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St. Mary's Law Journal

Abstract

One of the most common forms of managed health care is the health maintenance organization (HMO). An HMO is a quasi-insurance arrangement which provides health care to subscribers for a prepaid monthly fee. These have been attractive as they offer health care at lower cost to consumers. Health care brokers have developed four standard models of HMOs— “staff model,” “group model,” “network model,” and “independent practice association” (IPA) model. Given the degree of control HMOs exercise over member-physicians under any of the above models, Texas courts should hold HMOs liable for their member-physicians’ malpractice under the doctrine of vicarious liability, including respondeat superior, apparent agency, agency by estoppel, and nondelegable duties. In addition to vicarious liability for member-physicians' malpractice, Texas HMOs should face direct liability for their own tortious conduct under the doctrine of corporate negligence.

Texas courts use many legal tools to protect citizens from unreasonable risk of harm. Texans looking to medical brokers for health care face greater risks of harm from medical malpractice than patients in hospitals. Further, given the high degree of control HMOs exercise over patient care, subscribers face additional threats of harm due to improper action by the HMO itself. Texas courts have been vigilant in their efforts to protect hospital patients from the malpractice of physicians practicing in hospitals and the wrongful actions of the hospital itself. Implicitly, Texas courts have determined the minor financial burden on health care costs created by finding liability for medical negligence is vastly outweighed by the deterrent effects of such liability and the need to compensate victims. Therefore, no reason exists for refusing to protect Texans simply because they are receiving care from an HMO.

Publisher

St. Mary's University School of Law

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