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Physician Law Current news, updates, & useful tips relating to legal issues affecting physicians & non-institutional providers in their personal & professional lives

More Physicians Opting to Punch the Time Clock

Posted in Physician Compensation, Practice Management

Curious what the future of medicine will look like?  According to this recent article on CNBC.com, it appears that for many physicians it will involve a boss, a timeclock and a steady paycheck.  Not surprisingly, as the legal and administrative burdens of running a private practice continue to increase, more and more seasoned physicians are making the leap to hospital employment.  And, according to the CNBC article, it appears that a new generation of physicians is bypassing the private practice model altogether and heading right into hospital employment.

Unfortunately, in my experience, many hospitals are not prepared to accommodate physician employees on a large scale and often lack the expertise to manage physician practices efficiently.  After all, hsopitals are in the business (often not-for-profit) of running hospitals, not doctors’ offices.  As a result, hospital-owned physician practices can quickly become money-losing propositions.  While some hospitals may be willing to subsidize physician practices for a period of time, in my experience, they may try to play “catch-up” in the contract renewal period – imposing unrealistic performance targets on physicians or tying compensation to expenses or other factors beyond physician control.

Hospital employment can be a long-term career option but physicians should understand that most initial hospital employment terms will be less than 5 years and are commonly only 3 years.  It is critical therefore that when negotiating your initial hospital employment agreement, you try to build a framework for negotiation of renewal terms.  This may involve caps or floors on compensation adjustments, realistic performance criteria and mechanisms to overcome negotiation impasses such as reliance on independent third party valuation experts.