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2002]WHEN THE "MACHINE THAT GOES 'PING"' CAUSES HARMliable in informed consent cases27 and the extent to which the institutional dutyis non-regressive, meaning whether it is limited to pre-adverse eventcredentialing or policymaking, 28 or continues forward to apply to occasions of30individual treatment. 29 The indeterminacy surrounding the reach of Darlinghas threatened to minimize its impact and characterize it as 3littlemore than an1institutional version of administrative or ministerial liability.Only a few courts have shown outright hostility towards the doctrine ofinstitutional liability. 32 Objections to the institutional default may, however, be27. See, e.g., Cross v. Trapp, 294 S.E.2d 446, 472 (W. Va. 1982) (holding that absent agencyrelationship with physician, hospital had no duty to obtain patient's informed consent to surgery).See also Wells v. Storey, No. 1970450, 1999 Ala. LEXIS 361 (Ala. Nov. 24, 1999); Bryant v.HCA Health Servs. of N. Tenn., Inc., 15 S.W.3d 804 (Tenn. 2000); Cooper v. Curry, 589 P.2d201 (N.M. Ct. App. 1978). See also Giese v. Stice, 567 N.W.2d 156 (Neb. 1997) (reviewingauthorities); Cf Clark v. Perry, 442 S.E.2d 57 (N.C. Ct. App. 1994); Butler v. S. Fulton Med.Ctr., 452 S.E.2d 768, 772 (Ga. Ct. App. 1994).In obtaining a consent form, a nurse is not acting as a "borrowed servant" of thedoctor, but as an employee of the hospital because the task of obtaining a properlyexecuted form is administrative and does not involve professional medical skill orjudgment . The verification that a consent form has been properly executed and is partof the patient's records does not require application of medical judgment and the hospitalmay be liable under some circumstances for the nurses' failure to obtain the form inviolation of its internal procedure.Butler, 452 S.E.2d at 772.28. For example, an institution may have a duty to use reasonable care in formulating thepolicies and procedures that govern its medical staff and nonphysician personnel. See DentonReg'l Med. Ctr. v. LaCroix, 947 S.W.2d 941 (Tex. App. 1997); Air Shields, Inc. v. Spears, 590S.W.2d 574 (Tex. Civ. App. 1979).29. This is particularly the case where the patient's own relationship with the institution istenuous. See, e.g., Pedroza v. Bryant, 677 P.2d 166, 172 (Wash. 1994) (holding that corporateliability should not be imputed to a hospital that granted hospital privileges to a non-employeephysician who allegedly harmed a patient in his private office off the hospital premises). See alsoTripp v. Pate, 271 S.E.2d 407 (N.C. Ct. App. 1980).30. See generally David H. Rutchik, The Emerging Trend of Corporate Liability: Courts'Uneven Treatment of HospitalStandards Leaves Hospitals Uncertain and Exposed, 47 VAND. L.REV. 535 (1994).31. See, e.g., Advincula v. United Blood Servs., 678 N.E.2d 1009, 1023 (I11.1996).32. See, for example, Gafner v. Down East Community Hospital, 735 A.2d 969, 979-80 (Me.1999), where the allegation of institutional negligence was the hospital's failure to have in place awritten policy requiring mandatory consultation with a specialist in the case of high risk births.The court stated:There are a number of reasons for our refusal to accept the [plaintiffs'] theory of liabilityagainst the Hospital.Private hospitals in Maine are extensively regulated.TheLegislature has created duties and guidelines for the actions of those hospitals in a numberof areas. Before the expansion of tort liability into an area that has been significantlycontrolled by the Legislature, we should allow the Legislature to address the policyconsiderations and determine whether imposing such a duty constitutes wise publicpolicy.

SAINT LOUIS UNIVERSITY LA W JOURNAL[Vol. 46:37more deep-rooted and viewed as an endorsement of the deconstruction ofindividual professionalism, that itself may be an anathema to many judges. Ata more superficial level, the very label, "institutional liability," may beproblematic, suggesting to some judges a blanket rule re-allocating adverseevent losses to hospitals. It is far more accurate to state the contended-for ruleas one of institutional duty. Recognition of such a duty is but one element in aliability analysis. Indeed, "for a hospital to be charged with negligence, it isnecessary to show that the hospital had actual or constructive knowledge of thedefect or procedures which created the harm. Furthermore, the hospital'snegligence must have been a substantial factor in bringing about the harm tothe injured party. 33 Additionally, most allegations of diagnosis, treatment andcare deficiencies will depend on34 expert testimony as to the national, customarystandard of care of institutions.Conventional arguments in favor of adopting the default position ofinstitutional duty need not be related in detail.These include improveddeterrence because of the realities of modem credentialing and bylaws, moreefficient compensation systems because of the market power of largeinstitutions in planning and buying indemnity, and reduced system costs asplaintiffs are able to avoid the costs and uncertainties associated withindividual liability models. 35 I take the position that these arguments areMoreover, creating a duty on the part of hospitals to control the actions of thosephysicians who have traditionally been considered independent contractors may shift thenature of the medical care provided by those physicians. In an area as replete with thepossibility of unexpected or unintended consequences as this, we should exercise restraintin the use of our authority to create new causes of action .In sum, there exist serious and unanswered public policy questions regarding thewisdom of requiring hospitals to control the medical judgments and actions ofindependent physicians practicing within their facilities. Those questions implicate bothquality of care and economic considerations. We will not lightly adopt a new theory ofliability in an area of such significant concern for the public health. We decline to do sohere.Id. at 979-80.33. Thompson v. Nason Hosp., 591 A.2d 703, 708 (Pa. 1991).34. See, e.g., Washington v. Wash. Hosp. Ctr., 579 A.2d 177 (D.C. 1990) (holding that thealleged failure of the hospital to provide anesthesiologists with an end-tidal carbon dioxidemonitor was sufficient to create an issue of fact for jury).35. Underlying the tort of institutional negligence is a recognition of the comprehensivenature of hospital operations today. The hospital's expanded role in providing health careservices to patients brings with it increased corporate responsibilities. As Darling explained:Present-day hospitals, as their manner of operation plainly demonstrates, do far more thanfurnish facilities for treatment. They regularly employ on a salary basis a large staff ofphysicians, nurses and interns, as well as administrative and manual workers, and theycharge patients for medical care and treatment, collecting for such services, if necessary,by legal action.Darling, 211 N.E.2d at 257.

20021WHEN THE "MACHINE THAT GOES 'PING"' CAUSES HARMstrongly reinforced by the phenomena of process reform and the emergence oftechnologically-mediated health care. Further, I argue that key technologicaland structural shifts facing our health care delivery system, adapted to reducemedical error, will confirm the final maturation of an institutional duty default.These phenomena I identify as institutional marketing, regulatingtechnologically-mediated care, accrediting technology and the structural andorganizational realities associated with technologically-mediated health care.A. InstitutionalMarketingIn the absence of corporate or enterprise duty emerging as the defaultliability rule for quality of care or "technical care" litigation, 36 courts havecontinued to refine intellectually bankrupt vicarious liability rules toapproximate institutional liability. These theories include case-by-case agencybased on the right to control rather than actual control,37 agency by estoppel,38and non-delegable duty. 39 It is, however, theories based on ostensible agency 40or apparent agency 1 that have flourished in a health care industry environmentre-organizing around consolidated entities, integrated delivery, institutionalrealities and holistic marketing. Furthermore, these are features that are bothconfirmed and reinforced by technological advancement, as hospitals both touttheir process technologies and embrace new technological channels such as theweb to market and provide their comprehensive services.Of the agency theories that apply institutional duty to (arguably) individualerrors, the current favorite is ostensible or apparent agency. More specifically,several courts are showing a preference for the version in the RESTATEMENTExpounding on the point, this court later stated: "[A] modern hospital . is an amalgamof many individuals not all of whom are licensed medical practitioners. Moreover, it is clear thatat times a hospital functions far beyond the narrow sphere of medical practice." Greenberg v.Michael Reese Hosp., 415 N.E.2d 390, 395 (111. 1980)."Thus, in recognizing hospitalinstitutional negligence as a cause of action, Darling merely applied principles of common lawnegligence to hospitals in a manner that comports with the true scope of their operations." Jonesv. Chi. HMO, 730 N.E.2d 1119, 1127 (111.2000). See generally Kenneth S. Abraham & Paul C.Weiler, Enterprise Medical Liability and the Evolution of the American Health Care System, 108HARV. L. REV. 381 (1994); Arthur F. Southwick, Hospital Liability--Two Theories Have BeenMerged, 4 J. LEGAL MED. 1,49 (1983). Cf. Rutchik, supra note 30, at 548-50.36. A distinction was advanced between interpersonal care and technical care. 1 AVEDISDONABEDIAN, EXPLORATIONS IN QUALITY ASSESSMENT AND MONITORING: THE DEFINITION OFQUALITY AND APPROACHES TO ITS ASSESSMENT 4-6 (1980).37. See Berel v. HCA Health Serv. of Tex., Inc., 881 S.W.2d 21, 21 (Tex. App. 1994).38. See Sword v. NKC Hosp., Inc., 661 N.E.2d 10, 13 (Ind. Ct. App. 1996).39. See Jackson v. Power, 743 P.2d 1376 (Alaska 1987); Beeck v. Tucson Gen. Hosp., 500P.2d 1153 (Ariz. 1972).40. See Schlotfeldt v. Charter Hosp., 910 P.2d 271 (Nev. 1996).41. See Jackson, 743 P.2d at 1376.

SAINT LOUIS UNIVERSITY LAW JOURNAL[Vol. 46:37OF TORTS 42over that to be found in the RESTATEMENT OF AGENCY. 43 Theformer approach to apparent agency is preferred by malpractice plaintiffsbecause it lacks the more rigorous justifiable reliance provision found in thelatter. 44 Building on this more generous representational standard, courts havepioneered a rule that essentially places the onus on the hospital or HMO torefute a patient's belief that the treating physician is an employee of theinstitution. 45 As framed by an Oregon court:(1)the hospital must hold itself out as a provider of medical services, and (2)unless the patient has actual knowledge of the physician's actual status as anindependent contractor, the patient can recover if it is objectively reasonable46for the patient to believe that physician is an employee of the hospital.As a result robust examples of defacto institutional duty are to be found incases where health care organizational reality and institutional marketingcombine, leaving the hospital with little room to refute the patient's reasonableexpectations of a health care provider's employment status. For instance, inKashishian v. Port, involving the allegedly negligent acts of an independentcontractor cardiologist, the Supreme Court of Wisconsin observed that"[m]odern hospitals have spent billions of dollars marketing themselves,nurturing the image with the consuming public that they are full-care modernhealth facilities. 47B. Regulating Technologically-mediatedCareMeasured against the modest goal of providing compensation for faultcaused adverse events, the law of medical malpractice operates at a reasonablelevel of efficiency. Arguably, it provides a needed role for patients or theirrepresentatives in assuring a forum for public accountability for substandardcare. The malpractice system aimed at an individual care provider, however, isan incredibly clumsy tool for deterring medical error. Little better are our state42.43.RESTATEMENT (SECOND) OF TORTS§ 429 (1965).§ 267 (1958).RESTATEMENT (SECOND) OF AGENCY44. See Jennison v. Providence St. Vincent Med. Ctr., 25 P.3d 358 (Or. 2001).45. See, e.g., Sword v. NKC Hosps. Inc., 714 N.E.2d 142 (Ind. 1999); Butler v. Domin, 15P.3d 1189, 1198 (Mont. 2000) (finding § 429 decisions "particularly relevant"); Jennison, 25 P.3dat 366.46. Jennison, 25 P.3d at 358. See also, the following statement by the court in Butler:Butler's testimony that he did not receive notice of the employment relationship betweenDr. Ehrlich and St. Patrick Hospital is sufficient to raise a genuine issue of material fact asto whether St. Patrick Hospital intentionally or negligently caused Butler to believe thatDr. Ehrlich was its agent. Furthermore, it is not apparent from the record that Butler hadany knowledge which would indicate that he did not in fact believe that Dr. Ehrlich wasSt. Patrick Hospital's employee.Butler, 15 P.3d at 1198.47. Kashishian v. Port, 481 N.W.2d 277, 282 (Wis. 1992). See also Simmons v. TuomeyReg'l Med. Ctr., 533 S.E.2d 312 (S.C. 2000).

20021WHEN THE "MACHINE THAT GOES 'PING"' CAUSES HARMlicensure-based disciplinary systems that, while arguably effective in egregiouscases such as fraud, substance abuse and multiple instances of error, lack theresources to tackle closer cases or the legal competence to address systemicfailures. Not surprisingly, therefore, the decades since Darling have witnesseda steady increase in regulatory activity that looks to improve quality by beingcompliance-based and institution-oriented.For example, the Health Care Quality Improvement Act of 1986 requires(assumedly institutional) peer review entities that take adverse actions to reportthe same to state licensure boards.48 It is the institution that subsequentlyenjoys a correlated immunity from damages. 49 Health care institutions thatdesire drug and device research funding must appoint Institutional ResearchBoards (IRBs). It is the IRB that then must determine that "[i]nformed consentwill be sought from each prospective subject or the subject's legally authorizedrepresentative .50 Indeed, even courts that have been less than enthusiasticabout imposing institutional liability in diagnosis, care and treatment caseshave done so where the institution has assumed the consent duty in this contextof regulated clinical investigation. 5'These trends, demonstrating the assumption of an institutional rolefollowed by its regulation, will be solidified by the most rigorous regulation oftechnologically-mediated health care that we have yet seen: the HIPAAprivacy regulations (PIHI).52 The PIHI regulations apply to health care entitiesthat utilize Electronic Data Interchange (EDI) for their transactions. Thelikelihood of any health care institution not doing so is minimal. PIHI requiresconsented-to disclosure 53 for treatment, payment or health care operationspurposes and authorized disclosures for other purposes. 54 Theoretically, theseconsents and authorizations could be kept separate from the informed consentsrequired for treatment; in practice it seems unlikely that they will be. As aresult, these institutional duties will occupy the same operational space as48. 42U.S.C.§ 11133(1995).49. 42 U.S.C. § I lII(a)(l) (1995).If a professional review action . of a professional review body meets all the standardsspecified in section 11112(a) of this title. the professional review body. shall not beliable in damages under any law of the United States or of any State (or politicalsubdivision thereof) with respect to the action.Id.50. 45 C.F.R. § 46.111(4) (2000).51. See, e.g., Friter v. Iolab Corp., 607 A.2d 1111 (Pa. Super. Ct. 1992); Kus v. ShermanHosp., 644 N.E.2d 1214 (Ill. App. Ct. 1995), appealdenied, 652 N.E.2d 343 (Ill.1995).52. Standards for Privacy of Individually Identifiable Health Information, 65 Fed. Reg.82,462 (Dec. 28, 2000) (to be codified at 45 C.F.R. pt. 160 and 164).53. Standards for Privacy of Individually Identifiable Health Information, 65 Fed. Reg. at82,810-11.54. Standards for Privacy of Individually Identifiable Health Information, 65 Fed. Reg. at82,811.

SAINT LOUIS UNIVERSITY LA W JOURNAL[Vol. 46:37treatment-related informed consent, vaporizing any institutional arguments thatthe latter remain individual duties.C. Accrediting TechnologyDarling established a link between institutional duty and accreditationstandards by suggesting that the latter operates as a surrogate for traditionalexpert testimony as to the standard of care. 55 The 2001 revisions 56 to the JointCommission on Accreditation of Healthcare Organizations (JCAHO) standardsmandate increased proactive reporting and risk reduction systems in order toreduce medical error. 57 Specifically, there are new requirements promotingdatabase driven risk management and error reduction systems 58 and mandatingimprovements in institutional knowledge-base systems.59 It is beyond a doubtthat accreditation agencies view technologically-mediated care as aninstitutional responsibility, making it more likely than ever that a courtexamining a malpractice claim resulting from 60a technology induced errorwould hold the institution accountable by default.D. Infrastructureand OrganizationalRealitiesThe Supreme Court of New Jersey recently ruled that "[olur medical-legaljurisprudence is based on images of health care that no longer exist. '' 6 1 Ofcourse, Darling62 and the more faithful of its followers 63 have long urged thatthe business realities of health care delivery are the most potent arguments infavor of institutional duty. Such arguments are premised on the shift in thecenter of gravity of health care from individuals to institutions from theperspective of both the business relationships and the expectations ofconsumers. The new reality of technologically-mediated health care is that itcan only exist at the institutional level.55. Darling, 211 N.E.2d at 257.56. Joint Commission on Accreditation of Healthcare Organizations, Revisions to JointCommission Standards in Support of Patient Safety and Medical/Health Care Error Reduction(July 1,2001), available at http://www.jcaho.org/standard/frptsafety.html (last visited Sept. 29,2001).57. Id. See Standard LD.5.2 of the Leadership Chapter for a discussion of this standard.58. Id. See Standard IM.8 of the Management of Information Chapter for a discussion ofthese new requi

** Professor of Law and Co-Director, Center for Health Law Studies, Saint Louis University. 1. COMM. ON QUALITY OF HEALTH CARE IN AMERICA, INST. OF MED., To ERR Is HUMAN: BUILDING A SAFER HEALTH SYSTEM (Kohn et al. eds., 2000) [hereinafter To ERR IS HUMAN]. 2. See, e.g., Rodney A. Hayward & Timothy P. Hofer, Estimating Hospital Deaths Due to