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Perception is reality
LITIGATION, LEGISLATION, AND ETHICS
Perception is reality Laurance Jerrold, DDS, JD Massapequa Park, NY
H
ooray, hooray! The day has finally come. You may have just finished your residency training, maybe you have moved to another state and are ready to start anew, you may have split with previous partners, or maybe you’re tired of being someone else’s associate and long to be your own boss. Regardless of the circumstances, you are going out on your own–solo practice. As Jerry Seinfeld might put it, you’re about to become master of your own domain. Fiscal reality being what it is, you cannot open up from scratch, but, instead, you sublet space in someone else’s office. You hope that within a year or 2 you will have built the practice up enough to make it financially reasonable to open up your own office. Lucky for you, a building in town houses the offices of Dental Specialty Associates (hereinafter called “Associates”), which comprises the practices of a periodontist, an endodontist, and a prosthodontist. Together, they lease the space, sharing many common charges and the common areas. Luckier still, there are 2 operatories available, averaging a day and a half a week for you to sublet. As fate would have it, a patient referred to you from one of the other doctors practicing in Associates comes to you for treatment. He requires premedication for SBE prophylaxis. You neglect to do so; he develops SBE that leads to an ischemic stroke and congestive heart failure, and, ultimately, he requires an aortic valve replacement. Being a bright, young practitioner (read that as inexperienced and unworldly in the arena of the business of orthodontics) who is just starting out and believes, first, that you had the finest orthodontic training, and, second, your instructors’ little white lies about how great a doctor you would be, you purchased only $500,000 to $1,000,000 worth of malpractice insurance. This case will go for a lot more that this. The plaintiff, recognizing that your pockets are not as deep as expected, looks to “your partners,” the other doctors who comprise Associates, to cough up the difference. These are essentially the facts in DiBenedetto v Ray et al, NY Slip Op 40470U, NY Misc, 2001. Program Director, Postgraduate Orthodontics, Saint Barnabas Hospital, Bronx, NY. Am J Orthod Dentofacial Orthop 2003;123:478-9 Copyright © 2003 by the American Association of Orthodontists. 0889-5406/2003/$30.00 ⫹ 0 doi:10.1067/mod.2003.94
478
The defendants moved for summary judgment, seeking dismissal of the action against them because they had never treated the patient. For the reasons given below, the appellate court ruled that a viable claim existed and that it was a factual matter to be decided by a jury as to whether liability could be imposed against Associates using the theory of ostensible agency. Ostensible agency can be used to impute vicarious liability on nontreating practitioners based on the appearance that they are members of a joint practice as viewed from a reasonable patient’s perspective. Follow the court’s reasoning. The plaintiff had a prior professional relationship with a doctor of Associates, the one who referred him to you, and he went to Associates’ office for treatment. The office door listed the names of all doctors who practiced there, regardless of whether they were actually partners in Associates. Common telephone and fax numbers were used by all doctors practicing in Associates’ office. Patient registration forms bore the name of Associates and listed each doctor’s name individually, yours included. The stationery you used bore an Associates heading, with the doctors again listed individually. Associates’ staff took care of appointment scheduling, patient accounts management, and billing services. At this point, you should place yourself in the patient’s position and ask “is it reasonable for me, an objective patient, to assume that you were a member of Associates?” The defendants who were members of Associates would counter that this was merely a subtenant relationship between the parties, substantiated by a memo to that effect; you were only paying rent based on the use of office space; and although Associates did the physical billing, the bills were sent in your name, and the checks were made payable to you. The court noted that it is precisely because of conflicting evidence that the issue of ostensible agency is a factual one. Therefore, it is for a jury, not the court, to decide this issue. The court remanded the case for trial and did not dismiss the action against Associates. COMMENTARY
There is an extremely common fact pattern in this case. For some of us, our practices might not have fully
American Journal of Orthodontics and Dentofacial Orthopedics Volume 123, Number 4
developed or might be winding down. Either way, a sublet relationship for office space could be a viable alternative. Maybe the sublet space relates to a satellite office site or a faculty practice facility; it might result from a displacement due to fire, flood, or other natural disaster, or it might be because rents in your locale are so expensive that you must be economical when it comes to space. Whatever the reason, you must understand the doctrine of ostensible agency and the risks in this relationship. We have explored vicarious liability before—the theory that a doctor can wind up being liable for another’s acts. Ostensible agency is merely another form of this legal doctrine; the difference is the perspective used to view the relationship. We must remember that we treat patients. Patients perceive who we are in direct response to how and who we purport ourselves to be. If we associate with other health care practitioners in a setting that would cause a reasonable patient to assume that we are “united in interest” in some way, usually professional or financial, then it is only fair to assume the responsibilities that attach to that perception. In the patient’s mind, this is the reality of the situation. Risk management is a lot like orthodontics. They both rely on established principles, either biologic or legal, to address the particulars of a malocclusion or a
Litigation, legislation, and ethics 479
fact pattern. These principles govern how we go about correcting the malocclusion or, conversely, deciding the outcome of a case in controversy. The key to dealing with either is to possess a working understanding of the biomechanics and physiological response, or of case law and applicable legal theories, depending upon the venue. One can then analyze the best approach in dealing with the occlusal discrepancies, or the facts and relationships, both contractual and causal. We place ourselves daily in positions of potential liability exposure, and we often do so not because we intend to, but because we don’t recognize the foreseeable nuances that have placed us in those positions. Ostensible agency is one more pitfall we must be aware of. The final thing to remember is that the outcome of this case means very little to our young orthodontist. He’s going down for the policy limits, and, if no one else can be tagged on, well, you can’t get blood from a stone. If the award is much more than the sum of his personal assets, he’ll declare bankruptcy and start all over again. It’s the senior doctors, the ones who formed Associates, for whom the bell might toll, incurring risks not previously identified—all for having rented some excess space and for promoting the practice to the dental consumer in a manner that created a false impression in the patient’s mind.
Information pertaining to litigation, legislation, and ethics will be reported under this section of the American Journal of Orthodontics and Dentofacial Orthopedics. Manuscripts for publication, reader’s comments, and reprint requests may be submitted to Laurance Jerrold, DDS, JD, 82 Laurel Dr, Massapequa Park, NY 11762.
Perception is reality Laurance Jerrold, DDS, JD Massapequa Park, NY
H
ooray, hooray! The day has finally come. You may have just finished your residency training, maybe you have moved to another state and are ready to start anew, you may have split with previous partners, or maybe you’re tired of being someone else’s associate and long to be your own boss. Regardless of the circumstances, you are going out on your own–solo practice. As Jerry Seinfeld might put it, you’re about to become master of your own domain. Fiscal reality being what it is, you cannot open up from scratch, but, instead, you sublet space in someone else’s office. You hope that within a year or 2 you will have built the practice up enough to make it financially reasonable to open up your own office. Lucky for you, a building in town houses the offices of Dental Specialty Associates (hereinafter called “Associates”), which comprises the practices of a periodontist, an endodontist, and a prosthodontist. Together, they lease the space, sharing many common charges and the common areas. Luckier still, there are 2 operatories available, averaging a day and a half a week for you to sublet. As fate would have it, a patient referred to you from one of the other doctors practicing in Associates comes to you for treatment. He requires premedication for SBE prophylaxis. You neglect to do so; he develops SBE that leads to an ischemic stroke and congestive heart failure, and, ultimately, he requires an aortic valve replacement. Being a bright, young practitioner (read that as inexperienced and unworldly in the arena of the business of orthodontics) who is just starting out and believes, first, that you had the finest orthodontic training, and, second, your instructors’ little white lies about how great a doctor you would be, you purchased only $500,000 to $1,000,000 worth of malpractice insurance. This case will go for a lot more that this. The plaintiff, recognizing that your pockets are not as deep as expected, looks to “your partners,” the other doctors who comprise Associates, to cough up the difference. These are essentially the facts in DiBenedetto v Ray et al, NY Slip Op 40470U, NY Misc, 2001. Program Director, Postgraduate Orthodontics, Saint Barnabas Hospital, Bronx, NY. Am J Orthod Dentofacial Orthop 2003;123:478-9 Copyright © 2003 by the American Association of Orthodontists. 0889-5406/2003/$30.00 ⫹ 0 doi:10.1067/mod.2003.94
478
The defendants moved for summary judgment, seeking dismissal of the action against them because they had never treated the patient. For the reasons given below, the appellate court ruled that a viable claim existed and that it was a factual matter to be decided by a jury as to whether liability could be imposed against Associates using the theory of ostensible agency. Ostensible agency can be used to impute vicarious liability on nontreating practitioners based on the appearance that they are members of a joint practice as viewed from a reasonable patient’s perspective. Follow the court’s reasoning. The plaintiff had a prior professional relationship with a doctor of Associates, the one who referred him to you, and he went to Associates’ office for treatment. The office door listed the names of all doctors who practiced there, regardless of whether they were actually partners in Associates. Common telephone and fax numbers were used by all doctors practicing in Associates’ office. Patient registration forms bore the name of Associates and listed each doctor’s name individually, yours included. The stationery you used bore an Associates heading, with the doctors again listed individually. Associates’ staff took care of appointment scheduling, patient accounts management, and billing services. At this point, you should place yourself in the patient’s position and ask “is it reasonable for me, an objective patient, to assume that you were a member of Associates?” The defendants who were members of Associates would counter that this was merely a subtenant relationship between the parties, substantiated by a memo to that effect; you were only paying rent based on the use of office space; and although Associates did the physical billing, the bills were sent in your name, and the checks were made payable to you. The court noted that it is precisely because of conflicting evidence that the issue of ostensible agency is a factual one. Therefore, it is for a jury, not the court, to decide this issue. The court remanded the case for trial and did not dismiss the action against Associates. COMMENTARY
There is an extremely common fact pattern in this case. For some of us, our practices might not have fully
American Journal of Orthodontics and Dentofacial Orthopedics Volume 123, Number 4
developed or might be winding down. Either way, a sublet relationship for office space could be a viable alternative. Maybe the sublet space relates to a satellite office site or a faculty practice facility; it might result from a displacement due to fire, flood, or other natural disaster, or it might be because rents in your locale are so expensive that you must be economical when it comes to space. Whatever the reason, you must understand the doctrine of ostensible agency and the risks in this relationship. We have explored vicarious liability before—the theory that a doctor can wind up being liable for another’s acts. Ostensible agency is merely another form of this legal doctrine; the difference is the perspective used to view the relationship. We must remember that we treat patients. Patients perceive who we are in direct response to how and who we purport ourselves to be. If we associate with other health care practitioners in a setting that would cause a reasonable patient to assume that we are “united in interest” in some way, usually professional or financial, then it is only fair to assume the responsibilities that attach to that perception. In the patient’s mind, this is the reality of the situation. Risk management is a lot like orthodontics. They both rely on established principles, either biologic or legal, to address the particulars of a malocclusion or a
Litigation, legislation, and ethics 479
fact pattern. These principles govern how we go about correcting the malocclusion or, conversely, deciding the outcome of a case in controversy. The key to dealing with either is to possess a working understanding of the biomechanics and physiological response, or of case law and applicable legal theories, depending upon the venue. One can then analyze the best approach in dealing with the occlusal discrepancies, or the facts and relationships, both contractual and causal. We place ourselves daily in positions of potential liability exposure, and we often do so not because we intend to, but because we don’t recognize the foreseeable nuances that have placed us in those positions. Ostensible agency is one more pitfall we must be aware of. The final thing to remember is that the outcome of this case means very little to our young orthodontist. He’s going down for the policy limits, and, if no one else can be tagged on, well, you can’t get blood from a stone. If the award is much more than the sum of his personal assets, he’ll declare bankruptcy and start all over again. It’s the senior doctors, the ones who formed Associates, for whom the bell might toll, incurring risks not previously identified—all for having rented some excess space and for promoting the practice to the dental consumer in a manner that created a false impression in the patient’s mind.
Information pertaining to litigation, legislation, and ethics will be reported under this section of the American Journal of Orthodontics and Dentofacial Orthopedics. Manuscripts for publication, reader’s comments, and reprint requests may be submitted to Laurance Jerrold, DDS, JD, 82 Laurel Dr, Massapequa Park, NY 11762.