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The Right to Employ Physicians

Elyas Bakhtiari, for HealthLeaders Media, September 10, 2009

In July 1868, as the United States was reconstructing and reuniting after being torn apart by civil war, the nation came together to enshrine in a constitutional amendment the right of employment for every physician in the country.

Ok, that may not have been the original intent, but some California physicians are using the 14th Amendment to argue that the state's Medical Practice Act, which bans hospitals from employing doctors, is unconstitutional.

"No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States," the amendment reads, and some are arguing that targeted restrictions on how physicians can earn a living do just that.

But even more interesting, to me at least, than the legal validity of the case is the context in which it is being debated.

Those in favor of the ban on employing physicians, including the California Medical Association, have claimed the ban allows physicians to maintain their independence. They fear that an employed physician's decisions would be influenced by the hospital's profit motives, degrading the sacred physician-patient relationship.

But now it is opponents who argue that employment is nearly the only way for physicians to maintain their independence, because the financial climate has become so severe that physicians are struggling to make a living as independent practitioners.

Those who fear employment would lead to corporate control need only look to other states where employment is not only allowed, but is becoming much more common.

Employment does change the financial incentives physicians face, but rather than inject profit motives into medicine, it tends to diminish them. Look at organizations like Mayo and Cleveland Clinic that are being held up as examples of excellence in the healthcare reform debate. Both organizations employ their physicians, and it has helped them coordinate care to deliver quality, low-cost care.

Beyond financial incentives, though, employment seems to frequently come up as the answer to questions of how best to align hospitals and physicians.

Want to ease tensions with the medical staff over call coverage? Employ some physicians to handle emergencies. Having trouble getting buy-in for system-wide quality improvement initiatives? It's easier with employed doctors. Trying to recruit physicians just out of training? Many younger physicians actually prefer employment to independent practice.

It's certainly not the answer to all alignment problems. Many physicians have no interest in employment, and in many markets it simply isn't feasible.

But employment sits at the far end of an alignment continuum, and as collaboration between hospitals and physicians become more important to the success of both, employment is looking like an increasingly attractive arrangement for both.

We've already seen increased interest in many parts of the country, and it's no surprise that we're also seeing it in California. At some point, the ban will likely be lifted. If not because it is unconstitutional, because it is increasingly impractical.


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Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

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