Fostering Physician-Employer Relationships

The American Medical Association six principles for physician employment acknowledge the broad trend toward physician employment and provide broad guidance to enhance the physician-employer relationship.

The American Medical Association recently introduced a set of six principles for physician employment that, according to the association, are intended to help “physicians, those who employ physicians, and their respective advisors identity some of the unique challenges to professionalism and the practice of medicine arising in the face of physician employment.”

Attorney Douglas Grimm, partner and health care practice chair at Stradley Ronon, doesn’t believe the principles are a game-changer; more that the AMA recognizes the impact of the broad trend toward employment that is taking place within the profession.

The six principles, he adds, should help guide doctors in their negotiation.

Proactive, not reactive

Grimm says that the reason the trend toward employment exists is because employment offers a certain degree of security to physicians who are coming out of practice or who have been in practice for a long time and, thinking they see the writing on the wall, are looking to preserve their income stream through employment. The six AMA principles are a proactive response to that trend.

“I am not aware of any kind of watershed moment where people have said, ‘These principles are needed,’” Grimm explains. “From a purely legal standpoint, these principles are not binding. But, they are very powerful.”

As an example, Grimm points to the first principle that addresses conflicts of interest, and references that the physician “owes a duty of loyalty to his or her employer.” He points out that as employees, physicians obviously need to serve the needs of their employers, adding that there are many “realities” recognized in the principles.

“When you become a physician, you take an oath,” Grimm says. “So, we’re talking about things that aren’t written into the law; they’re construed in the common law. There’s no statute that says that you owe a duty of loyalty to an employer. You do [owe a duty of loyalty], but you haven’t taken an oath.”

Give physicians credit

The six principles and their preamble regularly make reference to the employer-employee relationship, and the “broad guidance” the principles provide. Grimm says that’s because the AMA principles are to be applied in a broad manner. They refer to any entity — from hospitals to small medical practices — that would employ a physician. But in some respects, Grimm adds, the guidelines do not give physicians enough credit.

“Physicians are licensed individuals who are responsible first and foremost for themselves and their license — then they look outwardly,” Grimm says. “And the next entity to which they are most beholden to is their patient. Or, you could flip that. You look to the patient first and that implicates your license. You have made certain representations, and now you’re guided by certain laws that restrict you and grant you certain privileges under the number on your license. Now, as you move outward, then you worry about your employer.”

The exception, Grimm says, might be in the case of a young physician just coming out of residency. A large hospital might offer the physician a significant sum of money to work in its emergency room. Will the hospital tell the physician that he or she has a minimum number of patients that must be admitted? Or that there are certain types of patients who must be admitted? A hospital is not permitted to do so, but an unscrupulous one or ignorant of the law could hand the physician such agreements, Grimm says.

“I realize I’m reducing this to the absurd, and the new crop of doctors coming out of medical school are just as business savvy as any crop of doctors,” he says. “Regardless, I think this document has increased the awareness that a physician is clinically autonomous and that institutions can’t really intrude upon their license. Nor should they be permitted to.”

Working together

Grimm believes the key word that sums up the intent of the AMA’s Principles for Physician Employment is “collaboration.” The goal of the association and the six principles, in turn, is to build or enhance the physician-employer relationship.

“Maybe these are things that have been unsaid before, and we thought of them as just common sense,” Grimm says. “Maybe we’ve been doing or thinking about these things to begin with, but let’s just make sure we formalize them and work together.”