Changes in Medicine: Job Security

Reference as: Robbins RA. Changes in medicine: job security. Southwest J Pulm Crit Care 2011;3:72-4.  (Click here for a PDF version).

A Medscape article entitled the “Six Biggest Gripes of Employed Doctors” listed job security as a major concern of hospital employed physicians (1). When I left fellowship, most junior physicians joined an established, group practice either as a salaried associate or with a guaranteed income. Few ventured into solo practice, especially in pulmonary and critical care where night calls are frequent and days off are rare. Usually after a few years, the associate became a partner. Partners were entitled to share in profits that they generated, and usually profits of the group. Now that many physicians are employees of hospitals or corporations rather than physician-controlled practices, marked changes in physicians’ business hiring and business practices are occurring.

Some observers don't think job security is a problem for physicians. I would agree. Doctors are in demand and nearly every physician can find a job. Matt Robbins, Senior Director of Marketing for Delta Physician Placement in Dallas, points out that hospitals will hire more physicians as healthcare reform expands coverage and increases the emphasis on care coordination (1). However, the physicians of the future may question the cost of medical school, residency, and fellowship to enter into a “master-servant” relationship with an employer.

For example, a radiologist with a long term private practice relationship with a hospital for many years was told that the hospital was severing this relationship in order to form an all employee model. However, he and his private practice colleagues were given the opportunity of joining the new hospital radiology group. Now his income is dependent on his productivity. It is difficult for him to find time to teach, discuss cases with consultants, or participate in conferences without a financial penalty.

Several of the Phoenix pulmonary and critical care fellows were previously employed as hospitalists. One was jobless after the group that had provided hospital services for services for several years did not have their contract renewed. The hospital hired their own hospitalists, mostly young physicians just out of training. However, within a few months most had left because of dissatisfaction, especially with the workload.

Although lack of physician productivity, hospital financial losses or hospital mergers have been cited as reasons for terminating or modifying physician contracts, it would appear that maximizing profits is more likely. In the “master-servant” relationship inherent with a hospital-employed physician, the downside may be increasing workload, decreasing income and declining autonomy. Although some would argue that this increasing competition is good for the patient consumer, the rising healthcare costs with declining physician income argue against this.

However, if a physician is unhappy, he or she can always leave. After all the relationship is “master-servant” not “master-slave” and most contracts can be cancelled with a few months notice. However, more and more contracts have noncompete clauses, requiring a physician not to practice within a certain distance after leaving (1). With many hospitals or hospital corporations expanding, many physicians may have to move from their previous practice area, even from a large metropolitan area. There is also the possibility that if the separation is acrimonious, the quality assurance process can be used make a physician’s relocation even more difficult. While the hospital administrator has the option of complaining about a physician, the reverse is often not true. Hospital employed physicians are frequently required to sign contracts stating that they cannot discuss their employment.

The negative side of hospital employment should cause physicians to pause and carefully examine a contract. The negatives may outweigh the positives. Furthermore, with hospital mergers and administrators frequently changing, even the best situation could quickly deteriorate.

What is needed is increased oversight of the physician-hospital relationship. First and foremost, an administrator directing or pressuring physician employees to order certain tests, prescribe certain medications, etc. is an unlicensed practice of medicine by the administrator. It increases the cost of healthcare by the ordering of unnecessary testing, procedures, or therapy where profit margin is more a consideration than patient benefit. This should be reported to state licensing agencies. Second, it is questionable that hospitals should be allowed to hire physicians. California has a law prohibiting hospital or corporation ownership of physician’s practices (2) but the law is complicated and appears to be largely unenforced (3). As hospitals hire more physicians, laws to protect both patients and physicians from unscrupulous hospital administrators need to be both enacted and enforced. Third, physicians should be wary of noncompete and no discussion clauses in contracts. These are red flags that could signal potential dire professional and financial consequences to a physician who is in a difficult employment which they wish to leave.

Richard A. Robbins, M.D.

Editor, Southwest Journal of Pulmonary and Critical Care

References

1. Terry KJ. Six biggest gripes of employed doctors. Medscape Business of Medicine 2011. http://www.medscape.com/viewarticle/737543 (accessed 8-22-11).
2. http://www.mbc.ca.gov/licensee/corporate_practice.html (accessed 9-23-11).
3. Fichter AJ. Owning a piece of the doc: state law restraints on lay ownership of healthcare enterprises. Journal of Health Law 2006:39:1-76.

The opinions expressed in this editorial are the opinions of the author and not necessarily the opinions of the Southwest Journal of Pulmonary and Critical Care or the Arizona Thoracic Society.