Considering Physician Employment? What Physicians and Hospitals should be asking themselves and each other before the deal is signed.

physician partnerships

The current scenario.

Many physician practices are exploring every option to remain (or become) financially stable and glean any sort of certainty in a world where uncertainty is the norm. 

Practices are searching for ways to stop fighting fires and start moving the strategic needle. 

After exploring a variety of alignment models, some physicians ultimately opt to become employed by a hospital or health system.

At first glance, it seems like a win-win scenario. Both physicians and health systems have the same goals in mind. 

Then why do we learn all too often about failed employment relationships, promises made and seemingly broken?  


Here is my observation: 

In the beginning, the possibility is exciting. 

We talk about operational items of importance. 

We talk about how the physician can now focus on the practice of medicine and leave all the administrative tasks to the hospital.

We go line by line through the contract. 

We negotiate the small print. 

The contract is signed, and we begin….

There is a honeymoon period where all hands are on deck supporting the practice success.

But soon frustrations and tensions start to rise. Expectations are not met. 

Perhaps the hospital takes longer than the physicians would like to respond to concerns. 

The finances don’t look great. The practice isn’t full. 

The physicians assumed they would have more say in matters that were important to them. 

Finger-pointing might ensue.

No one anticipated how hard the transition was going to be. 

And they certainly didn’t talk about it before the contract was signed. 


So, what are the successful hospital and physician partnerships doing before the ink is dry to set up these newly employed practices for success? 

While the physician employment process varies by organization and culture, there are three important conversations that define future success. 


1. The Pre-Contract Conversation 

This series of conversations happens before the contract is on the table. 

The pre-contract conversations are an opportunity to set realistic expectations for all parties. 

They provide an opportunity to connect on a human level. 

This is where reality checks, elephants in the room and other indicators of future distress are discussed. The pre-contract conversations save hours of difficult conversations and frustration later on. 

They also provide the most leverage in terms of forming trust, connection and making mutual decisions about what is best for the practice and hospital long term. 

When done well, they define fit and potential for success before long hours are spent on contract negotiations. 

So, why aren’t the Pre-Contract Conversations happening 100% of the time? 

The reason is fear and pressure. 

Both parties are typically motivated to make a deal happen and there are personal fears that prevent dialogue that might truly help determine future success. 

To have productive pre-contract conversations, we need to start asking ourselves questions around fear and pressure:

  • What is my fear if this deal doesn’t get signed?
  • What is my fear if this deal does get signed?
  • What are the elephants in the room that could get in the way at a later date? 
  • What judgments and assumptions might I be bringing to the discussions?
  • What is my role in ensuring the success of this long-term partnership?

Once we are clear in our answers to those questions, then we can create a dialogue that gets to the heart of what is important for the success of this future partnership. 

Each party can develop a set of questions to gain clarity into fit and potential for success.

Some examples might be: 

  • What does it mean to be a physician partner vs. a physician employee? What does partnership mean for you?
  • What does success look like beyond the signed contract? How would we work together to achieve that?
  • Let’s get clear on specific productivity expectations: Who defines productivity benchmarks? How are they defined? What has been your past experience in the market achieving those benchmarks, etc.? 


2. The Negotiation Conversation

This is where most future partnerships spend the majority of their time and is where we ensure all financial, risk and legal needs are met. 

However, if we skip the Pre-Contract Conversation and the opportunity to ensure that the human needs are met, the negotiation conversation alone can’t guarantee success. 


3. The Integration Conversation

Forming a true partnership.

The successful physician employment models go beyond the typical onboarding processes and ensure the foundational building blocks for true partnership are in place. 

Successful organizations integrate personal and professional development opportunities for their physicians including coaching, leadership development, and physician community-building opportunities. 

For example, they educate on how to build relationships with referring physicians and other colleagues to ensure all voices are heard. 

Therefore, successful partnerships ensure a clarity of strengths, decision making processes and roles.  

When this support and clarity is then layered to a robust structure of shared governance, accountability and authority, retention and engagement skyrocket. 

In other words, each conversation has key elements that if skipped or glossed over can make or break a partnership.


What if you had an easy-to-follow checklist to help you overcome the three most common leadership challenges? Simply put in your name and email below and I will deliver the free checklist to your inbox! (p.s. I will never share your email, no one likes spam including me.)


Carrie Koh is an Interpersonal Efficiency Leadership coach, consultant, and former healthcare administrator with a passion for enhancing the way we connect to one another in healthcare to ensure efficient and innovative results and greater fulfillment along the way. She would love to connect at