7.2 The Treatment Relationship

When does a physician or other care provider enter the realm of medical professional responsibility? According to tort law, this occurs when the provider forms a treatment relationship, that is, begins to undertake the care of a patient. Undertaking care is the critical point at which a provider leaves the zone of generic negligence law, which holds actors responsible only for risks they create judged by a general reasonableness standard and assumes the more affirmative responsibilities defined by professional standards.

A treatment relationship’s timeline – its beginning and ending – is defined largely by contractual principles. Sometimes overt agreements to start or end a treatment relationship can be identified, but often they cannot. A physician simply starts to engage with a patient and then stops engaging, or they engage in ways that can be ambiguous as to the nature and scope of the engagement. Thus, the Restatement of Medical Malpractice begins by addressing the foundational contours of a treatment relationship.Footnote ⁸

At the threshold, one visible indication of common law adaptation is the modernizing of the rules around formation of the treatment relationship. Historically, courts have tended to apply what might be called a “hair trigger” test for relationship formation, by finding that contractual elements are met with only a slight indication of potential intent by the provider to assume responsibility. Thus, in various circumstances, courts have found that a treatment relationship formed when a patient made an appointment, or when a provider discussed the patient’s situation and needs only briefly, or only with a colleague.

The quick trigger approach stands in sharp contrast to lawyers undertaking client representation. Lawyers commonly consult with a potential client before launching representation, and that launch rarely occurs without an explicit understanding about its basic scope and terms.

When patients are sick and in need of immediate attention, there are obvious reasons to dispense with formalities. Recognition, however, that greater complexities and subtleties can legitimately arise in the modern setting, coupled with the emergence of a more overtly “consumerist” ethos in medicine, led the Restatement to endorse a moderating stance. Based on limited, but sufficient, case law, the Restatement advises that, “in appropriate nonemergency circumstances, medical providers should have leeway, similar to that in legal representation, to first assess a patient’s condition and to discuss potential courses of treatment and costs before initiating a patient-care relationship.”Footnote ⁹ That passing sentence is a small but instructive example of common law adaptation.

The unhelpful aspect of inertia in the common law can be seen, however, in its episodic conception of treatment relationships. Following well-established case law, the Restatement declares that a treatment relationship ceases “once the particular condition or conditions that gave rise to treatment no longer need attention, unless the patient has reason to believe that the provider intends to continue the relationship.” As it notes, this “captures what is sometimes referred to as a ‘spell of illness’ demarcation of treatment relationships.”Footnote ¹⁰ The Comment acknowledges, however, that “patients as well as providers often think of themselves as having an established and ongoing relationship that bridges episodes of illness.”

Here, the Restatement urges courts to better adapt the law to modern practice. The Comment instructs that medical liability law should attempt “to shape itself to the actual contours of patient-provider interactions and understandings.” Further, it notes that “several modern developments support, in appropriate circumstances, embracing a more continuous rather than episodic conception of patient-care relationships.” An obvious example is chronic illness with episodic flare-ups. Another, which is more institutionally contingent, is the contemporary emergence of primary-care “medical home” arrangements, “in which a primary-care provider is paid to manage a patient’s needs on an ongoing basis across a range of providers and conditions.” The Comment prompts courts to recognize that these (or similar) arrangements “can form an ongoing patient-care relationship that transcends spells of illness.”Footnote ¹¹

This type of small-bore, stepwise evolution is a hallmark of the common law and thus is comfortably within the bounds of the Institute’s guidelines and practices for how Restatements justifiably may guide further legal development.Footnote ¹² The Restatement embraces a similarly less transactional and more relational view in its section on informed consent. There, it keys the informed consent duty to a “course of treatment” rather than to a specific intervention, recognizing (again without much explicit precedent) that “it is typical, and permissible, to obtain informed consent in a manner that bundles a variety of discrete items of treatment.”Footnote ¹³ In these several respects, we see a somewhat successful, but still limited, ability of common law to adapt to basic changes in treatment relationships.

7.3 Sharing Responsibility among Medical Professionals

Common law has been somewhat less successful, however, in adapting to changes in how medicine is practiced. Tort law has frequently had to determine the scope of an individual provider’s professional responsibility in the context of multiple professionals working together as part of a treatment team.Footnote ¹⁴ This first arose in the surgical operating arena. Cases a century ago asked whether a surgeon is responsible for errors that surgical assistants make, such as nurses charged with counting sponges to ensure none are left behind. As surgical techniques advanced, subsequent courts were asked to determine a lead surgeon’s responsibility for another physician’s error in, for instance, administering anesthesia.Footnote ¹⁵

Initially, courts adopted a strong version of vicarious liability known as the “captain of the ship” doctrine, which held the lead surgeon responsible as a matter of law for any negligence under their “command,” regardless of the surgeon’s actual control over the team member.Footnote ¹⁶ One rationale at the time for this small-scale form of enterprise liability was that, with respect to nurses, if the surgeon were not liable then there would be no adequately sized pocket from which to seek recovery, given that almost all hospitals at the time were immune from liability, either as charitable or governmental institutions.

In many cases, modern courts have appropriately backed away from this literal-absolutist application of the captain-of-the-ship metaphor, in favor of a more fact-based inquiry, now referred to as the borrowed “employee” doctrine.Footnote ¹⁷ This modern version appropriately adapted to changing circumstances in the profession and applies more conventional vicarious liability principles to inquire whether a surgeon, in a particular situation, controls, or has the right to control, “the manner and means” by which a colleague performs their work. Recognizing that in modern practice, the training and oversight of nurses is typically the hospital’s responsibility, this more nuanced doctrine nevertheless allows a finding based on the facts of a particular case that a surgeon assumed temporary control of a team member’s action.

But the story isn’t all a positive one. Variability remains in how these principles play out in recurring scenarios, including the original scenario of sponges, clamps, or other foreign objects accidentally left behind during surgery.Footnote ¹⁸ Some courts look to how providers themselves allocate responsibility, recognizing that “operating room personnel have specialized tasks to perform during surgery, … [and] that it [may] not [be] practical for [surgeons] to exercise control of the nurses in their sponge-counting task.”Footnote ¹⁹ Other courts, however, continue to hold surgeons responsible as a matter of law.Footnote ²⁰ They do so without resuscitating an explicit and free-ranging captain-of-the-ship notion; instead, they embrace the more limited common-sense notion that when a surgeon inserts a foreign object, the surgeon remains responsible for ensuring its proper removal. That line of thinking is more appropriately considered to be a straightforward recognition of a nondelegable duty.Footnote ²¹

These established strands of doctrine have not matured, however, into more general principles of shared professional liability when errors occur in team-based care settings. The Reporters’ Note to the Comment on borrowed employees explains that, “[a]lthough such team-care arrangements are increasingly common, courts continue to resist viewing them as a basis for vicarious liability among individual medical professionals, as long as none of the providers actively supervises or controls his or her counterpart. Instead, courts apply a highly compartmentalized view of shared physician responsibility.” The Note continues in an editorial vein to say:

These sentiments are those only of the Reporters, however, and do not speak for the Institute. The ALI’s official position is expressed in Comments recognizing that “much of this Restatement addresses a simple one-on-one relationship between provider and patient, even though much medical care, especially in hospital settings, is in fact provided by teams that share and assign responsibilities in complex ways,” and noting that the “Restatement only partially accounts for this complexity.”

Here, then, we see a glaring example of the limits of common law tort principles, rooted in an anachronistic framing of medical care delivery. Despite dramatic changes in how modern medicine structures care delivery, tort law can struggle to fully adapt to modern conditions.

Partly accounting for this doctrinal rigidity, however, is that medical professionals themselves hold on to a bounded view of their own responsibilities. Thus, when providers collaborate across disciplines or fulfill supervisory roles, they form explicit understandings about the nature of limits of their separate but dovetailing responsibilities.Footnote ²³ In honoring these understandings, tort law is not so much stubborn to change, as it is compliant with professional norms. Thus, the common law is more subject to the criticism of declining to push for overarching structures of responsibility, than of failing to recognize professional and institutional realities.Footnote ²⁴

7.4 Institutional Responsibility

Common law’s rigidity can be seen in the failure of institutional liability to fully adapt to modern circumstances. A few years before work began on the Third Restatement of Torts, the Institute commissioned a project, led by a group of eminent torts scholars, to restate institutional responsibility for personal injury. The group’s work proved too scholarly and lacked grounding in existing case law. The Institute therefore downgraded what was originally intended as a Restatement to simply a “Reporters’ Study,”Footnote ²⁵ meaning that it spoke only for the reporters and not the Institute.Footnote ²⁶ For similar reasons, this Restatement attempts no bold move toward sweeping enterprise liability for medical institutions.Footnote ²⁷ That move would require fairly dramatic legislation action. Short of that, however, this Restatement recognizes a number of doctrinal advancements that, potentially, form building blocks for more sweeping enterprise liability.

First, the Restatement’s institutional liability ambit is substantially broader than just hospitals and nursing homes. The institutions subject to some form of medical liability are “entities that arrange for or furnish medical care through the services of medical professionals,” including: “medical facilities that treat patients, such as hospitals, clinics, and nursing homes; entities, such as managed care insurance plans, that arrange medical care for their customers; and newly emerging arrangements such as ‘accountable care organizations.’”Footnote ²⁸ This Section is explicit, however, that all such institutions do not have the same set of duties. Instead, different duties apply according to whether the institution directly delivers care or instead merely helps to arrange for care.

Ample precedent exists to articulate the basic duties owed by institutions engaged in direct medical care. Precedent is limited, though, for other forms of institutions – those that merely arrange for or influence patient care rather than act as a provider. Managed care insurers are the primary example, but, owing to preemption by the Employee Retirement Income Security Act (ERISA), relevant precedents are scarce.

Despite this absence of precedent, the Section is able to state based on general principles that any such medical institution owes a “duty of reasonable care” to the extent that it “select[s] and retain[s] the medical professionals who furnish care under its auspices,” or that it “make[s] or actively review[s] medical decisions.”Footnote ²⁹ Comments explain that this structure and wording does not require institutions to engage in such activities unless they actually deliver care; if not, the Section tailors medical duties to the functions that particular institutions choose to undertake.Footnote ³⁰ These principles provide appropriate room for flexible development both of different types of medical institutions and different attendant duties, rather than embracing a “one size fits all” rule.

The Institute is especially careful to avoid insisting that medical institutions actively supervise medical professionals in a manner that requires institutions to regularly inject themselves directly into medical decision-making as it occurs (rather than reviewing decisions more retrospectively). If institutions choose to do so, naturally they assume a more exacting duty of care, but requiring institutions to take on this responsibility would contravene public policies that seek to minimize untoward institutional influence in professional judgment. In these ways, the Section aims to set a doctrinal stage for the ongoing development of a wide variety of different types and forms of medical institutions.

The Restatement also addresses institutional liability through vicarious liability doctrine. In particular, the Restatement discusses the substantial body of case law that has developed under the “apparent (or ostensible) agency” doctrine.Footnote ³¹ In developing and applying this and other aspects of vicarious liability, the Comments emphasize that courts are especially attentive to public policy consideration, such as:

Because these policies can point in different directions or can be given differing weights, there is notable variability in the extent to which different courts, sometimes from the same jurisdiction, assess whether an adequate manifestation of authority exists to invoke institutional vicarious liability.

Nevertheless, the Restatement is explicit that doctrinal articulation and application of vicarious liability should change in response to changes in health care delivery and finance. Thus, Comments note that the classic model – of independent physicians on a hospital medical staff having no other contractual relationship with the hospital – no longer predominates. Instead, physicians who treat hospital patients increasingly either work for the hospital or are part of a group that contracts, or is affiliated, with the hospital or a parent organization. Legal precedents from the pure independent-practice era may not necessarily be a good fit with these more complex “integrated delivery systems.”Footnote ³³

Institutional liability for hospital-based specialists that a hospital does not employ is the leading example of doctrinal evolution that reflects several of these public policy considerations. Conventionally, when a professional (or other actor) is not an actual employee or agent of an institution, the institution assumes no vicarious liability unless the injured party (here, a patient) detrimentally relies on the institution representing that the professional is acting on its behalf as its agent.Footnote ³⁴ Courts increasingly have relaxed these doctrinal demands of actual reliance and overt representation. They have held, for instance, that patients need not show reliance in the form that a different understanding about agency would have caused them to seek care elsewhere. Instead, patients need only show simply that they assumed the doctor was working for the hospital. Moreover, in many jurisdictions, patients need not point to a specific holding out or representation of agency; instead, it suffices that the patient’s assumption was reasonable in the circumstances.

The Restatement makes ample room for these doctrinal liberalizations but does not insist on their adoption, recognizing that doing so appropriately requires taking account of factual circumstances. Noting the variability that remains among decisions, as well as the fact-sensitivity of these standards, the relevant Comment sets an outer limit of apparent agency only at the point where “a patient establishes a relationship with an independent physician prior to hospital treatment.”Footnote ³⁵ Then, “the patient cannot convincingly claim that the independent physician is the hospital’s apparent agent, simply because the physician is on the hospital’s medical staff or is entitled to work on the hospital’s premises.” Otherwise, for hospital-based specialists, “various circumstances can give rise to a patient’s reasonable belief that the physician is acting and has authority to act on behalf of the hospital when, in fact, the physician is an independent contractor.”Footnote ³⁶

Beyond this expansion of apparent agency, tort law has not gone much further toward possible full-scale enterprise liability for hospitals or other medical institutions, nor does this Restatement encourage doing so, recognizing that Restatements are not an overt law-reform initiative.Footnote ³⁷ In this respect, basic institutional liability remains much as it was a half-century ago. It remains to be seen whether dramatic innovations such as artificial intelligence – allowing much more detailed real-time interaction with professional decision-making – will push institutional roles and legal doctrine to a tipping point of more encompassing liability.

In the meantime, this Restatement does contain limited doctrine that may become seeds for future development of more encompassing enterprise liability. It notes that, in emergency room settings, where public policy considerations loom especially large, more courts are willing to curtail or dispense with the factual issues that might complicate a finding of apparent institutional agency. These courts, for instance, tend to adopt a presumption of reasonable impression of agency status, and they decline for obvious reasons to honor disclaimers of agency contained in form paperwork presented to emergency patients.

The relevant Comment takes an important further step, pointing courts to the availability of a more straightforward, but still limited, embrace of nondelegability as a matter of law. Building from decisions that presume apparent agency, the Comment notes that, “for certain core hospital functions, such as nursing care, it may be unacceptable as a matter of law to permit a medical institution to disavow vicarious liability for the negligence of independent contractors – even if it furnishes patients clear and timely notice of the contractors’ independent (nonemployee) status.”Footnote ³⁸

The extent to which courts take up this invitation remains to be seen. But, even with some uptake, wholescale enterprise liability for independent physicians remains inconceivable in the short or medium term. More likely, continuing integration among facilities and professionals will diminish the practical importance of any major doctrinal reform regarding independent physicians.

7.5 Conclusion

This chapter presents several examples of tort law’s ability to thoughtfully adapt to changes in health care delivery at a measured pace – a pace that does not attempt to anticipate changes before they become widespread but also does not lag too terribly far behind important changes. The new Restatement of Medical Malpractice dutifully reflects where such changes have already taken hold and points to other changes that are primed to occur or to become more mature. Considering how rapidly health care delivery has changed, tort law appears by this assessment to be performing acceptably well on the adaptability score.

In some respects, however, this assessment highlights challenges to tort law governing and shaping modern health care delivery. Because the DNA of tort law adapts to practices, structures, and norms as they are, it is not well suited to leading or pushing for reform. Because a Restatement is, at its core, a synthesis of existing doctrine rather than a law-reform enterprise, Restatements have very limited ability to force tort law to improve or modernize. Nevertheless, embedded in the Restatement are a number of key passages that point in potentially constructive directions that future evolution of tort doctrine might take. Other points of doctrinal rigidity, however, might require more overt law-reform efforts to overcome.