Blog Post

When Employment is Not an Option

14M07D01 KKR When-Employment-is-Not-An-Option

Despite a flood of cardiologists entering into employment arrangements with hospitals and health systems, not all are following suit. We continue to work with a number of cardiology groups that are not interested in or eligible for employment. Why? The reasons are as disparate as the physician practices. Some cardiologists cannot become employed due to state regulations or because they are part of a multispecialty group. Others simply treasure their independence. Regardless, shrinking reimbursement and crushing cost pressures are pushing more cardiologists in private practice to explore their available options. And when employment is not an option, there are alternative arrangements that offer similar benefits while preserving physician independence.

Professional Services Agreement

A Professional Services Agreement (PSA) is an attractive model for physicians who want strong ties with a hospital but are reluctant or restrained from becoming employed. We typically find two common reasons why PSAs are pursued in lieu of employment: (1) cardiologists are already part of a multispecialty group and want to remain in partnership, and/or (2) they continue to practice at multiple organizations and don’t want to play favorites.


Comanagement represents a slightly less integrated model for physicians, but it still provides a strong bond between physicians and their affiliated hospital. These arrangements can span multiple physician groups, including those in solo practice. However, they get a bit tricky when a large number of independent practitioners are involved.

Service Line Leadership

A service line leadership model is the simplest of the nonemployment approaches but is also rather thin on alignment. Even so, there are a number of physician groups drawn to this option because it is often less time-intensive than comanagement yet still gives physicians a voice in management.

You Have Options

While employment often represents the simplest approach to alignment, there are a number of physician groups that are pursuing alternative models and achieving clinical and financial success. To find the right-fit alignment option, physician groups need to work closely with their affiliated hospitals (and, in many cases, their physician partners) to determine the type of structure that will best address the needs and future of the practice.

This post is adapted from a column that originally appeared in the July 2014 issue ofCardioSource WorldNews, a publication of the American College of Cardiology.