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Many American hospitals have wound up employing family practice physicians or establishing contract management arrangements for their practices. Most hospitals that employ doctors have found that they are losing money on office operations. In essence, the hospital absorbs a loss on the physician practice management side in order to sustain key relationships with physicians who refer patients to the hospital for outpatient and inpatient services. How do you feel about this situation, which now faces so many American hospitals? As CEO of a community hospital, how would your address such a situation if it existed in your own organization.

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As the structure of the healthcare industry has becoming increasingly complex physicians are seeking a more stable income as indicated by the number of physicians both full-time and part-time, 15% in 2010 represent hospital employment, (Goldsmith, 2011). As a result of the retiring Baby Boomer generation the cohort of physicians totaling 230,000 will older than 55 years old have watched their retirement plans go away. As the economic recovery lengthens a...
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