Doc shortage fuels hospital-physician employment agreements

As the national physician shortage continues, hospitals are grasping for physicians and hanging onto them with employment arrangements, according to a white paper by consulting firm Deloitte.

"Much of the shortage is focused on specialty care, but as the tide turns towards primary care and preventative medicine with low supply and growing demand, the shortage will be exacerbated," the white paper states.

Recent studies indicate that physicians are increasingly leaving private practice in favor of hospital employment. For instance, less than a third of physicians will be in private practice by 2013, choosing instead to be part of a larger health system, according a survey this month by management consulting firm Accenture Health. In addition, more hospitals are viewing physician employment as an alignment strategy, as well as a way to increase service-line profits, according to another study this month conducted by research firm the Center for Studying Health System's Change.

For those institutions that employ physicians, Deloitte encourages clearly structuring legal agreements, spelling out the following: compensation; term and termination; duties and performance expectations; restrictive covenants and moonlighting; malpractice and medical liability coverage terms, funding, and sovereign immunity; intellectual property ownership; and employee benefits, including insurance, retirement plans, continuing education allowances, business expense allowances, eligibility, and sabbatical allowances.

Similarly, the American Medical Association last month issued guidelines, recommending that both hospitals and physicians understand their respective rights before entering into agreements.

To learn more:
- read the Deloitte white paper (.pdf)

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