The great majority of midlevel providers are employees. Most physicians now become employees as they enter practice, and many of the older private practices have been sold and their owners have also become employees. Medical care practitioners may work for hospitals and clinics providing medical services to the general public, in the medical departments of nonmedical businesses providing occupational and general medical care to the other employees, or in governmental institutions such as prisons and schools. They are subject to the same rules as other professional employees. This means that while the employer can set the general workplace rules, the employer may not require medical care practitioner employees to violate the terms of their license or to violate professional norms of practice.

While some physicians now work as employees of hospitals, most physicians who practice at hospitals are independent contractors whose relationship with the hospital is governed by the medical staff bylaws. The effect of this contract is to ensure that the nonemployee physician is subject to the rules of the institution. Many managed care companies use this same model for their relationships with physicians. These contracts pose difficult legal issues. They may impinge on the physician’s professional decision making and may limit the patient’s right to information or alternative treatments. Since the physician is not an employee, there are few protections available if the contract is terminated because the physician is unwilling to comply with improper practices.