Let the hospitals hire

Did you know that California is one of only five states in which hospitals are forbidden to employ physicians directly? It’s a useless prohibition that is making it more difficult for some hospitals, including Chico’s Enloe Medical Center, to do their jobs.

The impetus for the so-called “prohibition against the corporate practice of medicine” was the concern that doctors working for hospitals might have loyalty conflicts and put the hospitals’ financial interests ahead of patients’ health interests. But studies have shown that the worry is unfounded. In addition, there are federal provisions that protect doctors who are acting in patients’ best interests.

Over the years, California hospitals have found a way around the prohibition. They form foundations that contract with doctors to work at the hospitals. But the process is cumbersome and expensive—at least 40 doctors must sign up beforehand.

The costliness of foundations gives those hospitals large enough to afford them a leg up on smaller hospitals when it comes to recruiting doctors to their towns. Unable to offer compensation security, smaller hospitals must rely on arrangements with private-patient physicians and medical groups. Unfortunately, many private-patient doctors these days are unwilling to take hospital call.

Compounding the problem for small, rural hospitals and independent ones like Enloe that don’t have foundations is the fact that there is a shortage of doctors, especially primary-care physicians, and health-insurance reform is going to bring millions of new patients into the system.

Currently two bills in the state Legislature, AB 646 and AB 648, would establish pilot programs at publicly funded and small, rural hospitals allowing them to hire doctors directly. The intentions are good, but why are pilot programs even needed? We know from other states’ experience that patient care is not affected by direct hiring.

Rural hospitals are dying every day, and independent hospitals like Enloe are under tremendous stress. They need all the help they can get. It’s time to get rid of the prohibition on direct hiring of doctors.