Brief Fact Summary. Dr. Berlin (Plaintiff) sought to have a restrictive covenant that prohibited him from competing with Sarah Bush Lincoln Health Center (Defendant) declared unenforceable.
Synopsis of Rule of Law. A duly licensed hospital is authorized by legislative authority to practice medicine by using a staff of licensed doctors and is excepted from the operation of the corporate practice doctrine.
Where a decision reached on the merits cannot result in appropriate relief to the prevailing party, the court has, in effect, rendered an advisory opinion.
View Full Point of LawIssue. Is a duly licensed hospital authorized by legislative authority to practice medicine by using a staff of licensed doctors and is it excepted from the operation of the corporate practice doctrine?
Held. (Nickels, J.) Yes. A duly licensed hospital is authorized by legislative authority to practice medicine by using a staff of licensed doctors and is excepted from the operation of the corporate practice doctrine. The corporate practice doctrine, which prohibits corporations from employing doctors to provide medical services, does not apply to licensed hospitals in the modern health care industry for public policy reasons. Therefore, the employment agreement between Defendant and Plaintiff was not unenforceable just because Defendant was a corporate entity. Reversed. Â
Discussion. The court in this case found that legislative enactments in reference to hospitals supported its conclusion that licensed hospitals were excepted from the prohibition. It found that certain states clearly authorized, and at times mandated, licensed hospitals to provide medical services regardless of their corporate stature. It also could not find any justification for distinguishing between nonprofit and for-profit hospitals in that regard.