Source: https://www.eckolaw.com/blog/2016/september/holding-hospitals-liable-for-the-negligence-of-t/
Timestamp: 2019-04-22 11:13:47+00:00

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In this modern and very competitive age of medicine, many hospitals are launching aggressive marketing and advertising campaigns in a quest to obtain market recognition and garner public trust and patronage. Many of these advertising campaigns feature physician endorsement of the hospital or, conversely, hospital endorsement of certain physicians and include all forms of media, ranging from bill-boards and television ads to print ads in small local newspapers. Either way, the message in these advertising campaigns is unmistakably clear: “Choose our Hospital-We provide excellent care;” the obvious implication being that the “We” refers not only to hospital staff and providers of nursing care, but to the physicians that practice at the hospital as well.
In many instances, the physicians appearing in these ads and practicing medicine at these hospitals have actually been recruited by the hospital to move to the city where the hospital is located, open a private practice within the city and, of course, bring business and patients to the hospital facility for medical treatment and procedures. In turn, the hospital grants the physician privileges to practice medicine in the subject hospital and agrees to pay the physician an annual salary as well as, in some instances, a “recruiting” or “signing” bonus for becoming part of that hospital’s “team.” While the vast majority of these “recruited” physicians and/or ” hospital team-members” are paid by the hospital as independent contractors rather than as employees, that subtle but significant legal distinction is generally not disclosed to the unsuspecting patient who believes, when she goes to the hospital for treatment, that the physicians provided to treat her are employed by the hospital.
So what, then, is a patient to do when she goes to the hospital for treatment, is provided by the hospital with one or more of its recruited-but non-employee-physicians, and is seriously injured through the negligent acts and/or omissions of those physicians? Since these physicians are not “employees” of the hospital, the hospital’s vicarious liability for their negligence is not assumed. However, in certain circumstances, a hospital may be held liable for the negligence of its non-employee physicians under a theory of apparent authority. Although still an issue of first impression in Utah, the theory of apparent authority has gained wide-spread acceptance throughout the country, as a significant number of jurisdictions have whole-heartedly accepted the apparent authority doctrine as a means of allowing a patient to hold the hospital responsible for the negligence of its non-employee physicians.
One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.
1. THE EMERGENCY ROOM SETTING.
2. BEYOND THE E.R. SETTING.
In those instances where the hospital has obtained the signature of the patient on a consent form attempting to notify the patient of the independent-contractor status of the physician, do not assume that such a form automatically defeats the patient’s apparent authority claim against the hospital. The circumstances under which the consent form was provided to the patient, as well as the conditions under which the patient’s signature was obtained, must be reviewed to determine if the notice is sufficient and/or valid. For example, in Sword v. NKC Hospitals, Inc., 714 N.E.2d 142 (Ind. 1999), the plaintiff signed such a consent form but was still allowed to pursue her apparent authority claims against the hospital for the negligence of an anesthesiologist provided by the hospital to administer an epidural to the patient. The court allowed the patient’s apparent authority claim against the hospital to go forward, in spite of the consent form’s notification provision to the patient of the anesthesiologist’s independent contractor status. In holding in favor of the plaintiff, the court found that such a form was not sufficient to put plaintiff on notice of the physician’s independent contractor status because the consent form was given to her to review and sign right before she went into labor. Accordingly, when such a form exists, it is crucial to study the circumstances under which the form was presented to the patient and how and when the patient’s signature was obtained in determining both the sufficiency and the validity of the notice.
Public policy strongly favors holding hospitals liable for the negligence of their non-employee physicians when an apparent-agency relationship has been created. As previously discussed, we are living in a day and age when hospitals aggressively compete for business utilizing advertising campaigns in order to persuade the public that it ought to place its health and well-being, as well as its health-care dollars, in the hands of that particular hospital. Hospitals have become providers of a myriad of medical services and have physicians on staff and/or on-call in most specialties. Indeed, many hospitals are directly involved in the selection, recruitment and payment of these physicians. Yet, hospitals attempt to escape liability for the physicians’ negligence by engaging and paying them as independent contractors instead of as employees. A hospital’s recruitment and endorsement of many of these physicians is for the specific purpose of bringing the hospital business by creating the perception that the hospital is well-staffed and has capable physicians on the hospital’s medical “team.” When the public is left to conclude from the hospital’s actions that the physician belongs to the hospital and/or is one of the hospital’s agents and/or employees, and relies on that message, public policy requires that the hospital be held accountable for the actions of those physicians as if they were employed by the facility.
On a more basic level, (recruiting and advertising aside) when a patient presents to the hospital for treatment and receives medical care from a physician that is chosen and provided to her by the hospital, she should be allowed to reasonably conclude from this that the physician is an agent and/or employee of the hospital, unless she is otherwise notified and the notice provided is both legally sufficient and valid. Any person receiving medical care from a physician that is provided by the hospital could reasonably conclude that the physician is an agent and/or employee of the hospital and that the hospital is responsible for the quality of care that is provided. When a hospital’s conduct leads a patient to believe that the physicians practicing at the hospital are employed by the hospital, the hospital should not be allowed to escape responsibility for the quality of medical care provided within its own walls by the very physicians it has placed there to provide care to its patients. Such a result is unfair to patients and allows the hospital to capitalize on a fiction of its own making (“these physicians are our employees”) while denying patients the right to hold the hospital responsible for the very perception its actions created. Clearly, public policy requires that hospitals be held liable for the negligence of their non-employee physicians when an apparent authority relationship exists.
Martell v. St. Charles Hospital, 523 N.Y.S.2d 342, 350 (N.Y. Sup. Ct. 1987). See, also, Sharsmith v. Hill, 764 P.2d 667 (Wyo. 1988); Clark v. Southview Hosp. and Family Health Ctr., 628 N.E.2d 46 (Ohio 1994);Kashishian v. Port, 481 N.W.2d 277 (Wis. 1992); Torrence v. Kusminsky, 408 S.E.2d 684 (W. Va. 1991); Pamperin v. Trinity Mem. Hosp., 423 N.W.2d 848 (Wis. 1988); Richmond City Hosp. Auth. v. Brown, 361 S.E.2d 164 (Ga. 1987); Irving v. Doctors Hospital of Lake Worth, Inc., 415 So.2d 55 (Fla. Ct. App. 1982), petition for review denied, 422 So.2d 842; Paintsville Hospital Co. v. Rose, 683 S.W.2d 255 (Supreme Ct. Ky. 1985), etc.
In determining issues of agency law in other contexts, Utah courts have routinely turned to the Restatement for guidance and have historically recognized the legal principles espoused therein. See: Luddington v. Bodenvest, Ltd., 855 P.2d 204 (Utah 1993).
Clark, 628 N.E.2d at 52.
Meija v. Community Hospital of San Bernardino, 99 Cal. App. 4th 1448, 1453 (2002).
Clark, supra, 628 N.E.2d at 53.
Meija, 99 Cal. App. 4th at 1454 (citations omitted).
Clark, 628 N.E.2d at 53.
12720 S.W.2d 618, 625 (Tex. Ct. App. 1986) rev’d on other grounds, 925 S.W.2d 503 (Texas 1997).
Kashishian v. Port, 167 Wis.2d 24, 481 N.W.2d 277 (1992).
Laderer v. St. Rita’s Medical Center, 702 N.E.2d 476, 481 (Ohio Ct. App. 1997)(anesthesiologist); (citing Grewe v. Mt. Clemens General Hospital, 273 N.W.2d 429, 433 (Mich. 1978) (internist and orthopedic surgeon/resident).
See: Guadagnoli v. Seaview Radiology, 712 N.Y.S.2d 812 (N.Y.S. 2000) (radiology); Arthur v. St. Peters Hosp., 405 A.2d 443 (N.J. Super. 1979) (radiology); Gunther v. Staten Island Hospital, 640 N.Y.S.2d (N.Y. App. 1996); Stanhope v. Los Angeles College of Chiropractic, 128 P.2d 705 (Cal. App. 2nd Dist. 1942) (finding liability against the facility for the negligence of a radiologist/x-ray technician);Sword v. NKC Hospitals, Inc., 714 N.E.2d 142 (Ind. 1999) (anesthesiologist); Sharsmith v. Hill, 764 P.2d 667 (Wyo. 1988) (pathologist); Dahan v. UHS of Bethesda, Inc., 692 N.E.2d 1303 (Ill. App. 1998) (diabetes clinic);Hunt v. Mercy Medical Center, 710 A.2d 362 (Md. App. 1998) (pathologist); Grewe v. Mt. Clemens General Hospital, 273 N.W.2d 429 (Mich. 1978) (internist); Simmons v. St. Clair Memorial Hosp., 481 A.2d 870 (Pa. Super. 1984) (psychiatrist); Soltis v. State of New York, 568 N.Y.S.2d 470 (N.Y. App. Div. 1991) (physician’s assistant examining prisoner on behalf of state); Howard v. Park, 195 N.W.2d 39 (Mich. App. 1972) (physician removing cast at another physician’s clinic); Malanowski v. Jabamoni, 688 N.E.2d 732 (Ill. App. 1997) (gynecologist at outpatient clinic); Quintal v. Laurel Grove Hosp., 397 P.2d 161 (Cal. 1964) (anesthesiologist). Seneris v. Haas, 291 P.2d 915 (Cal. 1955) (anesthesiologist).
Meija v. Community Hospital of San Bernardino, 99 Cal.App.4th 1448 (Cal. App. 2002); Butler v. Domin, 15 P.3d 1189 (Mont. 2000); Sword v. NKC Hospitals, Inc., 714 N.E.2d 142 (Ind. 1999); Clark v. Southview Hospital & Family Health Center, 628 N.E.2d 46 (Ohio 1994); Kashishian v. Port, 481 N.W.2d 277 (Wis. 1992); Torrence v. Kusminsky, 408 S.E.2d 684 (W.Va. 1991); Sharsmith v. Hill, 764 P.2d 667 (Wyo. 1988); Paintsville Hospital Co. v. Rose, 683 S.W.2d 255 (KY 1985); and Hardy v. Brantley, M.D., 471 So.2d 358 (Miss. 1985).
What Makes a Hospital Liable for Its Physicians?

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