Legal risk management in healthcare
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As healthcare specialists, our lawyers regularly receive requests from clients for advice on various issues or legal process support services.
In this article we will discuss legal risk management.
Our following publication will be devoted to another popular questions regarding business scaling.
Issues of concern and possible solutions
Regardless of the scale and consistency of the medical business, every business owner is interested in minimizing their liability. This issue is of particularly importance given the fact that people’s lives and health are at stake here, so sanctions can be severe.
Our experience leads us to conclude that the key problems usually arise when interacting with:
Client conflicts are the most common form of legal risks in the medical business, which can result in financial and reputational losses. And doctors, as well as hospital management team can, in some situations, be even criminally prosecuted.
Problems of this kind are usually caused by:
- Medical error;
- Poor quality of health services.
To minimize the negative effects of such situations, it is necessary to:
- Conclude a Medical Service Agreement;
- Obtain all necessary patient’s consents;
- Act in accordance with the protocols of medical care approved for a particular condition or disease.
Competitor conflicts are a common situation that can be caused by a number of infringements:
- Copying the trademark, name, advertising materials, etc.;
- Comparative advertising, defamation, malicious dissemination of false information;
- Acquisition, use, disclosure or inducement of trade secrets disclosure.
These problems can be avoided by following fair business practices and:
- Properly checking and registering trademarks, conducting a comprehensive audit of advertising materials, and obtaining appropriate guarantees from advertising producers;
- Checking databases or other information received from competitors to ensure that it is not a trade secret, and that the person providing you with the information is not restricted from using it.
We have seen many cases of health facilities using information on the lack of proper license, facilities and equipment or staff competence to hinder their competitors’ business.
In most cases, these actions cannot be qualified as illegal (provided they are true), and therefore the only way to avoid adverse consequences is to duly bring all license documentation in line with the law.
Involvement of regulatory authorities may be requested by clients or competitors or for the purpose of scheduled or unscheduled inspections.
The most common inspection is carried out by the Health Ministry of Ukraine. It usually has a complex character: inspectors check the documents and information submitted during the licencing procedure, as well as all amendments.
Related article: Individual doctor’s license
To successfully pass the inspection, ensure that:
- the information presented coincides with actual information;
- all reports and statistical data forms, registers and so on are properly drafted and kept.
Inspections can also be carried out by:
- State Service of Ukraine on Food Safety and Consumer Protection;
- State Service of Ukraine on Medicines and Drugs Control;
- Antimonopoly Committee of Ukraine;
- Other authorities.
The risk minimization plan based on the inspection results will vary depending on the authority to carry out the inspection.
The healthcare sector is quite regulated that, on the one hand, has favorable implications and, on the other hand, gives rise to various potential risks.
The primary sources of legal risks are conflicts with patients and competitors, as well as inspections carried out by regulatory authorities. The list of problematic situations is not meant to be exhaustive, and the degree of risk should be assessed on a case-by-case basis.
In order to offset risks, it is necessary to:
- Properly document relationships with patients and obtain all necessary consents;
- Ensure compliance with medical protocols of treatment, develop inner policies and procedures;
- Develop and ensure that all health records are maintained in accordance with the competencies and level of healthcare delivery;
- Duly notify the licensing authority of all changes in the license;
- Follow fair business practices when interacting with competitors.
Related article: What steps are to be taken to start private medical practice?
In the following article, we will discuss scaling and financing options for health business. The topic will be of particular interest to those who want to develop a network of healthcare institutions, including opening a franchise, as well as to attract third party investment.