Healthcare: Private Vs Employment


The healthcare system within the USA has been structured in a way that allows a physician not only to get employed by health care organizations but also for groups or practice as private entities. Laws that govern the private and organizational employment exist. In the private practice sector, physicians are the primary shareholders in the premises. Moreover, they make independent decisions that affect their practice, or the management of the business. The number of physicians who are employed by hospitals is higher than the number of those in the private sector. According to (…), in the past years, there were more physicians in private practice than those employed. Previous laws and regulations attracted more physicians in the private sector. In 2015, there was an increase of 50% in the number of doctors employed in the formal hospital setting. Therefore, the distribution of doctors in private or public practice is varied and is dependent on the state governments.

The contract laws that govern the employment of physicians cover a wide area of employment terms. These areas include physician reimbursement schemes, regulatory oversight, the scope of practice, and risk management. The laws may be enacted by the federal government of the state governments dependent on the affected section of health care provision. Both the private and public parts uniformly implement some laws. For example, the requirement that ensures patients are not denied emergency care is implemented and exercised by both the individual and the public sectors. Increasingly, there are differences in terms of the legal and ethical implications of the laws that govern physician practice. This paper will discuss the impact of contract laws for employed physicians and provide a comparison between the legal and ethical differences between employed and private practice physicians.

Contract laws for physicians

The elements of contract laws for employed physicians are varied. Different states have enacted separate contracts that are customized based on the region and the number of physicians. According to (…), physicians should expect that every employment contract binds them to their workplace and a signed contract can be used in a court of laws as a sign of evidence. First, the term of the contract is the duration which the agreement between the employer and employee is bound to last before it is renewed or expires. The federal government has specified that employment contracts to have a term of 1 or two years. However, this is not standardized as some states have extended or reduced this period for the physicians. For example, Senate Bill 807 of 2015 allowed the state of Texas to reduce the term contract for military physicians to 6 months. Therefore, the term is not strictly 1 or 2 years, but it can be customized to a region.

Furthermore, the contract laws require that doctors should carry out different duties as specified in a signed contract. The responsibilities of physicians are well laid out in the agreement such that the employer’s expectations are met at the end of the deal. Performance standards and physician autonomy require a doctor to deliver maximum services to the public, but he/she should have autonomy of self-expression and creation of time. These laws are varied. In the state of Michigan, Section 333.17001 of Michigan Legislature, there are provisions of the bill for the autonomy of the physician. , and the state government monitors their validity. However, some states in the south do not have such a legal clause.

The contract laws for private physicians are specified under the 405.415 law of 1992. According to the Legal Information Institute, a private contract for doctors must have some essential clauses. First, the contract must state if the doctor is excluded from formal employment under section 1128, 1892, or 1156 of the Senate Act.  Second, the physician must take full responsibility for the patient and be aware that the government does not compensate the patient in case of medical negligence. Third, the private physician must renew the contract annually and pay the renewal fee. Moreover, there are no tax exemptions for the individual practitioner. The private contract laws have been amended and the 80 FR 71370 amendments of 2015, changed the government revenue generation plan. The state benefits from any private medical ventures by collecting revenue from the physicians.

Physician reimbursement scheme

According to (…), the physician reimbursement scheme has been primarily influenced by policies formed by the federal and state governments. The national government formulated the rules that prescribe the form of physician reimbursement, and the limits of payments for the doctors. , and the minimum salary for these physicians is approximately $270,000.  The figures may vary from state to state. However, in the private sector, the predominant mode of payment has been Fee-For-Service wages. This type of payment requires the physician to attend t a patient and get paid directly by the patient. As per (….), this mode of reimbursement had been in practice for a long time. The ethical legalities that surrounded the scheme were later discovered to be exploitive. The physician would over-charge the patients, and the government introduced the use of medical care. Currently, the FFS approach is minimal, and the government has strengthened the formal employment thereby attracting more doctors from the private sector.

The similarities between the two modes of reimbursement are numerous. First, the government has control over the use of medical resources. For example, the Pharma industries of North America are compliant with the law thereby minimizing consumer exploitation. Distortions that existed before have been ethically minimized. Overpayment for the procedures is reduced. The government acquires tax from both schemes. Doctors pay fees to the government whether they are in public or private practice. Considered in ethical perspectives, the role of the government in the regulation of the private and public physician practice has ensured that patient negligence and mistreatment is decreased. Doctors respect life because their salaries can be withdrawn.

Increasingly, capitation is another mode of doctor payment within the country. Capitation creates a periodic pattern of reimbursement for the doctors and thereby improves accountability between the clinician and the patient. Compared to fixed salaries, capitation is crucial in establishing a financially flexible scheme for the government thus ensuring that the physicians ca re-design their incentives and adjustments to rate settings.

Regulatory oversight

The private or public entities achieve the regulatory oversight of the united states health care. The federal, state and local governments have an oversight role in the health care practice within the country. The national regulatory bodies include the Center for Disease Control CDC. However, there are third parties that also regulate health care practitioners. First, the federal government ensures that the international coded of conduct for doctors are followed. Ethically, this approach has minimized case of medical negligence and physician malpractice. The legal framework requires that doctors meet a bare minimum of standards before applying for private practice. The state governments ensure this is possible through the issuance of licenses that act as a checklist for the private practice. Furthermore, the permissions for private practice are renewed every year to monitor the progress of health care delivery within the country.

Moreover, the US Department of labor provides an oversight role for the employed physicians. The labor department strictly monitors the contract laws signed between the physicians and the employer. The department has similar functions to the CDC. Ethically, the two entities ensure that patients have justice and autonomy in selection or health care providers. Any patient is treated fairly and equal without discrimination over class or region. Besides, beneficence is also exercised by the two entities thereby improving primary health care. All patients enjoy equal rights. However, the legal extent of the CDC and the department of labor collides whereby the jurisdictions of operation are not well defined by the law.

Scope of practice

According to (…), the scope of practice of any physician should be limited to the level of competence of the doctor. Based on the study done in the USA, the competence of a doctor and the level of experience should dictate the scope of their primary healthcare provision. The federal government has defined the range of operation based on the current needs for health care. The need for consistency in the national guidelines, state government objectives, World Health Organization WHO requirements, and individual physician preferences, has sparked a uniform scope of practice for the practitioners.

Keeping with the terms of any contract, a healthcare practitioner in the USA should exercise his/her duty based on the jurisdiction of the career requirements. The federal law allows medical practitioners who have a master’s degree to operate private premises for health care provision. On the other hand, the general practitioner with one degree is also allowed to work under employment contracts offered by the government or private hospitals. The individual practice physicians can ethically exploit the patients while the employed doctors can minimally exploit patients. This is because the monitoring of private physicians is not keenly regulated. Besides, individual doctors are limited to a few specialties compared to employed doctors; therefore, the number of patients who will receive care from private doctors is lesser than public hospitals.

However, similarities exist between private and public hospitals. First, both streamlining of the two services creates a channel where general physicians can refer patients to specialist clinics. Referral helps in the management of cases that are complicated. Second, the scope of practice has flexibility. Flexibility implies that private practitioners can change to the public when they choose to.

Risk management

Risk management is the process of planning, coordinating, and managing the operations within the hospital to minimize the uncertainties and risks associated with health care provision. According to (…), the role of risk management in health care is to ensure patient safety. The risk management similarities between the physicians who are employed and those who work in private exist based on the legal and ethical uniformity of risk stratification. First, both doctors in private and employment deploy analysis schemes for investigation of any incidences. This is a legal requirement and providing a common project ensures that there is a collaborative approach in averting risks. Second, all private and public physicians are required to have a Risk Management Information System that provides multiple platforms for mitigation of risk. This similarity has improved government funding on risk assessment and prevention (…). Finally, both the private and public are required to perform a compliance reporting regularly and submit the report as a legal requirement for risk assessment.

However, some differences exist in the risk management of private and employed doctors. First, the physicians who practice in private or groups have a lower incident of the risk reporting system. Cases of negligence do not get the attention of the public. Therefore, the ethical code of practice is broken compared to public doctors whose conduct is reported and an action is taken. Second, management of risk claims by the employed doctors is sustained by government action while private entities and legal advisors sustain that of private doctors. This difference in risk prevention has slowed down the process of risk controlling in the private sector. Overall, risk management has ethical and legal aspects, which differ between employed doctors and individual physicians.


In conclusion, the US government has permitted the provision of private medical services by physicians. The legal framework that sustains the delivery of primary healthcare both in private and public has regional variations. However, the primary goal of all the entities is the establishment of quality healthcare for the citizens. There should be collaborative efforts between the federal government, the state governments, and the physicians to ensure delivery of quality health care.