Johnson v. Misericordia Community Hosp.
99 Wis. 2d 708, 301 N.W.2d 156 (1981)
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Rule of Law:
A hospital has a direct, independent duty to its patients to exercise reasonable care in the selection of its medical staff and in granting specialized medical privileges. A hospital is negligent if it fails to conduct a reasonable investigation into a physician's qualifications and this failure results in harm to a patient.
Facts:
- On March 5, 1973, Dr. Lester Salinsky applied for orthopedic surgical privileges at Misericordia Community Hospital.
- In his application, Salinsky falsely stated that his privileges at other hospitals had never been suspended or revoked, claimed privileges at hospitals where he had none, and omitted information about his malpractice insurance.
- Misericordia Hospital's administration, which did not have a functioning credentials committee, failed to conduct any investigation into Salinsky's application, never contacting the hospitals or references he listed.
- A proper investigation would have revealed that another hospital had suspended Salinsky's hip surgery privileges just two months prior, he had been denied privileges at a different hospital, had seven malpractice suits filed against him, was not board-certified, and was considered incompetent by his local peers.
- Misericordia granted Salinsky orthopedic privileges on August 8, 1973.
- On July 11, 1975, Salinsky performed surgery on James Johnson at Misericordia to remove a pin fragment from Johnson's hip.
- During the surgery, Salinsky damaged Johnson's femoral nerve and artery.
- As a result of the damaged nerve and artery, Johnson suffered a permanent paralytic condition and loss of function in his right thigh.
Procedural Posture:
- James Johnson filed a lawsuit against Misericordia Community Hospital and Dr. Lester Salinsky in the circuit court for Milwaukee County (trial court).
- Prior to trial, Johnson reached a settlement with Dr. Salinsky and his insurer, who were then released from the suit.
- The case against Misericordia proceeded to a jury trial, which found the hospital 80% causally negligent and awarded damages to Johnson.
- The trial court entered judgment on the verdict in favor of Johnson.
- Misericordia, as the appellant, appealed the judgment to the Wisconsin Court of Appeals (intermediate appellate court).
- The Court of Appeals affirmed the trial court's judgment.
- Misericordia, as the petitioner, successfully petitioned the Supreme Court of Wisconsin for review.
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Issue:
Does a hospital breach its duty of care to a patient when it grants surgical privileges to a physician without investigating their qualifications, if a reasonable investigation would have revealed information suggesting the physician was unqualified and posed a foreseeable risk of harm?
Opinions:
Majority - Coffey, J.
Yes, a hospital breaches its duty of care under these circumstances. A hospital has an independent duty to exercise reasonable care in selecting its medical staff, a duty grounded in the foreseeability that granting privileges to an unqualified physician creates an unreasonable risk of harm to patients. This theory of corporate negligence holds the hospital directly liable for its own actions, not vicariously liable for the physician's negligence. The standard of care is that which is exercised by the average hospital under like circumstances, which includes investigating an applicant's credentials. Misericordia admitted it failed to investigate Dr. Salinsky's application. The hospital is charged with the constructive knowledge of facts that a reasonable inquiry would have revealed—in this case, Salinsky's restricted privileges, denied applications, malpractice history, and poor reputation. Based on this constructive knowledge, a hospital exercising ordinary care would not have granted Salinsky orthopedic privileges; therefore, Misericordia was negligent.
Analysis:
This decision formally establishes the doctrine of corporate negligence for hospitals in Wisconsin, making it clear that a hospital's duty extends beyond merely providing facilities to actively ensuring the competence of its medical staff. It creates a direct cause of action against a hospital for negligent credentialing, even when the physician is an independent contractor. The ruling significantly heightens a hospital's responsibility for due diligence in its credentialing and peer-review processes, holding the institution accountable for failing to protect patients from physicians it knows, or should know, are incompetent.
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