What should the standard of care be for national hospital chains? Two years ago, Politico published an article asking “Are we a nation of McHospitals?” We all know the trend occurring locally, with local health care entities buying up hospitals and medical practices. Multicare owns facilities throughout Pierce and King County. The same is also true of CHI-Franciscan, which owns facilities in Pierce, King, and Kitsap Counties.
Even the U.W. Medical Center now effectively owns and operates hospitals such as Northwestern and Valley Medical Center. And whatever happened to Stevens Hospital in Edmonds? It’s now Swedish/Edmonds. Vancouver’s PeaceHealth operates hospitals in Clark, Lewis, Skagit, and Whatcom counties. Virginia Mason is now the major health care provider in Yakima.
This trend to consolidate hospitals and health care in a few “super-hospitals” has had a large impact on health care in Washington. But is has not significantly changed medical malpractice law. Since most employees of these various medical facilities are employees (or at least agents) of the large mega-chains, a claimant can simply sue the employer since it is responsible for the negligence of an employee or agent. And to the extent the health care entity itself is responsible, as opposed to a specific doctor or other employee, the case of Pedroza v. Bryant, decided by the Washington Supreme Court in 1984, established a rule of “corporate negligence,” in which the hospital entity itself has a duty of care to its patients.
A later trend, however, raises more difficult questions. More and more, local hospitals (and chains of hospitals) are being bought up or merged with other hospitals throughout the country to “nationalize” the provision of health care. Some of the largest are for-profit corporations, such as Tenet Health Care and HCA (Hospital Corporation of America). Others are non-profit, primarily Catholic-based, such as Catholic Health Initiatives (CHI). CHI recently merged with Dignity Health to form CommonSpirit Health, a $29 billion dollar system operating 142 hospitals and more than 700 care sites in 21 states.
Consolidation has its benefits – and drawbacks
Often, when these acquisitions and mergers are announced, the stated rationale is that the larger entities can provide better care through economies of scale and development and sharing of good medical practices. And in many cases, particularly when smaller hospitals are made part of the national chain, that is true. The resources needed to provide good medical care were often lacking in smaller, especially rural, hospitals, and the mega-chains were a source of greater medical knowledge as well as uniform business practices.
Liability for bad medical care, however, is often less clear for the mega-chains. The national chains may have almost complete power over how a local hospital is operated, through control of boards of directors, control over financial practices, and other means. But the local hospitals are usually separately incorporated and, in traditional corporate law terms, are independent entities. Thus, you can sue St. Joseph Hospital in Tacoma, but you may not be able to sue CHI Franciscan, the local corporate entity that is part of the Catholic Health Initiatives national group. That would be true even when the national chain is negligent in failing to develop practices to be followed by its local hospitals.
So, what should be the standard of care for national hospital chains?
Washington’s medical malpractice statute authorizes cases against a “health care provider,” and, indeed, all cases involving the provision of health care can only be brought under the statute. A “health care provider” is someone licensed under Washington law to provide medical care, e.g., a doctor, nurse, chiropractor, etc., or an entity that employs a health care provider.
Where does that leave a multi-state conglomerate of hospitals, such as Catholic Health Initiatives? It may contend that it does not employ any health care providers at all in Washington, and does not provide any medical care itself in the state. The care, and therefore the accountability, is found in the local hospital or group of hospitals, which are separately incorporated under Washington law. In effect, the larger national chain is in a position to claim immunity from any liability for its own negligence, by setting up separate corporations to actually provide the hands-on care.
Additional problems also exist. The Washington medical malpractice statute requires that the “standard of care” that must be followed to avoid liability is that of a reasonably prudent health care provider in Washington acting in the same or similar circumstances. How can the standard of care of the national mega-hospital entity be measured? Under the Washington statute, there is no national standard of care, even though the local standard may be based, to some extent, on the national standard.
Medical care has changed dramatically over the last decades. The Pedroza case recognized the change from clinic-based care to hospital care, and the law should now be changed to recognize the paradigm shift in health care from a state-based to a national-based health care system.
