INTRODUCTION

Nurses are becoming involved in malpractice lawsuits at an alarming rate. The increased specialization, expertise, accountability, and autonomy of the nursing profession has concomittantly increased their exposure to liability. As nurses push the envelope of their profession, they must safeguard themselves against a burgeoning litigation crisis, which had previously been shouldered exclusively by hospitals and physicians.

The Hospital-Employee Relationship

Nurses must recognize that the relationship between hospitals and their employees is undergoing a fundamental change in terms of legal accountability. Although the doctrine of respondeat superior, in which the employer is responsible for the actions of the employee, is still used by most courts, increasingly, hospitals and their insurance carriers are seeking damages from negligent employees: "The paternalistic attitudes of the past, in which the physician and the hospital willingly accepted all responsibility--including that of the nurse--without seeking compensation from the employee are no longer the norm." Federal healthcare employees face different liability issues than their private sector counterparts. Generally, federal employees cannot be sued individually for malpractice if an employee-employer relationship is clearly established. In this relationship, the employer has the right to control the actions of the employee. Some professionals who provide healthcare services to the government are actually independent contractors. In such instances, the federal government is not liable for malpractice claims. The independent status of the healthcare professional depends on the circumstances involved in the case. For example, an appeals court ruled that a nurse employed at a government hospital through a temporary placement services agency was a federal employee because the placement agency had no control over the nurse's duties at the hospital.

Hospital Risk Management

Hospitals incur enormous costs because of malpractice lawsuits. The malpractice crisis illustrates one of the critical issues of managerial decision making. The exposure to liability creates an environment of uncertainty for hospital administrators. In such an environment, there are several possible outcomes of healthcare decisions and the probability of each outcome is unknown: "Risk refers to the amount of variability among the outcomes associated with a particular strategy." In today's litigious environment, many physicians and nurses tend to shy away from high-risk cases, particularly if they have previously been involved in malpractice lawsuits. Hospitals generally require that all physicians have malpractice insurance as a prerequisite of employment, and the day may be imminent when this requirement will apply to nurses as well.

Hospitals require physicians to carry malpractice insurance even though the majority of malpractice cases do not result in defense verdicts. This is an example of risk-averse behavior. Medical doctors pay an estimated $4 billion a year in malpractice premiums, yet only about $1.4 billion a year is paid out in claims: "Thus the average physician pays an insurance premium of about $3 for every dollar of loss expected." A typical doctor will spend $30,000 annually against possible claims of $10,000. Physicians who practice in high-risk specialties often pay premiums of up to $50,000 per year. The utility of these expenditures is questionable, given the actual percentage of claims; however, hospitals, like most institutions in society, equate risk aversion with prudence.

The Elements of Malpractice Lawsuits

Generally, malpractice lawsuits consist of four elements. First, a preliminary determination that a defendant has a specific duty to a particular patient must be established. Second, it must be established that a breach of that duty occurred or that the defendant failed to follow the standard of care. The third element of malpractice is causation