Court Opinion

ID: 9533256
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:29:55.424776+00
Date Added: 2024-06-11T13:28:58.996449
License: Public Domain

RATLIFF, Judge,
concurring.
I concur in the result reached by the majority in this case. In my view, the record amply supports the hospital’s termination of Dr. Kiracofe’s hospital privileges. Upon the facts of this case, the actions of the hospital clearly were not arbitrary, capricious, or unreasonable. Good reason for the termination of hospital privileges clearly was shown. Further, Dr. Kiracofe was afforded sufficient due process rights by way of a hearing before the Executive Committee, the Ad Hoc Committee, and the Appellate Review Committee. Therefore, the termination of hospital privileges here was done fairly and legally. However, I find some of the statements made by the majority to be troublesome and disturbing to the conscience. Because of the possible impact of the majority opinion upon future cases, I feel compelled to state my reservations and to indicate what I believe to be a better rule for such cases.
I agree with the majority that Dr. Kira-cofe had no Fourteenth Amendment due process rights because of the lack of any governmental involvement in the action taken by a private hospital. Our decision in Renforth v. Fayette Memorial Hospital Association, Inc., (1978) 178 Ind.App. 475, 383 N.E.2d 368, trans. denied (1979), cert. denied 444 U.S. 930, 100 S.Ct. 273, 62 L.Ed.2d 187, establishes this point. However, for reasons which I shall develop, the fact that a physician has no due process rights under the Fourteenth Amendment to the Constitution of the United States applicable to the decisions of a private hospital in its action denying or suspending his hospital privileges does not necessarily mean the physician has no rights in the nature of due process in such situations. In fact, it is significant that in Renforth, the physician was afforded such rights to the extent *1142that he was granted hearings and opportunities to make his position known. Again, in Yarnell v. Sisters of St. Francis Health Services, Inc., (1983) Ind.App., 446 N.E.2d 359, this court observed that “the [h]ospital in this instance went further than what was required by its bylaws to afford appellant due process.” 446 N.E.2d at 363.
It appears to me that the majority here and this court in Renforth are following the rule that granting or denying physicians hospital privileges by private hospitals is discretionary with the governing authority of that hospital. This rule finds support in several decisions. See e.g., Moore v. Andalusia Hospital, Inc., (1969) 284 Ala. 259, 224 So.2d 617; Monyek v. Parkway General Hospital, Inc., (1973) Fla.App., 273 So.2d 430; Bello v. South Shore Hospital, (1981) 384 Mass. 770, 429 N.E.2d 1011; Cowan v. Gibson, (1965) Mo., 392 S.W.2d 307; Annot., 37 A.L.R.3d 645, 659-61 (1971). Such rule has been said to be the general rule. Cowan.
On the other hand, it has been held that a private hospital’s action in granting or denying medical staff privileges is not completely discretionary, but is subject to some judicial control. See e.g., Greisman v. Newcomb Hospital, (1963) 40 N.J. 389, 192 A.2d 817, perhaps the leading case in this area, and Reiswig v. St. Joseph’s Hospital & Medical Center, (1981) 130 Ariz. 164, 634 P.2d 976; Garrow v. Elizabeth General Hospital & Dispensary, (1979) 79 N.J. 549, 401 A.2d 533; Guerrero v. Burlington County Memorial Hospital, (1976) 70 N.J. 344, 360 A.2d 334; Davidson v. Youngstown Hospital Association, (1969) 19 Ohio App.2d 246, 250 N.E.2d. 892; Annot., 37 A.L.R.3d at 661-66. These cases point out that the so-called “private hospitals” are private only in the sense that they are not governmental entities, but that, in reality, such hospitals are at least quasi-public institutions. In making that distinction, those courts have focused upon the facts that such hospitals often receive public funds, patient’s bills are paid by Medicare and other public supported programs, the hospitals receive tax exemptions, and the overriding public interest in the health services industry. And, particularly where, as here, the hospital is the only hospital in the community, its economic impact is great, and the denial of hospital privileges, in many cases, is tantamount to denying a physician the opportunity to practice his or her chosen profession. These considerations were best stated by the New Jersey Supreme Court in Greisman, where it said of such hospitals:
“They are private in the sense that they are nongovernmental but they are hardly private in other senses. Newcomb is a nonprofit organization dedicated by its certificate of incorporation to the vital public use of serving the sick and injured, its funds are in good measure received from public sources and through public solicitation, and its tax benefits are received because of its nonprofit and nonprivate aspects.... It constitutes a virtual monopoly in the area in which it functions and it is in no position to claim immunity from public supervision and control because of its allegedly private nature. Indeed, in the development of the law, activities much less public than the hospital activities of Newcomb, have commonly been subjected to judicial (as well as legislative) supervision and control to the extent necessary to satisfy the felt needs of the times. [Citations omitted.]”
40 N.J. at 396, 192 A.2d at 821.
The New Jersey Supreme Court in Greis-man went on to say that the power to select a medical staff is a fiduciary power to be exercised reasonably and for the public good. The court observed further:
“The Newcomb Hospital is the only hospital in the Vineland metropolitan area and it is publicly dedicated, primarily to the care of the sick and injured of Vineland and its vicinity and, thereafter to the care of such other persons as may be accommodated. Doctors need hospital facilities and a physician practicing in the metropolitan Vineland area will understandably seek them at the Newcomb Hospital. Furthermore, every patient of his will want the Newcomb Hospital fa*1143cilities to be readily available. It hardly suffices to say that the patient could enter the hospital under the care of a member of the existing staff, for his personal physician would have no opportunity of participating in his treatment; nor does it suffice to say that there are other hospitals outside the metropolitan Vineland area, for they may be too distant or unsuitable to his needs and desires. All this indicates very pointedly that, while the managing officials may have discretionary powers in the selection of the medical staff, those powers are deeply imbedded in public aspects, and are rightly viewed, for policy reasons entirely comparable to those expressed in Falcone [v. Middlesex Co. Medical Soc., (1961) 34 N.J. 582, 170 A.2d 791] as fiduciary powers to be exercised reasonably and for the public good.
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Hospital officials are properly vested with large measures of managing discretion and to the extent that they exert their efforts toward the elevation of hospital standards and higher medical care, they will receive broad judicial support. But they must never lose sight of the fact that the hospitals are operated not for private ends but for the benefit of the public, and that their existence is for the purpose of faithfully furnishing facilities to the members of the medical profession in aid of their service to the public. They must recognize that their powers, particularly those relating to the selection of staff members, are powers in trust which are always to be dealt with as such. While reasonable and constructive exercises of judgment should be honored, courts would indeed be remiss if they declined to intervene where, as here, the powers were invoked at the threshold to preclude an application for staff membership, not because of any lack of individual merit, but for a reason unrelated to sound hospital standards and not in furtherance of the common good.” 1
40 N.J. at 402-04, 192 A.2d at 824-25.
All of the facts alluded to in Greisman are present here. Reid Memorial Hospital is the only hospital in the community; it receives public funds; it has a monopoly in its area; it is tax-exempt; denial of staff privileges would have a devastating economic impact upon a physician in the Richmond area and would interfere seriously with his right to practice his profession in that community.
Other decisions have made similar observations:
“A non-profit hospital serving the public generally is a quasi-public institution whose obligation to serve the public is the linchpin of its public trust and the fiduciary relationship which arises out of that trust.
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When a hospital’s board of trustees or directors is in the process of determining whether a doctor should be admitted to its staff, the hospital’s public trust is directly involved in view of the public’s interest in the quality and availability of medical service. The board, of course, has an interest in preserving its autonomy and in maintaining control over the quality of its staff. Additionally, doctors, particularly surgeons, have a substantial interest in favorable responses to their applications for staff membership, for their ability to pursue their profession may depend on the availability of necessary hospital facilities. [Citations omitted.]”
Garrow, 79 N.J. at 557, 401 A.2d at 537.
“Fundamental fairness dictates that the hospital apprise the physician of the specific charges and that the applicant be afforded the opportunity to appear and present witnesses and material in support of his position and to contradict or explain the bases asserted for the proposed denial. Such hearings in addition *1144to affording the doctor an opportunity to respond to charges enable a hospital to make ‘an intelligent and reasonable judgment in good faith upon all the facts presented. [Citations omitted.]’ ”
Id. at 564, 401 A.2d at 541.
The Garrow court also determined that the physician-applicant was entitled to counsel at the hearing. Further, the court asserted that the board’s findings and conclusions will not be upheld if arbitrary and capricious. “Its conclusions must be founded on reasonable and sensible grounds.” Id. at 565, 401 A.2d at 541. Garrow declared that “QJudicial review of the hospital board’s action should properly focus on the reasonableness of the action taken in relation to the several interests of the public, the applicant, and the hospital.” Id.
The majority here declares that a hospital can exclude a physician from its staff without being subject to a judicial review. Majority opinion at 1139. Obviously, this is following the discretionary rule. The majority then states:
“When a hospital is determining whether to reappoint a physician to its medical staff, the decision is subject to the limited judicial review of whether the hospital administration adhered to the procedures contained in the bylaws. Where the hospital follows the procedures in its bylaws, any decision reached by the hospital board shall not be subject to judicial review. [Yarnell].”
Majority opinion at 1139.
The trouble with the above quoted language and the language in Yarnell upon which it is based is that no concern is given to the reasonableness of the bylaws or the reasons for the denial of reappointment. Thus, so long as the hospital board followed the procedures specified in its bylaws it could terminate a physician’s staff privileges for reasons having no connection with the interests of the public, the applicant, and the hospital, and which bore no relation whatever to the public good. Such a rule should not prevail.
I recognize that this court in Renforth rejected the argument that a private hospital was, nevertheless, a public institution. In my judgment that rejection was wrong. We should re-examine our position in the light of the realities of the situation and the factors focused upon in Greisman and Garrow, and reject our myopic view of the “private” character of the áo-called “private hospital,” and our blind adherence to the discretionary rule.
Therefore, in my view, if a private hospital is considering suspension or termination of hospital privileges, or denial thereof, to a duly licensed physician practicing within the area served by that hospital, especially where, as here, it is the only hospital reasonably available, that physician should be apprised of the reasons for the contemplated suspension, termination, or denial, and be granted a hearing at which the physician may present testimony or material in support of his position, and at which he is entitled to the benefit of counsel. This hearing need not be formal, but sufficient reasons must be developed for the board’s action. If the hospital governing authority acts in a manner which is not arbitrary, capricious, or unreasonable, and its conclusions are founded on reasonable and sensible grounds consistent with the best interests of the public, the physician, and the hospital, and in keeping with the hospital’s public trust, the hospital’s action will not be disturbed. The right of judicial review must be extended to the physician, however, in order that the actions of the hospital board be kept within allowable bounds.
Here, the actions of the hospital board substantially met the requirements I would impose, and I concur in the decision.

. Greisman involved a hospital bylaw which would admit only persons holding the degree of Doctor of Medicine to the hospital medical staff, thus effectively denying hospital privileges to doctors of osteopathy even though they held unlimited licenses to practice medicine.