SPRINGFIELD — The Illinois Supreme Court's recent decision to not hold Northwestern Memorial Hospital vicariously liable for alleged malpractice committed by doctors from an independent clinic could have far-reaching implications for hospitals in the state, making it harder for trial lawyers to loop hospitals into some medical malpractice lawsuits.
Plaintiff Christinia Yarbrough had sued the hospital, claiming mistakes allegedly committed by her doctors, who held practice privileges at Northwestern, led to the premature birth of her child.
Justin DeLuca, an attorney at Chicago-based SmithAmundsen, said the decision resolved a key legal question facing hospitals.
“The Supreme Court, despite the divided decision, held that a hospital cannot be held liable for the actions of an employee/agent from an unrelated and independent clinic,” DeLuca said.
The Illinois Supreme Court on Dec. 29 sided with Northwestern Memorial, 4-3. In that decision, the majority indicated they believed they could not stretch precedent to affirm Yarbrough’s request to force Northwestern to pay for the actions of doctors employed by Erie Family Health Center, to whom the hospital had merely granted privileges to practice at the hospital, without any other affiliation or relationship.
The Supreme Court decision overturned a decision by a Cook County judge and state appellate panel, which had rejected Northwestern’s assertion, saying they thought there were enough connections between NMH and Erie to establish a close enough relationship to meet the requirements for vicarious liability as established by the high court's decision in Gilbert v. Sycamore Municipal Hospital.
The majority in the more recent decision, however, drew distinctions between NMH and Erie, DeLuca noted.
“The Supreme Court noted that Erie, the independent clinic, did not use any of Northwestern’s branding, colors or name in any of its materials,” DeLuca said.
Moreover, DeLuca noted the clinic was a federally funded health center relying on the use of federal funding and Medicaid assistance.
“These factors were key in determining whether the doctrine of apparent authority applied to an independent, unrelated healthcare center,” he pointed out. “While this was a divided decision, the Supreme Court held that these factors were not sufficient to hold Northwestern Hospital liable for any negligent care and treatment provided by an employee and agent of Erie Family Health Center.”
Ultimately, DeLuca noted the decision will narrow the reach of apparent agency as enunciated by the court in Gilbert v. Sycamore Hospital.
“The impact is not lessened due to the divided nature of the decision,” he said. “The divided nature of the decision, however, demonstrates that some justices are prepared to further expand the reach of apparent agency and Gilbert.”
The case also could have significant implications for medical practices and hospitals in Illinois.
“This is a significant decision for hospitals in Illinois as this is the first time that the Supreme Court has restricted the doctrine of apparent authority,” DeLuca noted. “It shields hospitals from liability when healthcare providers from other institutions or organizations have privileges at the defendant hospital.”
Further, DeLuca pointed out that the decision also could hamper plaintiffs' attempts to add hospitals to malpractice actions against doctors.
“One key element of this decision was that the Supreme Court held that, just because a physician has privileges at a hospital, it does not create an apparent agency relationship between the physician and the hospital,” he explained. “Therefore, a plaintiff cannot rely solely on the fact that a physician has privileges at hospital when alleging that the physician is an agent or employee of a hospital.”
DeLuca also noted that the case “firmly rejected the expansion of the doctrine of apparent agency to situations where the healthcare provider is an employee or agent of another organization and now limits or eliminates the potential exposure for hospitals for the actions of independent healthcare providers.”
Any expectations that the case could have implications beyond healthcare could be tempered, with DeLuca noting that the decision has its roots firmly in the healthcare arena.
“However, it will be interesting if the reasoning behind this decision can be used in cases involving other apparent authority cases not involving healthcare,” he said.
The decision also may issue some key takeaways going forward for clients, DeLuca concluded.
“First, hospitals and healthcare providers should inform the patient in a well-worded consent form that a specific physician is not an actual agent or employee of the hospital,” he said. “Second, hospitals should avoid lending their logo, advertising or branding to another facility. Third, when leasing premises to independent healthcare providers, the hospital should take affirmative measures to inform the public that the lessee is not an agent of the hospital. “