United States of America et al v. Halifax Hospital Medical Center et al

Filing 371

ORDER denying 304 Motion to exclude the expert report and testimony of Richard J. Henley, Henley's testimony will be limited as noted in the order. Signed by Judge Gregory A. Presnell on 10/18/2013. (TKW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
USA and ELIN BAKLID-KUNZ,
Plaintiffs,
v.

Case No: 6:09-cv-1002-Orl-31TBS

HALIFAX HOSPITAL MEDICAL
CENTER and HALIFAX STAFFING,
INC.,
Defendants.

ORDER
The United States has moved to exclude the expert report and testimony of Richard J.
Henley (Doc. 304). Defendants oppose the Motion (Doc. 324).
On January 23, 2013, Defendants engaged Henley as a testifying expert with respect to
non-profit hospital financial operations. (Doc. 304, Ex. A).1 On February11, 2013, Mr. Henley
submitted his Rule 26(a)(2)(B) report. (Doc. 304, Ex. B). That report is a two-page letter that
purports to “address the practical considerations for hospital decision-making in meeting
community need and compensating physicians required to provide selected clinical services.” Id.
Boiled down to its essence, Henley’s opinion is that hospitals must serve the community’s
need for health care services. This requires necessary and appropriate facilities, equipment and
personnel. Because hospitals must provide services, including high-cost specialty services (such
as neurosurgery), to indigent patients, it is reasonable to compensate physicians in excess of what

1

Mr. Henley has twenty-five years management experience in hospital operations and
finance. (Doc. 324, Ex. 8). He is qualified under Fed.R.Evid. 702 to offer expert opinion in this
area.

they can directly generate from professional fees. Plaintiff contends that this report fails to meet
the requirements of Fed.R.Civ.P. 26(a)(2)(B) and that this opinion would run afoul of Fed.R.Evid.
702. (Doc. 304).
Fed.R.Evid. 702 provides that:
A witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of an
opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge
will help the trier of fact to understand the evidence or to determine
a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods;
and
(d) the expert has reliably applied the principles and methods to the
facts of the case.
As the Supreme Court recognized in Daubert v. Merrell Dow Pharmaceuticals, Inc., Rule
702 contemplates that the district court will serve as a gatekeeper to the admission of scientific
testimony. 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993); see also McCorvey v.
Baxter Healthcare Corp., 298 F.3d 1253, 1256 (11th Cir.2002). Under Daubert and its progeny,
courts conduct a three-part inquiry to determine the admissibility of expert testimony, weighing
whether:
(1) [T]he expert is qualified to testify competently regarding the
matters he intends to address; (2) the methodology by which the
expert reaches his conclusions is sufficiently reliable as determined
by the sort of inquiry mandated in Daubert; and (3) the testimony
assists the trier of fact, through the application of scientific,
technical, or specialized expertise, to understand the evidence or to
determine a fact in issue.
City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562 (11th Cir.1998) (footnote omitted)
(citing Daubert, 509 U.S. at 589, 113 S.Ct. 2786).

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In their response, Defendants claim that “Henley is being offered to opine on the
considerations a non-profit or public hospital takes into account when meeting community needs
… and setting physician compensation.” (Doc. 324 at 2). These considerations include:
geography, patient mix, proximity of competing hospitals, community demographics, on-call
requirements, and the general availability of physicians within a given specialty. (Doc. 304, Ex.
2). These considerations are offered in support Henley’s opinion that it is commonplace (and
commercially reasonable) for hospitals like Halifax to compensate physicians in excess of what
they can generate from professional fees. (Doc. 324 at 7).
To the extent Henley testifies generally about hospital operations and the factors
considered in setting physician compensation, it would be relevant, reliable and of assistance to
the jury’s understanding of the matter. However, his report is not specific to Halifax, as he makes
no attempt to analyze these factors as they relate to Halifax physicians. Accordingly, his
testimony at trial will be limited to the general concept disclosed in his report. He will not be
allowed to relate this concept and the application of these factors to the compensation of Halifax’s
physicians. Specifically, he will not be allowed to testify as to whether Halifax’s compensation
decisions were commonplace or commercially reasonable. It is, therefore
ORDERED that said Motion is DENIED, provided, however, Henley’s testimony will be
limited as noted above.
DONE and ORDERED in Chambers, Orlando, Florida on October 18, 2013.

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Copies furnished to:
Counsel of Record
Unrepresented Party

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