First, it said, hospitals had become big business by increasingly marketing themselves as health care providers and profiting from emergency room services. Second, the public s reasonable expectations had changed as people came to rely on a hospital s reputation in seeking out health care and would assume a hospital s emergency room physicians were it employees. Consequently, Gilbert held that unless the patient knows or should have known that the physician providing treatment is an independent contractor, vicarious liability can attach to a hospital for the medical malpractice of its physicians under the apparent authority doctrine, Bilandic wrote in Petrovich. To prove apparent agency against a hospital, according to Gilbert, the plaintiff must show holding out by the hospital and justifiable reliance by the plaintiff, Bilandic wrote. We now hold that the apparent authority doctrine may also be used to impose vicarious liability on HMOs, Bilandic wrote in Petrovich.
Apparent agency is a question of fact.
Justifiable reliance means a plaintiff relied on the HMO, not on a specific physician, to provide health care. The element would not be met if a plaintiff had selected his own personal physician and merely looks to the HMO as a conduit through which the plaintiff receives medical care, he wrote. The doctrine of implied authority, bilandic wrote, comes into play when a defendant is shown to have exerted enough control over an alleged agent that it negated the person s status as an independent contractor. Where an HMO effectively controls a physician s exercise of medical judgment and that judgment is exercised negligently, the HMO cannot be allowed to claim that the physician is solely responsible for the harm that results, Bilandic wrote. In such a circumstance, both the physician and the HMO are liable for the harm that results.