Physicians have long been employed by other physicians, but with a growing share of doctors employed by hospitals—as shown in a recent AMA survey (PDF)—it is essential that those considering this arrangement understand what is at stake. Hospital employment contracts can determine not only one’s day-to-day responsibilities but also whether doctors feel they have fulfilled the dreams that drove them to the profession.
“Hospital employment is a very different animal because hospitals can have doctors do things differently,” 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. “This is a new age in the practice of medicine.”
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.
“I know employment contracts are boring,” Snelson said. “But if you don’t get yours the way you want it, it could clash dramatically with what you thought you’d be doing with your life.”
The 83-page guide provides sample language in more than 20 crucial contract areas, including physician duties, the physician’s unfettered right to exercise personal and professional judgment, noncompete provisions and even termination.
“If, for example, your contract says ‘other duties as assigned,’ that could mean—for a surgeon, say—you find yourself in a situation where the hospital has you on call for the emergency department every Tuesday,” she said. “That might not comport at all with what you expected, and it might change your family life, your social life and even your earning potential.”
For better or worse—and that’s every employed physician’s choice—the entire practice of medicine gets condensed into a single legal document, Snelson noted.
“I can't tell you how many very smart, very well-read, highly educated physicians sign a contract that says horrible stuff, and they just don't understand that it's horrible,” she said. “Or they think they talked about it with the employer and it will all work out. They don't understand that it doesn't matter what you talked about—the only thing that matters, legally, is the contract. A jury will look at this incredibly overeducated human and think, ‘How could you not know? It's right there on paper!’”
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) and featuring 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.
“Physicians are not afraid of educating themselves, so they tend to want to not know what they're getting into before they even hire a lawyer. This guide should help with that,” Snelson said.
But that does not mean anyone reading the guide should think it is a substitute for professional advice.
“I didn't count how many times I said ‘hire a lawyer’ in that guide, but if that's the only lesson that physicians take from it, then it was a smashing success,” Snelson said, adding that it’s important to find a lawyer who specializes in representing physicians. “The cousin who practices tax law—and she might be really good at tax—isn’t appropriate.”
The upshot is that, just as anyone in need of hand surgery would prefer an orthopedist who’s done a fellowship in hand surgery over one who specializes in knees, physicians considering hospital employment should find a lawyer with that expertise.
“Especially younger doctors who have only worked for hospitals,” Snelson said, “I hope the guide makes them aware that this work is not as simple as it sounds.”
Learn more with the AMA about understanding physician employment contracts.