Corporate Liability

Hospitals are no longer considered mere facilities in which medicine is practiced by independent physicians over whom hospital administration exercises no control. Regulatory requirements, expanding tort liability, hospital accreditation requirements, and shifts in reimbursement tying quality to payment have caused hospitals to close the gap between administrative functions and clinical functions through structural, operational, and policy changes. To minimize the risk of corporate liability, risk managers must address the full range of operational and clinical risks in a rapidly changing environment. Against this backdrop, corporate liability for patient care continues to evolve in the courts on a case-by-case basis.

In a wrongful-death action, the Supreme Court of Tennessee concluded that hospitals may be held directly liable to patients holding that a hospital must use such reasonable care toward a patient as his known condition may require and that a patient who enters a hospital is entitled to such reasonable attention as his safety may require (Barkes v. River Park Hosp.). The hospital’s policy required that patients arriving at the emergency department (ED) be seen by the emergency nurse, triaged, and then seen by the appropriate physician and that all patients be assessed by an emergency physician. A nurse practitioner who treated the patient without ordering a cardiac workup was not aware of the policy. The patient died from a cardiac arrest shortly after his discharge from the ED.

The court found that based on expert testimony regarding hospital administration, a jury could reasonably conclude that the hospital’s failure to inform the ED staff of its policies and its failure to effectively oversee and enforce its policies was negligence that caused the patient’s death.

A Pennsylvania court imposed a direct duty on a hospital to provide the decedent’s next of kin full information regarding the decedent’s medical treatment (Krapf v. St. Luke’s Hosp.). The hospital had a duty to inform a patient’s next of kin when it knew or should have known that its employee killed the patient. A nurse’s testimony that her superiors “shunned her concerns” that a homicidal nurse was harming patients established “constructive notice” on the hospital, the court stated. It found conflicting testimony from the hospital’s risk manager, outside legal counsel, a nursing supervisor, and others about what was learned...