caring needs to be aware before negotiating such contracts and they must make sure they have defined the services scope thoroughly. This comprises of both the future and the present services that needs to be given. Another important part of the exclusive contract is compensation (Justia Law, 2015). Healthcare leaders must give complete details of the cost of services they are providing. The hospitals which are in exclusive contracts, the compensation is based on the service area of the hospital and its demographics.

A contract is breaching when one party is not able to hold their end of the bargain when the contract is in place. This type of breach of the agreement can be anticipatory and also actual. The actual breach of contract is that when one part rejects the required performance of services as agreed on the contract. Another condition is that the services are not given on the due date or are not complete (Justia Law, 2015).  The anticipatory breaches occurs when one party in advance tells that the services cannot be performed on the date due. When there is a breach of contract the only remedial measure is to pay for the damages (Pozgar, 2012).  The reason for this measure is to safeguard the effected or injured party and prevent the effected party from money loss. In the case Ortiz thought that there was a breach of contract by the hospital and that is why the district court safeguarded Ortiz which was the injured party (Pozgar, 2012).

There was reversal on liability for the verdict jury because of no grounds presented by St. Peter’s. Moreover, there was sufficient proof which supported the findings of conspiracy for the jury which was intended to injure the competition. So, the court district findings of the excessive damages were deemed reasonable and the order of the court was within discretion.

References

Pozgar, G. (2012). Legal aspects of health care administration (11th ed.). Sudbury, MA: Jones & Bartlett.

Justia Law,. (2015). Tafford E. Oltz, Plaintiff-appellant-cross-appellee, v. St. Peter’s Community Hospital, Defendant-appellee-cross-appellant, 19 F.3d 1312 (9th Cir. 1994). Retrieved 26 April 2015, from http://law.justia.com/cases/federal/appellate-courts/F3/19/1312/628256/