Joseph Grillo, M.D.
J.D. candidate (2020)
It is often the case in medical malpractice action that the physician’s malpractice coverage is limited by statute. For instance, in Texas, the minimum coverage allowed physicians across all specialties in two-hundred-thousand dollars. It is often the case, too, that the patient suffers damages well beyond this.
It becomes important to explore other avenues for recovery, and therefore worthwhile to explore third-party liability. Theories of vicarious liability are often available, and is a function of the relationship between the tortfeasor and the hospital. Here, I present discussion on alternative theories.
The legal question at hand is what are the potential legal theories that apply to defective policies and procedures.
II.Legal Theories based on defective policies and procedures
Often a direct negligence claim against the hospital is allowed. In this case, it is worth having a general medical consultant review hospital policies, procedures and protocols. In my experience, this has been fruitful.
Policies may be defective either on their face or as applied. When a policy is written in a manner that makes it difficult to follow by the target audience(s) of the policy, it is defective on it’s face. This is found when the hospital writes a policy with the intent of fulfilling JACO requirements, and not for clinical staff, even though it is written under the auspices of patient safety. An example of an ‘as applied’ defect is when the policy or procedure is not implemented, which usually means that it is embedded in the electronic medical record.
Hospital policies and procedures are designed to help prevent patients being harmed during the course of their treatment. The importance of hospital policy and procedures is not disputed. They help hold employees accountable for following the right steps when caring for patients. They standardize practices across the organization and ensure that every patient receives the same level of care. They are in place in order to establish some sort of internal standards and rules for operation. It is no surprise that the most comprehensive set of policies and procedure manual is the one directed to patient care policies. Not surprisingly either is that hospital policies and procedures are also intended to mitigate risks
Historically, the hospital’s policies and procedures are placed in a binder and distributed to department heads and employees. These days, the binder is replaced by software. Policies and procedures for hospitals should be more than just theoretical guidelines. And they should be more than a set of rules that sits forgotten on a shelf somewhere in the hospital office.
III. Direct Liability Theory Based on Defective Policies, Procedures and Protocols
The direct liability claim is not dependent on the negligence of the health care providers; it is independent of the conduct of the health care providers because it is based on the hospital’s independent, direct duty owed the plaintiff.
All hospitals must have policies and procedures in place in order to effectively supervise the hospital employees and the medical staff. If those policies and procedures are negligently created or maintained, the hospital will be liable for any patient injury caused by that negligence.
Direct negligence due to defective policies can be predication on:
- Negligent supervision of policy/procedure.
- Negligent administration of policy/procedure.
- Negligence in failing to formulate and/or enforce policies and procedures in order to ensure adequate peer review and quality assurance of its medical staff.
- Negligently maintained and updated policies and protocols.
Closely akin to negligent supervision, a hospital also has a duty to provide periodic oversight and review of physicians and staff. This leads to another independent inquiry that should be undertaken by the plaintiff – the Peer Review process. By law, a hospital must have a peer review committee. Availing oneself of the hospital’s peer review may be fruitful. If defective in any way, this may assist in proving up direct negligence. Therefore, a review of their process and the minutes of each meeting should be undertaken. States may have laws that protect information developed by hospital peer review committees from discovery – which may serve to obstruct our organizational negligence claims.
The reason for protecting peer review garnered information is the concept of improving healthcare quality by allowing critical analysis of adverse events without fear of medical malpractice litigation.
An Independent Duty of Care to the Patient
A hospital must exercise ordinary care in making and enforcing its policies and procedures, and failure to do so may render the hospital liable. In most states, a hospital has an independent duty to their patients, in using reasonable care when formulating the policies and procedures. All hospitals must have policies and procedures in place in order to effectively supervise the hospital employees and the medical staff. If those policies and procedures are negligently created or maintained, the hospital will be liable for any patient injury caused by that negligence.
In Texas, for example, there is a duty to use reasonable care in formulating the policies and procedures that govern its medical staff and non-physician personnel, and to “establish reasonable policies, procedures and protocols regarding standard of care.” Under Texas law, a hospital may be liable independently of the negligence of its physicians or employees, when policy should have been in place but was not. Hospital liability under this direct theory of liability arises from the negligent performance of a duty owed directly to the patient.
A. A steep hurdle – proving up the standard of care relative to hospital policy and procedure.
Hospitals promulgate policies and procedures governing the practice of medicine in a hospital. These policies and procedures constitute standards to which those practicing in the hospital must adhere in order to deliver appropriate patient care. The policies and procedures typically address standards of care for delivery of health services to patients, including the requirements which must be met by those who work in the hospital. [F]ailure … of the hospital’s policies and procedures is an indication of negligence.
“the standard of care requires hospital administration to ensure that its employees are competent, to have and enforce policies and procedures, and to ensure that those policies are being implemented. Specifically … the hospital must train their nurses to be competent and to understand the hospitals’ policies and procedures. … [and] also includes requiring hospital management and administration to formulate and enforce policies to facilitate this training and to ensure nurse competency.”
In order to establish a ‘direct liability’ theory for (a) providing defective policies and procedures; (b) failing to adequately train its nurses and staff in their policies/procedures, (c) failure to enforce its policies and procedures, and (d) to adequately supervise its nurses – the first step is to establish the standard of care for hospital policy.
One should be aware that the appropriate expert to define standard of care as it relates to policies and procedures must be had. Prior to a finding of negligence on the part of the hospital relative to its policies and procedures, the plaintiff must first establish what the standard of care is. “The standard of care for a hospital is what an ordinary, prudent hospital would do under the same or similar circumstances.”Universal standards as provided by JCAHO are informative and helpful.However, standards are also hospital specific and may include the hospital’s internal policies and bylaws, in addition to JCAHO standards.
V. The expert and the standard of care
Many jurisdictions require an expert with sufficient familiarity, training, or experience with formulation of training programs, formulation or enforcement of hospital policies and procedures, and supervision of nurses. In Reed, for example, neither a neurologist nor ER physician were deemed qualified to testify regarding the standard of care with respect to policies and protocols for administering t-PA. Hospital administrators, who may or may not be physicians, are useful in any case in which hospital records or procedures are at issue. Their testimony may also be valuable in determining costs of future treatment for damages. Several universities have special schools of hospital administration, and these sources of information should not be overlooked.
The two leading national associations are:
- American College of Hospital Administrators, 840 N. Lakeshore Drive, Chicago 11, Illinois
- American Hospital Association, 840 N. Lakeshore Drive, Chicago 11, Illinois
While the standard of administrative care at a hospital may be established by lay testimony, medical expert testimony is required where the underlying issue involves the performance of medical procedures. A two-part test governs whether expert testimony is admissible: (1) the expert must be qualified; and (2) the testimony must be relevant and based on a reliable foundation.
The Duty to Exercise Due Care in Physician Credentialing Decision
Jurisdictions that recognize a theory of negligence under negligent credentialing impose a duty to exercise reasonable care in the selection and continued monitoring of physicians seeking staff privileges. “This duty requires a hospital to examine the qualifications of any physician seeking staff privileges and to limit the physician’s practice to those procedures for which the physician is qualified.”32 The hospitals’ duty to select and retain competent physicians is based upon the concept that hospitals, which control physicians’ hospital privileges, are in the best position to protect patients from incompetent physician care.
Generally, in order to sustain a cause of action for negligent credentialing, the plaintiff must show: (1) the hospital had a duty to exercise due care in credentialing decisions, (2) the credentialed physician was incompetent or unfit and either should not have been credentialed or should have been subject to practice restrictions, (3) the hospital failed to exercise due care in its credentialing decision, (4) the physician committed malpractice that resulted in an injury, and (5) the hospital’s credentialing decision was a proximate cause of the injury.
Despite research showing the prominent role of organizational failures in medical errors and the availability of legal actions for holding the organization responsible, individual providers remain the primary targets of medical malpractice lawsuits. This is largely because it is easiest for the patient to prove the existence of a duty and breach by the individual healthcare provider from whom they directly received treatment. More difficult for the patient, is recognizing the existence of a duty and breach on behalf of the healthcare organization. Unlike the individual provider, the healthcare organization does not enter into a physician-patient relationship with the patient.
Direct liability of the third-party hospital is possible under a number of legal theories, predicated on such underpinnings as defective policies and ineffective peer review. Proving up the standard of care in these cases can be challenging, and careful selection is required. Often a medical consultant – physician can be helpful.
Besides the client hospital, it is often beneficial for the plaintiff to name several parties defendant. The plaintiff’s decision in naming defendants usually results from consideration of both liability and practical aspects by plaintiff’s counsel.
Plaintiffs should inquire into the medical staff, which determines medical policy and oversee peer review within the hospital, is headed by a chief of staff who is appointed periodically either by the medical staff or by the governing body of the institution. Generally, the medical staff is divided as follows:
Active Staff: Those physicians regularly attending patients in the institution.
Associate or Courtesy Staff: Physicians who may occasionally attend a patient in the institution, but who do not take an active part in the hospital’s affairs.
Consultant Staff: Recognized specialists who may be called in on special cases from time to time.
Resident Staff: Existing only at teaching hospitals, this staff is composed of interns and residents, and includes chief residents and assistant residents in large hospitals with extended training programs.
The nursing service has its own hierarchy. In charge of all nurses
is the director of nurses. In charge of all nurses on a particular service, or
all over the hospital on a
shift of duty, is the head nurse. Under the head nurse is the nurse supervisor,
who exercises authority over a ward or over a series of wards. Under the
direction of the nurse supervisor are R.N.’s (registered nurses), L.P.N.’s
(licensed practical nurses), staff nurses, nurse attendants, assistants, and
 Columbia N. Hills Hosp. Subsidiary, L.P. v. Alvarez, 382 S.W.3d 619 (Tex. App. 2012); See also Terry O. Tottenham, Current Hospital Liability in Texas, 28 S. TEX. L.REV. 1, 10 (2007) (the theory of corporate liability “will hold the hospital culpable, notwithstanding charges of medical malpractice against any other defendant”).
 Negligent policies and procedures, 44 Tex. Prac., Medical Malpractice § 1:32 (3d ed.)
 id. at 268.
 Kadyszewski v. Ellis Hosp. Ass’n, 595 N.Y.S.2d 841 (A.D.3 Dept. 1993)
 See Mills v. Angel, 995 S.W.2d 262, 269 (Tex. App. 1999)
 Air Shields, Inc. v. Spears, 590 S.W.2d 574 (Tex. Civ. App.—Waco 1979, writ ref’d n.r.e.).
 42A Tex. Jur. 3d Healing Arts and Institutions § 36
 Negligent policies and procedures, 44 Tex. Prac., Medical Malpractice § 1:32 (3d ed.)
 Denton Reg’l Med. Ctr. v. LaCroix, 947 S.W.2d 941, 950 (Tex.App.-Fort Worth 1997, pet. denied).
 Standards of Hospital Care, 44 Tex. Prac., Medical Malpractice § 17:15 (3d ed.)
 Columbia N. Hills Hosp. Subsidiary, L.P. v. Alvarez, 382 S.W.3d 619, 628–29 (Tex. App. 2012)
 Reed v. Granbury Hosp. Corp., 117 S.W.3d 404 (Tex. App. 2003)
 RICHARD L. GRIFFITH & DEWEY W. JOHNSTON, TEXAS HOSPITAL LAW: LIABILITY & DAMAGES § 3.1.1 at 3–3 (3rd ed.2003).
 Am. Transitional Care Centers of Texas, Inc. v. Palacios, 46 S.W.3d 873, 876 (Tex. 2001)
 See GRIFFITH, TEXAS HOSPITAL LAW § 3.0121, at 49.0. (“These standards were formulated by the JCAHO as ultimate goals and not as universal minimal standards.”) Id. § 3.032, at 65.
 id. at 412.
 Am. Jur. Trials 357 (Originally published in 1964, updated May 2019)
 See Reed, 117 S.W.3d at 406
 id. at 409