LEGAL MEDICINE GROUP 5 (Tuesday 5:30-6:30 pm)

BAGAS
CABREGA, ANGELICA J.
CRUZ, MARIAN HAZEL A.
GIBSON, MARIA REGINA L.

History of the Doctrine of Corporate Negligence

Recent years have seen the doctrine of corporate negligence as the judicial answer to the problem of
allocating hospital’s liability for the negligent acts of health practitioners, absent facts to support the
application of respondeat superior or apparent authority. Its formulation proceeds from the judiciary’s
acknowledgment that in these modern times, the duty of providing quality medical service is no longer
the sole prerogative and responsibility of the physician. The modern hospitals have changed structure.
Hospitals now tend to organize a highly-professional medical staff whose competence and performance
need to be monitored by the hospitals commensurate with their inherent responsibility to provide quality
medical care. (Purcell v. Zimberman, 18 Ariz. App. 75, 500 P 2d 335 (1972)).

The doctrine has its genesis in Darling v. Charleston Community Hospital, 33 Ill. 2d 326, 211 N.E. 2d
253). There, the Supreme Court of Illinois held that “the jury could have found a hospital negligent, inter
alia, in failing to have a sufficient number of trained nurses attending the patient; failing to require a
consultation with or examination by members of the hospital staff; and failing to review the treatment
rendered to the patient.” On the basis of Darling, other jurisdictions held that a hospital’s corporate
negligence extends to permitting a physician known to be incompetent to practice at the hospital. (Corleto
v. Hospital, 138 N.J. Super. 302, 350 A. 2d 534 (Super. Ct. Law Div. 1975); Purcell v. Zimbelman, 18
Ariz. App. 75,500 P. 2d 335 (1972); Hospital Authority v. Joiner, 229 Ga. 140, 189 S.E. 2d 412 (1972)).
With the passage of time, more duties were expected from hospitals, among them: (1) the use of
reasonable care in the maintenance of safe and adequate facilities and equipment; (2) the selection and
retention of competent physicians; (3) the overseeing or supervision of all persons who practice medicine
within its walls; and (4) the formulation, adoption and enforcement of adequate rules and policies that
ensure quality care for its patients. (Welsh v. Bulger, 548 Pa. 504, 698 A. 2d 581 (1997)). Thus, in Tucson
Medical Center, Inc. v. Misevich, 115 Ariz. 34, 545 P 2d 958 (1976), it was held that a hospital, following
the doctrine of corporate responsibility, has the duty to see that it meets the standards of responsibilities
for the care of patients. Such duty includes the proper supervision of the members of its medical staff.
And in Bost v. Riley, 262 S.E. 2d 391, 300 NC 194, 269 S.E. 2d 621 (1980), the court concluded that a
patient who enters a hospital does so with the reasonable expectation that it will attempt to cure him. The
hospital accordingly has the duty to make a reasonable effort to monitor and oversee the treatment
prescribed and administered by the physicians practicing in its premises.

What is the Corporate Negligence Doctrine?

 Corporate negligence is a doctrine under which a hospital is liable if it fails to uphold the proper standard
of care owed a patient. This “standard of care” ensures a patient’s safety and well-being while
hospitalized. The theory of a hospital’s liability is to create a non-delegable duty with which the hospital
owes directly to a patient. In other words, an injured party does not have to establish the negligence of a
healthcare professional in the employ of the hospital in order to bring forth a claim of corporate
negligence. Vicarious liability is the cause of action for a claim wherein the injured party alleges
negligence on the part of the hospital’s employee or agent, such as a physician, nurse, therapist, etc.

Who Can File A Claim?

Under corporate negligence doctrines, a client may be able to sue the health care business as a whole for
negligence of its employees.The corporate negligence doctrine requires health plan providers and medical
organizations to:
a. Ensure clients that their doctors are properly qualified and certified to provide treatment; and
b. Create and execute policies that allow the client to receive quality medical treatment and care.

Who Can Be Held Liable for Corporate Negligence?

Corporate negligence liability often applies to smaller healthcare businesses and organizations. Liability
may also extend to any surgeons or specialists who practice at the hospital, regardless of whether they are
technically employed by the hospital, although this varies by state. This often allows the client to recover
damages in instances where they might have been more limited in the past. Corporate negligence laws
may also apply to other entities that provide comprehensive medical care for clients, including nursing
homes, dentist offices, and medical clinics.

In Thompson v. Nason Hospital, the Pennsylvania Supreme Court reasoned that a corporate negligence
claim was needed for hospitals “in full recognition of the corporate hospital’s role in the total health care
of its patients.” Both vicarious liability and corporate negligence claims may be brought against a hospital
in a medical malpractice lawsuit. In addition, specific claims may be brought against individual
healthcare professionals who cared for the patient while in the hospital.

Liability Of Hospitals Under The Doctrine of Corporate Negligence

The case of Professional Services, Inc. v. Agana, G.R. No. 126297; Agana, et al. v. Fuentes, G.R. No.
126467; Ampil v. Agana, et al., G.R. No. 127590, January 31, 2007 set the precedent for the liability of
hospitals for the negligence of doctors employed by it, or even consultants. The Supreme Court said that
courts in holding a hospital liable for damages, having undertaken one of mankind’s most important and
delicate endeavors, must assume the grave responsibility of pursuing it 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 v. Tuzon General
Hospital, 500 P. 2d 1153 (1972), citing Darling v. Charleston Community Memorial Hospital, 33 Ill. 2d
326, 211 N.E. 2d 253).
 The Philippine Court adopted the four areas of general hospital responsibility laid down in Thompson v.
Nason. It Includes:
1. A duty to use reasonable care in the maintenance of safe and adequate facilities and equipment.
2. A duty to select and retain only competent physicians.
3. A duty to oversee all persons who practice medicine within its walls as to patient care
4. A duty to formulate, adopt, and enforce adequate rules and policies to ensure quality care for the
patients

What are Some Examples of a Corporate Negligence Violation?

There are many types of actions and conduct that could qualify as a corporate negligence violation. These
actions include:

● Failing to check doctor credentials;

● Performing a license check that is not thorough enough;
● Failing to maintain and provide a safe, clean medical environment;
● Failing to properly train medical employees; and/or
● Implementing policies that are unsafe.

Doctrine of Corporate Negligence as applied in Philippine Jurisdiction

In Manila Doctors Hospital v Chua, the court declared that the operation of private hospitals and medical
clinics is impressed with public interest and imbued with a heavy social responsibility. Nonetheless, the
court also recognizes that the hospital is also a business and has a right to institute all measures of
efficiency commensurate to the ends for which it is designed, especially to ensure its economic viability
and survival. It is to be noted that the medical community vehemently rejects any proposal to enact a law
on malpractice. The contention that creating a law would ordain a culture of malpractice litigation in the
Philippines, which would only increase health care cost, and thus ultimately be more detrimental to
patients. On the question of liability there is no argument that those who are negligent should be liable.
Nevertheless, in adopting any principle, whether law or otherwise, that imposes liability on physicians or
hospitals, the greater effect on health care should be considered.

It is suggested that greater responsibilities should be demanded of hospitals. Unless the court is prepared
to provide guidelines, it should reconsider its decision to impose duties on hospitals that are not provided
by law. The Doctrine of Corporate Negligence, as applied in this jurisdiction ignores basic procedural and
organizational realities of hospital and medical practice. The liability system as developed in Philippine
jurisprudence creates unnecessary burdens which will affect the process by which medical decisions are
made and will ultimately reflect on the cost of healthcare, safety of patients and welfare of the public. In
the context of the flailing Philippine Health Care System, hospitals and physicians should not be unduly
burdened with liability even without fault.

Cases:

Thompson v. Nason Hospital

Facts: Following an automobile accident, Mrs. Thompson (Plaintiff) was admitted to the hospital where
she remained in intensive care for three days. On the fourth day, she developed complete paralysis of the
left side, which she never recovered from. Plaintiff sued Defendant, claiming that her injuries were the
direct and proximate result of Defendant’s negligence acting through its agents, servants, and employees
who failed to sufficiently examine and treat her. The court adopted a theory of corporate liability with
respect to Defendant and found it liable.Defendant appealed.

Issue: Whether the hospital is liable under the principle of corporate negligence.

Held: Yes. In order to charge a hospital with negligence, it must be shown that the hospital had actual or
constructive knowledge of the defect or procedures that caused the harm, and the negligence of the
hospital must have been a significant factor in bringing about the harm There was a material issue of fact
regarding Nason Hospital’s (Defendant) duty to monitor the medical services Plaintiff was provided.
There was a failure to report changes in the condition of the patient that was not in accord with standard
medical practice

Professional Services Inc. (PSI) v. Natividad Agana

G.R. No. 126297, 31 January 2007

Facts: Natividad Agana was rushed to the Medical City General Hospital (Medical City Hospital)
because of difficulty of bowel movement and bloody anal discharge. After a series of medical
examinations, Dr. Miguel Ampil diagnosed her to be suffering from “cancer of the sigmoid.” Dr. Ampil,
assisted by the medical staff of the Medical City Hospital, performed an anterior resection surgery on
Natividad. He found that the malignancy in her sigmoid area had spread on her left ovary, necessitating
the removal of certain portions of it. Thus, Dr. Ampil obtained the consent of Natividad’s husband,
Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No. 126467, to perform hysterectomy on
her. Thereafter, Dr. Ampil took over, completed the operation and closed the incision. However, based on
the record of the hospital, the attending nurses indicated nota bene that 2 sponges were missing. The same
was reported to Dr. Ampil but were not found after “diligent search”.

After couple of days, Natividad complained of excruciating pain in her anal region. She consulted both
Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural consequence of the
surgery. Dr. Ampil then recommended that she consult an oncologist to examine the cancerous nodes
which were not removed during the operation. Natividad went to the United States for four months but
she was only declared free of cancer. In Natividad’s return to the Philippines, her daughter found a piece
of gauze protruding from her vagina. Upon being informed about it, Dr. Ampil proceeded to her house
where he managed to extract by hand a piece of gauze measuring 1.5 inches in width. He then assured her
that the pains would soon vanish. But instead the pains intensified, prompting Natividad to seek treatment
at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez detected the presence of
another foreign object in her vagina a foul-smelling gauze measuring 1.5 inches in width which badly
infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive organs which forced
stool to excrete through the vagina. Natividad underwent another surgical operation to remedy the
damage. Civil and administrative complaints, for damages and gross negligence respectively, were filed
against Professional Services Inc., owner of Medical City Hospital, Dr. Ampil and Dr. Fuentes.
Issue: Whether corporate negligence is present.

Held: Yes. Hospital’s corporate negligence extends to permitting a physician known to be incompetent to
practice at the hospital. A patient who enters a hospital does so with the reasonable expectation that it will
attempt to cure him. The hospital accordingly has the duty to make a reasonable effort to monitor and
oversee the treatment prescribed and administered by the physicians practicing in its premises. In the
present case, it was duly established that PSI operates the Medical City Hospital for the purpose and
under the concept of providing comprehensive medical services to the public. Accordingly, it has the duty
to exercise reasonable care to protect from harm all patients admitted into its facility for medical
treatment. Unfortunately, PSI failed to perform such duty.

ROGELIO E. RAMOS and ERLINDA RAMOS v. Court of Appeals

G.R. No. 124354

Facts: Plaintiff Erlinda Ramos was, until the afternoon of June 17, 1985 a 47-year old robust woman.
Except for occasional complaints of discomfort due to pains allegedly caused by presence of a stone in
her gall bladder, she was as normal as any other woman. Married to Rogelio Ramos, an executive of
Philippine Long Distance Telephone Company (PLDT), she has three children whose names are Rommel,
Roy Roderick, and Ron Raymond. Because of the discomforts somehow interfered with her normal ways,
she sough professional advice. She was told to undergo an operation for the removal of a stone in her gall
bladder. She underwent series of examination which revealed that she was fit for the said surgery.
Through the intercession of a mutual friend, she and her husband met Dr. Osaka for the first time and she
was advised by Dr. Osaka to go under the operation called cholecystectomy and the same was agreed to
be scheduled on June 17,1985 at 9:00am at the Delos Santos Medical Center. Rogelio asked Dr. Osaka to
look for a good anesthesiologist to which the latter agreed to. A day before the scheduled operation, she
was admitted at the hospital and on the day of the operation, Erlinda’s sister was with her inside the
operating room. Dr. Osaka arrived at the hospital late, Dr. Guttierez, the anesthesiologist, started to
intubate Erlina when Herminda heard her say that intubating Erlinda is quite difficult and there were
complications. This prompt Dr. Osaka to order a call to another anesthesiologist, Dr. Caldron who
successfully intubated Erlina. The patient’s nails became bluish and the patient was placed in a
trendelenburg position. After the operation, Erlina was diagnosed to be suffering from diffuse cerebral
parenchymal damage and that the petitioner alleged that this was due to lack of oxygen supply to
Erlinda’s brain which resulted from the intubation.

Issue: Whether or not the doctors and the hospital are liable for damages against petitioner for the result
to Erlinda of the said operation.

Held: Yes. The private respondents were unable to disprove the presumption of negligence on their part in
the care of Erlinda and their negligence was the proximate case of her piteous condition.

Nevertheless, despite the fact that the scope of res ipsa liquitor has been measurably enlarged, it does not
automatically follow that it apply to all cases of medical negligence as to mechanically shift the burden of
proof to the defendant to show that he is not guilty of the ascribed negligence. Res ipsa loquitur is not a
rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the
circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is
able to say, as a matter of common knowledge and observation, that the consequences of professional
care were not as such as would ordinarily have followed if due care had been exercised. A distinction
must be made between the failure to secure results, and the occurrence of something more unusual and
not ordinarily found if the service or treatment rendered followed the usual procedure of those skilled in
that particular practice. It must be conceded that the doctrine of res ipsa loquitur can have no application
in a suit against a physician or surgeon which involves the merits of a diagnosis or of a scientific
treatment.

Scientific studies point out that intubation problems are responsible for 1/3 of deaths and serious injuries
associated with anesthesia. Nevertheless, 98% or the vast majority of difficult intubation may be
anticipated by performing a thorough evaluation of the patient’s airway prior to the operation. As stated
beforehand, respondent, Dra. Guttierez failed to observe the proper pre-operative protocol which could
have prevented this unfortunate incident. Had appropriate diligence and reasonable care been used in the
pre-operative evaluation, respondent physician could have been more prepared to meet the contingency
brought about by the perceived atomic variations in the patient’s neck and oral area; defects which could
have been easily overcome by a prior knowledge of those variations together with a change in technique.
In other words, an experienced anesthesiologist, adequately alerted by a thorough pre-operative
evaluation, would have had little difficulty going around the short neck and protruding teeth. Having
failed to observe common medical standards in pre-operative management and intubation, respondent
Dra. Guttierez negligence resulted in cerebral anoxia and eventual coma of Erlinda.