Hospital employment has acquired some allure in recent years for physicians. There’s no negotiating payment rates with insurers for one, and no having to run a human resources department for another.
But physicians need to be aware that hospital employment has its own potential downsides—not just conceptually but also contractually.
“Physicians usually look first at the zeros in the compensation section of their employment contract,” said Elizabeth A. Snelson, president of Legal Counsel for the Medical Staff PLLC, which specializes in working with medical staffs, medical societies and medical staff professionals. “I’d like them to focus instead on the below-the-radar issues, because those are super important when you’re working for a hospital.”
Snelson is the author of the AMA Physicians’ Guide to Hospital Employment Contracts (PDF), free for AMA members, which provides expert guidance to physicians contemplating, entering into or working under employment contracts with hospitals or related entities.
Among the issues that Snelson thinks are make or break to a physician’s time working for a hospital: physician’s duties.
“Physicians really need to be aware that their expectations of the job have to match the duties in the contract,” Snelson said. “I don't want say the lawyers who write these contracts are trying to trick doctors, but they're representing their clients’ needs.”
For example, a hospital might want very broad descriptions of duties, but ambiguity in these areas can wreak havoc on a doctor’s well-being and professional satisfaction.
“Let’s say you’re an orthopedist and you just finished a fellowship in hand surgery,” she said. “You might assume that you’re being hired to do hand surgery. But the hospital might be looking at you and thinking an orthopedist does all the bones in the body.”
In addition, duties include locations, hours and call, the terms of which should all be spelled out.
“If you sign a contract that doesn’t specify all of those things, you might be called in the middle of the night to do a knee surgery—and you might have to do it an hour from home,” she said.
The AMA guide provides sample provisions for these and other duties, including billing and compliance, managed care contracts, and representations and warranties.
Even administrative duties should be specified, Snelson noted.
“I imagine a physician saying: How hard can that be?” she said. “But administrative work is time consuming. Often, you can end up working full-time on something that’s supposed to be part-time.”
As the guide notes, “the parties should discuss the scope of these duties, estimate the anticipated time involved in the duties, and decide what additional compensation is merited.”
For all the specificity the guide provides, Snelson is adamant that it is not a substitute for advice from a lawyer—and not just any lawyer.
“Employment law is a highly specialized area. So just as you wouldn't go to a shoulder guy to get your hand operated on, you shouldn't go to, say, a tax attorney to get your physician employment contract evaluated,” she said.
In fact, even within employment law, physician employment is unique.
“Physicians are subject to peer review. Physicians are highly regulated. And much of what physicians can do in one state is absolutely a crime in the next,” Snelson said. “Your lawyer needs to be someone who does physician employment contracts.”
The AMA has assembled a variety of resources to help physicians flourish in the employment setting. That includes developing the Annotated Model Physician-Group Practice Employment Agreement (PDF) as well as experts’ perspective on collective bargaining for physicians.
At the 2023 AMA Annual Meeting, the House of Delegates adopted policy backing efforts to ban many physician noncompete provisions.