Kiracofe v. Reid Memorial Hospital , 461 N.E.2d 1134 ( 1984 )

ROBERTSON, Judge.

George Kiracofe, M.D. (Kiracofe) appeals the judgment upholding Reid Memorial Hospital’s (hospital) suspension and termination of Kiracofe’s privileges to practice medicine at the hospital.

We affirm.

Kiracofe is a licensed physician practicing medicine in Richmond, Indiana, and specializes in family practice. Most of his patients reside in the area. Reid Memorial Hospital is a general hospital and is organized as a not-for-profit corporation. The hospital has a Board of Trustees consisting of twenty-one members, with one member being appointed by each of the following governmental organizations: Richmond City Council, Wayne County Council, Wayne Township Trustees, and Wayne County Commissioner. The hospital receives tax support from the state and county and it also participates in programs with federal funding.

Kiracofe was initially admitted to the medical staff of the hospital in 1975 with privileges in family practice. His history at the hospital has been replete with the filing of approximately ten unusual occurrence reports. Some of the reports have resulted in disciplinary action being taken against Kiracofe. The reports were initiated because of Kiracofe’s refusal to explain orders to nurses, abusive behavior towards nurses who questioned his orders, entering inappropriate and defamatory statements in medical records, failure to complete medical records in a timely fashion, and giving orders which were inappropriate and potentially harmful. These incidents led the medical staff to require Kiracofe to obtain counseling, to his censure, and to a recommendation to suspend his privileges.

Kiracofe’s privileges were placed on probation by the medical staff in January, 1981. His privileges were limited and his work was subject to scrutiny by the officers of the medical staff and the family practice section. Additionally, the terms of his probation also required Kiracofe to undergo psychiatric counseling and evaluation from a psychiatrist approved by the Executive Committee of the medical staff.

Kiracofe was summarily suspended by the hospital’s Chief of Staff for his treatment of a fourteen year old patient. Kira-cofe admitted the girl into the hospital on January 21,1982, with a diagnosis of pelvic inflammatory disease (PID). The diagnosis was not substantiated by the laboratory tests, nor did the tests indicate the presence of disease or infection. Moreover, the probability of the existence of PID in a fourteen year old girl is extremely unlikely. Kiracofe ordered the patient be treated with several antibiotics. The Chief of Family Medicine questioned the hospitalization of the girl because her charts indicated that the treatment was not working and her hospitalization was quite extended. He requested Kiracofe obtain consultation, which Kiracofe initially refused.

The consulting physician examined the patient and concluded that her problems were primarily emotional. He recommended against the use of antibiotics. Ki-racofe continued to treat her for PID and prescribed Piperocil, an extremely strong antibiotic. This order was questioned and the Chief of the Medical Staff requested a consultation with Kiracofe. Kiracofe met with the Chief of Staff, who demanded Kiracofe turn over treatment to another doctor on March 2,1982. Kiracofe requested that the antibiotic be continued. Kira-cofe was summarily suspended by the Chief of Staff that day and he filed formal charges against Kiracofe that day.

The Executive Committee met to review the suspension on March 9, 1982, and hear evidence on behalf of Kiracofe. The Committee received Kiracofe’s personal file which included a chronological summary of past grievances against Kiracofe. The Committee upheld the suspension and voted to terminate Kiracofe’s privileges. Ki-racofe appealed this recommendation to the Ad Hoc Committee, which voted to uphold the suspension and termination. Kiracofe then appealed to the Appellate Review Committee, which affirmed the termination. The Board of Directors subsequently upheld the actions of these committees.

Kiracofe initiated the lawsuit. The trial court found that Kiracofe failed to establish a nexus between the suspension and termination by the hospital and the government involvement or functions. It also found there was evidence consisting of Ki-racofe’s past record and his current treatment to support Kiracofe’s suspension and termination. It held that the hospital’s actions were not unlawful, arbitrary or capricious, and entered judgment in favor of the hospital.

The primary issue Kiracofe presents for review is whether he was entitled or accorded due process prior to his suspension and termination of his privileges. He raises numerous preliminary issues regarding due process which will be combined in this opinion for purposes of clarity. The thrust of Kiracofe’s argument is that the hospital has become a public institution such that its actions constitute state action. Kira-cofe alleges the state has insinuated itself into a position of interdependence with the hospital so as to become a joint participant with the hospital. Kiracofe raises other issues regarding the procedures which will also be discussed.

The Due Process Clause of the Fourteenth Amendment applies to state action, but it offers no shield against private conduct regardless of how wrongful such conduct may be. Renforth v. Fayette Memorial Hospital Association, Inc., (1978) 178 Ind.App. 475, 383 N.E.2d 368, cert. denied, 444 U.S. 930, 100 S.Ct. 273, 62 L.Ed.2d 187; Jackson v. Metropolitan Edison Co., (1974) 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477. Kiracofe argues the hospital is a public institution, thus, he was entitled to due process prior to his suspension and termination of his privileges.

Kiracofe argues the following facts establish that the hospital is a public institution: the hospital’s Board of Directors consists of twenty-one members, four of which are appointed by the Richmond City Council, the Wayne County Council, the Wayne Township Trustee, and the Wayne County Commissioners; the legal title to the land upon which the hospital rests is held by the City of Richmond; the hospital receives federal, state, county, and township funds; the hospital is subject to extensive state regulation; it is the best staffed and best equipped hospital in the area, such that it has a monopoly in the area; the hospital receives tax revenues from Wayne County; and the hospital’s bylaws contain a statement that it is owned by the people of Richmond.

In Renforth v. Fayette Memorial Hospital Association, Inc., supra, we rejected the arguments that a hospital was a public institution because it had members of its Board of Directors appointed by local governmental units, because the hospital enjoyed a monopoly position, and because it received public funds and tax revenues. This court held that in order to find state action, one must establish a nexus between the governmental involvement and the particular activity being challenged.

The fact that a business or industry is heavily regulated does not convert the business or industry into a public institution. In Jackson v. Metropolitan Edison Co., supra, the Supreme Court stated:

The mere fact that a business is subject to extensive state regulation does not by itself convert its action into that of the state for purposes of the Fourteenth Amendment. Nor does the fact that the regulation is extensive and detailed, ..., do so ... 419 U.S. 351-352, 95 S.Ct. 453-354.

We also fail to see what significance the statement in the bylaws has to do in this case.

Kiracofe argues Renforth is distinguishable because the legal title to the land on which the hospital is situated is held by the City of Richmond. He argues this case is controlled by Burton v. Wilmington Parking Authority, (1961) 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45.

In Burton, the operator of a private restaurant, which leased space in a building which was financed by public funds and owned by the public parking authority, refused to serve a customer solely because he was a Negro. The Supreme Court reversed the opinion of the Supreme Court of Delaware which held the restaurant acted in a purely private capacity. The Supreme Court held there was state action because the public parking authority had “insinuated itself into a position of interdependence with Eagle [the restaurant] that it must be recognized as a joint participant ...” Ki-racofe argues that state action should be found in the present case because the title to the land is held by the City of Richmond. He also argues the state has insinuated itself into a position of interdependence.

The Supreme Court also limited its opinion in Burton with the following language:

Because readily applicable formulae may not be fashioned, the conclusions drawn from the facts and circumstances of this record are no means declared as universal truths on the basis of which every state leasing arrangement is to be tested. Owing to the very “largeness” of government, a multitude of relationships might appear to fall within the Amendment’s embrace, but that, it must be remembered, can be determined only in the framework of the peculiar facts and circumstances present. 365 U.S. 725, 81 S.Ct. 862.

Other cases interpreting Burton have limited its holding.

Doe v. Bellin Memorial Hospital, (7th Cir.1973) 479 F.2d 756, involved an appeal by a woman seeking an abortion at a private hospital which received federal funds. The hospital denied the woman and her doctor the use of its facilities. She alleged the decision violated her right to have an abortion pursuant to Roe v. Wade, (1973) 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147. The opinion held Burton was distinguishable because there was no evidence that the state sought to influence the hospital decisions or policies either through direct regulation or discriminatory application of its powers or its benefits.

In order to recover, Kiracofe must establish “a sufficiently close nexus between the state and the challenged activity of the regulated entity so that the action of the latter may be fairly treated as that of the state itself.” Jackson v. Metropolitan Edison Co., supra, 419 U.S. at p. 351-352, 95 S.Ct. at 453-454. Kiracofe has argued Renforth is not applicable because of Burton. However, it is Burton which is distinguishable from the present case because there is no lease between the hospital and the City and racial discrimination is not involved. Similar to Doe v. Bellin Memorial Hospital, supra, Kiracofe has failed to show that the state sought to influence the hospital’s decision to terminate his privileges through the various factors previously discussed. Thus, he has failed to establish the nexus between the state and the challenged activity as required by Renforth. • The trial court properly concluded there was no state action and therefore, Kiracofe was not entitled to due process.

In a similar argument, Kiracofe again relies upon Burton to allege the state has “so insinuated itself to a position of interdependence” with the hospital, “that the state must be recognized a joint participant in the hospital’s activities. Burton v. Wilmington Parking Authority, supra, 365 U.S. at 725, 81 S.Ct. at 862. The factual distinctions between Burton and the present case do not support Kiracofe’s argument. In Burton, the building was built and operated by the public parking authority. Approximately seventy percent of its expected revenue was to come from commercial leases and sixty percent of the building’s space was allocated to commercial leases. The commercially leased areas constituted “a physically and financially integral and, indeed, indispensable part of the state’s plan to operate its project”. Id. at 723-724, 81 S.Ct. at 860-861. We remain unpersuaded that the present case is controlled by Burton, or that the state must be recognized as joint participant in the hospital’s decision to terminate Kiracofe’s staff privileges because there is no similar state plan or a showing that the hospital’s services are indispensable to the state.

Kiracofe was not entitled to due process because there was no state action and the state was not a joint participant in the activities of the hospital. The standard of review in cases where a private hospital dismisses a physician has recently been addressed in Yarnell v. Sisters of St. Francis Health Services, (1983) Ind.App., 446 N.E.2d 359. Generally, a hospital can exclude a licensed physician from its staff without being subject to a judicial review. 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. Id.

Kiracofe argues the trial court erred in its determination that the hospital complied with its bylaws. He asserts the summary suspension was improper because the life or health of the patient was not endangered and that the bylaws merely require a physician to substantiate his diagnosis and treatment of a patient. Kiracofe also contends the trial court erred in this determination because he had been placed on probation by the hospital and there was no provision for probationary status in the bylaws.

Although the bylaws do not contain a provision for probation, the trial court did not err in its determination that the hospital complied with its bylaws. The facts reveal Kiracofe agreed to probation and agreed to undergo counseling as a condition of probation. If Kiracofe had an objection to this probationary status, he should have raised it before he agreed to be bound by it. His argument is waived. A hospital has the right to take reasonable measures to protect itself and its patients. Renforth v. Fayette Memorial Hospital Ass’n., Inc., supra. We also fail to see what harm Kiracofe suffered as a result of his probation because the probation merely extended his privileges.

Kiracofe also alleges the trial court erred by determining the hospital complied with its bylaws in terminating him because the bylaws require the life or health of a patient be endangered and that the physician has to substantiate his diagnosis and treatment. Kiracofe argues that he substantiated the possibility of PID and that the patient’s life was not threatened. This argument is a request to reweigh the evidence. In determining whether a judgment is supported by sufficient evidence, this court neither weighs the evidence nor resolves questions of credibility, but rather reviews only that evidence most favorable to the appellee, together with all logical inferences flowing therefrom. It is only where the evidence leads to but one conclusion and the trial court has reached the opposite conclusion that its decision will be disturbed as being contrary to law. Cook v. Rosebank Development Corp., (1978) 176 Ind.App. 664, 376 N.E.2d 1196.

There was evidence before the various committees of the hospital showing that Kiracofe was treating the patient with extremely potent antibiotics for a very low grade fever. The patient was hospitalized for forty-one days for problems which other physicians considered to be psychosomatic. During her hospitalization, the patient made very little improvement. The evidence was sufficient to support a determination the patient’s health was being threatened by the continuation of Kira-cofe’s treatment.

Kiracofe also argues that he substantiated the possibility of PID. Difficulty arises with this issue because PID is hard to detect. However, there were medical opinions from other physicians which considered PID to be a very remote possibility in a girl of this age. Kiracofe’s tests did not substantiate the presence of this disease or did his treatments produce any noticeable results. There was sufficient evidence to support the committees’ and the trial court’s determination.

Kiracofe alleges it was error for the committees to review his personal file which contained his record of previous occurrences. He argues that he did not have notice that his record would be before the committees. Both the letter from the Chief of Staff and a memorandum to the Executive Committee make reference to Kira-cofe’s probation and his past behavior. Ki-racofe acknowledged receiving both documents and that they made references to his past record. Although the letter and memorandum are not models of draftmanship for giving notice, they were sufficient to apprise Kiracofe that his past record was subject to review because he was on" probation.

Kiracofe also alleges the committees were unduly prejudiced by the Chief of Staff and other committee members. He infers that these individuals lobbied against him and that the various committees’ decisions were the result of petty personality conflicts. It must be noted that this argument, as well as the last issue, are due process arguments and Kira-cofe did not have any rights to due process because no state action was involved. Furthermore, we have already held there was sufficient evidence to support his suspension and termination of privileges. The decision of a hospital concerning staff privileges is accorded great deference and judicial intervention is limited to an assessment of whether the procedures employed by the hospital are fair, whether the standards set by the hospital are reasonable, and whether they have been applied without arbitrariness and capriciousness. A physician must demonstrate actual bias in order to disqualify an administrative tribunal. Laje v. R.E. Thomason General Hospital (5th Cir.1977) 564 F.2d 1159. Kiracofe has not demonstrated actual prejudice.

Kiracofe alleges the trial court erred by excluding the testimony of another patient who he had treated for PID. The hospital objected to this testimony as being irrelevant and that the witness was not competent to give medical testimony. The trial court correctly sustained this objection. Her testimony would have merely shown that Kiracofe treated her properly but it would have been irrelevant to his case of the fourteen year old patient or to Kiracofe’s record and probationary status.

Kiracofe alleges the trial court erred by not applying IND.CODE 16-12-23-1, which provides that hospitals supported by county funds are open to all taxpayers and licensed physicians of their choice. This statute includes the language “the provisions of this act shall not deprive the governing board of such a hospital of the right to adopt and enforce reasonable rules and regulations concerning the use of such hospitals and its facilities by such physicians”. In the present case, the hospital granted Kiracofe privileges to use its facilities for approximately eight years pri- or to terminating his privileges because he failed to adhere to its rules and regulations. The hospital’s rules and regulations were reasonable. Whatever error may have been committed by the trial court was harmless.

Kiracofe’s final allegation of error is that the evidence was insufficient to justify the suspension and termination of his privileges and that the hospital’s actions were arbitrary and capricious. This issue has been resolved adversely to Kiracofe by our determination that the hospital complied with its bylaws. We will neither reweigh the evidence nor burden this opinion with a repetition of the facts.

The judgment is affirmed.

NEAL, P.J., concurs. RATLIFF, J., concurs with opinion.