Mid-Atlantic Health Law TOPICS

We all know the first joke of the new millennium: "Don't be on a life-support system at midnight on December 31, 1999."

Of course, the "Year 2000" or "Y2K" problem is not a joke, but is of critical concern to the medical community, with potentially deadly serious ramifications. The danger is that there will be multiple computer malfunctions when we pass from the year 1999 to 2000, because computers will mistakenly read "00" as the year 1900, rather than 2000. 

Almost all medical devices incorporate computer software and are date-dependent in some way. For example: medical records depend on a patient's age; test results depend on incubation periods; and so called "embedded chips" continuously check the most recent maintenance performed on certain equipment. In each instance, if the computer were to read the year as 1900 rather than 2000, the program and related equipment could malfunction or shut down.

The apportionment of liability for the damages resulting from this "millennium bug" will be the subject of hundreds of legal battles. Although the millennium problem itself has not yet been decided by the courts, courts have, nevertheless, often dealt with malfunctioning medical equipment. In fact, these prior cases can be used to predict how liability for Y2K malfunctions will be distributed among doctors, hospitals and suppliers of equipment and software.

A. Who's Responsible?

Frequently, courts have held doctors and hospitals liable for harm to patients when the care givers failed to exercise reasonable care or diligence while using medical equipment, or when they did not have appropriate skill or knowledge to operate the equipment. These rulings could easily be applied to a Y2K situation when, after January 1, 2000, a doctor, who is untrained in reading calculations processed on a computer that may have miscalculated the proper dates, makes an error regarding patient care.

Medical facilities have also been held liable when they were negligent in the care or upkeep of medical equipment. Similarly, a hospital or private practice could easily find itself liable if it has not attempted to update its equipment to be Y2K compliant, and the equipment then fails to function properly.

As between the hospital and doctor, if the doctor could not have known about a defect, so he or she could not reasonably be expected to fix the defect, then the medical facility has usually been found solely liable for the harm caused to patients due to equipment malfunction. Next year, the "defect" at issue could easily be a machine failing to operate because it believes it has not been serviced in 100 years.

Members of the Board of Directors of medical practices and hospitals also have responsibilities. The law generally requires a director to act in good faith, in a manner he or she reasonably believes to be in the best interests of the organization, and with the care that an ordinary prudent person in a like position would use. In this situation, the directors should at least know what steps a facility is following to become Y2K compliant. If the directors have not bothered to inquire, then they may find themselves personally liable for a bad patient outcome caused by a Y2K bug.

Of course, manufacturers and suppliers of equipment may be the parties ultimately responsible for the harm caused if their equipment, which should have operated properly, does not do so because it either stops operating or makes miscalculations after January 1, 2000.

Manufacturers and suppliers are held to a stricter standard of liability because they are the originators of the equipment, and because they have placed a defective item that should, but does not, work into the marketplace. The doctors' and medical facilities' liability is not as automatic. In a legal action, the equipment's "operators" must be shown to have acted improperly by, for example, having failed to try to determine if the equipment was infected with the millennium bug, or by having failed to take reasonable action in light of such investigation. On the other hand, merely showing that the equipment was defective is usually enough to render the manufacturer liable.

However, over the years, equipment manufacturers often go out of business, or do not have the resources to absorb the liability that a health care provider would otherwise attempt to shift to the manufacturer. Therefore, as a practical matter, the health care provider might be stuck with the liability.

Also, manufacturers might have contracted away their liability in sale or lease documents. Accordingly, suppliers and purchasers are busy reviewing contracts for existing systems to anticipate where legal arguments can be won or lost. General warranty and disclaimer language, the Uniform Commercial Code and other aspects of contract law are all areas of concern.

B. Is There a Cure?

Besides reviewing old contracts, parties currently acquiring hardware and software should be certain that their new contracts address the Year 2000 problem, by properly allocating both the responsibility for compliance, and the resulting liability if the software or system will not work on or after January 1, 2000.

The cure for the embedded chip is also especially difficult in the medical field, because so much equipment is currently in use. However, all equipment does not contain embedded chips, and all equipment that does will not stop functioning. So the real task is determining which equipment with embedded chips will cause a problem. In fact, some users have chosen merely to replace all equipment that contains embedded chips rather than try to identify and to reprogram the problem chips.

Sadly, there is no wonderful inoculation or cure for the "millennium bug." There is no uniformity in either hardware or software -- each program requires investigation.

The man hours required to fix operating programs and to identify problematic embedded chips are where the true cost and delay of curing the problem exists. Computer programmers able to fix the situation are also becoming more scarce each day; in the next months they will be some of the most sought after professionals, commanding higher and higher compensation.

Moreover, when all else fails, parties will be left to negotiate, and possibly to litigate, over who bears the burden of paying for damages if a computer system or software does not operate after January 1, 2000, with the courts likely relying on prior cases of equipment malfunctions to decide these disputes.

If you have not examined your own enterprise for Year 2000 compliance, now is the time. You should try to be sure that your systems operate properly. Moreover, a review of your applicable legal documents can potentially reduce the costs you incur in regard to the Y2K problem. Without proper preparation, the joke could be on you.