Hospital Vicarious Liability for Negligence by Independent Contractor Physicians: A New Rule for New Times

The contractual relationship between a treating physician and the hospital where treatment takes place is a factor in determining whether a patient can hold the hospital liable for medical malpractice occurring on the hospital’s premises. Under the doctrine of respondeat superior, a hospital is vicariously liable only if an agent or employee of the hospital commits malpractice. Historically, physicians were agents or employees of the hospitals where they provided treatment. Therefore, patients could hold hospitals responsible for malpractice committed on the hospitals’ premises. However, under common law, hospitals were immune from liability caused by the negligence of independent contractors.Due to dramatic changes in the health care industry, hospitals started providing a wide array of medical services through independent contractor physicians. Relying on their common-law immunity, hospitals were able to benefit from relationships with independent contractor physicians while avoiding any risk of liability for medical malpractice committed by those same physicians on hospital premises. Recognizing the ability of hospitals to exploit their common-law immunity, courts across the nation began holding hospitals responsible for the negligence of independent contractor physicians.In Gilbert v. Sycamore Municipal Hospital, the Illinois Supreme Court abrogated hospital immunity to vicarious liability of independent contractor physicians. The Gilbert court held that hospitals could be held liable for the actions of independent contractor physicians under the doctrine of apparent authority. However, the court’s decision failed to adequately set forth the requirements for apparent authority liability. In particular, the court failed to sufficiently define the required element of reliance and did not address the situational differences between emer-gency room and non-emergency room treatment.After Gilbert, courts in Illinois imposed divergent reliance standards, including detrimental and assumed reliance. Furthermore, courts applied different and contradictory interpretations of those standards. As a result, vicarious liability of hospitals under the doctrine of apparent authority has developed into a confusing and unpredictable area of law in Illinois. Other states have also struggled with the reliance requirement of independent contractor vicarious liability for hospitals.The author proposes a comprehensive, hospital-specific vicarious liability rule for independent contractor physician negligence. The rule accounts for both emergency room and non-emergency room situations, as well as situations where a patient relies on a third-party for treatment decisions. The rule is based on traditional agency by estoppel principles and diverges from those principles only where required by the public policy concerns giving rise to the abrogation of hospital common-law immunity to independent contractor vicarious liability. In short, the author proposes that non-emergency room patients have a heavy burden to establish the reliance requirement for liability, while emergency room patients are relieved of the burden to show reliance.

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