Organizational Management of Healthcare Institutions - Essay Example

Corporations are viewed as persons because they have rights and freedoms almost similar to those given to a human being. For example, under the United States constitution corporations cannot be deprived of the right to liberty, life, or property without due process. Additionally, under the Fourteenth Amendment, no state shall not deny any person the equal protection of the laws in that even the corporations should not be discriminated against.

Corporations have the right to own, acquire and dispose of property, as well as, sue and are sued. However, although corporations are given these rights they are denied the right to vote as a person and to acquire licensure because the corporations do not meet any educational requirements. A corporation is created by filing the article of association with the secretary of state and when the articles are accepted or approved a corporate charter is given to a corporation (Showalter, 2014). Incorporation of the organization means giving the corporation five principal advantages. They include limited liability, perpetual existence, free transfer of ownership interest, ability to raise capital, and taxation separate from individual income taxes.

Corporations have both implied and express powers that are written down clearly under the statute or charter. The powers of the corporation have to be consistent with the charter and when the corporation goes against those powers they are held to be ultra vires meaning that they acted beyond their limit. Hospitals are viewed as Not-for-profit organization, which is mostly owned by shareholders. The shareholders are entitled and are expected to receive dividends from the corporation’s earnings, and they are also allowed to share assets in case of the dissolution of the corporation.

Although Not-for-Profit corporations are allowed most of the privileges of the corporation in case they want to use the corporation for other gains they have to include such acts in the articles of association in a restrictive clause on their actions (Showalter, 2014). The Not-for-Profit organizations are liable for their employee’s actions and also for the corporation's actions. Most Not-for-Profit organizations include hospitals, which are liable for corporate negligence and vicarious liability under the doctrine of Respondeat Superior.

Hospitals have difficulty when differentiating between an independent contractor and employees under the doctrine of respondeat superior. However, various mechanisms have been created by the courts to ensure that the hospitals are liable for their employee’s actions. In most cases, they may use the defense of an independent contractor but the defense is mostly countered by either apparent agency or agency by estoppel.

The case of Norton V. Argonaut Insurance Co (1962)144 2d 249 references two legal principles. The first principle that is presented by the case is vicarious liability under the doctrine of Respondeat Superior where the employers are liable for the negligent acts of their employees. In this case, the hospital was liable for the actions of the nurse and the physician when an overdose was administered to an infant that led to its death. In the Norton case, the hospital was liable for the negligent acts of the employees because the employer had the responsibility of ensuring that all the employees were competent. The second principle that the case presents is a corporate liability, which occurs when the administration or the employees of the corporation are held liable for their negligence or illegal act. However, corporate liability does not hold for employees or individual workers of the firm. Corporate liability means that employees working for the hospital should be assessed to ensure that they qualify for the position they are given in the facility. Additionally, it is the legal duty of the hospital to ensure that all patients are given the best medical care available by placing the best medical practitioners to cater to the patients.