Legal Aspects of Health Care Administration.
Legal Aspects of Health Care Administration.
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Library of Congress Cataloging-in-Publication Data Names: Pozgar, George D., author. Title: Legal aspects of health care administration / George D. Pozgar, MBA, CHE, D.Litt. Description: Thirteenth edition. | Burlington, MA: Jones & Bartlett Learning, [2019] | Includes bibliographical references and index. Identifiers: LCCN 2018002863 | ISBN 9781284127171 (casebound) Subjects: LCSH: Health services administration—Law and legislation—United States. | Medical laws and legislation—United States. | Medical personnel— Malpractice—United States. | BISAC: BUSINESS & ECONOMICS / Information Management.
Classification: LCC KF3821 .P69 2018 | DDC 344.7304/1—dc23 LC record available at https://lccn.loc.gov/2018002863
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Printed in the United States of America 22 21 20 19 18 10 9 8 7 6 5 4 3 2 1
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I dedicate this book to Denise Mirafuentes.
Your life was an inspiration.
Your love for family, friends, caregivers, and the many lives you have touched never failed.
Your unwavering faith in God and the challenges you faced have forever changed the lives of so many.
Your life is a testimony to goodness, kindness, and compassion.
Though the thoughts I wish to impart continue to swirl in my mind, words alone will never suffice.
So I leave you with this my dear friend,
Your signature phrase to “Live, Laugh, and Love” describes you well.
“The best and most beautiful things in the world cannot be seen or even touched, they best be felt with the heart.”
Helen Keller ALOHA & MAHALO
Until We All Meet Again
Contents Epigraph Preface About the Book Acknowledgments
Chapter 1 Hospitals Through the Ages Learning Objectives Early Hindu and Egyptian Hospitals Greek and Roman Hospitals Hospitals of the Early Christian Era Islamic Hospitals Early Military Hospitals Medieval Hospitals The “Dark Age” of Hospitals Hospitals of the Renaissance Hospitals of the 18th Century Early Hospitals in the United States Late 19th Century Renaissance 20th-Century Progress Health Care and Hospitals in the 21st Century History Challenges Us to Do Better Chapter Review Review Questions Notes
Chapter 2 Government, Law, and Ethics Learning Objectives Development of Law Sources of Law Government Organization Department of Health and Human Services Government Ethics Political Malpractice Chapter Review Review Questions Notes
Chapter 3 Tort Law—Negligence Learning Objectives Objectives of Tort Law Negligence Forms of Negligence
Degrees of Negligence Elements of Negligence Summary Case Chapter Review Review Questions Notes
Chapter 4 Intentional Torts Learning Objectives Assault and Battery False Imprisonment Defamation of Character Fraud Invasion of Privacy Infliction of Mental Distress Products Liability Chapter Review Review Questions Notes
Chapter 5 Tort Reform and Risk Reduction Learning Objectives Mediation and Arbitration Statute of Limitations Structured Awards Medical Malpractice Screening Panels Collateral Source Rule Contingency Fee Limitations Countersuits: Frivolous Claims Joint and Several Liability Malpractice Caps No-Fault System Regulation of Insurance Practices Reducing the Risks of Malpractice Collaboration in Tort Reform Chapter Review Review Questions Notes
Chapter 6 Criminal Aspects of Health Care Learning Objectives Criminal Procedure Healthcare Fraud Kickbacks Tampering with Drugs
Internet Pharmacy and Sale of Drugs Falsification of Records Patient Abuse Criminal Negligence Homicide Manslaughter Rape and Sexual Assault Theft Chapter Review Review Questions Notes
Chapter 7 Contracts and Antitrust Learning Objectives What Is a Contract? Types of Contracts Elements of a Contract Breach of Contract Corporate Contracts Partnership Agent Independent Contractor Conditions Performance Nonperformance Defenses Remedies Employment Contracts Medical Staff Bylaws: A Contract Exclusive Contracts Restraint of Trade Hospital Staff Privileges Transfer Agreements Insurance Contract Chapter Review Review Questions Notes
Chapter 8 Civil Procedure and Trial Practice Learning Objectives Pleadings Discovery Motions Pretrial Conference Notice of Trial Memorandum of Law The Courtroom and the Judge
The Jury Subpoenas Burden of Proof Res Ipsa Loquitur Opening Statements Examination of Witnesses Judicial Notice Rule Evidence Defenses Against Plaintiff’s Allegations Closing Statements Judge’s Charge to the Jury Jury Deliberation and Determination Awarding Damages Joint and Several Liability Appeals Execution of Judgments Chapter Review Review Questions Notes
Chapter 9 Corporate Structure and Legal Issues Learning Objectives Authority of Corporations Corporate Committee Structure Corporate Ethics Corporate Negligence Doctrine of Respondeat Superior Governing Body Responsibilities Corporate Reorganization and Mergers Chapter Review Review Questions Notes
Chapter 10 Medical Staff Organization and Malpractice
Learning Objectives Medical Staff Organization Medical Director Medical Staff Privileges Common Medical Errors Patient Assessments Diagnosis Treatment Discharge and Follow-Up Care Infections Psychiatry
Principles of Medical Ethics Physician–Patient Relationship Chapter Review Review Questions Notes
Chapter 11 Nursing and the Law Learning Objectives Scope of Practice Nurse Licensure Nursing Careers Advanced Practice Nurses Legal Risks of Nurses Duty to Question Discharge Duty to Report Physician Negligence Chapter Review Review Questions Notes
Chapter 12 Hospital Departments and Allied Professionals
Learning Objectives Paramedics and First Responders Emergency Department Laboratory Medical Assistant Nutritional Services Pharmacy Physical Therapy Physician Assistant Radiology and Related Lawsuits Respiratory Therapist Chiropractor Dentistry Podiatrist Security Licensure and Certification of Healthcare Professionals Helpful Advice for Caregivers Chapter Review Review Questions Notes
Chapter 13 Information Management and Patient Records
Learning Objective
Information Management Medical Record Contents Documentation of Care Privacy Act of 1974 Health Insurance Portability and Accountability Act Patient Objects to Record Entries Ownership and Release of Medical Records Use of Patient Data Collected Retention of Records Electronic Medical Records Legal Proceedings and the Medical Record Falsification of Records Illegible Handwriting Timely Completion of Medical Records Confidential and Privileged Communications Charting: Some Helpful Advice Chapter Review Review Questions Notes
Chapter 14 Patient Consent, Rights, and Responsibilities
Learning Objectives Patient Consent Patient Rights Patient Responsibilities Chapter Review Review Questions Notes
Chapter 15 Healthcare Ethics Learning Objectives Ethics Morality Ethical Theories Principles of Healthcare Ethics Values Pillars of Moral Strength Religious Ethics and Spirituality Secular Ethics Professional Ethics Ethics Committee Reasoning and Decision Making Moral Compass Gone Astray Chapter Review Review Questions
Notes
Chapter 16 Procreation and Ethical Dilemmas Learning Objectives Abortion Sterilization Artificial Insemination Surrogacy Chapter Review Review Questions Notes
Chapter 17 End-of-Life Issues Learning Objectives Patient Autonomy Constitutional Right to Refuse Care Legislative Response Defining Death Futility of Treatment Do-Not-Resuscitate Orders Withholding and Withdrawal of Treatment Euthanasia Physician-Assisted Suicide Advance Directives Autopsy Organ Donations and Transplantation Research, Experimentation, and Clinical Trials Human Genetics Stem Cell Research Chapter Review Review Questions Notes
Chapter 18 Legal Reporting Requirements Learning Objectives Abuse Child Abuse Senior Abuse Communicable Diseases Aids Births and Deaths Adverse Drug Reactions Physician Competency Incident Reporting Sentinel Events
Look Closer, See Me Chapter Review Review Questions Notes
Chapter 19 Labor Relations Learning Objectives U.S. Department of Labor Unions and Healthcare Organizations National Labor Relations Act Norris–Laguardia Act Labor–Management Reporting and Disclosure Act Fair Labor Standards Act Civil Rights Act Occupational Safety and Health Act Rehabilitation Act Family and Medical Leave Act State Labor Laws Workers’ Compensation Labor Rights Management Rights Affirmative Action Plan Patient Rights During Labor Disputes Injunctions Administering Collective Bargaining Agreement Discrimination in the Workplace Chapter Review Review Questions Notes
Chapter 20 Employment at Will, Rights, and Responsibilities
Learning Objectives Employment at Will Public Policy Issues and Termination Termination Unemployment Compensation Wrongful Discharge Defending a Claim for Unfair Discharge Fairness: The Ultimate Test Effective Hiring Practices Employee Rights Employee Responsibilities The Caregiver’s Pledge Chapter Review Review Questions
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Notes
Chapter 21 Professional Liability Insurance Learning Objectives Insurance Policies Insurance Policy Provisions Conditions of Insurance Policies Liability of the Professional Intentional Torts: Coverage Denied Medical Liability Insurance Self-Insurance Trustee Coverage Mandated Medical Staff Insurance Coverage Investigation and Settlement of Claims Chapter Review Review Questions Notes
Chapter 22 Managed Care and National Health Insurance
Learning Objectives Managed Care Models of Managed Care Organizations Federally Qualified HMO State HMO Laws Case Management Firms Third-Party Administrators Utilization Review Liability for Nonparticipating Hospitals Employee Retirement Income Security Act Reducing Exposure to Liability Health Care Quality Improvement Act of 1986 Ethics in Patient Referral Act (1989) Managed Care and Legal Actions Price Fixing Market Power National Health Insurance Veterans Care Chapter Review Review Questions Notes
Author’s Afterword Glossary Index
Epigraph I consider ethics, as well as religion, as supplements to law in the government of man.
—Thomas Jefferson, President of the United States (1743–1826)
In law a man is guilty when he violates the rights of others. In ethics he is guilty if he only thinks of doing so.
—Immanuel Kant, Philosopher (1724−1804)
Books are the carriers of civilization. Without books, history is silent, literature dumb, science crippled, thought and speculation at a
standstill. I think that there is nothing, not even crime, more opposed to poetry, to philosophy, ay, to life itself than this incessant business.
—Henry David Thoreau, Author, Poet, Philosopher (1817–1862)
It is curious—curious that physical courage should be so common in the world, and moral courage so rare.
—Mark Twain, American Author, Humorist (1835−1910)
In civilized life, law floats in a sea of ethics.
—Earl Warren, Chief Justice of the United States (1891–1974)
How far you go in life depends on your being tender with the young, compassionate with the aged, sympathetic with the striving, and
tolerant of the weak and the strong— because someday you will have been all of these.
—George Washington Carver, American Inventor (1864–1943)
Preface He has achieved success who has lived well, laughed often and loved much; who has gained the respect of intelligent men and the love of
little children; who has filled his niche and accomplished his task; who has left the world better than he found it, whether by an improved poppy, a perfect poem, or a rescued soul; who has never lacked appreciation of earth’s beauty or failed to express it; who has always looked for the best in others and given them the best he had; whose life was an inspiration; whose memory a benediction.
—Bessie Stanley
egal Aspects of Health Care Administration, Thirteenth Edition, as with the previous 12 editions, continues to be the most comprehensive and
engaging book encompassing both the legal and ethical issues of healthcare administration. The Thirteenth Edition continues its tradition of providing a solid foundation in a wide range of current healthcare topics in an understandable format that carefully guides the reader through the complex maze of law and ethics, as well as an overview of practical ways to improve quality and safety in the delivery of patient care. As in previous editions, the Thirteenth Edition serves as a valuable tool for both undergraduate and graduate programs. Additionally, as has been well recognized by practicing healthcare professionals, Legal Aspects of Health Care Administration continues to be a valuable reference tool in their day-to-day work activities.
The author infuses life into the educational process through legal case studies that have been litigated in the courtroom or reported in the press, as well as real-world healthcare events through “reality checks” experienced by patients and healthcare professionals. The author’s approach inspires dynamic discussion and excitement in the learning process, thus creating an atmosphere of interest and participation, which is conducive to learning.
Although the court cases relating examples of malpractice are often mirror images of the failures of medicine, this Thirteenth Edition provides a comprehensive resource from which the reader will learn how the law, ethics, and medicine intertwine. The contents of this book serve as a reminder to its readers of the need to learn from the mistakes and tragedies experienced by others to avoid repeating them. The legal cases and resulting headlines should stand as a reminder of the responsibility that caregivers bear to the profession they have chosen.
With revised estimates that as many as 400,000 patients die each year as a result of medical errors, according to a September 2013 study reported in the Journal of Patient Safety, it is mandatory that caregivers be ever mindful of the
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nature of the life-and-death settings within which they work. At the time of this writing the headlines continue to repeat themselves. For example, on December 4, 2014, an Oregon hospital’s medication error led to the death of a 65-year-old patient. This error resulted in three employees being placed on administrative leave. The knowledge gained here will help prevent caregivers from becoming the next headline.
Although there will always be a “next time” for human error, the reader who grasps the contents in this book and understands its lessons will better understand how failures can turn to success and the pain of past mistakes can turn to hope. The application of the knowledge gained from this book and in the classroom learning process will serve to improve the competency of the reader and the quality of life for the patient through an educational process that will help prevent further injury in the healing process
About the Book Legal Aspects of Health Care Administration, Thirteenth Edition, lays a strong foundation in both health law and ethics. Chapter 1 begins with a review of hospitals through the ages, providing the reader with an overview of the historical development of hospitals as influenced by medical progress. This allows the reader to see the successes and failures of hospitals through the centuries and how history has a way of repeating itself, thus creating a need to learn from past mistakes in order to prevent repeating them. Chapter 2 continues with an introduction to government, law, and ethics.
Chapters 3 and 4 introduce the reader to negligence and intentional torts. Chapter 5 discusses tort reform and risk reduction, thus reducing the costs of health care. Chapter 6 reviews the criminal aspects of health care, and Chapter 7 reviews the basics of contract law as it pertains to healthcare professionals. The reader is then introduced to civil procedure and trial practice in Chapter 8. The reader’s journey continues with a discussion of corporate structure and related legal issues in Chapter 9. A review of medical staff organization and physician liability is covered in Chapter 10, followed by nursing and the law and common nursing practice errors in Chapter 11. Chapter 12 reviews the legal risks of various other hospital departments and healthcare professions.
Information management and patient records are reviewed in Chapter 13. Issues related to patient consent, rights, and responsibilities are reviewed in Chapter 14, followed by a discussion of ethical theories, principles, virtues, and values. Chapter 15 concentrates on healthcare ethics, theories, principles, and values. This review is followed by procreation and ethical dilemmas in Chapter 16, and end-of life issues in Chapter 17.
Legal reporting requirements are discussed in Chapter 18. Labor relations and employment-at-will, employee rights, and employee responsibilities are reviewed in Chapters 19 and 20, respectively. An overview of professional liability insurance, managed care, and national health insurance is provided in Chapters 21 and 22.
The practical application of the law and ethics in the healthcare setting is accomplished by interspersing the thoughts of great minds through Quotes, applicable News Clippings, provider and organizational experiences through Reality Checks, and patient experiences through legal rulings and summaries through Case Law. When reviewing the various cases, the reader should consider both the ethical and legal implications of a dilemma and how they intertwine with one another. It is important to recognize that the decisions in the cases described are generally governed both by applicable state and federal statutes and common law principles. When reviewing a case, the
reader must keep in mind that the case law and statutes of one state are not binding in another state.
There is no one magical legal or ethics book that can possibly compress into its pages the plethora of issues that have bombarded the healthcare industry. This book is merely a beginning of the study of legal and ethical issues and is an adventure that all caregivers should take. Although there is always much more that could be discussed on any one topic, the reader will understand that this book provides a solid foundation for practical everyday use as well as further study in the law and ethics.
Each life is like a novel. Filled with moments of happiness, sadness, crisis, defeat, and triumph. When the last page has been written, will
you be happy or saddened by what you read?
—Author Unknown
The Thirteenth Edition presents real-world life experiences that bring the reader through a journey of learning that provides an effective transitional stage from the classroom to the reality of the everyday work environment. When considering matters of law and ethics, healthcare professionals are usually considering matters of freedom in regard to personal choices, one’s obligations to other sentient beings, or judgments about human character and the right to choose. The author’s objective is to equip the reader with the background knowledge necessary to understand that legal and ethical behavior begins with recognizing that we have alternatives and choices in our behavior. To make good decisions, each individual must first understand that those decisions will only be as good as the knowledge and understanding he or she possesses of right and wrong. This book is not an indictment of any profession or organization. There is a deluge of ethical issues in every aspect of human existence. Although cultural differences, politics, and religion influence who we are, it is all of life’s experiences that affect who we become.
IT’S YOUR GAVEL . . . “It’s Your Gavel” boxes offer the reader an opportunity to make their own decisions about actual court cases. Many chapters begin with a case that has been reviewed by the courts in state or federal jurisdictions. After reviewing each case and subsequent relevant material, readers can take on the role of the fact finder and render a decision. Then, at the end of the respective chapters, the actual court findings and reasoning for each case are given in “The Court’s Decision” box.
▸ Case Presentation Format When reviewing the various cases in this book, the reader should consider what happened, why things went wrong, what the relevant legal issues are, and how the event could have been prevented. The reader should also
consider how, if one fact in a particular case changed, the outcome might have been different. What would that fact be? The cases presented in the text have been chosen because of the frequency of their occurrence. The general format for each boxed case review is as follows:
Title: Each case has a title that signals the type of case to be reviewed.
Case Citation: The case citation describes where a court’s opinion in a particular case can be located. It identifies the parties in the case, the text in which the case can be found, the court writing the opinion, and the year in which the case was decided. For example, the case citation of Bouvia v. Superior Court (Glenchur), 225 Cal. Rptr. 297 (Cal. Ct. App. 1986) is described as follows:
Bouvia v. Superior Court (Glenchur): Identifies the basic parties involved in the lawsuit 225 Cal. Rptr. 297: Identifies the case as being reported in volume 225 of the California Reporter on page 297 Cal. Ct. App. 1986: Identifies the case as being decided in the California Court of Appeals in 1986
Students who wish to research a specific case should visit a law school library, which provides access to various state and regional reporters.
Facts: A review of the material facts of the case is presented.
Issues: This is the disputed point or question the judge or jury must decide. The issues discussed in any given case are selected for review based on medical and legal pertinence to the healthcare professional. Although any one case in this text may have multiple issues, emphasis is placed on those issues considered to be more relevant for the reader in the context of the topic being discussed.
Holding: The court’s ruling based on the facts, issues, and applicable laws pertaining to a case is summarized.
Reason: The rationale for the court’s decision based on the facts, issues, and relevant laws surrounding a case is presented.
Author’s Note: This book is not a definitive treatise, but rather a portrait of the ever-evolving story of health care through the study of law and ethics. It is educational in nature and should not be considered a substitute for legal advice on any particular issue. Moreover, each chapter presents an overview, rather than an exhaustive treatment, of the various topics discussed.
The author, legal reviewers, and/or the publisher cannot be responsible for any errors or omissions, including additions to, interpretations of, and/or changes in the regulations presented in this book.
Acknowledgments The author especially acknowledges the staff at Jones & Bartlett Learning, whose guidance and assistance was so important in making this Thirteenth Edition a reality. Special thanks to Mike Brown, Director of Product Management at Jones & Bartlett Learning, who has once again been truly an amazing leader and mentor. I would like to thank Danielle Bessette, Product Specialist, who worked diligently and tirelessly with me on this Thirteenth Edition. I would also especially like to acknowledge Sophie Teague, Senior Marketing Manager, Brooke Haley, Production Assistant, and Merideth Tumasz, Rights & Media Specialist, who worked with me on the Thirteenth Edition. Thank you for allowing me to leave behind this legacy of writing.
I am grateful to the very special people in the more than 1,000 hospitals and ambulatory sites from Alaska to Puerto Rico with whom I have consulted, surveyed, and provided education over many years. Their shared experiences have served to remind me of the importance of making this book more valuable in the classroom and as a reference for practicing healthcare professionals.
To my students in healthcare law and ethics classes at the New School for Social Research, Molloy College, Long Island University–C.W. Post Campus, Saint Francis College, and Saint Joseph’s College; my intern from Brown University; my resident in hospital administration from The George Washington University; and those I have instructed through the years at various seminars, I will always be indebted for your inspiration.
Many thanks are also extended to all of the special people at the National Library of Medicine and the Library of Congress for their guidance over the years in locating research materials.
© Hein Nouwers/Shutterstock, Inc.
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CHAPTER 1
Hospitals Through the Ages I was created at the end of the Renaissance, watched pirates rule the oceans as Ivan the Terrible ruled Russia, and witnessed the arrest of
Galileo for believing the Earth revolved around the Sun.
—I Am History
▸ LEARNING OBJECTIVES
The reader, upon completion of this chapter, will be able to:
Explain how societal conflicts due to politics, religion, and warfare have both impeded the growth of hospitals and contributed to their progress. Describe how advances in medicine led to the rise of the modern-day hospital and improved the quality of patient care. Describe how the knowledge gained from best practices (e.g., infection control) can lead to progress while at the same time result in patient harm if not consistently followed over time.
We can learn from history how past generations thought and acted, how they responded to the demands of their time and how they solved
their problems. We can learn by analogy, not by example, for our circumstances will always be different than theirs were. The main thing history can teach us is that human actions have consequences and that certain choices, once made, cannot be undone. They foreclose the possibility of making other choices and thus they determine future events.
—Gerda Lerner
This chapter provides the reader with notable historical events, from ancient civilizations to the present time, which continue to revolutionize the delivery of patient care. It provides a review of the advance of civilization as disclosed in the history of hospitals and medical achievements through the ages. A study of the past often reveals errors that then can be avoided, customs that persist only because of tradition, and practices that have been superseded by others that are more effective. The past may also bring to light long-abandoned practices, which may be revived to some advantage. The story of the birth and evolution of the hospital portrays the triumph of civilization over barbarism and the progress of civilization toward an ideal characterized by an interest in the welfare of the community.
This chapter reviews some of the most amazing medical discoveries and achievements in the history of medicine. It also describes some of the failures that continue to plague the healthcare industry. The importance of the study of history is undeniable. The Spanish philosopher George Santayana (1863– 1952) recognized this all too well when he said, “Those who do not remember the past are condemned to repeat it.” George Bernard Shaw (1856–1950), an Irish dramatist and socialist, recognized the tragedies of the history of civilization when he said, “If history repeats itself, and the unexpected always happens, how incapable must man be of learning from experience.” Yes, Santayana and Shaw are right: If we do not learn from the mistakes of the past, we are doomed to repeat them. Progress in health care will only prevail so long as advances in medicine are practiced by each new generation.
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Although the struggle to progress is a road filled with many pitfalls, hope still looms.
Martin Makary wrote in the Wall Street Journal that “Medical errors kill enough people to fill four jumbo jets a week . . . To do no harm going forward, we must be able to learn from the harm we have already done.” If we do not learn from historical events to those of the present days, we are bound to repeat them. This chapter takes the reader on a journey from the past to the present, from which to spring forward on a better road that returns the people’s trust in the safety net of the nation’s hospital systems. Here, we go “back into the future” to bring forth the fruits of healthier hospitals and healthier lives. Let the reader now travel that road.
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▸ EARLY HINDU AND EGYPTIAN HOSPITALS Two ancient civilizations, the Hindu (in what is now India) and the Egyptian, had crude hospitals. Hindu literature reveals that in the 6th century BC, Buddha appointed a physician for every 10 villages and built hospitals for the crippled and the poor. His son, Upatiso, built shelters for the diseased and for pregnant women. These examples probably moved Buddha’s devotees to erect similar hospitals. Despite a lack of records, historians agree that hospitals existed in Ceylon as early as 437 BC.
During his reign from 273 to 232 BC, King Asoka built 18 hospitals that hold historical significance because of their similarities to the modern hospital. Attendants gave gentle care to the sick, provided patients with fresh fruits and vegetables, prepared their medicines, gave massages, and maintained their personal cleanliness. Hindu physicians, adept at surgery, were required to take daily baths, keep their hair and nails short, wear white clothes, and promise that they would respect the confidence of their patients. Although bedside care was outstanding for those times, medicine was only beginning to find its way.
Egyptian physicians were probably the first to use drugs such as alum, peppermint, castor oil, and opium. In surgery, anesthesia consisted of hitting the patient on the head with a wooden mallet to render the patient unconscious. Surgery was largely limited to fractures, and medical treatment was usually given in the home. Therapy away from home was often available in temples, which functioned as hospitals.