Health Care Report: The Testing Time Bomb: Not Testing Could Mean Explosion Of Punitive Damages

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[This is the fifth of seven articles which appeared in the premier issue of Prospective Risk Management In Healthcare. It is not available online. All usual disclaimers apply.]

The Testing Time Bomb: Not Testing Could Mean Explosion Of Punitive Damages

A wait-and-see approach to finding out whether biomedical equipment will fail come Jan. 1, 2000, could create havoc for your healthcare organization, legal experts warn. Taking the easy path on the test-vs.-don't-test crossroads is "reckless" and could expose healthcare concerns to punitive damages, stressed Lori Iwan, Esq., the partner in charge of the Y2K practice at Williams & Montgomery, in Chicago.

The question of whether to test or not is an ongoing controversy in the healthcare industry, with people espousing both extremes, said Joel Ackerman, BS, MBA, executive director of the independent, nonprofit, member-supported RX2000 Solutions Institute (http://www.rx2000.org/), in Minneapolis.

Operationally, risk managers can argue for testing because in many instances manufacturers are not providing reliable information, meaning that self-testing "may be the only way to get any kind of information," said Ackerman.

"Additionally, manufacturers do not test in the same environment in which you're using it, and they may not have configured it exactly the same way you're using it," he noted. "So a real field test can get different results from a laboratory test by the manufacturer."

On the con side, some manufacturers and others theorize that healthcare organizations may do inadequate testing because they generally don't have as much information as the manufacturers about how to test, what to test or what to look for, explained Ackerman.

"Implicit in that version of events is someone is assuming you're going to send an incompetent person in to test your equipment," argued Iwan. "There are many reputable companies that can do this very effectively for you and document it. Then they take the heat if they're wrong."

Legally, some pundits say that in-house testing by a healthcare organization may reduce the liability or obligation of the manufacturer to provide the information. "Essentially, we may be saying, 'We checked it out ourselves, so we're not counting on the manufacturer,'" Ackerman said.

But others, such as Iwan, contend that a lack of testing--either in-house or outsourced--means a healthcare organization hasn't adequately prepared because they know they're not getting complete information from the manufacturers.

While suggesting that it's difficult to predict whether a healthcare organization hypothetically might be exposed to punitive damages, Sean Hanifin, Esq., of Washington, D.C.-based Ross, Dixon & Masback agreed that if a healthcare concern makes a deliberate decision not to test equipment, he too would be concerned about subsequent legal exposure.

"I really wouldn't view the Y2K situation as distinct from any other situation in which the healthcare provider is advised that there may be a problem with some piece of equipment that they are using in the process of treating or caring for patients."

RX2000's Ackerman decried the testing controversy as a "damned if you do, damned if you don't" situation. Risk managers should steer their management teams to consult legal counsel to address the issue, he advised.

-- Steve Hartsman (hartsman@ticon.net), February 19, 1999


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