Holmes v. Hoemako Hospital

573 P.2d 491, 117 Ariz. 417, 1977 Ariz. App. LEXIS 822
CourtCourt of Appeals of Arizona
DecidedApril 6, 1977
DocketNo. 2 CA-CIV 2399
StatusPublished
Cited by2 cases

This text of 573 P.2d 491 (Holmes v. Hoemako Hospital) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holmes v. Hoemako Hospital, 573 P.2d 491, 117 Ariz. 417, 1977 Ariz. App. LEXIS 822 (Ark. Ct. App. 1977).

Opinions

OPINION

RICHMOND, Judge.

Appellant is duly licensed to practice medicine in Arizona. He appeals from a summary judgment upholding the suspension by appellees of his right to practice in the appellee hospital because he failed to carry available professional liability insurance. Appellees contend their action and the regulation under which appellant’s medical staff privileges were suspended are justified as reasonably necessary for the “. . . preservation of the fiscal integrity . . ..” of the hospital corporation.

The undisputed facts clearly demonstrate the conflicting interests in this case. On the one hand, the appellee hospital is a private non-profit corporation operating the only hospital serving most of Pinal County, including the city of Eloy. On the other hand, appellant is the only medical practitioner in Eloy and his patients are in a low-income category. Over the years appellant’s patients, when hospital care was required, have been admitted to appellee hospital as the only such facility in the immediate area. The medical staff bylaws of the hospital require that:

“All staff members shall have and maintain insurance of a kind and amount required by the staff and approved by the governing body.”

For years the medical staff, with the approval of the hospital’s governing board, has required that medical staff members carry professional liability insurance with minimum coverage limits of $250,000.

[418]*418The insurance requirement was reviewed by the governing board of the hospital in November of 1975 because of a question as to the availability of such insurance coverage, and the board determined to retain the requirement. Among the factors it considered were the following:

(1) That a doctor’s failure to carry insurance could impair the doctor’s ability to compensate patients for injuries for which the doctor was legally responsible;

(2) That permitting medical staff members to practice without insurance could adversely affect the amount payable by the hospital for its own malpractice insurance or the availability of such insurance to the hospital;

(3) That judgments in malpractice cases could be obtained against several medical staff members jointly and that any uninsured medical staff member might not be able to pay his just share of such a judgment;

(4) That not carrying malpractice insurance could adversely affect patient care in the hospital in that uninsured physicians might avoid participating in the care of patients with serious medical or surgical problems and might be influenced to practice so-called defensive medicine by ordering various tests and procedures that might not otherwise be ordered; and

(5) That professional liability insurance was still then available to members of the medical staff.

About the same time, appellant notified the hospital that his malpractice insurance was about to expire and he did not intend to renew it. He was notified in turn by the hospital administrator that his medical staff privileges would be suspended as of the date of expiration of his insurance. Appellant renewed his coverage, and commenced an action to enjoin the hospital, its board of directors and administrators from enforcing the requirement. When appellant’s malpractice insurance again expired in March, 1976, during pendency of the action, and he failed to renew it, his staff privileges were suspended by the hospital’s governing board, which first gave him a full and fair opportunity to be heard in the matter.

Both parties filed motions for summary judgment with supporting affidavits. The trial court concluded that it had jurisdiction of the subject matter, and appellees concede on appeal that judicial intervention is proper within the limitations set forth in Blende v. Maricopa County Medical Society, 96 Ariz. 240, 393 P.2d 926 (1964) and Peterson v. Tucson General Hosp., Inc., 114 Ariz.App. 66, 559 P.2d 186 (1976).

The court found that there were no genuine disputed issues of material fact, and granted appellees’ motion, basing its ruling on conclusions that hospitals are subject to potential liability arising out of the claimed malpractice of medical staff physicians and such liability may be imposed jointly upon the hospital as well as the physician; the responsibilities of a hospital’s governing board include the responsibility of safeguarding the fiscal integrity of the hospital corporation; and, therefore, the action of appellee hospital’s governing board was neither unlawful, arbitrary nor capricious.

At the outset, we think the court properly focused its attention upon the hospital’s right of self-preservation rather than the factors found to have been considered by the governing board in November of 1975 in reaching its determination. The speculative possibility that an uninsured physician might practice defensively, or the possible impairment of his ability to compensate patients for injuries resulting from substandard care, is of little relevancy where the alternative for appellant’s patients is no hospital care by the physician of their choice, whose professional competency is not being questioned.

In response to appellant’s argument that he is willing and able to cover his malpractice exposure with his own financial resources, and that it is economically impossible for him to pay insurance premiums without passing on the cost in his fees to patients who cannot afford the increase, appellees say they “. . . suspect that if he possesses these riches, he could buy insurance.” Apparently they would have him [419]*419eliminate any risk to his financial resources by making their depletion a certainty. Appellees assert that even if appellant were unable to include his insurance costs in his fees along with all other costs of conducting his practice, the hospital is not required to underwrite his risks. We need not question the assertion because we find it inapplicable to the facts of the case.

The record before the trial court contained a letter from the casualty underwriting manager for the hospital’s liability insurer stating that the insurer “. does not care whether or not doctors in an insured hospital carry malpractice insurance ..” and “. . . that it is not the policy of this Company to require that doctors practicing in an insured hospital carry malpractice insurance as a condition precedent to the Company’s providing malpractice insurance for such hospital.” Thus the governing board’s consideration of the cost or availability of the hospital’s malpractice insurance was not material to its decision in November, 1975.

The record also contained appellant’s uncontroverted affidavit that he has exercised his staff privileges as an independent contractor, and that the hospital in all his years of practice has recognized the independent nature of the staff physician, thereby precluding vicarious liability of the hospital under Beeck v. Tucson General Hospital, 18 Ariz.App. 165, 500 P.2d 1153 (1972). Thus, although there are circumstances under which a hospital has been held liable under the doctrine of respondeat superior for a physician’s conduct, none is presented by the record here.

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Related

Holmes v. Hoemako Hospital
573 P.2d 477 (Arizona Supreme Court, 1977)

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Bluebook (online)
573 P.2d 491, 117 Ariz. 417, 1977 Ariz. App. LEXIS 822, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holmes-v-hoemako-hospital-arizctapp-1977.