Friday, Jun. 23, 2023
Do most states allow hospitals to directly employ physicians?
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.
Sources
- Texas Secretary of State Texas Administrative Code RULE §177.17 Exceptions to Corporate Practice of Medicine Doctrine
- Ohio Laws & Administrative Rules Ohio Revised Code Section 4731.228 | Termination of physician's employment with a health care entity
- California Hospital Association California’s Ban on Physician Employment by Hospitals
- Nevada Legislature Veto Message AB11
- Health Leaders California Hospitals Fight for Right to Hire Doctors
- Physicians Advocacy Institute COVID-19’s Impact On Acquisitions of Physician Practices and Physician Employment 2019-2020 (page 6)
- American Medical Association Recent Changes in Physician Practice Arrangements: Private Practice Dropped to Less Than 50 Percent of Physicians in 2020
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Fact briefs are bite-sized, well-sourced explanations that offer clear "yes" or "no" answers to questions, confusions, and unsupported claims circulating online. They rely on publicly available data and documents, often from the original source. Fact briefs are written and published by Gigafact contributor publications.
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