Vicarious Liability in Action–Holding a Hospital Liable for the Malpractice of its Independent Anesthesiology Group

By Mark A. Abramson and Kevin F. Dugan

In the past, we have written about the potential areas of vicarious liability under which medical malpractice plaintiffs could recover from a hospital for the negligent acts of independent contractor physicians affiliated with the hospital.1 Recently, we settled a case with a New Hampshire hospital for the egregious malpractice of certain members of an independently owned anesthesia group who provided exclusive anesthesia services to that hospital and who, unfortunately, provided anesthesia services to our client when she scheduled an elective surgery at that hospital. During depositions we were able to elicit testimony to prove that the members of the anesthesia group were agents of the hospital under respondeat superior and apparent authority theories, and that the hospital had a non-delegable duty to provide safe anesthesia services to its patients. This article will explain how we were able to practically apply the law we have espoused in our previous articles.

II. Background

We represented the guardian of a 39-year old woman who was left in a permanent vegetative state when she suffered prolonged oxygen deprivation after an elective facial surgery at a New Hampshire Hospital. Our client was a Vietnamese immigrant with a high school education, who spoke English as her second language. In addition to her cultural language barrier though, our client suffered from a facial deformity that severely interfered with her speech. This was the deformity she sought to correct through elective surgery at the hospital.

Prior to her surgery, our client worked full-time to support her two-year old daughter, over whom she had sole physical custody. Our client also took courses to become a United States Citizen and supplemental courses to become a supervisor at work. The plastic surgeon, who worked with our client for more than two years preparing for her surgery, said that he thought our client “was one of those immigrants that personifies the American dream.”

In February 2003, however, Our client’s American dream was shattered. Our client is now in a total care facility, where she will remain for the rest of her life. Her three-year old daughter will now be raised without a mother.

III. The Surgery

That fateful morning, our client arrived at the hospital before 8:00 a.m. She met with an anesthesiologist and his certified nurse anesthetist (CRNA) to discuss the role of anesthesia in a surgery and to review the informed consent forms, which bore the hospital’s logo and address. The anesthesiologist and CRNA were wearing blue scrubs, hospital hats and booties, and hospital name tags showing the hospital logo with their names and photos. Neither wore any clothing that would identify them with any entity other than the hospital. Furthermore, although some of the deposition testimony is in conflict, neither the anesthesiologist nor the CRNA ever discussed our client’s procedure with the surgeon before the procedure began and the anesthesiologist never developed a plan for extubation after surgery ended.

Intubation occurred at 8:05 a.m. The anesthesiologist left the operating room as soon as our client was intubated. Unknown to our client, the CRNA, who was left unsupervised and in charge of her care, had been working at the hospital for only fifteen days, had never received training or an orientation, had never received a copy of the hospital or anesthesiology group’s rules and regulations, and, although she had been admitted to the hospital’s medical staff, she had neither been given nor even read the hospital bylaws.

Without a physician’s order or supervision, this inexperienced CRNA began reversing our client from anesthesia halfway through the procedure. Later, she overdosed our client on lidocaine, she did not chart our client’s vital signs for at least two hours, she charted medications that she never gave and she failed to chart medications that were given. Around noon, the anesthesiologist did return to the operating room, but only to tell the CRNA that a different anesthesiologist would be taking over. Without ever looking at the chart or giving the second anesthesiologist all of the details of the surgery or information about the extubation plan, the anesthesiologist left the CRNA alone with our client yet again.

The second anesthesiologist made an appearance in the operating room only for the extubation of our client at the end of the surgical procedure. Meanwhile, the CRNA with no experience had decided to do a deep extubation to avoid ruining the plastic surgeon’s work by having the patient bucking or thrashing from removal of the tube. The anesthesiologist agreed with the CRNA’s proposal, although he had very little knowledge of the surgery that had occurred. At their depositions, all of the anesthesiologists agreed that a deep extubation should never have occurred in a plastic surgery where the patient’s nose is packed with gauze and lips are sutured at the midline, because there is no adequate airway for ventilation. No one, however, had ever discussed that with the inexperienced CRNA.

Thus, sometime after her extubation and before her arrival in the Post Anesthesia Care Unit (PACU), our client stopped breathing and no one noticed for a period of 10 to 20 minutes. Being deprived of oxygen for that length of time caused the brain damage from which our client will never recover.

To add further insult to our client’s injuries, upon her arrival to the PACU, the crash carts were not stocked and the PACU was not prepared to accept an adult patient. Once the code was called, the anesthesiologist who began the procedure learned for the first time that our client’s lips had been sewn together although he should have known this to begin with, since he made the anesthesia plan. Finally, the surgeon responded to the code as well. After he removed all of the sutures and work he had performed, our client was re-intubated and regained respiration. Now, in addition to being permanently brain damaged, our client is more disfigured than she was before her surgery.

IV. The Law Suit

We sued the Hospital, the Anesthesia Group, both anesthesiologists, the CRNA, and the head of the Anesthesia Group. Against the Hospital, in addition to bringing a medical negligence count for the nursing errors, we brought claims for joint venture and vicarious hospital liability for the conduct of all of the anesthesiologists and the inexperienced CRNA.

We asserted that the hospital was liable because the members of the anesthesiology group were its agents, either actual or apparent, and because provision of safe anesthesia services from qualified personnel is a non-delegable duty for a full-service medical facility. The Hospital claimed that all of the people employed by the anesthesia group were independent contractors who were not employed by the hospital. Thus, it asserted that it was not liable for their negligence. The testimony of the members of the anesthesiology group demonstrated that regardless of the label the hospital attached to its relationship with them, each anesthesiologist and CRNA in that group were agents of the hospital.

A. Respondeat Superior

As we have explained in the past, in New Hampshire, respondeat superior liability will be imposed when the agent is acting in the scope of its employment when it injured the plaintiff.2 An agent’s act occurs in the scope of its employment when (a) it is the kind of act the agent was hired to perform, (b) it occurs within the authorized time and space limits of the employment, and, (c) it occurs with a purpose to serve the employer.3

An employer is not generally liable for the acts of independent contractors because the employer reserves no control or discretion over the execution of the work.4 The two notable exceptions to this rule are if the work contracted for is inherently dangerous,5 and if the work contracted for is a non-delegable duty of the employer.6 If, however, the employer has the right to control the manner, means and performance of the work contracted for, as well as the ends, then liability will be imposed.7 This is a factual inquiry based upon the totality of the circumstances of whether, on all of the facts, the community would consider the person to be an employee.8

Other jurisdictions have applied the same legal standard when analyzing whether a hospital can be held liable for the negligence of its “independent anesthesia associates.” In Massachusetts, the courts inquire into both the details of the work being performed as well as the conditions under which the work is performed.9 Massachusetts courts do not just look to the label the parties may have attached to the relationship, but rather they look to the nature of the relationship in its actuality.10 One Massachusetts court looked at the following factors when imposing liability upon a hospital for the negligent conduct of an “independent” anesthesiologist:

  1. Hours of work required at the hospital
  2. Ability of anesthesiologist to select or reject its own patients
  3. Ability of anesthesiologist to select its own operating room
  4. Who bills for the anesthesia services
  5. Who provides the anesthesia medications and supplies and equipment
  6. Whether the work is governed by hospital regulations, policies & procedures
  7. Was the individual doctor a party to the contract between the hospital and the anesthesia group (because a third party cannot be detrimentally bound to terms in a contract not bargained for)
  8. Was the doctor involved in any hospital departments or committees
  9. Was the doctor subject to hospital Quality Assurance regulations/procedures.11

In another case, when holding a hospital liable for the negligent conduct of an independent CRNA, the state Supreme Court looked at:

  1. Whether the CRNA was subject to hospital rules and regulations
  2. Whether the hospital was the CRNA’s exclusive place of employment
  3. Whether the CRNA was a part of the hospital’s anesthesia department
  4. Whether the hospital updated and enforced the guidelines the CRNA was required to follow.12

In addition to the above criteria, some courts also look at whether the hospital advertises itself as a full-service facility and whether an anesthesia department is a required component of a full service facility.13 Most courts find that a patient has no duty to inquire as to the employment relationship of a provider at a hospital.14 Thus, if the hospital fails to give effective notice to a patient of the independence of its anesthesia department in a meaningful time and manner, then the hospital will be considered the employer.15 Jurisdictions that have addressed the issue seem to agree that if a hospital holds itself out as a full service medical facility, an anesthesia department is required to provide full medical services. Thus, if the patient cannot choose the provider of the anesthesia services, then respondeat superior liability should be imposed upon the hospital.16

One court has even found that a hospital can be held liable for failing to enforce its own bylaws and regulations when it had existing written policies that governed the administration of anesthesia, the supervision of CRNAs, and the standards of patient care.17 This is because, when a patient consents to surgery at a hospital, the patient must accept all hospital rules and regulations.18 Therefore, the hospital must enforce all of those rules and regulations to satisfy its duty to the patient it imposes those rules upon.19

Finally, one other State Supreme Court analyzed the following factors:

  1. The patient’s choice in the service provider
  2. The schedule of the Anesthesiologist
  3. Whether the Anesthesiologist is subject to ER duty and on call duty
  4. Whether the hospital provides all equipment, supplies, space, and medications
  5. Whether the hospital provides technical assistants and non-professional personnel
  6. Whether the anesthesia department is part of the hospital
  7. Whether the hospital bills patients for the service
  8. Whether the hospital keeps records of the service
  9. Whether there is an exclusivity agreement with the anesthesia group
  10. Whether the anesthesia group is subject to hospital bylaws, rules & regulations
  11. Whether the hospital dictates the guidelines and standards for anesthesia practice
  12. Whether anesthesia is an inherent function of the hospital in that the hospital could not achieve its “full service” purpose without it.20

We used these cases as guides as we prepared for the depositions of the anesthesiologists in this case and, based on their answers to our questions, we conclusively determined that the independent anesthesia group at this hospital was comprised wholly of hospital employees.

We learned that this anesthesia group had an exclusive contract with the hospital. Indeed, its employees could not work at any other hospital; they were required to become members of the hospital’s medical staff; they were subject to all of the hospital by-laws, rules and regulations; they were required to be on call for the hospital; and they were required to work in the hospital emergency room. In fact, this anesthesia group was the hospital’s entire anesthesia department, when combined with all of the anesthesia technicians and other non-professional personnel, whom the hospital supplied and paid for. The hospital also billed for the anesthesia services and dictated the prices and billing practices for the department.

Additionally, we learned that the hospital provided all of the means required for the anesthesia group to do their job. The hospital provided offices and operating room space; it provided all shelving and desks in the offices; it provided all medications, equipment, technicians and supplies; it provided all scrubs, booties, hats, gloves and name tags, as well as laundry services for those items; and it provided all billing and consent forms, in addition to dictating billing practices and prices. The only things that the anesthesiologists supplied for themselves were their books from medical school.

Finally, we learned that all members of the anesthesia department were subject to all hospital quality assurance protocols; they were involved in hospital rule-making committees; they could not choose their patients, procedures or operating rooms; and they could not deviate from the standards of anesthesia practice dictated by the hospital.

Under all of these facts, the hospital clearly controlled not only the means, manner and performance of the members of this anesthesia group, but also the ends.21 The members of the anesthesia group provided the services they were hired for, they provided those services on hospital property during hospital hours of operation, and they provided those services to allow the hospital to function as a full-service medical facility. Thus, respondeat superior liability should have been imposed.22

As most courts addressing the issue have found, the department of anesthesia is an integral part of a full-service hospital whether or not it is staffed by an independent anesthesia group. Therefore, because the standards of medical practice and patient care are dictated by the hospital for its departments, the hospital will be liable for any violation by its agents.23

B. Apparent Authority

As we explained in a recent article about apparent authority, in New Hampshire,24 an agent will be considered to have apparent authority for a principal when the principal acts in a manner that indicates to a plaintiff that the agent has the authority to act on the principal’s behalf.25 The agent’s conduct also must fall within the general pattern of conduct for agents in that field.26 Apparent authority is the authority that a reasonable plaintiff believes an agent possesses based on the principal’s conduct.27

When applying this theory of liability to an independent anesthesia group, one state Supreme Court focused on three specific factors:

  1. Whether the hospital held itself out to the public as a provider of the agent’s negligently granted services through advertising or an express representation to a plaintiff.28
  2. Whether the patient reasonably relied upon the hospital’s conduct, or lack thereof. In other words, did the plaintiff reasonably believe the hospital was providing the services themselves or was it clear that the hospital was only providing a place for the agent to work as a contractor.29
  3. Did the hospital provide prior notice to the plaintiff that its agent was an independent contractor and not an employee of the hospital. Did the plaintiff have meaningful information to make an informed choice or was the plaintiff allowed to make a choice at all in who provided the services?30

The general view is that a court will look for objective evidence that the plaintiff justifiably relied upon the skill of the apparent agent to provide her medical services.31 One court looked at the following factors:

  1. Whether the hospital admission form indicated the status of its agents?
  2. Whether the request for surgery and consent forms reference the hospital or are on hospital letterhead?
  3. Whether the plaintiff had any choice in the CRNA and anesthesiologist?
  4. Whether the plaintiff had spoken with the anesthesiologist in the days before the surgery or not until she was admitted?32

Another Court recently focused on the hospital’s advertising brochures and website as to the services it said it provided, in addition to the above-listed factors.33 The court focused upon whether the patient was looking for care from the hospital or merely for a place for its personal doctor to provide the service.34 The court stated that unless a patient seeks out the services of a specific physician, then it will be deemed to be seeking services from the hospital.35 Furthermore, the court found that when a patient requires services from many different hospital departments, it is presumed that the care comes from the hospital and not an independent contractor.36

In this case, during the depositions of the anesthesiology personnel, we learned that they wore plain blue scrubs, hats and booties that bore no hospital or other corporate insignia. With these nondescript uniforms, however, the anesthesia personnel wore name tags with the hospital logo emblazoned next to the agent’s name and photo. We also learned that the informed consent form is explained to the patient in the hospital waiting area and that the form has the hospital name, address and logo printed on the top and bottom of the form.

We learned that there were no signs delineating where the anesthesia group’s offices were. Nor were there name tags or logos to identify the anesthesia personnel as being employed by a separate entity. There was absolutely no indication to any patient that a separate anesthesia group existed except for a secondary billing form which was mailed from the anesthesia group’s accounting office. This individual billing form is insufficient to show any patient they are dealing with separate corporate entities. That is especially true, however, for a Vietnamese immigrant who speaks English as a second language, whose employer is paying for the surgery and anesthesia services. Our client had no meaningful information that would allow her to know she was dealing with a separate entity at all.

Finally, the hospital brochures and website advertise a full service medical facility and list each of the anesthesiologists, with their pictures, as being part of the hospital medical staff. Each anesthesiologist also testified that neither our client nor the surgeon had any choice in who the anesthesiologist or CRNA providing services would be. Furthermore, while our client did meet one of the anesthesiologists on the morning of her surgery, she never knew that her care would be transferred to another doctor at lunchtime. Nor was she ever informed that it mattered who provided the services to her.

In this case, the hospital clearly held itself out to the public as a full service medical facility that had anesthesia personnel on staff to provide anesthesia services. The hospital logo was on each anesthesiologist and CRNA’s name tag and it was on the hospital informed consent forms. Our client had no indication that the anesthesiology personnel she met that day were anything but hospital employees and the anesthesiology personnel attested to that under oath. These facts are sufficient under almost any analysis to impose vicarious liability for the anesthesiology group’s apparent authority.

C. Non-Delegable Duty

When it comes to non-delegable duties, the analysis is very similar to that which is applied for apparent authority. The general rule is that when an entity provides a business or service to a specific market, the entity cannot shield itself from liability for torts that occur when providing that business, product or service by hiring independent contractors.37 Just as consumers and customers expect their business transactions to be safe when they enter a business’ premises, a patient in a hospital can expect to be cared for in a safe manner when it enters a hospital for medical services.38

The hospital owes a common law non-delegable duty to render competent medical care to its patients and cannot avoid this duty by hiring independent contractors to provide those services.39 This is especially true when, as in our case, a hospital hires only independent contractors.40 This principle, which applies in cases with broken floors and badly loaded cargo has to also apply to hospitals, to whom patients entrust the most personal of their belongings, their bodies.41 Under the non-delegable duty doctrine, a hospital will be liable when:

  1. It held itself out as a provider of medical services and patient care;
  2. The plaintiff looked to the hospital for medical services or care; and
  3. A person in similar circumstances would have believed the person treating him or her was a hospital employee.42

Clearly, when a hospital undertakes the duty to provide medical and surgical services, it has a non-delegable duty to provide anesthesia services as well, to minimize the risk of injury to patients because it is an inherent function of the hospital.43

New Hampshire recognizes at least two non-delegable duties:

  1. The duty to provide a safe workplace
  2. The duty to provide safe business premises.44

The New Hampshire Supreme Court has acknowledged, however, that it may recognize others based upon the public policy considerations involved.45 I think that this case would have provided the precise policy considerations to do so. The hospital we were dealing with hired only independent contractors. If the provision of competent medical services to patients was not a non-delegable duty, this hospital could never be held liable for any type of medical error however egregious the outcome.

When our client presented to this hospital for her surgery, she reasonably presumed that the personnel providing her medical services were competent, trained medical personnel that would provide her with the services necessary to perform her surgery. The failures of everyone involved in this case to train, orientate, and at a minimum provide copies of the hospital by-laws, rules, regulations and procedures to people on the hospital staff violated the non-delegable duties of maintaining a safe medical care facility to serve patients in need of services and of doing so through competent personnel.

V. Conclusion

Fortunately for our client but unfortunately for the legal community in New Hampshire, this case settled prior to trial for a confidential amount so it will not set the stage for new areas of legal liability in medical malpractice actions. As the outlines in this article show, however, vicarious liability in the medical malpractice legal arena can be established with the appropriate focus of questioning both at deposition and at trial.

END NOTES

  1. See, e.g., Mark A. Abramson and Kevin F. Dugan, Holding Hospitals Vicariously Liable for the Malpractice of Independent Contractor Physicians, 26 TBN 154, 162 (Fall 2003); see also Kevin F. Dugan and Randolph J. Reis, Recent Developments in Hospital Liability, 16 TBN 90, 129 (Fall 1994).
  2. See Pierson v. Hubbard, 147 N.H. 760, 766 (2002).
  3. See id.
  4. See Arthur v. Holy Rosary Credit Union, 139 N.H. 463, 465 (1995).
  5. See id.
  6. See Valenti v. Net Properties Mgt., 142 N.H. 633, 635 (1998).
  7. See Boissonneault v. Bristol Federated Church, 138 N.H. 476, 478 (1994).
  8. See id.
  9. See Skillman v. Riskella, 1994 WL 879645 (Mass. Super. 1994).
  10. See id.
  11. See id.
  12. See Briggins v. Shelby Medical Ctr., 585 So.2d 912, 915 (Ala. 1991).
  13. See Clark v. Southview Hospital, 628 N.E.2d 46, 52 (Ohio 1994).
  14. See, e.g., id.
  15. See id. at 53.
  16. See id.
  17. See Williams v. St. Claire Med. Ctr., 657 S.W.2d 590, 594 (Ky 1983).
  18. See id.
  19. See id.
  20. See Adamski v. Tacoma General Hosp., 579 P.2d 970, 976 (Wash. 1978).
  21. See Boissonneault v. Bristol Federated Church, 138 N.H. at 478.
  22. See Pierson v. Hubbard, 147 N.H. at 766.
  23. See Adams v. Children’s Mercy Hospital, 848 SW2d 535 (Mo. Ct. App.1993).
  24. See Mark A. Abramson and Kevin F. Dugan, Holding Hospitals Vicariously Liable for the Malpractice of Independent Contractor Physicians, 26 TBN 154, 162-64 (Fall 2003).
  25. See Phillips v. Verax Corp., 138 N.H. 240, 244 (1994).
  26. See id.
  27. See Sword v. NKC Hospitals, 714 N.E.2d 142, 147 (Ind. 1999).
  28. See id. at 150.
  29. See id. at 151.
  30. See id. at 152.
  31. See Doctor’s Hospital of Augusta v. Bonner, 392 S.E.2d 897, 905 (Ga. 1990).
  32. See id.
  33. See McCorry v. Evangelical Hosp. Corp., 771 N.E.2d 1067, 1068 (Ill. 2002).
  34. See id. at 1069.
  35. See id.
  36. See id.
  37. See, e.g., Valenti v. NET Properties Management., 142 N.H. 633, 635-36 (1998).
  38. Compare, id., with, Simmons v. Tuomy Med. Ctr., 533 S.E.2d 312, 316-17 (S.C. 2000).
  39. See Simmons, 533 S.E.2d at 317.
  40. See id.
  41. See id at 318.
  42. See id.
  43.   See Jackson v. Power, 743 P.2d 1376 (Alaska 1987).
  44.   See Lawyer’s Title Ins. Corp. v. Groff, 148 N.H. 333, 338 (2002).
  45.   See id.