Greisman v. Newcomb Hospital
40 N.J. 389, 192 A.2d 817, 1963 N.J. LEXIS 196 (1963)
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Rule of Law:
A private hospital that operates as a public trust and holds a virtual monopoly in its area must exercise its power to select medical staff members as a fiduciary duty, meaning it cannot arbitrarily exclude a fully licensed and otherwise qualified physician for reasons unrelated to sound hospital standards or the common good.
Facts:
- In 1958, Dr. Greisman graduated from the Philadelphia College of Osteopathy and subsequently obtained an unrestricted license to practice medicine and surgery in New York, Michigan, Florida, and New Jersey.
- In July 1959, Dr. Greisman began the general practice of medicine in Vineland and, in November 1959, opened an office in Newfield, both within the Vineland metropolitan area.
- Dr. Greisman serves as the only licensed physician in Newfield and as a plant and school physician for local companies and schools.
- Newcomb Hospital, incorporated in 1921, operates as a non-profit general hospital, is the only hospital in the Vineland metropolitan area, and receives substantial funds from charitable contributions, the Ford Foundation, and municipal/county governments for indigent care, along with tax exemptions.
- In 1961, Dr. Greisman sought to file an application for admission to the courtesy staff of Newcomb Hospital, which refused to permit him to do so without questioning his personal or professional qualifications.
- The hospital's refusal was based solely on a bylaw requiring applicants to be graduates of an AMA-approved medical school and members of the County Medical Society; Dr. Greisman's school was not AMA-approved, and his application to the County Medical Society was consequently not acted upon.
- Dr. Greisman suffered economic and other harm, and his patients faced restricted choices of physicians or hospital facilities due to his inability to attend them professionally at Newcomb Hospital.
- Nearby Elmer Hospital and Bridgeton Hospital admit osteopathic physicians to their medical staffs without impairment of their accreditation, and major medical and hospital associations have recently shifted policies regarding the association of medical doctors and osteopathic doctors.
Procedural Posture:
- Dr. Greisman filed a lawsuit against Newcomb Hospital in the Law Division (trial court).
- The Law Division ruled that the hospital's bylaw was void or invalid as to Dr. Greisman and directed the hospital to consider his application without regard to that requirement.
- Newcomb Hospital appealed the Law Division's decision to the Appellate Division.
- The New Jersey Supreme Court certified the case for direct review before it was heard by the Appellate Division.
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Issue:
Does a private, non-profit hospital, which serves as the only general hospital in a metropolitan area and receives significant public funding and tax benefits, have the right to refuse to consider a fully licensed and otherwise qualified osteopathic physician's application for medical staff membership based solely on a bylaw requiring graduation from an American Medical Association (AMA)-approved medical school and membership in the County Medical Society?
Opinions:
Majority - Jacobs, J.
No, a private, non-profit hospital serving as the only general hospital in a metropolitan area, receiving public funds and tax benefits, does not have the right to refuse to consider a fully licensed and otherwise qualified osteopathic physician's application for medical staff membership based solely on a bylaw requiring graduation from an AMA-approved medical school and county medical society membership. The New Jersey Supreme Court affirmed the Law Division's judgment, emphasizing that hospitals, though nominally private, are deeply imbued with public interest. Newcomb Hospital, as the sole general hospital in its metropolitan area, functions as a 'virtual monopoly' and receives public support, placing it in a position of public trust. Citing Falcone v. Middlesex Co. Medical Soc. (1961), the court held that the hospital's power to select staff members is a fiduciary power, which must be exercised reasonably and for the public good, not arbitrarily. Excluding Dr. Greisman solely because he is an osteopathic physician, despite his full state licensure, reputable practice, and without any challenge to his individual merit or adherence to scientific principles, was deemed arbitrary and unrelated to sound hospital standards. The court noted the diminishing and dissipated reasons for discriminating against osteopaths, particularly in light of evolving policies from leading medical and hospital organizations.
Analysis:
This case significantly expands the judicial oversight established in Falcone, extending the 'fiduciary power' doctrine from professional societies to private hospitals. It clarifies that entities providing essential public services, particularly those with monopolistic control, cannot arbitrarily restrict access based on outdated or irrelevant criteria. The ruling underscores the courts' role in adapting common law to address contemporary societal needs, ensuring fair professional practice and public access to vital services. By rejecting the categorical exclusion of osteopathic physicians, the decision also reflects a progressive legal acknowledgment of the changing landscape of medical practice and the integration of osteopathic medicine.
