Between 2000 and 2010, the number of doctors employed by hospitals grew by 32 percent, to 212,000.  This unmistakeable trend raises serious questions about potential conflicts of interest that such employment arrangements may create.  For example, some physicians have reported that their hospital employer requires them to use in house lab facilities when the physicians have received better results or better service from an outside lab.  Others have reported that their hospital employers have instructed them not to insert pacemakers into Medicaid patients, because it costs the hospital money.  While such examples are rare, they highlight a growing problem that will only get worse as the physician-as-employee trend continues.


In November, the American Medical Association reminded its members that their paramount responsibility is to their patients.  In a policy statement, the AMA stated that “[i]n any situation where the economic or other interests of the employer are in conflict with patient welfare, patient welfare must take priority.”

Physicians should be very wary of entering into any employment arrangement that limits their exercise of independent professional judgment.  Even provisions that discourage physicians from referring patients to service providers not affiliated with the hospital can be problematic.  Physicians should review their employment agreements carefully with an eye toward protecting the exercise of their independent judgment.  As decreasing physician reimbursement makes hospital employment more attractive, care must be taken to make sure the quality of patient care is not compromised.