Reviewing Important Illinois Healthcare Court Rulings: Doctrine of Apparent Agency

By the close of last year, the Illinois Supreme Court and various Illinois Appellate Court Districts had published a series of decisions that addressed a variety of health law topics, from apparent agency to discovery practice.

Since these decisions significantly impact healthcare law in Illinois, we are going to explore them in detail with a series of posts this month. Our first post in the series looks at the Illinois Supreme Court decision of Yarbrough v. Northwestern Memorial Hospital, 2017 IL App 121367.

In this case, the Illinois Supreme Court found that a hospital cannot be vicariously liable through the doctrine of apparent agency for the acts of employees of an unrelated, independent clinic that is not a party to the litigation. Plaintiff sought prenatal care at Erie Family Health Center (Erie), a Federally Qualified Health Center serving communities with limited access to health care.  Following a premature delivery, Plaintiff alleged that Northwestern Memorial Hospital (Northwestern) was liable for the negligent acts and omissions of Erie's medical staff based on a theory of apparent agency.  Plaintiff believed that Northwestern employed the medical staff at Erie because she was told by a staff member at Erie that her ultrasounds would be performed at Northwestern and she would deliver her baby at Northwestern.  Plaintiff also received from the medical staff at Erie informational materials regarding tours of Northwestern's delivery area and birthing classes offered at Northwestern.

The Court noted that although Erie received financial support, technological assistance, and strategic support, from Northwestern, Erie is an independent clinic whose staff are considered federal employees. Furthermore, Erie does not utilize Northwestern's name or branding.  The Court refused to find an apparent agency relationship existed between the two entities simply because Northwestern granted hospital privileges to some physicians employed by Erie. 

The Court's decision in Yarbrough is a reminder to hospitals to take steps affirmatively disclaiming an agency relationship.  Hospitals should: (1) avoid lending branding and marketing materials to independent health care facilities; (2) ensure that consent forms specifically advise patients that their physician is not an agent or employee of the hospital; and (3) post signs within health care facilities disclaiming any agency relationship.

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