Hospital Employment of Physicians

Those of us who have been in the health care industry for awhile have seen hospital employment of physicians come and go several times. In my early years as a health care attorney, I was an in-house counsel in the hospital industry. I represented hospitals in the rush to jump on the band wagon of physician employment. I am now in the private practice of law and while I continue to represent hospitals, I also represent physicians and physician groups exploring various relationships with hospitals including employment.

My experience is that health care providers, hospitals and physicians, either adopt the “thin slice” approach to analysis described in the book, Blink, by Malcolm Gladwell, or the paralysis by analysis approach. Neither approach works.

Instead of under or overreacting to market pressures, hospitals and physicians exploring options with respect to their relationships need to address the basics. The first question is why are we doing this? Why do we want to get together? What’s the ultimate goal? Honesty and frank discussion is important here if the relationship is to survive.

Second, is to assure that there is a meeting of the minds. Here is where I see the biggest breakdown. I have been in hundreds of meetings between hospitals and physicians where the hospital administrators and physicians leave the same meeting with a completely different understanding of what was discussed and agreed upon at the meeting. Usually, that happens each party sees what they want to see. For any contractual relationship to work, each party has to understand and agreed on the terms and conditions of the relationship.

Finally, there needs to be an exit strategy. Hospital/physician relationships, while having many similarities to marriage, cannot survive hard times on love. It is not a sign of distrust or failure to commit to have an exit strategy. It is realistic and practical to address exit terms upfront.