Long before she was a lawyer, Shellie Karno, corporate counsel for Norwegian American Hospital in Chicago, had to be well-versed in legal aspects of healthcare.
Karno was a practicing nurse for ten years. While working in the labor-and-delivery unit of a hospital in Cook County, Illinois, during the 1980s, she witnessed the rise in medical malpractice lawsuits and the first million-dollar settlements. “There was a fairly litigious environment in Cook County, and I became interested in the practice of defensive medicine brought on by the malpractice crisis,” she says. “As clinicians, we became cognizant of the downside of our practice.”
The experience taught her a lot about healthcare and law, not to mention decision making. “In retrospect, everything looks clear and easy, but in the moment, it’s not,” she says. “I’m not saying physicians don’t occasionally make mistakes, but the plaintiffs’ bar took advantage of that opportunity to gouge the system and make a lot of money.”
Inspired by the extremely litigious environment in Chicago, Karno entered Loyola University Law School and began taking classes while she was still working as a nurse. “I wanted to protect providers,” she says. “I also wanted to serve in an educational role. The crisis made practitioners more cognizant of following protocols, standards, and evidence-based medicine, which are all good things.”
Upon graduation, Karno first worked with local hospitals in her role at the Joint Commission, a national, independent, nonprofit accreditation organization. She then took a job at a private practice, before eventually joining Norwegian American in 2012. As the hospital’s only in-house counsel, she is responsible for the entire legal function of the organization, including governance, employment, contract review, staff credentialing and licensing, professional liability claims management, staff affairs, and compliance—just about everything except litigation. She works with outside counsel, as well. “I have been in this business long enough to know what I know and what I don’t know,” she says. “I sometimes consult with outside attorneys on compliance matters and medical staff matters, but not that often. The medical staff is an independent body, so sometimes it is better to use outside counsel, so you can still work with them on an operational level.”
“There are so few hospitals in urban areas that are not part of a huge system anymore. We are a throwback to the old, stand-alone community hospital.”
Karno’s nursing background has been beneficial for her legal work. “Having been on the floor—on the front line—I understand how things work,” she says. “It’s one thing to talk about chain-of-command policy, but it’s another thing when you are on the floor.”
For example, she says her background gives her credibility with nurses and physicians, which is helpful when reviewing contracts.
Norwegian American is a 200-bed community hospital that serves a largely safety-net population (about 70 percent of its patients are on Medicaid) in the slowly gentrifying Chicago neighborhood of Humboldt Park. The hospital is in the process of updating its services and its look. “We hope to capture some of our new neighbors in order to get a different payer mix, while staying loyal to our core customers,” she says. “We don’t want to abandon that population.”
Renovations are needed, as the building is 123 years old. “Parts of it are still that old, believe it or not,” Karno says. The current project is to upgrade the first floor, including the emergency department. “We are bringing it into the twenty-first century so patients don’t feel like they are walking into an old hospital,” she says. Much of the remaining areas of the hospital have already seen upgrades. “Our operating room is state-of-the-art,” she says. “We have been improving our radiology area. Our labor and delivery rooms have been redone, and our ICU has been totally updated to be state-of-the-art. You wouldn’t think you were in an old hospital in these units. It is just the ER and first floor that don’t have that.”
Norwegian American is currently engaged in the planning phase of a community development and wellness project that encompasses a twenty-four-block area surrounding the hospital. Phase one involves developing a road map to chart the journey toward achieving a wellness district. “With our proximity to beautiful Humboldt Park and with the changing neighborhood, I believe the community development and wellness project is coming at the right time, in the right place, and it’s the right idea for this neighborhood,” she says. “With the assets the hospital controls and our 125-year presence in the community, the hospital is the right champion to lead this project based on the desire from other community organizations that we take the lead in developing infrastructure to advance community well-being. In addition, we have letters of support from our mayor, alderman, US senator, state representatives, and county commissioners.”
Although it’s relatively small, Norwegian American is busy: the hospital has about 35,000 emergency room visits a year and a robust amount of labor and delivery business. As such, it is an important asset to the community it serves. “There are so few hospitals in urban areas that are not part of a huge system anymore,” she says. “We are a throwback to the old, stand-alone community hospital. We are located on two side streets, so you really have to be in the neighborhood to even know we are here. Many of our employees have worked here thirty-plus years, and many live in the neighborhood. We are a real economic engine for the community.”