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It is said that 'doctors bury their mistakes.' At one time that may have been more true than in modern times, and when the original peer-review privileges case came out, it seemed as if it may have been more possible to bury culpable behavior in peer-review. That is not the case in 2007.
In general, when one attains a license to practice medicine, there is no state-placed limit on what a practitioner may do. An ophthalmologist could, theoretically, perform kidney transplants. The hospital credentialing process is the internal hospital governance that defines and sets individual physicians' scope of practice. Once a practitioner has been 'credentialed,' a term of art referring to this quality control mechanism, that practitioner may practice within the limited scope of the grant of privileges.
When a practitioner exceeds the scope of his or her privileges or where a hospital fails to require the practitioner to adhere to the scope of privileges, then the hospital may be liable for that failure. Additionally, where there is an 'outlier' ' a practitioner who repeatedly injures patients ' the hospital may be liable for its failure to appropriately monitor this physician, forming the basis for a negligent credentialing claim against the hospital. The theory is that the governing process within the hospital has failed and a patient has sustained injury; the hospital should have prevented this injury by better credentialing.
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