HOSPITAL LITIGATION

The current interest in quality control stems from the increase in medical malpractice litigation over the last ten years. The increase has been particularly striking in lawsuits filed against hospitals and other institutional providers. This is due to changes in the law that have altered the hospital's traditional immunity from litigation. These changes allow suits to be brought against the hospitals themselves as well as against the physicians practicing in the hospitals.

There were several legal doctrines that protected hospitals from litigation. The most pervasive was the "doctrine of charitable immunity." The basis for this doctrine was that a nonprofit hospital provides a community service that is financed through patient revenues. The courts ruled that it would be against the public interest to allow an injured patient to recover a judgment against a charitable hospital because such a judgment would drain off resources that could be used to treat many other patients.

Two dramatic changes in the basic nature of hospitals have led to the demise of this doctrine. First, many hospitals are businesses run by private investors. While protecting a hospital that is run by a religious order from liability might be justified, insulating a private investor from liability does not make economic sense. Second, even nonprofit hospitals have evolved into big businesses. A hospital with a religious affiliation may have several hundred beds and tens of millions of dollars in income each year. Nuns have been replaced by professional administrators, and the only evidence of religion is the chapel and the name over the door. As nonprofit hospitals have become professionally managed, million-dollar businesses. The courts have been increasingly unwilling to continue the immunity that evolved in much simpler times.

A second group of protective doctrines employed various names, such as "borrowed servant" and "captain of the ship." These theories were based on the premise that hospitals merely provided workshops for physicians. While the hospital did employ a staff, the staff acted only under the supervision of the physicians. If a nurse negligently injured a patient, the negligence was attributed to the supervising physician, who had "borrowed" the nurse.

The captain-of-the-ship doctrine was a special case of the borrowed servant doctrine that applied in operating rooms. In the operating room, the surgeon, as the captain of the ship, picked the "crew" and gave all the orders. The surgeon was charged with supervising all members of the operating room team. This made some sense in the early days of surgery when the surgeon was usually the only physician in the room, and the entire surgical team was a nurse to assist and a nurse to give anesthesia. In a modern operating room, with a physician giving anesthesia and a team of highly trained nurses, the idea that the surgeon controls all the activity in the room has become untenable.

The persistence of the captain-of-the-ship and borrowed servant doctrines beyond the point where they fairly represented medical practice was caused by the failure of many courts to understand their origins. The borrowed servant doctrines were not developed to protect hospitals from lawsuits. Hospital were already effectively protected by the charitable immunity doctrine. The idea that the nurse was always under the control of the physician developed as a way of allowing a patient to sue the physician when the hospital was actually at fault. This evolved because the courts are very reluctant to deny injured persons their day in court. Even if the hospital was a charity, the physician had money and was considered fair game. Rather than being used to protect hospitals, the borrowed servant and captain0of-the-ship doctrines were developed to force physicians to pay for mistakes made by hospital personnel. When charitable immunity was overruled, the need to allow the patient injured by the hospital employee to sue the treating physician came to an end.

The early 1970s saw hospitals rapidly lose their protection from litigation. The ensuing lawsuits came as a shock to most administrators. They had assumed that the previous lack of suits were due to a lack of negligent incidents, not legal immunity from suit. This confusion between lack of litigation and lack of exposure continues to the present time. Many states have only recently allowed effective litigation against hospitals. In these states, the hospitals have been given a false sense of security because the increased litigation that hospitals face begins several years after immunity is revoked. This has led facilities to take a more casual attitude toward quality control than is merited by their potential exposure.

The difficulty with waiting for an increase in litigation before beginning a comprehensive quality control program stems from the retrospective nature of legal decisions. Laws passed by legislatures have an effective date, and the proscribed action is not illegal before that date. In contrast, when a judge allows a civil suit under a new theory (such as holding the hospital liable for the actions of an operating room nurse), it has the same legal effect as "finding" a law that has always been in effect. This means that lawsuits based on the new theory may be filed on incidents that occurred before the judge's ruling, so long as these incidents are within the statue of limitations. Since the statute of limitations is usually at least two years, this creates a pipeline of potential cases.

The retrospective exposure requires that the quality control manager anticipate new trends in the law. It is often possible to do this by careful analysis of court decisions in other states. This ongoing analysis should provide the basis for planning a quality control strategy to deal with new situations. As discussed later, professional standards also provide insight into future legal duties. The failure properly to anticipate changes in the litigation climate led to the large increases in malpractice premiums in the mid 1970s. This sudden increase in premiums has been a driving force for quality control.