Mo Hospital Bill Shortchanges Victims and Disowns Doctors

Everything seemed right with Crystal Jefferson’s life.  She was living the American dream – a happy family, a good job, and a love for life. On October 27, 2005, she had her first child. While she was in the hospital at Missouri Baptist Medical Center in St. Louis, she experienced abdominal pain and underwent a CT scan that revealed a soft tissue mass in her stomach and fluid collection in her pelvis. Her attending radiologist recommended a follow-up study.

Crystal followed those orders and underwent a follow-up scan at Missouri Baptist on December 9, 2005. The second scan showed the same things. And again, her attending radiologist recommended a follow-up study. Crystal followed those orders and underwent a third scan – again at Missouri Baptist on January 19, 2006. This time, the radiologist gave her a clean bill of health.

Three years later, in the spring of 2008, Crystal noticed pressure in her abdominal pain. By this time, she had two young children. Tragically, testing soon revealed that the soft tissue mass first identified in 2005 was not only still present, but was in fact inoperable stage IV colon cancer – that could and should have been diagnosed at any one of the three times she was treated at Missouri Baptist in 2005. If the last Missouri Baptist doctor who saw her in January 2006 had taken appropriate action, Crystal could have easily beat her cancer. But by 2008 it was too late. She battled but passed away in 2011.

This week, the Missouri House debated whether Missouri Baptist Medical Center should be responsible for the harms and losses its doctors caused Crystal and her family?

Under the common law of agency, employers in the position of Missouri Baptist Medical Center have long been held responsible for the wrong-doing of their employees. In fact, the roots for this legal rule can be traced all the way back to Roman law – where the master was responsible for harm caused by his servant.

For an employer to be liable under the common law of agency, the central question is one of control: Does the employer set the terms of employment? Does the employer provide the facility where the work is done or the instruments through which the work is carried out? Does the employer generally set the hours worked? Is the work part of the regular business of the employer? Is the alleged employee engaged in an occupation that is identifiably distinct from that of the alleged employer?

In Crystal Jefferson’s case, Missouri Baptist said it could not be held legally responsible for the actions of its own doctors solely because it did not pay its doctors directly and that it provided a separate insurance policy for those doctors. The lawyers for Crystal’s family argued that the well-settled common law principles applied. Crystal prevailed. The Eastern District Court of Appeals allowed the claim against Missouri Baptist to proceed if Crystal could prove agency. Having lost in court, Missouri Baptist and other hospitals in Missouri decided to exercise their First Amendment rights to petition government.

The result is House Bill 452 and its Senate counterpart, both of which would eliminate the common law of agency for Missouri hospitals by stating that a hospital is only responsible for the actions of its agents that it compensates directly. Forget the factors set forth above, it’s now a one-part test. If the hospital pays its doctors through a third-party entity, then HB 452 permits the hospital to disclaim responsibility for its own physicians.

The bill negatively impacts two groups of Missourians. The first are patients. If a hospital attempted to have you sign a form document stating that, in exchange for services, you agreed that the hospital would not accept legal responsibility for the wrongdoing of any person not directly compensated by the hospital, Missouri courts — and most states — would reject that “contract” as being void against public policy. Yet HB 452 strips patients of the right to recover losses caused by substandard health care. It provides by legislative fiat that hospitals have no responsibility for the actions of any person it does not pay directly. All that’s necessary to avoid responsibility is to funnel compensation through a shell company.

Physicians are also harmed here. The attorney for Crystal’s family has a duty to help recover the full amount of the harm they suffered. If the hospital is immune, then the doctor is left to pay the entire damages. At the same time, if the hospital can be held legally responsible, there are no added damages to the case. Crystal’s children do not get to present any different evidence of the harm. They are entitled to be made whole for what has been taken from them – nothing more, nothing less.

Like many other bills in this area, it’s important to consider them in a real-world context – to put aside the talking points and Ivory Tower theorizing. For this bill, that’s really easy to do. After all, HB 452 was designed specifically to “fix” the result in Crystal Jefferson’s case.

Proponents of the bill argue that hospitals should not be liable where they have nothing to do with the actions at issue in a case. But the facts of Crystal Jefferson’s case belie this argument. Does a hospital have anything to do with the health care delivered on its premises? Crystal Jefferson believed that it did – and so too does every Missourian who goes to a hospital expecting adequate medical care. By design, HB 452 short-changes victims and permits hospitals to disown their own doctors – and that is why I voted no.