1. You are the CEO of a small hospital located in a southeastern state. You have successfully competed with larger hospitals in the area because your hospital is more efficient than the larger hospitals, and you have a dedicated staff of doctors who have remained loyal to you despite receiving lower pay than doctors at the large hospitals.

Your hospital serves a rural population of mostly lower middle-class farm families who work small tracts of land. Most of those small farms have been passed down from generation to generation. In addition, your hospital serves a large population of immigrant families who work as farm hands on the local farms. Most of these families live at or below the poverty level. Yours is the only hospital within 50 miles.

Recent news reports have caused you great concern. Several of the large hospitals have been successfully sued by patients who claimed they were injured as the result of medical malpractice. At least six hospitals have paid out multi-million-dollar damage claims, some of which included punitive damages.

You realize that even one such lawsuit would likely put your hospital out of business. At a recent conference of small rural hospitals that you attended, several CEO’s warned that ours had become a very litigious society and that small hospitals need to protect themselves from these frivolous lawsuits. One speaker suggested that the tort laws should be changed to prevent these huge damage awards. The more you listened, the more you realized that these kinds of lawsuits could destroy your business, leaving many patients without hospital service. The last speaker at the conference was a lobbyist hired by the hospital industry to try to convince the state legislature to pass, among other things, a law placing a cap on damage awards for medical malpractice. He invited all interested hospital CEO’s to join in the effort to reform the tort law.

One of the members of the Board of Directors of your hospital also attended the conference. She has reported back to the full Board. As a result, the Board has voted to support the idea of tort reform. The Board has directed you to present, at the next meeting of the Board, a plan for tort reform in your state. Describe, in detail, the plan for tort reform that you will present at the next Board meeting.

2. You have started a new business called “Speedy Delivery.” You provide delivery services for local retail stores. You need to hire drivers. You have decided not to hire them as employees, but rather as independent contractors. The drivers would have to provide their own trucks of a type and model that you choose, and the trucks would have to display “Speedy Delivery” on large signs on the side of the trucks. You will provide the signs. In addition, you will dispatch the trucks to pick-up and drop off the deliveries. The drivers will be paid an amount for each delivery, based on the distance travelled and the size of the package. The drivers are not allowed to use their trucks except to deliver for “Speedy Delivery.”Explain why you chose to hire the drivers as independent contractors rather than as employees and discuss whether you are concerned that you might be accused of mis-classifying the drivers as independent contractors.

Write a total of 4 or more pages about this questions and fully explain your answer