The number of doctors employed by hospitals and physician groups grew again in 2016 according to an AMA survey. As per the survey, 47.1% of America’s doctors were employed in 2016 as opposed to 41.8% the year before. Furthermore, fewer than half the doctors surveyed had any kind of ownership stake in the practice or facility at which they work.

Many suggestions have been offered to explain the steady increase in employed doctors over the years. One such suggestion boils down to protection. Some say that doctors are choosing employment because working for a hospital or group practice offers better protection against performance complaints. If doctors are choosing employment for this reason, are their assumptions correct?

In looking for the answer, it is important to talk about both regularly employed physicians and their locum tenens counterparts who, though technically self-employed, work for the facilities who contract them for the entirety of said contract. Tiva Healthcare explains that locum tenens contracts are physician jobs for the purposes of evaluating performance issues.

The Peer Review Process

Doctors subject to performance complaints will typically undergo what is known as the peer review process. This process has been compared to the annual performance review other employment sectors are known for, but it actually goes far beyond such an evaluation. A peer review looks at specific complaints at the time such complaints are filed. There is nothing necessarily annual about it.

There is a perception among doctors that employment offers better protection for the simple fact that many hospitals keep peer review information confidential. Such information only may see the light of day if a complaint becomes litigation. The worry is that litigation will result in loss of licensing, credentials, or local privileges, thereby prompting employers to work out problems while staying out of the courtroom.

This may offer doctors a bit more protection than they would otherwise have in private practice. But it is not protection that should be taken for granted or relied on completely. Even a hospital willing to keep peer review information under wraps cannot tolerate doctors who consistently underperform. Too many complaints eventually lead to litigation, which is bad for both doctor and hospital.

Peer Review Immunity

Another factor to consider is what is known as peer review immunity. This comes into play when peer review results in the termination of employment and the loss of privileges. The affected doctor may decide to litigate against his or her former employer, requiring peer review information to be made public. Peer review immunity is not protected under either the Health Care Quality Improvement Act or the Age Discrimination in Employment Act. Therefore, it is in the best interests of employers to avoid termination unless especially egregious circumstances warrant it.

In cases for which termination is the best move, it is in the employer’s best interests to make sure everything is properly documented. Attorneys for the terminated doctor may request any and all documentation relating to the peer review, information they are entitled to for investigative purposes. If a hospital does not clearly document everything, there could be problems.

Knowing all of this, it would be easy to assume that full-time employment and locum tenens work both offer a bit more protection where patient complaints are concerned. The other side of that particular coin though, is patient satisfaction. Primary practice owners have a lot more incentive to guarantee positive outcomes because their businesses rely on doing so. They may enjoy an extra measure of protection simply by making their patients happy.