Lawsuit Threatens Doctors’ Procedure on Reviewing Peers

A lawsuit over a tonsillectomy that left a 5-year-old boy with permanent brain damage has threatened to undermine a system California doctors use to police the quality of medical care they provide in hospitals, according to the state medical association.

The anesthesiologist in the 1979 procedure was suspended from practicing at Santa Ana-Tustin Community Hospital, now known as Western Medical Center, after a peer committee reviewed her performance. She sued, claiming that the committee acted unfairly and maliciously. In 1984, an Orange County Superior Court jury agreed, awarding her $2.3 million.

A large part of that verdict was against the individuals on the committee, and the result has “terrified” physicians who regularly participate, without pay, in peer reviews at hospitals throughout the state, said David E. Willett, counsel for the California Medical Assn., which represents 29,000 doctors.

‘Chill’ Involvement

The fear that a suspended doctor could win large sums of money in court because of a bad performance review from fellow physicians “will chill, if not freeze” voluntary physician involvement in “necessary quality assurance activities,” the association said in court papers.

The case, one of a handful involving punitive damages against members of peer panels, is now on appeal and has helped spawn new state legislation on the peer-review process.

Dr. Jeanne Gannon had served on the staff of Santa Ana-Tustin Community Hospital 17 years, 11 as chairman of the department of anesthesiology.

When she began administering anesthetic to 5-year-old Mark Flores on Aug. 13, 1979, it was the sixth surgery in which she assisted that day, according to the court file in the lawsuit. During the tonsillectomy, the surgeon noticed a darkening in the color of Flores’ blood, indicating a lack of oxygen. When he mentioned it to Gannon, she checked and found no pulse.

A cardiac surgeon operating nearby said Gannon appeared confused and not in control. When she could not state what anesthetic she had used, a nurse had to check the empty containers on her hospital cart to find out, according to trial testimony.

Within days after the tonsillectomy, hospital administrator Wayne Schroeder asked for an investigation. The main figures were Dr. Frank Stocker, then chairman of the hospital’s department of anesthesiology, and Dr. Jack S. Rounds, who took over that position in 1980.

Gannon claimed that within six weeks she had been prohibited from practicing in the hospital, even though she had not been adequately advised of the charges against her or allowed to examine the evidence, all in violation of peer-review procedures at the hospital.

Forced the Issue

Hospital lawyers contended that Stocker and Rounds thought they had come to an understanding with Gannon that would protect the institution and Gannon’s reputation as well. Hospital officials said they thought she had taken a voluntary leave of absence.

But with no formal decision out of the peer-review process, Gannon finally forced the issue by scheduling herself for surgery on Feb. 8, 1980.

At that point, Rounds formally suspended her. He stated that Gannon created “a substantial risk” to patient health care, citing the Flores surgery and “a pattern of inattentiveness in her monitoring of patients.”

Gannon appealed and won reinstatement from a full committee of the medical staff of the hospital three months later.

Left Hospital, Sued

She left the hospital a year after the Flores surgery and sued. The jury found irregularities and unfairness in the review that led to her suspension.

The jury awarded her punitive damages of $1.5 million against the hospital. In addition, its verdict called for individual punitive-damage awards of $125,000 against Schroeder, $200,000 against Stocker and $120,000 against Rounds.

Rounds, now practicing in Texas, filed a lawsuit last month against Western Medical Center and its lawyer, Richard E. Madory, claiming $2,245,000 in damages for bad advice and lack of support in the case.

Gannon, 59, left California six months after she was reinstated and now practices medicine in Sewickley, Pa. Contacted at the hospital, she declined to be interviewed.

“She’s working; she wants to work,” her lawyer, Robert I. Schwartz, said. “It’s not a job to her--it’s a way of life.”

The peer-review process provides continuous monitoring of the medical care given in hospitals, as well as special inquiries into individual cases. In the view of the California Medical Assn., the process is the primary first-line mechanism for policing the medical profession. Lawyers for the association say that “quality patient care depends on effective peer review.”

The state licenses doctors and may punish those who “do something way out of line,” medical association lawyer Willett said. “But there really is no regulation of what a physician is doing day in and day out except what happens at the peer-review panel.”

Protections for doctors reviewing their colleagues’ performances traditionally have been inadequate, said Dr. Gregg Pane, a member of the department of emergency medicine at UCI Medical Center. But doctors continue to participate in the review process because if they do not, “others will do it for us,” Pane said.

Lawsuit Threat ‘Onerous’

“Physicians have felt strongly enough about their responsibility to the public that they have participated even though they recognize they could find themselves at the wrong end of the lawsuit,” said Dr. Milton E. Legome, past chairman of the Orange County Medical Assn.

But the threat of lawsuits is “onerous,” said Dr. Russell C. Ewing of Yorba Linda, an officer with the Orange County Medical Assn.

“There are many physicians who really will not participate in peer review,” Ewing said. “Good physicians who would be good for the process won’t participate. It leads the whole process, in my opinion, to be too lenient on physicians.”

Inspired in part by the Gannon case, the California Medical Assn. pushed for passage this year of a measure that will strengthen the immunity of peer-review physicians from lawsuits to some extent, association lawyer Willett said. Under the new law, which takes effect Jan. 1, punitive damages will be allowed only when there is proof of intent to injure.

Mark Flores, now 12, is living with his mother in Orange County. His IQ ranges from 69 to 77, and he is not expected to advance beyond his current level of emotional and mental maturity.

“He won’t be able to work, to care for himself, or to drive a car,” said Steven Jay Weinberg, the Flores’ attorney. “He would be a danger to himself if left alone--so he’ll need companion care for life.”

In 1985, in a lawsuit filed by the Flores family, an Orange County Superior Court jury found the hospital should have suspended Gannon before the surgery. The result: a $2.25-million verdict against the hospital in favor of Flores.

On Dec. 1, the hospital formally dropped its appeal of the judgment after the Flores family agreed to accept $1.6 million in damages.

Before Gannon’s case against the hospital had come to trial, she agreed to a settlement with the family under which her total liability was $567,000 in payments and annuities that could reach a total value of $5.5 million if the boy lives to be 73 years old.

‘Looking for Scapegoat’

The appeal in Gannon’s suit against the hospital, now before the 4th District State Court of Appeal in Santa Ana, remains at the center of controversy.

The hospital “made the rules and then broke them,” Schwartz said. “My gut reaction is that they had this incident occur with Mark Flores, and they were looking for a scapegoat. They decided that for whatever reason they were going to go after Jeanne Gannon. It wasn’t until Jeanne pushed back that they finally had to answer for what they’d done to her.”

Said the medical association’s Willett: “These people (peer-review doctors) are volunteers trying to do something good, and they get nailed if they don’t dot every ‘i’ and cross every ‘t’ as lawyers would have done.”