WASHINGTON - With hospitals buying up medical practices around the country and seeking to make the most of their investment, the American Medical Association (AMA) reached out to doctors this week to remind them that patient welfare must always come first and not be overridden by the economic interests of hospitals that now employ doctors in ever-growing numbers.

"In any situation where the economic or other interests of the employer are in conflict with patient welfare, patient welfare must take priority," says a policy statement adopted by the association.

"A physician's paramount responsibility is to his or her patients," the association said.

At the same time, it added, a doctor "owes a duty of loyalty to his or her employer," and "this divided loyalty can create conflicts of interest, such as financial incentives to over- or under-treat patients."

Protecting autonomy

The AMA is disseminating its policy to doctors at a time when more of them are becoming hospital employees. About one-third of new doctors say they would prefer to be employed by hospitals rather than practice on their own. The association is urging hospitals and medical groups to adopt similar policies.


The guidelines say that "physicians should always make treatment and referral decisions based on the best interests of their patients." Moreover, the AMA says, patients should be told whenever a hospital provides financial incentives that encourage, discourage or restrict referrals or treatment options.

"We never want patients to worry or wonder if a decision is being made in their best interest," said Dr. Ardis Dee Hoven, a Kentucky internist and AMA president-elect.

From 2000 to 2010, the American Hospital Association says, the number of doctors employed by hospitals grew by 32 percent, to 212,000. The trend has accelerated since then, in part because of federal policies that encourage doctors and hospitals to band together to coordinate care.

In addition, many doctors have found that private practice on their own is no longer profitable and comes with a host of complications.

"Physicians are squeezed between rising costs and decreasing reimbursement," and they "see only declining revenue in the future" as Medicare and private insurers restrict payments, the AMA said.

An 'unfettered right'

In a report accompanying its principles for physician employment, the association said that doctors have a "fiduciary responsibility" to patients and should have an "unfettered right to exercise independent professional judgment" in caring for and advocating for patients.

Dr. Jerry D. Kennett, a leader of the American College of Cardiology, said he was aware of cases in which a hospital had told doctors not to place defibrillators in Medicaid patients because "it's a money-losing proposition" for the hospital.

In other cases, he said, hospitals have told doctors they must use the hospital for laboratory work and certain imaging procedures, even if doctors found that they got better results or better service elsewhere.

Richard Umbdenstock, the president of the American Hospital Association, said he had no major problem with the AMA's principles. "Hospitals and doctors have a long history of being on the same page, doing what is best for patients," he said.

In compensating doctors, hospitals often pay a salary with a bonus that depends on a doctor's productivity, contributions to the quality of care and patient-satisfaction ratings.

Productivity is typically measured in terms of "relative value units," which reflect the time, technical skill, physical and mental effort and judgment required to perform a particular service. Federal officials have assigned a relative value to each service for the purpose of paying doctors under Medicare.

"Use of relative value units is a fairly standard measure of performance for physicians" employed by hospitals, the association says in a manual describing doctor-hospital contracts.

Hospitals often set a goal for doctors that can result in a bonus, but if the doctors fall short, their salary may be reduced the next year.