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An adverse drug event (ADE) is defined as “harm experienced by a patient as a result of exposure to a medication.”¹ The Institute of Medicine says an ADE is “an injury resulting from a medical intervention.”² Like any adverse event, occurrence of an ADE does not necessarily indicate an error or poor quality care. However, adverse drug events account for nearly 700,000 emergency department visits and 100,000 hospitalizations annually.¹

Running a medical practice involves making business decisions that can increase the risk of adverse patient outcomes, professional liability, and regulatory violations. Yet, the skills and training that support conscientious, excellent medical care do not always facilitate skilled business decision-making.^1,2

Physician advertising is controlled by state and federal laws and regulations. Violating these regulations can lead to medical board discipline and fines, can complicate the defense of liability claims, and may not be covered by medical liability insurance policies. State laws may also allow patients to sue the physician for damages if they were injured by the false or deceptive advertising.¹

To “indemnify” or to “hold harmless” means to insure another party’s risk. Indemnity clauses appear in a wide variety of business contracts, including those between physicians, their groups, and the hospitals in which they treat patients. When a physician signs a contract to join a medical group, and the contract has indemnification language, the physician may be agreeing to take responsibility for the group’s malpractice liability if both are named in a lawsuit. Consequently, physicians should be wary of signing any contract with an indemnity/hold harmless clause.

In the following case, the group’s medical director over-utilized medical assistant (MA) externs for cost-saving purposes. Because he did not understand how his plan was putting patients at risk, he was resistant to negative input from his colleague. The physician conflict exacerbated the inherent risks of the externship program.