Most hospitals have three categories of doctors practicing medicine in their hospital: (1) a doctor who has privileges at that hospital; (2) salaried employees and (3) independent contractors. In emergency rooms in Maryland, most of the doctors that are providing treatment are independent contractors.
Of course, patients don’t know this. In fact, if you polled members of the Maryland State Bar Association, I think you would find the average Maryland lawyer does not know this either. So the question is can the hospital hide behind its independent contractor relationship with the ER group? The question hinges on whether malpractice lawyers can hold hospitals vicariously liable for its contractors’ negligence under the theory of ostensible/apparent agency. Certainly, hospitals argue for the application of the rule that it should be absolved of liability because the ER doctors are independent contractors over who it has no control.
Maryland follows the apparent agent theory set forth in the Second Restatement of Agency. Section 267 says that:
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.
The seminal Maryland malpractice case for ER liability is Mehlman v. Powell. The malpractice lawsuit in this case stemmed from a patient who went to the emergency room at Holy Cross Hospital. The man – like most patients – had no clue that the ER was not operated by the hospital. Plaintiffs argued the ER doctor misdiagnosed his heart condition by misreading his electrocardiogram and that the malpractice caused the death of their father/husband.
The Maryland Court of Appeals rejected the hospital’s contention that it could not be vicariously liable for the actions of an independent contracting doctor’s malpractice:
[A] hospital . . . is engaged in the business of providing health care services. One enters the hospital for no other reason. When [the plaintiff] made the decision to go to [the hospital], he obviously desired medical services and equally obviously was relying on [Holy Cross] to provide them. Furthermore, the hospital and the emergency room are located in the same general structure. . . . It is not to be expected, and nothing put [the plaintiff] on notice, that the various procedures and department of a complex, modern hospital . . . are in fact franchised out to various independent contractors.
Accordingly, the Maryland high court ruled that Holy Cross Hospital was liable for the emergency room doctor’s malpractice because the ER doctor was the apparent agent of the hospital.
Doesn’t it make sense to hold the hospital responsible for the emergency room doctor’s negligence? Think about it: even if the patient learns that the ER is an independent contractor when she gets to the hospital, what real choice does the patient have at that point? Also, doesn’t the imposition of liability incentivize hospitals to establish organizational structures that promote high standards of care? Hospital malpractice lawsuits – like them or hate them – do keep the hospital’s foot on the safety pedal.