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By Douglas A. Blair, JD, LLM (Health Law), Staff Attorney,
BJC Healthcare, St. Louis
Editor’s Note: In this article, our author, Douglas Blair, will discuss the growing trend of courts holding hospitals liable for the negligence of their emergency physicians, even when the hospital is not the employer of the physician, that is, when the hospital and the physicians (or physician group) have an independent contractor relationship. In particular, this article emphasizes the expanding role that the common law concept of "nondelegable duty" is playing in this trend. A discussion of a hospital’s separate and independent negligence, based upon the theory of corporate negligence (e.g., negligent credentialing) is beyond the scope of this article and will be the subject of a future article.
Why is a hospital’s vicarious liability for the acts of its emergency physicians an important topic? (See definition of vicarious liability, below.) The reason is not difficult to decipher. In today’s health care environment, in which physicians and other providers increasingly are at risk for medical malpractice suits, all parties with potential liability continually are trying to develop new ways to limit their ultimate exposure. For example, physicians can structure their relationship with the hospital to shift some, or all, of their malpractice risk to the hospital (e.g., by becoming an employee of the hospital). Hospitals are not ignorant of this fact and are quite adept at structuring contractual arrangements in an attempt to insulate themselves from the legal wiles of even the craftiest of plaintiff’s attorneys. A prime example of this tactic has been a shift in the relationship between hospitals and hospital-based physicians (e.g., radiologists and emergency physicians). In recent years, it has become commonplace for hospitals to not employ their emergency physicians, but, rather, to arrange for staffing the emergency department through an independent contractor agreement with a physician contract group. Structuring the relationship as an independent contractor relationship has important ramifications in medical malpractice since the general rule is that, even though an employer may be liable for the negligent acts of its employees (committed within the scope of employment), an "employer" is generally NOT liable for the negligent acts of its independent contractors. As a result, hospitals often go to great lengths to structure their relationships with physicians such that the law will more likely view the physician as an independent contractor rather than an employee.
|"Vicarious liability," sometimes referred to as "imputed negligence" or by its Latin name respondeat superior, is the term used to describe a party’s (Party A) liability for the negligent act(s) of another party (Party B), despite the fact that Party A played no part in the negligent act, did nothing whatever to aid or encourage it, and may even have done everything possible to prevent the negligent act.1 Party A’s negligence in such cases is based upon the relationship it has with Party B — usually an employment or agency relationship. In some ways, this is an imposition of strict liability on Party A; that is, liability without fault.|
1. W. Page Keeton, et al., Prosser and Keeton on the Law of Torts § 69. 5th ed. Belmont, CA: Wadsworth Publishing Co.; 1984.
The consequence to the emergency physician of the independent contractor relationship is that the physician may be left standing alone to bear the financial responsibility of any damages arising from his or her negligence. On the other hand, when the hospital is ultimately responsible for an emergency physician’s malpractice (e.g., as the physician’s employer), the physician should feel a significant level of relief relative to any concern that a judgment might exceed his or her malpractice insurance coverage. The old adage that "misery loves company" seems particularly true when you are a defendant in a lawsuit. As a result, measures being taken by courts to extend a hospital’s vicarious liability to the acts of its independent contractor physicians should come as a welcome development in the eyes of most emergency physicians.
Historically, hospitals were immune from medical malpractice liability under the doctrine of charitable immunity. Before government reimbursement of health care was as pervasive as it is currently, courts and legislatures reasoned that a charitable institution, such as a hospital, should devote its resources to treating the sick and injured, rather than compensating individuals injured by its negligent acts.1 Because the courts (or legislatures) reasoned that a charitable hospital’s assets should be used exclusively to provide care and should not be used to satisfy legal judgments, charitable hospitals were immune from suit (charitable immunity). Hospitals and the medical sciences, though, improved drastically over the last century and, with those improvements, came a corresponding increase in the importance of the role of hospitals in providing medical and health care.2 By the 1950s, courts began to take notice of the growing prominence of hospitals and the fact that they had begun actively supervising their medical staffs. The judiciary then began chipping away at the wall of immunity that had long protected hospitals against liability.
The seminal case that signified this changing judicial attitude was Bing v. Thunig.3 In Bing, the New York Court of Appeals opined that "today’s hospital is quite different from its predecessor of long ago; it receives wide community support, employs a large number of people, and necessarily operates its plant in a businesslike fashion."4 The Bing court additionally noted that, in contrast to what might have been the case at one time, hospitals by the 1950s were able to obtain liability insurance coverage, quelling the fear that a charitable hospital would be ruined by an adverse judgment in a medical malpractice case.5 Moreover, the court reasoned that hospitals "charge patients for medical care and treatment, collecting for such services, if necessary, by legal action . . . [and] the person who avails himself of hospital facilities’ expects that the hospital will attempt to cure him, not that its nurses and other employees will act on their own responsibility."6 That is, hospitals should be held liable because by this time they were taking an active role in ensuring the quality of care provided within their walls.
Today, it can scarcely be doubted that hospitals compete aggressively to provide the latest medical technology and the best facilities for the patients they serve.7 Hospitals not only aspire to be a source of pride in their local communities, but they seek to avoid operating at a financial loss, as well.8 Even so-called "nonprofit hospitals" are run much like any other large corporation in that they must operate in a fiscally responsible manner.9 Thus, hospitals in the aggregate, in an effort to attract business, spend billions of dollars to advertise their facilities and services in a variety of media, from newspapers and billboards, to television and the Internet.10
Recognizing such changes in the health care industry, courts gradually began to limit and eventually abolish the doctrine of charitable immunity. As the social and economic factors of the time gave rise to this doctrine, so too did they inevitably lead to its demise. In the words of one court:
The hospital itself has come to be perceived as the provider of medical services . . . [P]atients come to the hospital to be cured, and the doctors who practice there are the hospital’s instrumentalities, regardless of the nature of the private arrangements between the hospital and the physician. Whether this perception is accurate seemingly matters little when weighed against the momentum of changing public perception and attendant public policy.11
In the view of another court, this "public policy" is "a dynamic not static concept, and what was valid in the past is not necessarily a valid policy today. Moreover, when the reason for a declared public policy no longer exists, [courts] should not hesitate to abolish it and the rules which support the policy."12 And abolish it they have. Most, if not all, jurisdictions have come to recognize that "the words of whatever private contractual arrangements the physicians and the hospital [for profit or charitable] may have entered into, unbeknownst to the public, in an attempt to insulate themselves from liability for the negligence, if any, of the physicians," matter little when one considers the lengths to which those hospitals have gone to attract patients.13 In other words, many courts will look beyond the precise form of the hospital-physician relationship to find the hospital liable for the malpractice of its emergency physicians.
Furthermore, courts have recognized that a major component of a modern hospital’s business is the emergency department.14 Consequently, there has been a growing reluctance to permit hospitals to escape liability for negligent acts occurring in their emergency departments under the protective veil of their contractual arrangements with the physicians staffing those departments. In one court’s opinion: If emergency physicians "do their job well, the hospital succeeds in its chosen mission, profiting financially and otherwise from the quality of emergency care so delivered. On such facts, anomaly would attend the hospital’s escape from liability where the quality of care so delivered was below minimally acceptable standards."15 As with the basis for expanding the liability of hospitals in general, courts have likewise noted that "it is public policy . . . which should underlie the decision to hold hospitals liable for malpractice which occurs in their emergency rooms."16
The general umbrella theory under which courts have found hospitals liable for the torts of their physicians has been the concept of vicarious liability. This doctrine provides that an employer is liable for the torts of its employees committed within the scope of their employment, even though the employer was not itself negligent. In other words, it is a nonfault-based rule of liability. But note that the definition of vicarious liability reveals its most limiting factor: It applies only in the context of a master-servant relationship. Consequently, many hospitals historically evaded liability under this rule by simply contracting with their physicians as independent contractors rather than hiring them as employees. In response to this loophole, over the years, courts have relied on various principles from tort and agency law to hold hospitals liable for the negligent acts of their independent contractor physicians. Although this article will focus on the increasing prominence of nondelegable duty as the principle by which hospitals have been held liable in such cases, we will briefly review three other legal theories that have also been used by courts to hold a hospital liable for the negligent acts of its emergency physicians: ostensible agency or apparent authority, agency by estoppel, and inherent function.
Numerous courts have endorsed the doctrine of ostensible agency or apparent authority to find hospitals liable if an injured patient can prove that an emergency physician was the hospital’s "apparent agent."17 In the most rudimentary of terms, this means that, to a reasonable person, the emergency physician appeared to be acting as an employee of the hospital, or that it appeared that the hospital, rather than the physician, was providing the services. Ostensible agency or apparent authority is based on Section 429 of the Restatement (Second) of Torts (1965), which reads as follows:
One who employs an independent contractor to perform services for another which are accepted in the reasonable belief that the services are being rendered by the employer or by his servants, is subject to liability for physical harm caused by the negligence of the contractor in supplying such services, to the same extent as though the employer were supplying them himself or by his servants.
Although the required elements might vary slightly from state to state, to establish apparent authority, the injured patient must show that 1) he or she looked to the hospital, rather than the emergency physician, for care; and 2) the hospital "held out" the emergency physician as its employee.18
The focus is on the acts of the principal (i.e., the hospital), not the agent (i.e., the emergency physician). In other words, it is the authority that a reasonably prudent person would naturally assume the physician to possess because of the hospital’s actions.19
In the hospital context, the law in most states is that this doctrine "does not require an express representation to the patient that the treating physician is an employee of the hospital. Nor is direct testimony as to reliance required absent evidence that the patient knew or should have known that the treating physician was not a hospital employee when the treatment was rendered."20 That is, the patient is given the benefit of the doubt as to whether he or she thought the hospital was rendering care through an employed physician.
Some courts have relied upon the doctrine of agency by estoppel to find hospitals liable for the negligent acts of their independent contractor emergency physicians. Agency by estoppel, as the name implies, is based on the law of agency. Section 267 of the Restatement (Second) of Agency (1958) defines this term as follows:
One who represents that another is his servant or 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.
Comparing this standard to that of apparent authority discussed above, one can see that agency by estoppel is stricter in that it requires actual reliance by the patient (i.e., the patient must seek treatment relying on the representations of the hospital or the physician that the physician is an agent of the hospital). In applying this principle, the Ohio Supreme Court originally required that, in order for the hospital to be liable, the plaintiff must prove that:
i) the hospital made representations leading the plaintiff to believe that the negligent physician was operating as an agent under the hospital’s authority;
ii) the plaintiff was thereby induced to rely upon the ostensible agency relationship.21 The second element was interpreted as requiring that the plaintiff prove that she "would have refused . . . care if she had known [that the treating physician] was not an employee of the hospital."22 However, several years later, the Ohio Supreme Court re-examined its earlier position and noted the fallacy in its logic:
By requiring the patient . . . to demonstrate that she would have refused care had she known of the independent status of the treating physician, we have created an exception [to the rule that an employer is not vicariously liable for the negligent acts of its employees] that is so illusory that it forces the emergency patient to demonstrate that she would have chosen to risk further complications or death rather than be treated by a physician of whose independence she had been unaware. In addition, [this court’s earlier decision] imposed the burden that the patient ascertain and understand the contractual arrangement between the hospital and treating physician, while simultaneously holding that her belief upon arrival that the hospital would provide her with a physician is insufficient. Thus it is virtually impossible for the plaintiff . . . to establish reliance.23
Consequently, the court overruled its earlier opinion, stating that a "hospital may be held liable under the doctrine of agency by estoppel for the negligence of independent medical practitioners practicing in the hospital if it holds itself out to the public as the provider of medical services and, in the absence of notice or knowledge to the contrary, the patient looks to the hospital, as opposed to the individual practitioner, to provide competent medical care.
Unless the patient merely viewed the hospital as the site where her physician would treat her, she had a right to assume and expect that the treatment was being rendered through hospital employees and that any negligence associated therewith would render the hospital liable."24
Additionally, the court emphasized that the "notice" to the patient that a hospital’s physician is not an employee must come at a meaningful time.25 Therefore, according to the Ohio Supreme Court, efforts to prospectively disclaim liability, such as posting signs in the emergency department proclaiming that physicians working in that department are not hospital employees, are insufficient to avoid vicarious liability.26
Editor’s note: If you have trouble seeing the distinction between ostensible (apparent) agency and agency by estoppel, you are far from alone. More often than not, even attorneys and judges confuse the two concepts. As a result, in practice, the two concepts have considerable overlap and the only thing that need be remembered is that, if an emergency physician appears enough like an agent of the hospital, the hospital may be held vicariously liable for the physician’s malpractice.
The concept of inherent function is very similar to that of nondelegable duty. "[A]n inherent function of the hospital, [is] a function without which the hospital could not properly achieve its purpose."27 Basically, this principle asks which functions of a hospital are essential to its operation, reasoning that the hospital is responsible for performing those functions non-negligently. Two such functions recognized by courts are radiology and emergency services. Note that the focus of the inherent function test is the nature of the service being provided, rather than any reliance or expectation on the part of the patient as to the physician’s employment status. In Adamski v. Tacoma General Hospital, et al.,28 the plaintiff sued Tacoma General Hospital ("Tacoma General") and one of its independent contractor emergency physicians for damages resulting from misdiagnosis and treatment of a hand injury.29 Not surprisingly, Tacoma General argued that it was not vicariously liable for the negligent acts of its independent contractor physicians. After proceeding through a brief history of the erosion of protection afforded to hospitals by the vicarious liability doctrine, the Adamski court concluded that:
[w]hen, in fact, the hospital undertakes to provide medical treatment rather than merely serving as a place for a private physician to administer to his patients, the physician employed to deliver that service for the hospital may be looked upon as an integral part of the total "hospital enterprise." In such cases, it should make no difference that the physician is compensated on some basis other than salary or that he bills his patient directly. These are artificial distinctions, the efficacy of which has long since disappeared and to the perpetuation of which [this court does] not subscribe.30
The court also took judicial notice of the fact that the Washington State Board of Health in Olympia had adopted rules and regulations governing the establishment and maintenance of standards for the care and treatment of patients.31 In part, these regulations required a licensed hospital, such as Tacoma General, to provide emergency services in accordance with the community’s needs and the hospital’s capabilities.32 Additionally, the hospital is required to adopt written policies and procedures specific to emergency services.33 In particular, the hospital must have a physician who is responsible for the provision of emergency services and whose functions and responsibilities are subject to the hospital’s medical direction.34 Based upon this legislative and regulatory framework, the Adamski court concluded that Tacoma General’s independent contractor emergency physicians were performing an inherent function of the hospital.35 Therefore, Tacoma General could not evade its duty to provide such services non-negligently.
One of the newer bases for holding hospitals liable for the negligence of their independent contractor emergency physicians is the concept of nondelegable duty. Generally speaking, for a duty to be nondelegable, the duty must involve two things. First, the duty must be one that is either owed to the public or involves an inherently or abnormally dangerous activity.36 Second, the activity must involve an "employer"-independent contractor relationship.37 According to one of the more notable sources of authority on tort law:
[T]he employer’s enterprise, and his relation to the plaintiff, are such as to impose upon him a duty which cannot be delegated to the contractor . . . The cases of "nondelegable duty" . . . hold the employer liable for the negligence of the contractor, although he has himself done everything that could reasonably be required of him.
* * *
It is difficult to suggest any criterion by which the nondelegable character of such duties may be determined, other than the conclusion of the courts that the responsibility is so important to the community that the employer should not be permitted to transfer it to another.38
Consequently, "[t]he real effect of finding a duty to be nondelegable is to render not the duty, but the liability, not delegable; the person subject to a nondelegable duty is certainly free to delegate the duty, but will be liable to third parties for any negligence of the delegatee, regardless of any fault on the part of the delegator."39 In other words, the hospital does not itself have to be negligent because the nondelegable duty makes the hospital vicariously liable for the negligence of its emergency physicians, irrespective of any fault on the part of the hospital. In response to this theory, hospitals have argued that they do not have a nondelegable duty to guarantee safe treatment in their emergency departments. Physicians, they claim, not hospitals, have a duty to practice medicine non-negligently. Therefore, according to this argument, the hospital never had a duty that it could, much less did, delegate to its emergency physicians.
The Alaska Supreme Court was the first court to recognize the concept of nondelegable duty in a hospital context. Jackson involved an independent contractor emergency physician (John Power) who, while working at Fairbanks Memorial Hospital ("FMH"), failed to order certain unspecified procedures to determine whether there was damage to Brett Jackson’s (the patient) kidneys. Mr. Jackson had been airlifted to the emergency department after having fallen from a cliff. As a result of Dr. Power’s malpractice, damage to Jackson’s kidneys remained undetected for approximately nine to 10 hours after he arrived at the emergency department where he had been treated by Dr. Power. Ultimately, this damage caused Mr. Jackson to lose both of his kidneys. Jackson brought suit against FMH and Dr. Power. Mr. Jackson argued that FMH should be found liable for Dr. Power’s negligence under several theories, including that of apparent authority and nondelegable duty.
In deciding whether FMH had a nondelegable duty, the Jackson court first evaluated whether FMH had a duty to provide emergency services in the first place. The court considered that:
i) state regulations required general acute care hospitals, such as FMH, to maintain a physician at all times available to respond to emergencies;
ii) accreditation standards for the Joint Commission for the Accreditation of Hospitals (now Joint Commission for the Accreditation of Healthcare Organizations) in Oakbrook Terrace, IL, required that FMH have certain policies, procedures, and quality control mechanisms in place for its emergency department, as well as that the emergency department be "integrated with other units and departments of the hospital"
iii) FMH’s bylaws provided for the establishment and maintenance of an emergency room.41 Based upon these facts, the court reasoned that it could not be questioned that FMH had a duty to provide emergency department services, and that part of that duty included providing physician care in the emergency department.42
Finding that FMH had a duty to staff its emergency department, the court then turned to the issue of whether FMH could avoid responsibility for the care provided therein by claiming that the emergency physicians were not its employees. The court reviewed the other situations in which the common law has found that a nondelegable duty exists, such as common carriers for the safety of their passengers and landlords for the maintenance of common passageways. The myriad situations in which courts have found that a duty was nondelegable have been based upon the determination that "the responsibility [was] so important to the community that the employer should not be permitted to transfer it to another."43 To this list, the Jackson court added a hospital’s provision of emergency department services. The court had "little trouble concluding that patients, such as Jackson, receiving treatment at a hospital emergency room are as deserving of protection as . . . passengers [of a common carrier]. Likewise, the importance to the community of a hospital’s duty to provide emergency room physicians rivals the importance of the common-carriers’ duty for the safety of its passengers."44
In addition, the court considered how regulated hospitals were in the state, reasoning that:
[t]he hospital regulatory scheme and the purpose underlying it (to "provide for the development, establishment, and enforcement of standards for the care and treatment of hospital patients that promote safe and adequate treatment") along with the statutory definition of a hospital, (an institution devoted primarily to providing diagnosis, treatment, or care to individuals), manifests the legislature’s recognition that it is the hospital as an institution which bears ultimate responsibility for complying with the mandates of the law. It is the hospital that is required to ensure compliance with the regulations and thus, relevant to the instant case, it is the hospital that bears final accountability for the provision of physicians for emergency room care [A] general acute care hospital’s duty to provide physicians for emergency room care is nondelegable. Thus, a hospital such as FMH may not shield itself from liability by claiming that it is not responsible for the results of negligently performed health care when the law imposes a duty on the hospital to provide that health care.45
The court also discussed that its decision was based, in part, upon its perception that health care had become increasingly commercialized: "Not only is this rule consonant with the public perception of the hospital as a multifaceted health care facility responsible for the quality of medical care and treatment rendered, it also treats tort liability in the medical arena in a manner that is consistent with the commercialization of American medicine."46
Finally, the court directly attacked the legal fiction of emergency physicians being employed as independent contractors: "[W]e simply cannot fathom why liability should depend upon the technical employment status of the emergency room physician who treats the patient. It is the hospital’s duty to provide the physician, which it may do through any means at its disposal. The means employed, however, will not change the fact that the hospital will be responsible for the care rendered by physicians it has a duty to provide."47
One limitation of Jackson is that the court’s ruling does not apply to situations in which the patient is treated by his or her own physician in an emergency department provided for the convenience of the physician because such instances are beyond the scope of the duty assumed by an acute care hospital.48 This situation is, of course, increasingly uncommon.
At about the same time that the Alaska Supreme Court was grappling with Jackson, the New York Supreme Court was hearing a case that hinged on the same underlying issue of whether a hospital should be vicariously liable for the negligent acts of its independent contractor emergency physicians. In Martell, the plaintiff, Maria Martell, sued both the hospital and two of its physicians, Lea Tala and Jerome Weintraub, for emotional injuries that she allegedly incurred as a result of being erroneously informed by the defendant physicians that she was suffering from cancer.50 Drs. Tala and Weintraub were employed by Cooper Emergency Services of New York, PC, which staffed St. Charles Hospital’s emergency department at the time Ms. Martell was treated.51 Not surprisingly, St. Charles Hospital argued in its defense that, because the physicians staffing its emergency room were independent contractors, it should not be held vicariously liable for the physicians’ negligent acts. The Martell court, relying on public policy reasons and the realities of emergency medical care, disagreed:
[S]ound public policy demands that the full-service hospital not be permitted to contractually insulate itself from liability for acts of medical malpractice committed in its emergency room. First, the emergency room is an integrally related part of the full-service hospital. The hospital may not pretend that this essential element of its public service treatment facilities is a separate entity. Moreover, the nature of the situation when people turn to the hospital and its emergency room facilities for treatment is one fraught with crisis. People are often highly emotional. There frequently is no time to choose. Indeed, time is of the essence. The chances of going elsewhere for treatment are remote. Given the relationship of the emergency room to the full-service hospital and the crisis circumstances under which people seek emergency treatment, public policy requires that the hospital not be able to artificially screen itself from liability for malpractice in the emergency room.52
The Martell court’s decision is in harmony with Jackson in that the court was perfectly willing to disregard the technical form of the private contractual relationship between the hospital and its emergency physicians in order to accomplish its public policy objectives:
[E]ven with the knowledge that emergency room physicians were independent contractors, and not hospital employees, an individual requiring emergency room medical care, given a choice, would opt for the emergency room of the hospital which that individual perceived to have the better reputation. It is the hospital’s location and reputation which draw patients to its emergency room, as well as the exigencies of the moment, and, in this regard, the contractual relationship between the hospital and the emergency room physicians is irrelevant as a practical matter.53
Consequently, Martell implicitly supports the holding of Jackson in that it will not permit a hospital to delegate to independent contractor physicians its duty to provide non-negligent emergency medical services. Patients seeking such services will not be bound by "secret limitations" contained in the private contracts between hospitals and their emergency physicians.54 In the Martell court’s opinion, "hospitals are liable for the malpractice of physicians in hospital emergency rooms irrespective of private contractual relationships between the physicians and the hospitals and without regard for whether the patient has reason not to rely upon the appearance that the physician is a hospital employee."55 Both Martell and Jackson, then, support the policy that neither the underlying contractual relationship between a hospital and its emergency physicians, nor any attempts by the former to disclose the relationship to its patients (e.g., signs and disclosure forms) will protect the hospital against potential vicarious liability. The hospital has the responsibility to provide emergency department services, and it cannot circumvent its duty through a private contractual arrangement.
This recent case, decided in June 2000 by the South Carolina Supreme Court, involved the consolidation of two lawsuits against Tuomey Regional Medical Center (Tuomey) in South Carolina. One of the plaintiffs, Alethia Simmons, brought her father to the emergency department at Tuomey after he suffered a head injury from a moped accident. When she came to the emergency department, Ms. Simmons signed a consent form for her father’s treatment. This consent form contained the following provision: "THE PHYSICIANS PRACTICING IN THIS EMERGENCY ROOM ARE NOT EMPLOYEES OF TUOMEY REGIONAL MEDICAL CENTER. THEY ARE INDEPENDENT PHYSICIANS, AS ARE ALL PHYSICIANS PRACTICING IN THIS HOSPITAL."57 Ms. Simmons claimed not to have read the form because she was upset about her father’s injuries and, consequently, simply assumed that the emergency physicians were Tuomey’s own employees.
According to Ms. Simmons, the emergency physicians released her father without treating a serious head injury that was visible on the back of his head. The physicians apparently believed that his confused state was the result of intoxication, according to the court. Ms. Simmons’ father returned to Tuomey by ambulance the following day when his condition became worse. During this visit, the emergency physician on duty diagnosed him as suffering from a subdural hematoma and transferred him to another hospital. According to Ms.Simmons, her father died six weeks later because of complications caused by his head injury.
The other plaintiff, John H. Cooper, who previously had suffered a heart attack, was driven to Tuomey by a friend after experiencing chest pains. At Tuomey’s emergency department, Mr. Cooper informed the receptionist that he was having a heart attack and asked for immediate help. Mr. Cooper alleged that he waited on a gurney for at least an hour and a half before seeing a physician and that this delay caused him serious injury. In contrast to Ms. Simmons, Mr. Cooper did not sign a consent form containing the "independent physician" language quoted above. Consequently, Mr. Cooper believed that the emergency physicians were Tuomey employees. Moreover, Ms. Simmons and Mr. Cooper both claimed that they did not see any signs or other indications that the emergency physicians, working in an area that was an integral part of the hospital campus, were anything other than Tuomey employees.
Tuomey’s emergency physicians were, in reality, employees of Coastal Physicians Services Inc. (Coastal), which was under contract with Tuomey to staff its emergency department. The contract referred to Coastal as an "independent contractor" that provides "independent-contractor physicians" to work in Tuomey’s emergency room. The contract also stated that, "except as hereinafter provided and to the extent practice and professional conduct of all Hospital’s medical staff members are regulated by the Hospital, the Physicians shall not be under the direction or supervision of the Hospital in performance of their Emergency Department duties."58
The South Carolina Supreme Court was unimpressed by Tuomey’s reliance on its contractual relationship with Coastal and the consent form that Simmons signed. The legal basis upon which the court relied to impose liability on Tuomey was the concept of a nondelegable duty. After discussing the other situations in which a nondelegable duty exists, the court reasoned that a "principle that applies in cases of poorly repaired brick floors and sloppily loaded cargo certainly applies to situations in which people must entrust that most personal of things, their physical well-being, to physicians at an emergency room intimately connected with and closely controlled by a hospital."59 In situations such as these, a nondelegable duty means that a person or entity entrusted with important duties may not, in certain circumstances, assign those duties to somebody else and then expect to walk away unscathed when things go wrong.60
The Simmons court then outlines the "trend" of other jurisdictions to expand the applicability of the apparent agency doctrine in the hospital-independent contractor physician context. "Under that trend, hospitals will not be allowed to escape liability by giving last-minute notice of independent-contractor practitioners through admission forms or emergency room signs."61 The Simmons court used this observation as a springboard for taking the policy even further and adopting the nondelegable duty exception. Consequently, "[t]he result [of this decision] is that hospitals may be held liable for the malpractice of their emergency room physicians, regardless of whether it is through a theory of apparent agency or nondelegable duty."62
Not all courts, however, have been willing to accept the principle of nondelegable duty as a mechanism by which to find hospitals liable for the negligent acts of their independent contractor emergency physicians. Missouri, Connecticut, and Texas all have expressly rejected the application of this principle of liability in the hospital emergency department context. In Kelly v. St. Luke’s Hospital of Kansas City,63 the plaintiffs sued the defendant hospital for the death of a family member caused by the negligence of two independent contractor emergency physicians. The plaintiffs sued the hospital on theories of apparent authority and nondelegable duty.64 With respect to nondelegable duty, the Missouri Court of Appeals found that there was no statutory, regulatory, or case law basis for ruling that Missouri law precludes the delegation of emergency services by a hospital to independent contractor emergency physicians.65 Rather, according to the court, state law only required the defendant hospital to properly equip and competently staff its emergency department, a duty that it was free to delegate.
Connecticut is another state that has rejected the nondelegable duty exception in this context. In Menzie et al. v. Windham Community Mem. Hosp.,66 a federal court, applying Connecticut law, recognized that state regulations required hospitals to provide adequate care 24 hours per day for persons in emergency situations.67 Even though this factor proved significant in the Jackson court’s determination that such a regulation imposed a nondelegable duty on the hospital to provide emergency services in a non-negligent manner, the Menzie court reached the opposite conclusion: "The hospital’s duty is to provide a place for treatment and ensure the availability of treatment. The hospital is not necessarily charged with, nor has it undertaken, rendering or performing the actual care. The physician’s duty is to administer medical care in a non-negligent manner."68 Thus, the court implicitly acknowledged that a hospital could delegate its regulatory duty to provide adequate care for persons with acute emergencies and, thereby, avoid exposing itself to any liability for negligence on the part of the independent contractor emergency physician.
Finally, the Texas Supreme Court has stated flatly that it is unwilling to take "the full leap" of imposing a nondelegable duty on hospitals for the medical malpractice of emergency physicians.69 In that court’s opinion: "Imposing such a duty is not necessary to safeguard patients in hospital emergency rooms. A patient injured by a physician’s malpractice is not without a remedy. The injured patient ordinarily has a cause of action against the negligent physician and may retain a direct cause of action against the hospital if the hospital was negligent in the performance of a duty owed directly to the patient."70 Consequently, the Texas Supreme Court based its decision on the fact that the patient still had a "deep pocket" from which it could recover damages (i.e., the negligent emergency physician or, more likely, his or her insurance carrier). The Missouri and Connecticut decisions, in contrast, were premised on the notion that their respective state laws did not prohibit a hospital from delegating its duty to provide adequate emergency department services.
Whether relying upon the principle of ostensible agency or apparent authority, agency by estoppel, inherent function, or nondelegable duty, one thing is quite clear: Courts are becoming increasingly willing to disregard the underlying private contractual relationship existing between a hospital and its emergency physicians in order to hold hospitals liable for the negligence of their emergency physicians. From a public policy perspective, this judicial activism should come as no surprise.
When a patient comes into an emergency department, he or she is often in no physical or mental condition to effectively comprehend the protective measures being taken by the hospital in an attempt to prospectively limit its liability (e.g., disclosing the independent contractor relationship of the emergency physicians on signs and consent forms). Furthermore, even if the patient were able to understand such disclaimers, if a true emergency existed, it seems ludicrous to claim that the patient could have sought treatment elsewhere if the emergency physician’s independent contractor relationship was a basis for concern. Therefore, as a matter of public policy, it seems reasonable to hold the hospital vicariously liability for the negligence of its emergency physicians. The public’s perception is that the hospital exercises at least some control or supervision over its emergency physicians, such that the courts are justified in holding the hospital ultimately responsible if something goes wrong.
To those emergency physicians reading this article who are now rubbing their latex-covered hands together and gleefully thinking, "Great, this means I’m off the hook!" — A word of caution is in order: Read your contract CAREFULLY. Most likely, it contains a provision that requires you (or your contract group) to defend, indemnify, and hold the hospital harmless from all claims and liabilities resulting from your negligence.
Such provisions are generally enforceable and are one of the reasons hospitals require that their emergency physicians have at least a minimum amount of professional liability coverage and that the hospital be named as an additional insured. The lesson to be learned here is that the party who is liable for an injury might, or might not, be the party who ultimately bears the entire burden of paying the damages.
Although it might seem like a bit of self-promotion for the legal profession, this scenario is just one more reason that all emergency physicians are well-advised to consult with an attorney experienced in negotiating physician employment or independent contractor agreements before entering into any such contract.
1. See, Simmons v. Tuomey Regional Medical Center, 2000 S.C. LEXIS 130, *9-10 (S.C. 2000); Martin C. McWilliams and Hamilton E. Russell, Hospital Liability for Torts of Independent Contractor Physicians, 47 S.C.L.Rev. 431, 434-35 (19996); Kenneth S. Abraham and Paul C. Weiler, Enterprise Medical Liability and the Evolution of the American Health System, 108 Harv. L. Rev. 381, 385-86 (1994); Steven R. Owens, Note, 1990 Wis. L. Rev. 1129, 1131-32 (1990).
2. See, Simmons at *10.
3. 143 N.E.2d 3 (N.Y. 1957).
4. Id. at 7.
6. Id. at 8.
7. Simmons at *10.
8. Id. at *10-11.
9. Id. at *11.
11. Simmons v. Tuomey Regional Medical Ctr., 498 S.E.2d 408, 411 (S.C. Ct. App. 1998), quoting McWilliams and Russell, supra, 47 S.C. L. Rev. at 473.
12. Fitzer v. Greater Greenville South Carolina Young Men’s Christian Ass’n, 282 S.E.2d 230, 231 n.3 (S.C. 1981).
13. Gilbert v. Sycamore Municipal Hosp., 622 N.E.2d 788, 794, quoting Brown v. Coastal Emergency Serv., Inc., 354 S.E.2d 632, 637 (Ga. App. 1987), aff’d, 361 S.E.2d 164 (1987).
14. Id. at 793; See also, Martell v. St. Charles Hosp. et al., 523 N.Y.S.2d 342, 350 (1987) (citing cases in which the independent contractor relationship of a physician did not bar a hospital’s liability).
15. Id. at 793-794, quoting Hardy v. Brantley, 471 So.2d 358, 371 (Miss. 1985).
16. Martell v. St. Charles Hosp. et al., 523 N.Y.S.2d 342, 352 (1987).
17. See, e.g., Jackson v. Power, 743 P.2d 1376, 1379-82 (Alaska 1987) (ruling that a hospital may be found liable for negligence of ER physicians under the apparent agency doctrine); Gilbert v. Sycamore Mun. Hosp., 622 N.E.2d 788, 794-96 (Ill. 1993); Pamperin v. Trinity Mem'l Hosp., 423 N.W.2d 848, 856-58 (Wis. 1988) (applying the doctrine in which a radiologist misread the X-ray of an emergency department patient).
18. See, e.g., Jackson at 1380.
19. See, Gilbert v. Sycamore Municipal Hosp., 622 N.E.2d 788, 795 (Ill. 1993).
20. Jackson at 1382 n.10; See also, Gilbert at 795.
21. See, Clark v. Southview Hosp. and Family Health Ctr., 628 N.E.2d 46, 48 (Ohio 1994), quoting Albain v. Flower Hosp., 553 N.E.2d 1038 (Ohio 1990).
22. Clark at 50, quoting Albain at 1050.
23. Clark at 50. But cf Menzie et. al. v. Windham Community Mem. Hosp., 774 F. Supp. 91, 97 (D. Conn. 1991), requiring actual reliance by the patient despite the growing body of caselaw supporting the elimination of this requirement.
24. Id. at 53.
25. Id. at 54.
26. Id. at 54 n.1.
27. Beeck v. Tucson Gen. Hosp., 500 P.2d 1153, 1158 (Ariz. App. 1972).
28. 579 P.2d 970 (Wash. App. 1978).
29. Id. at 972.
30. Id. at 975 (footnotes omitted) (emphasis added).
31. Id. at 977 n.5.
35. Id. at 977.
36. See Restatement (Second) of Torts § 427A (1965). Courts have relied upon the "publicly-owed duty" aspect of this first requirement in applying the nondelegable duty principle to hospitals.
38. Keeton, supra note 1, at § 71.
39. McWilliams and Russell, supra note 2, at 452.
40. 743 P.2d 1376 (Alaska 1987).
41. Id. at 1,382-1,383.
42. Id. at 1,383.
43. See note 39 supra.
44. 743 P.2d at 1384.
45. Id. at 1,384-1,385 (citations omitted).
46. Id. at 1,385.
48. Id. at 1,385.
49. 523 N.Y.S.2d 342 (1987).
50. Id. at 343.
51. Id. at 348.
52. Id. at 351, quoting Hannola v. City of Lakewood, 426 N.E.2d 1187, 1190 (Ohio App. 1980).
53. Id. at 351-352.
54. Id. at 348, quoting Mduba v. Benedictine Hosp., 52 A.D.2d 450, 453-454.
55. Id at 352.
56. 2000 S.C. LEXIS 130 (S.C. 2000).
57. Id. at *3.
58. Id. at *4.
59. Id. at *17.
61. Id. at *24.
62. Id. at *24-25.
63. 826 S.W.2d 391 (Mo. App. 1992).
64. Id. at 395.
66. 774 F. Supp. 91 (D. Conn. 1991).
67. Id. at 98.
69. See, Baptist Mem. Hosp. Sys. V. Sampson, 969 S.W.2d 945, 949 (Tex. 1998).
70. Id. at 949.
In ED Legal Letter, August 2000, we discussed criminal charges brought against physicians in the context of alleged medical malpractice. Among the cases that were discussed, was a case involving Dr. Wolfgang Schug. As of August 2000, the civil matter involving Dr. Schug was pending. We have been advised by Dr. Schug’s attorney that the malpractice case against Dr. Schug was tried and a unanimous defense verdict was returned by the jury.