Hospitals have long been regarded as community protectors, historically perceived as charitable institutions that provide care regardless of a patient’s ability to pay. Over time, however, the commercialization of healthcare has transformed hospitals into profit-driven enterprises. This shift has brought new challenges, including the rise of preventable medical errors, now the third leading cause of death in the United States. Despite this alarming statistic, hospitals often evade liability by structuring physician relationships as independent contractor arrangements. This article argues for the imposition of a non-delegable duty on hospitals to ensure accountability for the medical care provided within their facilities.
The Evolution of Hospital Liability
Historical Immunity and the Shift to Corporate Accountability
Hospitals have long enjoyed the reputation of community protectors. The reputation originated a long time ago when hospitals were considered charitable organizations. Hospitals were viewed as places of refuge with compassionate caregivers who put themselves in harm’s way to help the injured, infirmed, and lower classes. They often did so without regard to whether the patient could pay for these services. Hospitals were thus viewed as insulated from profit-based motives, surviving on “donations” made for the benefit of the hospital’s mission. See Kenneth S. Abraham & Paul C. Weiler, Enterprise Medical Liability and the Evolution of the American Health Care System, 108 HARV. L. REV. 381, 385 (1994); Fisher v. Ohio Valley Gen. Hosp. Ass’n, 73 S.E.2d 667 (W. Va. 1952). As a result, hospitals were traditionally immune from tort liability under the charitable immunity doctrine. ARTHUR F. SOUTHWICK, THE LAW OF HOSPITAL AND HEALTHCARE ADMINISTRATION 539 (2d ed., 1988).
Fascinatingly, during the time of charitable immunity, hospitals typically were facilities that allowed individual doctors to provide care to their own patients. Marlin C. Williams & Hamilton E. Russell, III, Hospital Liability for Torts of Independent Contractor Physicians, 4 7 S.C. L. REV. 431, 435 (1996). In other words, doctors had patients that they would refer to the hospital for closer observation and treatment.
Courts and legislatures later abolished this protection as hospitals transitioned from charitable institutions to corporate entities advertising comprehensive medical services.
The Rise of For-Profit Hospitals and Medical Errors
While there was a gradual shift in the nature of hospitals, things changed quickly in the 1950s. Hospitals began advertising as full-service healthcare providers. Hospitals began deriving financial profit by holding “themselves out to the public as offering and rendering quality health care services.” See, e.g., Sharsmith v. Hill, 764 P.2d 667, 672 (Wyo. 1988); Hardy v. Brantley, 471 So.2d 358, 371 (Miss. 1985)).
Public perception shifted, viewing the hospital as a multifaceted healthcare facility responsible for the quality of medical care and treatment rendered. See, e.g., Jackson v. Power, 743 P.2d 1376, 1385 (Alaska 1987). We entered the era of “commercialization of American medicine.” Id.
It no longer reflects reality to envision hospitals as facilities where doctors and nurses can care for their own private patients without oversight. The hands-off approach of the past is gone. Present-day hospitals, as their manner of operation plainly demonstrates, do far more than furnish facilities for treatment. See Beeck v. Tucson General Hospital, 18 Ariz. App. 165, 169 (1972). The person who avails himself of ‘hospital facilities’ expects that the hospital will attempt to cure him, not that its nurses or other employees will act on their own responsibility.” See Bing v. Thunig, 2 NY.2d 656 (N.Y. 1957). This brought a dulled public sentiment for hospitals and saw increased hospital liability for medical errors.
Hospitals transformed from a facility that most people only went to when their physician told them to go, to healthcare institutions that provided physicians and diverse healthcare services without referral from your personal physician.
Fast forward to current day. Most hospitals are staffed with both direct employees and independent contractors. In most cases, hospitals formally employ nurses, technicians, and resident physicians. Depending on the hospital, some or all of the doctors can be independent contractors—ironically, even the ones called “hospitalists.”
Hedge funds, investors, and capitalism have turned hospitals into for-profit businesses. While the focus of the care providers is on patient care, the focus of upper management and owners is profit.
Not everyone benefited from this transition.
The privatization of hospitals has led to an epidemic—medical errors are the third leading cause of death in the United States. Preventable medical errors kill and injure millions of Americans every year. In fact, death by medical error is the nation’s leading cause of accidental death. Its death count exceeds that of strokes, chronic lower respiratory diseases, Alzheimer’s disease, and diabetes. Estimates are that preventable medical errors contribute to the deaths of around 200,000 Americans in hospitals every year (there are no estimates for those who die outside of U.S. hospitals).
One American dies in a hospital every 2 minutes and 30 seconds from preventable medical errors. That makes it an epidemic and a serious public health problem. Yet, how often do you hear about this on the news? How often do you hear politicians asking for billions of dollars to reduce the number of deaths? People barely tolerate one error in a restaurant order when determining if they will come back, so why do we tolerate so many fatal errors in the healthcare industry?
Maybe it’s because we don’t understand medicine or are constantly bombarded with propaganda about “frivolous lawsuits.” Healthcare lobbyists and advocacy groups would have you believe preventable medical errors are rare and that people who sue for medical malpractice are greedy liars.
These groups question statistics about preventable medical errors. They do not challenge that an error was made but, instead, challenge whether the error was the sole cause of death (or if the person was going to die anyway)—ignoring tens of thousands of cases where the preventable medical error contributed to the patient’s death.
Medical Malpractice and The Toll It Inflicts
The financial and emotional costs of medical errors are not limited or self-contained. The health insurance industry spends billions of dollars every year covering care necessitated by preventable medical errors. Your insurance premiums and tax dollars subsidize a healthcare industry that financially benefits from its mistakes (i.e., necessitating additional inpatient days and further medical care).
The sad reality is that only 2% of people who suffer from medical errors seek a civil remedy. The vast majority of claims injury victims assert involve catastrophic injuries or death. The most common source of medical malpractice claims is diagnostic errors. The second most common source of medical malpractice claims is surgical errors. The financial costs of these errors can overwhelm their victims. For example, the average cost of care for birth injuries exceeds $2.5 million. Families who lose a loved one often suffer economic losses exceeding $1 million. Those are just the financial losses. The non-economic damages and how such injuries and deaths impact the people are far beyond such paltry amounts.
Since most doctors only carry $1 million in medical malpractice insurance, injury victims must turn to the hospital systems that financially benefit from the doctors’ medical activities. This led to increased liability for hospitals under doctrines such as corporate negligence and vicarious liability.
Historically, medical malpractice laws were designed to address poor quality care, fairly compensate patients for injuries resulting from negligence, and impose justice in a manner that would make future occurrences less likely. However, in the age of for-profit hospital systems, medical malpractice laws have been gutted.
Most states created hurdles to pursuing medical malpractice claims by enacting laws to increase the costs of bringing a medical malpractice claim and decrease the potential amount of money a jury may award. For instance, many states capped non-economic damages—those damages intended to compensate you for pain, suffering, disability, disfigurement, scarring, and loss of enjoyment of life—as low as $250,000, with some states being even more draconian by capping total damages—economic and non-economic—as low as $500,000.
Such caps are arbitrary and should be unconstitutional. Imagine you have an athletic 14-year-old child who loves sports, plays an instrument, and is active in caring for your parents. Then, they accidentally break their arm, requiring surgery. Your child should recover to pre-injury ability, but the surgeon commits a preventable medical error that results in your child losing their arm. All hopes for the future, dreams, and aspirations of continuing to play sports and an instrument were cut short. In states that enacted damage caps, your 14-year-old child might only be able to collect $500,000. Put another way, your child’s compensation for the next 65 years of discomfort, phantom pain, disability, loss of enjoyment of life, and fears about work, relationships, and safety could be limited to $250,000—less than $4,000 per year. Would you voluntarily lose a limb for $4,000 per year? What if that child died? Would you feel fairly compensated with $250,000?
States with caps are not better at compensating victims or their families. Medical error victims often must hire an attorney to help them pursue their claim, which also requires the expenditure of $100,000 or more in litigation costs (e.g., medical experts, forensic examiners, economists). Then there’s the kicker that most injury victims are required to reimburse their healthcare insurance company for injury-related care it covered—thank your congress members for that. Further magnifying the obstacles for injury victims, some states and the federal government passed laws statutorily limiting the amount attorneys can charge. The limits on attorneys’ fees can make it difficult for injury victims to find an attorney willing to spend hundreds of hours and hundreds of thousands of dollars to help them pursue the case. Ultimately, with these oppressive laws, everyone else is getting paid but the injury victim.
These inequities might explain why the number of malpractice claims lodged every year has steadily decreased since the 1990s, despite the number of preventable medical errors staying steady. The decrease in medical malpractice claims is not because the quality of care has increased. Having worked around the healthcare industry since the 1990s, I can say with confidence:
- Preventable medical errors are one of the leading causes of death in America.
- Evidence shows that healthcare providers often hesitate to report errors, intentionally fail to document errors, and minimize errors or contrive alternative causes for the resulting problems.
- Lawsuits over preventable medical errors are not causing a crisis.
- Lawsuits over preventable medical errors are not causing an increase in healthcare costs.
- Traditionally, for every dollar the healthcare industry generates in patient harm, the civil justice system recovers only a few pennies.
- Healthcare providers almost never admit they made a mistake.
- Healthcare administrators almost never admit the provider made a mistake.
- Healthcare providers typically circle the wagons and defend medical malpractice claims without admitting anyone was negligent.
One troubling aspect of the last three points is that even if the hospital investigates a medical error, neither the patient nor their family will receive details of its findings. This obfuscation is part of the “Peer Review Protection.” All 50 states and the District of Columbia enacted laws protecting hospitals’ peer review activities to encourage participation by minimizing legal risks. The protection is such that, during the peer review process, a healthcare provider can admit to making a preventable medical error but then deny any wrongdoing in a civil suit brought by the injury victim or the family.
Ultimately, the healthcare industry is about making money for executives, managers, doctors, investors, and even insurance companies. As restaurants and small businesses regularly go out of business, doctor’s offices and clinics are popping up everywhere. There is a lot of money in healthcare.
Legal Framework for Hospital Liability
Vicarious Liability: Actual and Apparent Agency
Under existing Arizona law, hospitals may be held liable for physician negligence under theories of actual and apparent agency. Courts consider factors such as the hospital’s control over the physician’s work, contractual relationships, and representations made to the public. However, these agency-based theories often fail to hold hospitals accountable when physicians are classified as independent contractors.
Hospitals frequently avoid responsibility for medical errors because they do not employ healthcare providers (except for most nurses, orderlies, and techs). Instead, the healthcare providers are independent contractors for whom the hospital has no liability. This move by the money managers reaped many rewards—the hospital did not have to pay salaries, there were no fringe benefits, no sick days to keep track of, no human resource nightmares, no bonuses or incentives to worry about, and the hospital avoided all liability for the medical errors of these healthcare providers. Essentially, the hospital offloaded the duty to diagnose and treat to independent contractors.
You may wonder: how can a hospital that advertises its services to the community, is paid handsomely by its patients, delegate the duty to diagnose and treat without any accountability for medical errors?
The answer lies in a legal morass of agency theory. Generally, a company is only responsible for its employees. In a few limited circumstances, the company can be responsible for non-employees.
But what happens when the company’s duties are of such importance that it implicates a special relationship between the company and its customer? There is an exception to the general rule that the company is not liable for the negligence of an independent contractor known as the “non-delegable duty doctrine.”
The Doctrine of Non-Delegable Duty
Definition and Rationale
A non-delegable duty can arise in the context of a special relationship between persons. “For example, persons who engage in relationships that are ‘protective by nature’ (e.g., the common carrier, innkeeper, employer) are often held to possess an affirmative duty to guard the safety of their respective charges.” Ft. Lowell-NSS Ltd. Partnership v. Kelly, 166 Ariz. 96, 101 (1990) (citation omitted).
In Ft. Lowell, the Arizona Supreme Court found a storage facility vicariously liable for its invitees’ injuries even though the injuries were caused by an independent contractor. 166 Ariz. at 104. “If the employer delegates performance of a special duty to an independent contractor and the latter is negligent, the employer will remain liable for any resulting injury to the protected class of persons, as if the negligence had been his own.” Id. at 101. This exception, the Arizona Supreme Court explained, “is premised on the principle that certain duties of an employer are of such importance that he may not escape liability merely by delegating performance to another.” Id. “There are special situations in which the law prescribes a duty requiring a higher degree of care. This higher standard often stems from a special relationship between persons.” Id.
Interestingly, to date, Arizona common law has not formally recognized a duty on the part of hospitals to provide non-negligent medical care through employees or independent contractors. But it came close.
In 1985, in DeMontiney v. Desert Manor Convalescent Center, Inc., 144 Ariz. 6 (1985), the Arizona Supreme Court was presented with the question of whether the duty imposed by Arizona statutes on County mental health facilities to evaluate and provide care may be delegated such that the County is relieved of all liability to the patients. The Arizona Supreme Court noted, “The legislature’s concern for persons who, as a result of mental disorders, threaten their own safety and well-being” and determined “It is in the public interest that the county remain ultimately liable for any breach of that very important duty.”
In 1987, in Cooke v. Berlin, 153 Ariz. 220 (App. 1987), the Arizona Court of Appeals reflected on DeMontiney and noted the State, which ran a public health facility, could be held liable for the conduct of an independent contractor, “even if Dr. Berlin were an independent contractor, it appears that the state undertook to provide a non-delegable duty to provide adequate care.”
Arizona medical malpractice plaintiffs typically claim that a hospital is legally responsible for all care that takes place within its walls, whether delivered by physicians, nurses, or other healthcare providers. Underlying his claim is the principle that every hospital owes a duty to every patient to avoid preventable medical errors and that, even if care is delegated to an independent contractor physician, the hospital remains legally responsible for the medical errors of the physician.
We next briefly summarize and examine the progression to the current State of Arizona law concerning the “non-delegable duty” of hospitals.
Application to Hospitals
The General Rule of Corporate Liability
A hospital will be vicariously liable for the acts of its employees when the employee is acting within the course and scope of employment. State v. Schallock, 189 Ariz. 250, 255-261 (1997). This is undisputed. But what happens when there is a contractual relationship between a hospital and a healthcare provider that claims the healthcare provider is not an employee but rather an independent contractor?
The independent contractor relationship is predicated on autonomy in execution of the contracted service and is largely removed from the principal’s controlling influence. Courts will not hold hospitals liable for the negligence of independent contractors because of the absence of control in this relationship. It would seem unfair when the hospital lacks control.
Arizona appellate decisions addressing a hospital’s vicarious liability for independent contractors focus on agency theories to the exclusion of non-delegable duty principles. The agency theories are “actual agency” and “apparent agency”. The legal rationale behind agency theories is that the hospital has put the patient in a position where the patient is led to believe the healthcare provider is an employee or agent of the hospital.
This is primarily a result of advertising and efforts to persuade the public that one hospital system is better than another based on the services it offers. As noted by one Court, modern hospitals have spent “billions on marketing,” in the form of billboards, television commercials, and newspaper ads, to nurture the image that they are hi-tech facilities that offer virtually every health care service, “from the critical surgery and life-support required by a major accident to minor tissue repairs resulting from a friendly game of softball.”
These representations create the impression that the hospital is providing medical services directly to the public. Burless v. W. Va. Univ. Hosp., Inc., 601 S.E.2d 85, 93 (W. Va. 2004). As a result, patients now look to hospitals for medical care rather than individual healthcare providers.
For a hospital to be liable for a physician’s negligence on actual agency grounds, the focus is on the degree of the hospital’s control over the physician. See Gregg v. Nat’l Med. Health Care Servs. Inc., 145 Ariz. 51, 55 (App. 1985). The Arizona Court of Appeals has analyzed the following factors to determine actual agency: whether the hospital arranged services for the physician’s patients, whether the hospital handled all billing, whether the physician’s services were provided exclusively through the hospital, whether the physician was the head of a hospital department, and whether the physician’s group provided services pursuant to hospital rules and procedures. See Beeck v. Tucson Gen. Hosp., 18 Ariz. App. 165, 170–171 (1972); Barrett v. Samaritan Health Servs., Inc., 153 Ariz. 138, 146 (App. 1987). This is largely a question of fact that a jury must decide.
For a hospital to be liable for a physician’s negligence on apparent or ostensible agency grounds, the injured party must show: (1) that the hospital intentionally or inadvertently led them to believe the doctor was its agent, and (2) that they justifiably relied on the hospital’s representations. See Fadely v. Encompass Health Valley of Sun Rehab. Hosp., 253 Ariz. 515, 520 ¶ 15 (App. 2022). This is largely a question of fact that a jury must decide.
Non-Delegable Duty Parameters
It is well accepted that certain duties imposed on a particular individual or entity are so important that they cannot be delegated. Wiggs v. City of Phoenix, 198 Ariz. 367, 371, 10 P.3d 625, 629 (2000) (“[w]here one has a non-delegable duty, the one with whom the principal contracts to perform that duty is as a matter of law always an agent for purposes of applying the doctrine of respondeat superior.”); Ft-Lowell-NSS Ltd Partnership v. Kelly, 166 Ariz. 96, 101, 800 P.2d 962, 967 (1990).
Non-delegable duties may be imposed by common law, statute, contract, franchise, or charter. Ft. Lowell, 166 Ariz. at 101; see also Wiggs v. City of Phoenix, 198 Ariz. 367, 371 (2000); Myers v. City of Tempe, 212 Ariz. 128 (2006). Without such authority, Arizona courts decline to recognize a non-delegable duty. See Santorii v. MartinezRusso, LLC, 240 Ariz. 454, 458 ¶ 14 (App. 2016); see Myers, 212 Ariz. at 132–33 ¶¶ 17–19 (concluding that no authority imposes a non-delegable duty on a city to provide emergency services). The Arizona Court of Appeals, in Myers, noted that the non-delegable duties recognized in Arizona “appear to be few,” but this is misleading. 240 Ariz. at 132 ¶18.
In 2006, the Arizona Supreme Court looked to Arizona statutes and administrative regulations to determine the duties imposed by law. See Myers v. City of Tempe, 212 Ariz. 128 (2006). “An entity is liable for the actions of an independent contractor if a ‘statute or … administrative regulation’ imposes the duty.” Myers, 212 Ariz. at 132, ¶ 18.
Regulatory and Policy Considerations
Arizona Regulations
Arizona’s hospital regulations require facilities to provide essential medical services, including emergency care, surgical services, and intensive care. Hospitals are responsible for ensuring these services meet regulatory standards, regardless of employment arrangements. Notably, Arizona law prohibits hospitals from delegating intensive care services to private contractors, underscoring the recognition that certain medical duties should not be outsourced.
Arizona’s hospitals owe patients a non-delegable duty to provide competent healthcare services that are grounded in statute. Certain healthcare services are deemed so important that hospitals are highly regulated by state law. See A.R.S. §§ 36-401-445.04. These statutes require substantial compliance with licensure requirements. See A.R.S. § 36-405. Hospital licensure requirements come from Title 9, chapter 10 of the Arizona Administrative Code.
Arizona regulations require, inter alia, hospitals to have policies and procedures, medical staff bylaws, regulations, and quality management programs that relate to patient care. “Contracted services” are also regulated. A.A.C. § R9-10-205. Arizona hospitals are required to provide, through an organized medical staff, medical services and continuous nursing services for the diagnosis and treatment of patients. A.A.C. § R9-10-101(110). Hospital “patients,” in turn, receive “hospital services” that include “medical services, nursing services, and other health-related services provided in a hospital.” A.A.C. § R9-10-201(14). “Patient care” at Arizona hospitals, thus, consists of “hospital services provided … by a personnel member or medical staff member,” i.e., by a physician. A.A.C. § R9-10-201(30).
The concept of hospitals providing patient care is supported by Arizona case law. E.g., Maricopa County v. Rana, 248 Ariz. 419, 428 (App. 2020) (noting Maricopa County’s Zoning Ordinance defines a “hospital” as “an institution for the diagnosis, treatment, or other care of human ailments.”). Indeed, according to the American Hospital Association (AHA), hospitals are licensed institutions with at least six beds whose primary function is to provide diagnostic and therapeutic patient services for medical conditions, they have an organized physician staff, and they provide continuous nursing services under the supervision of registered nurses. The World Health Organization (WHO) considers an establishment to be a hospital if it is permanently staffed by at least one physician, can offer inpatient accommodation, and can provide active medical and nursing care.
Arizona regulations impose a duty on each hospital’s administrator to ensure that specific services are provided to all individuals requiring specialized care (e.g., nursing services, surgical services, anesthesia services, emergency services, pharmaceutical services, laboratory and pathology services, radiology and diagnostic imaging services, intensive care services, respiratory care services, perinatal services, psychiatric services, and rehabilitation services). A.A.C. §§ R9-10-201-234.
Therefore, when a doctor provides one of these services to patients in a hospital, that doctor is directly accountable to the hospital’s governing authority for the quality of their care. A.A.C. § R9-10-207A. State law imposes duties on the hospital’s administrator pertaining to the care and treatment of patients. See A.A.C. §§ R9-10-201-234. If the hospital chooses to use independent contractors to perform these obligations, it is required to ensure that the independent contractors comply with these and other regulations. See A.A.C. § R9-10-205.
Interestingly, Arizona hospitals cannot delegate intensive care services to independent contractors. See A.A.C. § R9-10-221. This regulation dictates that “Private duty staff do not provide hospital services in an intensive care unit;” where “private duty staff” are individuals, excluding a personnel member, compensated by a patient. In other words, the only doctor permitted to provide intensive care services is a “personnel member.” As such, Arizona Regulations establish that the doctors a hospital assigns to provide intensive care services are deemed “personnel members” of the hospital.
This may be a distinction without difference in terms of non-delegable duties.
The Arizona Supreme Court noted, “the duty which a hospital owes a patient in need of emergency care is determined by the statutes and regulations interpreted by this court in Guerrero v. Copper Queen Hospital, 112 Ariz. 104 (1975).” Thompson v. Sun City Community Hospital, 141 Ariz. 597 (1984). As Thompson noted, the Director of Health Services was required to adopt regulations for the licensure of general hospitals, such as St. Luke’s. A.R.S. § 36-405(A). “As guidelines for minimum requirements, the director was mandated to use the standards of the Joint Commission for Accreditation of Hospitals (JCAH).” Thompson, 141 Ariz. at 601. Specific regulations were adopted in Arizona in 1976, requiring that “general hospitals shall provide facilities for emergency care.” Thompson, 141 Ariz. at 602; Arizona Administrative Code R9-10-216. These statutes and regulations require hospitals to provide certain healthcare services to individuals needing those services. In determining whether the hospital could be liable for medical errors in the emergency room, the Arizona Supreme Court never questioned whether the doctor was an employee or agent. Vicarious liability was presumed based on the duty imputed by statutes and regulations.
Federal Regulations
The Code of Federal Regulations, enacted pursuant to the authority of Medicare Act, 42 USC §1395, et seq., unequivocally imposes a non-delegable responsibility on hospitals as a requirement for participating in Medicare. By choosing to participate in the Medicare program, a hospital assumes the responsibilities and duties promulgated under the Act. Participating hospitals “must” have a governing body that is “legally responsible for the conduct of the hospital as an institution.” 42 CFR § 482.12. The governing body “must … ensure that the medical staff is accountable to the governing body for the quality of care provided to patients.” 42 CFR § 482.12(a)(5). The relevant portion of the regulation states:
- 482.12 Condition of participation:
Governing body.
(e) Standard: Contracted services. The governing body must be responsible for services furnished in the hospital whether or not they are furnished under contracts….
(1) The governing body must ensure that the services performed under a contract are provided in a safe and effective manner.
Thus, the Code affirmatively places a duty and responsibility on participating hospitals as it relates to their contracted services, even when those services are performed under a contract.
Any question as to the intent and effect of 42 CFR § 482.12(e) is answered in the Federal Register, which begins with a pronouncement: “These conditions … are intended to protect patient health and safety and assure the quality of care provided to Medicare and Medicaid beneficiaries.” 51 Fed. Reg. 22010 (Background). The Federal Register reports at § 5, Standard for Contracted Services, § 482.12(a):
NPRM provisions. The 1983 NPRM was intended to clarify that the hospital has ultimate responsibility for services, whether they are provided directly, such as by its own employees, by leasing, or by through arrangement, such as formal contracts, joint ventures, informal agreements, or shared services. Because many contracted services are integral to direct patient care and are important aspects of health safety, a hospital cannot abdicate its responsibility by simply providing that service through a contract with an outside resource.
For purposes of assuring adequate care, the nature of the arrangement between the hospital and the “contractor” is irrelevant. The NPRM, therefore, proposed to specify that the governing body must be responsible for these services and the services must be provided in a safe and effective manner.
51 Fed. Reg 116 (1986), 22015.
The stated purpose of the CFR is to assure that hospitals participating in Medicare provide quality care and remain responsible for the services rendered at its facilities. Most hospitals, when they contract out services, include language that the provision of services must be consistent with the bylaws, rules and regulations, policies, and reasonable directives of the hospital.
Arizona’s Non-Delegable Duty for Hospital Liability Goes Beyond Statutes and Regulations
Reflecting back, DeMontiney includes a discussion on jury instructions. In this discussion, the Arizona Supreme Court appears to extend the non-delegable duty doctrine beyond duties created by statute. The Court noted Restatement (Second) of Torts § 314A sets out situations in which a special relationship between parties gives rise to a duty to aid or protect. According to § 314A, “[o]ne who is required by law to take or who voluntarily takes the custody of another under circumstances such as to deprive the other of his normal opportunities for protection” is under a duty similar to the duty of a common carrier to its passengers. The Court noted the duty of a common carrier to its passengers is:
“(a) to protect them against unreasonable risk of physical harm, and
“(b) to give them first aid after it knows or has reason to know that they are ill or injured, and to care for them until they can be cared for by others.”
Restatement (Second) of Torts § 314(A)(1) (a) and (b) (1965). The Arizona Supreme Court held “it is the special relationship between two parties that can give rise to a duty to prevent suicide. When an institution, such as Desert Manor, is charged with the care and custody of persons who it knows will be likely to harm themselves, therefore, that special relationship exists.”
The special relationship applies to “persons who engage in relationships that are ‘protective by nature’.” Id. There is nothing more “protective by nature” than the relationship between a patient with a medical emergency or a post-operative patient needing intensive care services and a hospital holding itself out as having the skills and resources necessary to provide those services.
Many states find that common carriers have non-delegable duties toward passengers. “The
carrier assumes a nondelegable duty to exercise heightened, extraordinary care because of its special relationship to patron-passengers.” Cox v. Evansville Police Dep’t, 107 N.E.3d 453, 466 (Ind. 2018) (discussing doctrine generally but finding it inapplicable). An Illinois court explained that “a common carrier’s heightened duty of care is nondelegable” so that a school transportation company could be liable for an employee’s sexual assault of a student. Doe v. Sanchez, 52 N.E.3d 618, 631 (Ill. App. Ct. 2016); accord, e.g., McNerney v. Allamuradov, 84 N.E.3d 437 (Ill. App. Ct. 2017) (taxi dispatch owed non-delegable duty; plaintiff alleged that independent contractor driver sexually assaulted her). A Washington court held that escalator operators owe non-delegable duties; “[t]hey are vicariously liable for the negligence of the independent contractor hired to maintain the escalator.” Knutson v. Macy’s W. Stores, Inc., 406 P.3d 683, 684 (Wash. Ct. App. 2017).
Some lawyers have grabbed the dicta in court opinions to argue there is nothing inherently special about medical care to create a special relationship. In what world is the relationship between a storage facility and its invitee (Ft. Lowell) more special than the relationship between a hospital and its sick patient? Arizona Courts have told us such a special relationship exists in the healthcare setting: DeMontiney v. Desert Manor Convalescent Center, Inc., 144 Ariz. 6 (1985), Cooke v. Berlin, 153 Ariz. 220 (App. 1987), and Beeck v. Tucson General Hospital, 18 Ariz.App. 165 (App. 1972). Arizona clearly values the provision of competent medical services to persons dependent upon the care provided by a healthcare facility:
Having undertaken one of mankind’s most critically important and delicate fields of endeavor, concomitantly therewith the hospital must assume the grave responsibility of pursuing this calling with appropriate care. The care and service dispensed through this high trust, however technical, complex and esoteric its character may be, must meet standards of responsibility commensurate with the undertaking to preserve and protect the health, and indeed, the very lives of those placed in the hospital’s keeping.
Beeck, 18 Ariz.App. at 169 (citing Darling v. Charleston Community Memorial Hosp., 211 N.E.2d 253 (1965) (emphasis added)). Arizona has applied the non-delegable duty doctrine in the context of negligent medical care given by contract physicians in DeMontiney v. Desert Manor Convalescent Center, Inc., 144 Ariz. 6, 695 P.2d 255 (1985) and Cooke v. Berlin, 153 Ariz. 220, 735 P.2d 830 (App. 1987). DeMontiney held that where a statute imposed on the County a duty to provide medical care (mental healthcare specifically), the County was permitted to hire an independent contractor physician to assist the County “in fulfilling that duty; but this does not relieve the County of its duty.” “It is in the public interest that the County remains ultimately liable for any breach of that very important duty.” 144 Ariz. at 9, 695 P.2d at 258.
This is not a novel theory.
National Trends in Hospital Accountability
Several other states value patient safety and disallow hospitals from escaping responsibility for medical errors. In line with Arizona’s public policy, “immunity fosters neglect and breeds irresponsibility, while liability promotes care and caution.” See generally Simmons v. Tuomey Regional Medical Center, 341 S.C. 32 (2000); President and Directors of Georgetown College v. Hughes, 130 F.2d 810 (U.S.C.A. D.C. 1942); Noel v. Menninger Foundation, 175 Kan. 751 (1954); Mississippi Baptist Hosp. v. Holmes, 214 Miss. 906 (1951); Sheehan v. North Country Community Hosp., 273 N.Y. 163 (1937); Rabon v. Rowan Mem’l Hosp., Inc., 269 N.C. 1, 13 (1967); Brown v. Anderson County Hosp. Ass’n, 268 S.C. 479 (S.C. 1977). Thus, imposing a non-delegable duty on hospitals in this context fulfills the goal of patient protection.
The Simmons Court further noted principles that are equally applicable in Arizona:
The cited cases clearly illustrate that a person or entity entrusted with important duties in certain circumstances may not assign those duties to someone else and then expect to walk away unscathed when things go wrong. A principle that applies in cases of poorly repaired brick floors and sloppily loaded cargo certainly applies to situations in which people must entrust that most personal of things, their physical well-being, to physicians at an emergency room intimately connected with and closely controlled by a hospital.
Simmons, 341 S.C. at 42, 533 S.E.2d at 322. This logic is followed in Alaska, Florida, New York, and several other states.
Two years after Arizona’s Supreme Court decided DeMontiney, the Alaska Supreme Court held that an acute care hospital that undertakes to provide emergency medical care has a non-delegable duty to provide emergency physicians and cannot escape vicarious liability for their malpractice by hiring them as independent contractors. Jackson v. Power, 743 P.2d 1376, 1384-85 (Alaska 1987). The Jackson Court had little trouble concluding that the duty to provide emergency medical care was at least as important as a common carrier’s duty to transport passengers, citing Alaska Airlines v. Sweat, 568 P.2d 916 (Alaska 1977) (air carrier could not escape liability for negligence by using an independent contractor to transport passengers). 743 P.2d at 1384. The Jackson Court also found a close parallel between the regulatory scheme of airlines and hospitals, noting that the operation of a hospital is one of the most regulated activities in the state. The Jackson Court concluded:
[W]e simply cannot fathom why liability should depend upon the technical employment status of the emergency room physician who treats the patient. It is the hospital’s duty to provide the physician, which it may do through any means at its disposal. The means employed, however, will not change the fact that the hospital will be responsible for the care rendered by physicians it has a duty to provide.
Jackson, 743 P.2d at 1385.
Alaska’s policy analysis echoes that of the Arizona Supreme Court in DeMontiney. It reflects a trend toward holding hospitals directly accountable for the care provided by the hospital through contractors, based upon public policy consideration, even as to duties beyond those imposed by statute or regulation.
Arizona’s Non-Delegable Duty for Hospital Liability May Include Self-Imposed Duties
In 2007, the Arizona Court of Appeals was faced with a personal injury claim where the injury victim alleged Safeway was responsible when a third-part security officer injured him at a Safeway grocery store. Simon v. Safeway, Inc., 217 Ariz. 330 (App. 2007). For purposes of this discussion, it should be noted that Safeway did not initially have a specific, nondelegable duty to provide security services. Instead, it voluntarily assumed that duty within the context of the heightened duty it already owed to its business invitees. Simon, 217 Ariz. at 339, ¶ 24.
Wait. What?
The Arizona Court of Appeals held that having assumed the task of providing security services on its premises, Safeway thus created for itself a personal, nondelegable duty to protect its invitees from the intentionally tortious conduct of those with whom it had contracted to maintain a presence and provide security on its premises. Safeway cannot now disclaim liability merely because the individuals it permitted to interact so closely with its customers had been hired by an independent contractor. Simon, 217 Ariz. at 339, ¶ 24.
Let’s take the rationale of the Arizona Court of Appeals, but substitute a few terms. Where an owner or possessor of a hospital undertakes to provide healthcare services, he remains liable as though he directly employed the healthcare providers, regardless of whether they are technically employed by an independent entity. See, e.g., Simon v. Safeway, Inc., 217 Ariz. 330, 339 n.9, ¶ 24. In performing these healthcare services, the hospital authorized the healthcare providers to closely observe and treat hospital customers, to document information in its medical records system, and to use the special tools (e.g., imaging and labs) located in the hospital.
Additional Thoughts
Agency principles are an archaic way of handling hospital liability in modern American medicine. Going forward, hospitals should be held liable for the actions of independent contractors, without exception. We’ve allowed hospitals generate a lot of revenue by having outside providers perform medical services within the hospital’s walls. Medical services that the state and federal government require hospitals to perform.
The hospital may use independent contractors to comply with the duties owed, but liability is not delegable. The party which owes the non-delegable duty retains liability and is vicariously liable for the negligent acts of the independent contractor. “A person may delegate a duty to an independent contractor, but if the independent contractor breaches that duty by acting negligently or improperly, the delegating person remains liable for that breach. See Simmons, supra.
It is unfeasible to suggest a specific criterion by which the non-delegable character of healthcare duties may be determined, other than the conclusion that the responsibility is so important to the community that the hospital should not be permitted to transfer it to another in hopes of escaping liability when things go wrong. Arizona law recognizes certain duties to be non-delegable, including the duty of a common carrier to transport passengers safely, of a municipality to keep its streets in good repair, of a landlord to maintain common spaces, and of any entity tasked with providing proper care and treatment under state law.
Though factually dissimilar, these accepted non-delegable duties are considered so important to the community that the responsibility for their execution cannot be transferred to another entity. Courts should extend the doctrine of non-delegable duty to hospital operations for the same reason.
We need only reflect on the requirements imposed on hospitals to participate in Medicare. Hospitals are required to establish a program for “quality assessment” and “performance improvement.” Hospitals must ensure that their program focuses on indicators related to improved health outcomes and the prevention and reduction of medical errors. In other words, hospitals are compelled to take affirmative steps towards patient safety.
As it is, people look to hospitals as primary care providers—a place to go if you feel sick, are in pain, or have a major medical issue. They see hospitals as caregivers based, in large part, on hospitals’ advertising the quality of their facilities, the numerous services offered, the reputation of their providers, and patient outcomes.
Courts around the country recognize the importance of hospitals in ensuring patient safety. The federal government recognizes the significant impact hospitals can have on ensuring patient safety. Many local governments require hospitals to monitor the practice of healthcare providers and take steps to ensure none are a danger to the hospital’s patients. Through credentialing and granting privileges, hospitals are required to ensure patient safety by monitoring healthcare providers’ practice within the hospital facility. The hospital’s duties under credentialing and granting privileges apply regardless of the employment status of the healthcare provider.
What is the purpose of credentialing and granting privileges, if not ensuring patient safety? Ensuring patient safety directly implicates the delivery of healthcare services.
Another critical factor in enforcing nondelegation is the fact that most hospitals assign healthcare providers to patients and, in most of these cases, the healthcare provider does not have an established relationship with the patient prior to admission. Some Courts believe agency exists merely when a hospital has established and staffed facilities or departments through which patients receive specialized care from medical professionals with whom they do not have a prior or ongoing relationship—the patient realistically does not have a choice in providers, cannot choose any provider they want from outside the hospital, and does not have the ability to negotiate for providers with better billing rates.
The hospital has demonstrated its endorsement of the healthcare providers, it has financially benefitted from the presence of the healthcare providers, and it uses the healthcare providers to satisfy its regulatory requirements to keep its facilities open to the public.
Since federal and Arizona laws make hospitals obligated to provide certain medical services and give them the power to direct healthcare providers in their facilities, the hospitals should bear a non-delegable duty to provide those medical services in a non-negligent manner.
Policy Implications and Recommendations
A Bright-Line Rule for Hospital Liability
To enhance patient safety and simplify legal determinations, courts should adopt a bright-line rule holding hospitals vicariously liable for all healthcare providers they assign to patients. This rule would ensure that hospitals cannot evade liability through contractual arrangements while incentivizing improvements in patient care.
No one should be suggesting hospitals need to be vicariously liable for healthcare providers with whom the patient has a relationship that leads to the hospital admission (e.g., a patient is admitted to the hospital for surgery with a healthcare provider they contracted with for surgery). However, there should be a bright-line rule that the hospital is vicariously liable for all healthcare providers it makes available or assigns to provide care to its patients. Liability would also apply to the ancillary staff the hospital provides for pre-op, intra-op, and post-op care following surgery with the patient’s own surgeon, unless the hospital allows the surgeon to come with their own support staff. See, e.g., York v. Rush-Presbyterian-St. Luke’s Medical Center, 222 Ill.2d 147, 194 (2006) (“…a patient nevertheless still reasonably relies upon the hospital to provide the remainder of the support services necessary to complete the patient’s treatment.”).
This brightline rule supports public policy considerations for patient safety, it recognizes the public’s reliance on hospitals as primary care and multi-specialty facilities, and it simplifies the analysis. Hospitals would have a vested interest in cutting down on preventable medical errors. One side effect of this rule will be simplifying medical malpractice litigation and eliminating the finger pointing that often obfuscates the real issues.
The Economic and Social Benefits of Hospital Accountability
Holding hospitals accountable would reduce preventable medical errors, leading to cost savings for both healthcare providers and patients. By shifting the focus from profit maximization to patient safety, hospitals could foster a culture of accountability and continuous improvement in healthcare delivery.
Preventable medical errors in hospitals have risen to epidemic levels that kill more than 200,000 Americans every year. That is like 3 plane crashes every day of the year! When a single plane falls out of the sky, Americans want accountability and prevention. Deaths from preventable medical errors should be no different.
It will only be through the wholesale adoption of a non-delegable duty that the healthcare system will work to decrease the likelihood of future harm. By forcing hospitals to be accountable for the healthcare from which they financially benefit, these for-profit institutions will likely leverage their strengths as private equity organizations and through technological developments to improve systems and ensure patient safety. Ensuring patient safety and cutting down on preventable medical errors will save hospitals and patients millions of dollars every year.
The commercialization of hospital services and infusion of private equity money created a wedge between patient safety and profits. Profits became the focal point leading management to work on cost-cutting methods as opposed to patient safety measures. While the frontline providers muddle their way through a broken system, management focuses on appeasing the next level up. Soon, patients are forgotten. When preventable medical errors occur, the hospitals try to distance themselves from the frontline providers they left behind. No more.
The great thing about the wholesale adoption of a nondelegable duty is that it should not disrupt current hospital systems or require a change in talent acquisition. Hospitals maintain the ability to hire directly or retain independent contractors. It may lead to competition among healthcare provider groups based on profitability and patient safety, rather than profitability alone. This could also lead to the decrease in medical costs to patients.
The doctrine of non-delegable duty will work to simplify the medical malpractice tort system while encouraging injury prevention. A win-win.
Conclusion
Preventable medical errors have reached epidemic proportions, yet hospitals frequently escape liability by exploiting independent contractor relationships. To rectify this injustice, courts and legislatures must recognize that hospitals owe a non-delegable duty to their patients. By doing so, the legal system can ensure that hospitals are held accountable for the care provided within their walls, ultimately promoting safer and more effective medical treatment for all patients.
About the Author
Joseph D’Aguanno is a distinguished personal injury attorney based in Phoenix, Arizona, with over two decades of experience. As the managing attorney at Gage Mathers Law Group, PLLC, he has built a reputation for securing significant settlements and jury verdicts in cases involving medical malpractice, car accidents, dog bites, and premises liability. Joseph focuses much of his time on medical malpractice cases and catastrophic injury matters, having been featured in Arizona’s annual Top Ten Jury Verdicts, selected as a lifetime member to the Multi-Million Dollar Advocates Forum, and admitted to the 2025 Southwest Super Lawyers list for Plaintiff’s Personal Injury.
