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Do most states allow hospitals to directly employ physicians?

By Noel Sims
YES

In all but a handful of states — including California, Ohio and Texas — hospitals are permitted under state law to employ physicians directly, as opposed to using them as independent contractors for outpatient care.

On June 3, Gov. Joe Lombardo vetoed AB11, which would have made Nevada the sixth state to prohibit the employment of physicians by hospitals. The bill was passed by the Senate and Assembly with limited bipartisan support.

According to a report by the American Medical Association, 2020 was the first year in which fewer than half (49.1%) of physicians worked in private practice. Another report from the Physicians Advocacy Institute found that the percentage of employed physicians grew rapidly during the pandemic because of the increasing overhead costs of private practice.

This fact brief is responsive to conversations such as this one.
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