By Tyler Goldberg-Hoss 

Since the Washington State Supreme Court adopted the corporate negligence doctrine in 1984¹, our society has seen a change in the way in which health care is delivered. In the (mythical) past, physicians graduated medical school with the near-glow of divinity surrounding them. They were trained in the art of medicine, a secret club with limited membership.

When CMG tried its first medical malpractice case in 1975, doctors wore white coats, carried stethoscopes, and they alone knew how to help you with your medical issue. They engaged in the diagnostic process internally, based on their education and training, and their experiences treating patients before you. And they used their “clinical judgment,” which, if not always accurate, was unquestionable.

Now, well, now it’s different. For many people, doctors are not universally thought of as sitting at the right hand of God herself. They might mean well, but they are overworked, have too many patients, and can’t spend enough time with us. It’s hard to get an appointment that isn’t weeks out. I go, and sit, and wait, and wait. And then the doctor comes in, rushed, and has only six minutes. All, more and more often, within the strictures a larger corporate medical system.

Of course, the above is an oversimplification of how things have changed. There were skeptics 40 years ago, and there are people today who think doctors still walk on water. But it is hard not to routinely handle medical malpractice cases and not see that things have changed. So what happened?

As with any topic so vast, it would be foolish to attempt to answer it fully. However, I believe there is a story to be told that includes the corporatization of healthcare, and the resulting effect on the public (and jurors).

The result of this is a jury pool more receptive to claims alleging negligence in medical care generally, particularly those that are framed as systems-based, corporate negligence. Yet, as much as there exists an appetite to hold large medical institutions accountable when system-based errors cause patients harm, the law in Washington has not caught up (and in some cases, has slid backward).

The corporatization of healthcare

Like so much in our society, corporate tentacles have slithered their way around and through nearly every aspect of medical care provided in our state. This corporatization, specifically increasing consolidation and focus on profits over patients, has created the need, now more than ever, for a robust legal framework to hold healthcare corporations accountable.

Consolidation—the process of combining several things into a single more effective or coherent whole²—is essentially what has been happening to entities providing healthcare in Washington State since the Pedroza case established corporate negligence.

Back then, in the mid-1980s, only 10% of hospitals were part of larger multi-hospital systems (that is, part of a system with more than one hospital). As of 2017, half of all hospitals are part of these larger systems. Currently, 40% of all hospitals in Washington are affiliated with one of the five biggest systems—Providence/Swedish, MultiCare, Virginia Mason Franciscan Health, UW Medicine, and PeaceHealth.³

In just the last dozen years or so we’ve seen: PeaceHealth gobble up Southwest Washington Medical Center in Vancouver (2010); Providence gobble up Swedish (2012); Franciscan absorb Highline Hospital and Harrison in Kitsap County (2013); Providence scoop up Pacific Medical Center (2015) and St. Joseph in Tacoma (2016); CHI Franciscan take over The Doctors Clinic (2016); CommonSpirit acquire Virginia Mason (2021); and MultiCare take on (over) Yakima Valley Memorial (2023).⁴

Not only has consolidation occurred, but private equity firms have entered our state and bought up healthcare entities. This includes hospitals—something called “Apollo Global Management” owns six facilities in Washington State, including Kindred Hospital in Seattle and Lourdes Medical Center in Pasco.⁵

It also includes physician groups. Nationally, in 2012 private equity firms bought 75 physician practices. In 2021, that number rose to 484.⁶ This includes 53 distinct practices since 2014, including gastroenterology, physical therapy, and ophthalmic/optometric practices.⁷

In Washington, health insurer United HealthGroup, through its subsidiary Optum, bought up the Polyclinic and The Everett Clinic in 2019.⁸ Recently rebranded, both entities will be known as Optum starting this year.⁹ That’s approximately 700 Washington State doctors employed by a national corporation, when five years ago they governed themselves.¹⁰

And private equity firms have subsumed physician staffing companies. These are companies that provide clinical staffing in various specialties to hospitals, such as emergency medicine, anesthesia, and hospitalist medicine. This includes TeamHealth, one of the largest emergency medicine staffing companies in the country, which is owned by a private equity firm. If you happen to seek care at an ER at Kadlec in Richland, Grays Harbor in Aberdeen, or Island Hospital in Anacortes (among others), there’s a good chance you will be treated by a doctor employed by TeamHealth.¹¹

Perhaps you need anesthesia for a surgery at Swedish (or elsewhere)? U.S. Anesthesia Partners and its 144 employed anesthesia providers in Washington alone probably provided it.¹²

Is this corporatization—including consolidation and private equity-owned medicine—making patients in Washington safer? In a word—no. “Generally, consolidations do not improve quality of care, but rather, drive up prices and impact access to care for patients and working conditions for providers.”¹³

Recently, a bill introduced into Washington State’s legislature would have allowed the state greater oversight over hospital consolidations. Called the Keep Our Care Act, it was introduced to address these larger healthcare conglomerates and insurance chains entering our state. Specifically, the bill intended to allow the Attorney General’s Office greater oversight over such transactions, particularly with an eye toward whether a particular merger would have a negative effect on patient care. Unfortunately, the bill (Senate Bill 5241) did not come up for a floor vote in the House before the deadline.¹⁴

Providing health care through hospitals owned by private equity firms makes patients less safe as well. A recent study published in the Journal of the American Medical Association found that hospitals owned by private equity firms had an increase in hospital-acquired adverse events such as falls and infections.¹⁵ Because, of course.

Accountability must be available for corporate negligence caused in systems-based healthcare

Now more than ever, a robust legal framework within which injured patients can bring claims of corporate negligence is necessary. It is necessary not only for the patient seeking redress, but for all of us who need medical care in Washington. Because now more than ever, systems— not individual doctors—are responsible for delivering safe care, systems are failing and causing patients harm, and systems must be held accountable when necessary to improve care for all of us.

A “system,” in this context, has been defined as “a set of interacting, interrelated, or interdependent elements that work together in a particular environment to perform the functions that are required to achieve the system’s aim.”¹⁶ In 1999, The Institute of Medicine issued a landmark report on patient safety, concluding that healthcare systems are the cause of many patient safety problems.¹⁷ This has only become more true and obvious as these systems have become larger and more complex.

Because of this, healthcare systems must owe a duty to patients to have reasonable procedures in place to ensure safe care is being provided. We have seen claims arise for system failures in two broad contexts: failures of communication, and failures of supervision/monitoring.

Failures of communication

There is rarely, if ever, one provider involved in the health care of a patient. Rather, there are several providers and administrative staff working within a complex system of hundreds or thousands of patients. There’s the medical assistant or nurse who brings you to your room, takes an initial history and your vital signs. There’s the doctor (or PA, or ARNP) who performs a more detailed analysis of your presenting complaint, performs a physical exam, and orders applicable tests. There are the orders for the tests that get sent to different departments (lab, radiology). Those providers perform the tests and issue reports. You might be sent to a specialist in a separate location (or separate system). You may need a procedure, requiring an admission at a hospital (perhaps another system). You are seen by anesthesia, surgery, hospitalists, nurses, and more.

Is there one unifying provider responsible for making sure everyone is on the same page? Should there be?

Clearly, given the complexity of medical care as illustrated above, no one doctor, who herself has a panel of hundreds of patients, should be responsible for remembering each patient and where they are in their care. Everyone (especially jurors) gets that. There must then be systems set up to ensure that necessary communication occurs. And when communication errors do occur, and patients are harmed, the healthcare entity responsible for the system must be held accountable.

The simplest and most tragic examples of communication errors causing preventable harm are when abnormal test results are not acted upon:

• A patient seeks care at an emergency room. The doctor orders an imaging study. The study helps the doctor assess treatment options for the patient’s presenting complaint (a bowel obstruction requiring admission and possible surgery), but the radiologist also notes an incidental finding—say a lung nodule—and recommends appropriate follow-up. The patient never learns of this, is hospitalized, and then discharged. Only years later, when symptoms of metastatic spread of cancer manifest, does he learn that his cancer should have been caught years earlier. But no one told him. No one told anyone.
• A patient presents with symptoms concerning enough for her doctor to take a tissue sample and send it for pathologic examination. The pathologist reports a finding of treatable cancer. The ordering doctor’s practice is to discuss these findings when the patient returns to see her for follow-up, but her appointment is cancelled at the last minute and never rescheduled. Two years later, increasingly worrisome symptoms prompt the patient to return to the doctor, who pulls up her chart and realizes what has happened. Now the cancer is terminal.

Corporate negligence claims for systems-based communication errors not only compensate the victims but compel healthcare entities to improve systems to prevent such errors from occurring in the future.

Now there is a system in some ERs where a nurse is always designated to receive radiology reports, tell the patient, and recommend the appropriate follow-up, with a record reflecting this for all to see within the hospital’s Electronic Medical Record (EMR) system.

Now, at least in one hospital, there is a system for ensuring follow-up of pathology reports that does not rely upon a patient returning for a follow-up appointment.

Now, at least some systems are a little bit safer.

Failures of supervision and monitoring

Medical care still requires actual people in 2024 (although AI’s inroads into the practice of medicine are too numerous for this article). Also, the delivery of medical care has become incredibly complex. There is so much data contributing to the collective and evolving understanding of medicine and medical care that it is often impractical to rely on each individual provider to keep up-todate with all of it, digest it, and adopt it in her practice. These are providers who are already overburdened with too many patients and too little time.

This creates opportunities for errors resulting in patient harm. It is necessary in this environment that we as a society impose a duty upon a healthcare entity to have reasonable procedures in place to ensure its patients are receiving safe, evidence-based medical care. This includes a duty to adopt policies that reflect current standards of care and make sure its providers follow them. It also includes a duty to supervise the practice of medi cine not specifically governed by a particular policy so that patients are receiving safe care.

One way corporate healthcare providers can ensure its patients are receiving safe care is by adopting policies that reflect the evolving understanding of particular aspects of medical practice. Committees within hospital systems are in a much better position than individual providers to digest current best practices and be deliberative in how new information can be used to provide safer care. These improvements are reflected in policies that can then be circulated to all applicable providers.

Another part of such a safe system is a procedure to ensure compliance, because what good is a safe policy if a doctor doesn’t know about it, use it, or is held accountable when he doesn’t use it (absent good reason to deviate)?

Much medical care cannot be reduced to a particular policy. Particularly in the diagnostic process, where systems rely on specific providers to provide evidence-based care. However, that does not mean that a system has no role to play in a patient’s diagnosis. Rather, it is incumbent on the healthcare system to ensure its providers are providing safe diagnostic care based on current best practices.

We cannot and should not expect our doctors—particularly those “generalists” like ER and family practice providers—to know everything about everything. But we should be able to expect that our providers are being supported by the systems within which they work with tools that can assist them in the diagnostic process.

These systems can take many forms, but invariably involve technology. Many studies in the last two decades have shown that clinical decision support systems can improve patient care, whether it is ordering the right test or appropriate disease management.¹⁸ This can take the form of algorithms built into the EMR system to flag possible signs of sepsis in an otherwise healthy “looking” patient, or diagnostic calculators that incorporate the best available data to help a doctor better understand whether a patient with chest pains is safe for discharge or should be admitted immediately.

Incorporating such assistive tools is one step. Monitoring for compliance—that providers are using the tools available to them, and not relying on “clinical judgment” exclusively—is another.

The growing corporatization of healthcare has shifted juror attitudes

I keep a quote from Paul Luvera taped up in my office. On the issue of what makes a successful medical malpractice case, he wrote: “I believe the best chance of winning these kinds of cases is proof of a gross betrayal of trust … That’s because medical mistakes will be forgiven, even if you prove they were mistakes, by jurors in this county and most anywhere else.”

I still believe this to be true, although I do not believe it as strongly as I did when I first read it over a decade ago. And I believe it only in the context of a person as defendant—a doctor or nurse, PA or ARNP. When jurors consider corporate defendants, the research is consistent with our experience—the increasing corporatization of healthcare and jurors’ experiences with it have shifted attitudes.

Jurors are more distrustful of corporations generally. The results of recent jury research are eye-opening. Prior to the pandemic, 27% of eligible jurors who participated in the survey responded that they viewed large corporations negatively. Now, just three years later, 45% view corporations negatively. And 77% of respondents favor punitive damages to punish corporations.¹⁹

This shift in opinion against corporations can be seen in responses to litigation specific questions. Jurors were asked, “In a lawsuit between an individual and a large corporation, which side would you probably tend to lean in favor of?” Three years ago, 33% said they’d lean toward the individual. Now, 59% would favor the person against the corporation, prior to hearing any evidence in the case.²⁰

Jurors’ attitudes toward lawyers were consistent with this trend: only 23% had a positive impression of lawyers who defend corporations sued in lawsuits, while 37% held a negative view. Conversely, plaintiff’s lawyers were far more popular: 58% of respondents had a positive view of “lawyers who represent injured people in lawsuits.”²¹

Despite a specific instruction to the jury to treat corporations and individuals the same,²² research indicates this does not happen.²³ Rather, jurors often see an unfair playing field, one in which corporations have more money and resources to use in litigation. “A whole corporation against one individual is not a fair fight,” said one participant.²⁴

Anecdotally, this is consistent with our experiences in jury selection. More often potential jurors are sharing their own poor experiences with medical care. While this can include stories of being a victim (or having a family member who was a victim) of medical malpractice, often it’s a more generalized frustration and anger based on their own substandard experiences with receiving medical services.

This shift in sentiment is also reflected in so-called “nuclear verdicts”—exceptionally high verdicts, and often defined as over $10,000,000.²⁵ Although this can be explained in part by inflation and the rise in cost of everything (when a house in Seattle costs $1,000,000, that might skew a juror’s perception of the value of million dollars), it may also be explained by jurors’ evolving distrust of and anger toward corporations.²⁶

This holds true in the medical malpractice context. From 2012 to 2022, there were between 34 and 52 verdicts of $10,000,000 or more each year. In 2023, that number jumped to 57, with more than half of those verdicts reaching $25,000,000 or more.²⁷ In the healthcare context, the consolidation and corporatization of healthcare is a common theory. This has reduced the personal connection jurors may have with their own healthcare providers. Big business is on trial now, not the local community hospital.²⁸

Jurors, perhaps more now than at any time in the last 40 years, are receptive to claims of corporate negligence in medical care. They are incentivized to do their part to fix a system that is less focused on people, and more focused on profit.

Unfortunately, the law on corporate negligence has not kept pace

Given the trends toward larger hospital systems since Pedroza, one might think the law would evolve and expand in a way that better addressed the scope of duties a systems-based healthcare entity owes its patients. Recently, the Supreme Court took a step in that direction with Estate of Essex v. Grant County Pub. Hosp. Dist. No. 1, acknowledging our antiquated corporate negligence legal principles and declining to accept the defense position that there are only four corporate negligence theories of recovery.²⁹

Notwithstanding Estate of Essex, appellate courts have generally chipped away at recognized duties, leaving victims of corporate medical negligence with fewer avenues of accountability. With less accountability, there is less motivation for these large healthcare corporations to create safer systems, with the result being diminished patient safety. There are at least three current threats needing remedy.

First: unequivocally, hospitals should have a duty not only to exercise reasonable care to adopt policies and procedures for health care provided to its patients, but also to make sure (through “oversight, training and enforcement”) that those policies and procedures are being followed. Although Estate of Essex confirms this in the context of a hospital’s nondelegable duty to provide medical services in the emergency department, the reality is much broader.³⁰ Hopefully trial courts will be persuaded that this nondelegable duty exists outside the emergency department.

Second, corporate negligence claims are distinct from claims of vicarious liability. Victims of medical malpractice may bring a corporate negligence claim AND a claim alleging the corporate healthcare entity is vicariously liable for the negligence of one of its providers. This was true before Estate of Essex confirmed it: “a hospital’s liability under a theory of corporate negligence is separate from its vicarious liability under the nondelegable duty doctrine.”³¹ And yet, too many of our clients’ corporate negligence claims have been dismissed based on the erroneous application of employment law. My colleague and friend William McClure wrote eloquently on this topic two years ago, so I will not belabor the point.³²

Third, this systems-based corporate practice of medicine is not limited to hospitals.³³ The same systems exist in urgent care clinics, and family practice offices, and specialty clinics. These places should have the same duties to provide reasonable care to patients, including duties to have reasonable policies and procedures, and to monitor the care provided within. Limiting corporate negligence claims to only hospitals is the very definition of drawing a distinction where no difference is.

As corporations expand their reach and role in the health care delivered to patients in Washington, so too should the law expand to mirror this reality. Corporate negligence claims, now more than ever, are a necessary check on such systems.

Conclusion

The corporatization of healthcare has dramatically changed how Washingtonians receive their medical care. In some ways this has improved the care that is delivered. In others, it has not. Accountability is one of the main goals of tort law. But that goal is frustrated when the law no longer applies to the way in which health care is delivered. “It is society and their patients to whom physicians are responsible, not solely their fellow practitioners.”³⁴

Society is demanding accountability. Hopefully, the law will respond.

Tyler Goldberg-Hoss, an EAGLE member, is a partner at CMG Law, which limits its practice to representing victims of medical negligence.

This article appeared in the May 2024 issue of WSAJ’s Trial News. https://www.trialnewsonline.org/trialnews/library/item/may_2024/4192972/

¹Pedroza v. Bryant, 101 Wn.2d 226, 677 P.2d 166 (1984).

²Oxford Language Dictionary.

³Health Management Associates. “WA OIC Preliminary Report on Health Care Affordability.” Nov. 29, 2023, https://www.insurance.wa.gov/media/11848.

⁴Id.

⁵“PESP Private Equity Hospital Tracker.” Private Equity Stakeholder Project. https://pestakeholder.org/private-equity-hospital-tracker/#hospital_tracker.

⁶Scheffler, Richard M., et al. “Monetizing Medicine: Private Equity and Competition in Physician Practice Markets.” The Nicholas C. Petris Center on Health Care Markets and Consumer Welfare. July 10, 2023, https://acrobat.adobe.com/link/review?uri=urn%3Aaaid%3As-cds%3AUS%3Aa1c57741-c7ee-3a21-bb10-26eed42b4584.

⁷WA OIC Preliminary Report on Health Care Affordability, supra.

⁸“About us: Optum Care Washington, Formerly The Everett Clinic.” Optum, https://www.everettclinic.com/about.html.

⁹Sumrall, Frank. “Everett Clinic, Polyclinic to become Optum in 2024 rebrand.” MYNorthwest.com. Sept. 18, 2023, https://mynorthwest.com/3931718/everett-clinic-polyclinic-become-optum-2024-rebrand/(you can’t make up some of these corporate names…how many focus groups did it take to come up with “Optum”?)

¹⁰“About us.” Optum, https://optumwa.com/aboutus/.

¹¹Id. See also, “Locations.” TeamHealth, https://www.teamhealth.com/locations/?r=1.

¹²“Washington providers.” US Anesthesia Partners, https://www.usap.com/locations/usap-washington/leadership-team.

¹³WA OIC Preliminary Report on Health Care Affordability, supra.

¹⁴Takahama, Elise. “Bill that would up oversight of WA hospital consolidations dies.” The Seattle Times. March 5, 2024, https://www.seattletimes.com/seattle-news/health/bill-that-would-up-oversight-of-wa-hospital-consolidations-dies/.

¹⁵Kannan, Sneha, et al. “Changes in Hospital Adverse Events and Patient Outcomes Associated With Private Equity Acquisition.” JAMA. Dec. 25, 2023, https://pubmed.ncbi.nlm.nih.gov/38147093/.

¹⁶Johnson, Julie K., et al. “Systems-Based Practice – Improving the Safety and Quality of Patient Care by Recognizing and Improving the Systems in Which We Work.” Agency for Healthcare Research and Quality. 2008, https://www.ncbi.nlm.nih.gov/books/NBK43731/.

¹⁷Kohn, L.T, eds. To err is human: Building a safer health system. Washington, DC: National Academies Press; 1999.

¹⁸Balogh, Erin P, et al., eds. Improving Diagnosis in Health Care. Washington, DC: The National Academies Press, 2015.

¹⁹Greene, Jenna. Today’s jurors are not OK (and probably don’t like you). Reuters. August 7, 2023, https://www.reuters.com/legal/litigation/todays-jurors-are-not-ok-probably-dont-like-you-2023-08-07/.

²⁰Id.

²¹Id.

²²WPI 1.07 Corporations and Similar Parties.

²³“In Their Own Words: 5 Reasons Why Jurors Are Unwilling to Treat a Corporation and an Individual Equally.” Bonora Rountree Trial Consulting & Research. August 2, 2017, https://br-tcr.com/archives/1348.

²⁴Id.

²⁵Gallegos, Alicia. “Mega Malpractice Verdicts Against Physicians on the Rise.” Medscape. Feb. 2, 2024, https://www.medscape.com/viewarticle/mega-malpractice-verdicts-against-physicians-rise-2024a10002bz?form=fpf.

²⁶Lyden, Taylor. “What are nuclear verdicts and why are they occurring?” Property Casualty 360. July 21, 2023, https://www.propertycasualty360.com/2023/07/21/what-are-nuclear-verdicts-and-why-are-they-occurring/?slreturn=20240208172200.

²⁷“Mega Malpractice Verdicts Against Physicians on the Rise,” Supra.

²⁸Id., See also, Anderson, Richard E., “Before COVID-19, Outlier Medical Malpractice Verdicts Were Rising—What’s Next?” The Doctors Company. Dec. 2020, https://www.thedoctors.com/articles/before-covid-19-outlier-medical-malpractice-verdicts-were-risingwhats-next/.

²⁹Estate of Essex v. Grant County Pub. Hosp. Dist. No. 1. Slip Op. No. 101745-6 (April 11, 2024).

³⁰Id. For example, Estate of Essex cites to WAC 246-320-281 for the purpose of supporting its conclusion that a hospital has a nondelegable duty to provide emergency medicine services, including a duty to “use hospital policies and procedures which define standards of care”. This same language can be found in WAC 246-320-251 (related to obstetrical services).

³¹Id. At p 15.

³²McClure, William T., “Retaining Concurrent Theories of Liability with the Corporate Negligence Doctrine.” Trial News, May 2022.

³³Foster v. Bellingham Urology Specialists, PLLC, 26 Wn. App. 2d 1002, review denied, 536 P.3d 178 (2023).

³⁴Harris v. Robert C. Groth, M.D., Inc., P.S., 99 Wn. 2d 438, 445, 663 P.2d 113, 117 (1983).