Essay on Liability Issues Faced by Health System CEOs

Published: 2021/11/16
Number of words: 726

The Healthcare system, just like any other industry, has its fair share of legal issues. Some of these issues are often vast and consequential, and more importantly, if they are not adequately managed, they affect the nature of care. However, and according to most state laws, healthcare CEOs are legally responsible for all the issues that arise during their leadership. There are many legal issues that CEOs need to address, some of which are highlighted in this paper.

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First, health CEOs are legally responsible for protecting patients and hospital data. It is important to note that when a breach of electronic data happens, it is the CEOs who are usually blamed. Electronic data breaches have become a significant problem in the contemporary world. Most hospitals and healthcare institutions find themselves amid this problem (Cohen et al., 2014). In most cases, hospital leadership finds itself entangled in court cases and legal suits regarding the loss or theft of social security numbers, and exposure of personal health information. Notably, some of these legal suits end up in huge settlements that later affect overall revenue. Nearly every state in the United States has its data breach laws. The laws, however, differ on what counts as private information, the amount of fines for non-compliance, and so on.

Healthcare leadership also has to deal with antitrust and competition issues. According to Nahed et al. (2012), antitrust laws outlaw practices such as price-fixing, market division, bid-rigging, and customer allocation. However, in the healthcare system, antitrust laws regulate how hospitals relate to other hospitals, hospital-physician relations, and how hospitals relate with their patients. In like manner, CEOs have to ensure that their organizational healthcare prices are not beyond the federal or state governments’ rates. In addition to this, hospitals CEOs are responsible for patients’ safety. There are specific laws, including the 2005 Patient Safety and Quality Improvement Act, which ensures that hospitals provide the necessary care and protection for their patients. Importantly, such laws ensure that in times of medical errors, hospital leadership takes full responsibility. In order to avoid safety issues, hospital leaders make sure that their staff is well equipped with both knowledge and necessary technology. Others ensure that patients and physicians are well informed in terms of their rights and responsibilities.

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Also, health care leaders must comply with federal Stark law, which prohibits physicians and nurses from referring patients to organizations where they have a financial relationship for designated health services paid by Medicare (Goldsmith, Kaufman, & Burns, 2016). In recent times, numerous healthcare organizations in the United States have found themselves or their staff entangled in legal battles due to the Stark law. For instance, in 2010, two healthcare executives pleaded guilty to Medicare fraud (Tom Watkins, 2020). Robert Bourseau and Rudra Sabaratnam pleaded guilty to their roles in a conspiracy to bribe patient recruiters to recruit homeless patients (Tom Watkins, 2020). In this case, the homeless patients were compelled to undertake medical treatment, many of which were not necessary, although they were billed to government healthcare programs.

Healthcare CEOs have a mandate to protect the patients and the dignity of their institutions. They are legally responsible for patients’ safety, privacy, and, more importantly, ensuring that their institutions comply with laws regulating the healthcare system. Inadequacy in managing these factors may lead to unnecessary lawsuits and settlements that end up harming the organizations in which they lead.


Cohen, I., Amarasingham, R., Shah, A., Xie, B., & Lo, B. (2014). The legal and ethical concerns that arise from using complex predictive analytics in health care. Health Affairs33(7), 1139-1147.

Goldsmith, J., Kaufman, N., & Burns, L. (2016). The tangled hospital-physician relationship. Health Affairs Blog9

Nahed, B., Babu, M., Smith, T., & Heary, R. (2012). Malpractice liability and defensive medicine: a national survey of neurosurgeons. Plos ONE7(6), e39237.

Tom Watkins, C. (2020). Hospital chain to pay $16.5 million in kickback case involving the homeless – CNN. CNN. Retrieved 24 June 2020, from

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