How to Work As a Physician Executive in Digital Health

Physician leadership positions carry greater risk, but can also glean greater rewards. Here we discuss the essentials you should know before considering a position in digital health.

Are you a physician interested in a leadership position in digital health? Perhaps you have already developed telehealth skills, and wonder what it’s like to work on the front line helping build technology with a digital health startup. If so, a position as a physician executive might be for you.

In this article, we outline the role of the physician executive and how physicians contribute to digital health teams, legal considerations and what to expect when working with a healthcare technology business, and the risks and rewards for physician leaders within digital health companies.

What Is a Physician Executive?

A physician executive is a physician leadership position blending professional medical knowledge with business acumen and management skills. Physician executive roles can hold many titles including chief medical officer (CMO), vice president of medical affairs (VPMA), medical director, or owner of a “friendly” professional corporation (affiliated physician group).

Physician executive jobs can range from the traditional—like working within a research institute or holding c-level administrative positions within a hospital—to the more leading-edge—working with digital healthcare companies in telehealth, telemedicine, remote patient monitoring, and other aspects of virtual care.

Within digital health technology companies like Wheel, physician executives play a meaningful role in determining how technology is developed and how the subsequent medical care is delivered.

How Physician Executives Contribute to Digital Health Teams

Creating world-class digital health products and services requires input from a diverse skill set. A digital health service needs a head of product to oversee the user experience, developers to build the technology infrastructure, and often the most important contributor, a physician executive to help guide how the new health technology will work in tandem with clinical service delivery.

In the tech development phase, a physician executive works in tandem with the product and engineering team to ensure that clinical best practices are incorporated into the software. Many digital health tools fail, or struggle to find traction because they fail to include a physician’s expertise in the R&D phase.

Following the tech development phase, the physician executive must oversee how the technology is implemented through clinical services. This is where a great physician leader can truly shine, but also where risks and liability concerns can overwhelm the physician.

Legal Considerations for Physician Executives

Often, a doctors’ enthusiasm to help build healthcare technology is tempered by the potential unknown risks:

• Am I responsible if the technology fails?
• Am I responsible if a security breach exposes PHI?
• Am I liable if I create the protocols, but another doctor delivers negligent care on the platform?

Fortunately, many of the perceived physician liability risks aren’t risks at all or can be mitigated in advance through thoughtful contractual agreements between physicians and technology companies. For example, many physicians are concerned about the heightened liability exposure of working in telemedicine compared to working in a brick-and-mortar practice. The reality is that professional liability claims for telemedicine are less frequent and less punitive when compared head-to-head with in-person claims.

Another example is that clinicians are often concerned about HIPAA violations when working in telemedicine. Yet traditional hospitals are often the biggest targets for personal health data breaches due to typically antiquated data storage methods compared to the data management within newer, tech-only care platforms.

Another concern and major point of confusion for many physicians centers around a legal doctrine known as the corporate practice of medicine.

What is the corporate practice of medicine (“CPM”)?

The corporate practice of medicine (CPM) is a legal doctrine that prohibits companies from profiting from the practice of medicine or directly employing a physician to provide professional medical services. The law is based on an ethical standard that believes medical judgment should be held separate from the influence of corporate profit incentives and unlicensed individuals.

While variations in the corporate practice of medicine laws exist state to state (see California's Corporate Practice of Medicine Law), the doctrine generally restricts a person or entity, such as a technology company, from directly delivering medical care.

Only a business owned solely by a licensed physician(s), called a professional corporation (“PC”) or a professional limited liability company (“PLLC”), can deliver medical services and contract with other clinicians for the purpose of delivering medical services.

(see “The Friendly PC model” below)

These laws often surprise doctors as this legal issue is rarely discussed in traditional clinical jobs. In most states, traditional physician employers like hospitals have statutory exemptions to CPM laws that allow hospitals or other licensed facilities to directly employ physicians.

Ultimately, the laws against the corporate practice of medicine are designed to prevent non-clinicians from interfering with or influencing the physician’s professional judgment. Therefore, they put some safeguards around how digital health companies enter into agreements with physicians and other health professionals.

The “Friendly PC” model in digital health

When starting work with a digital health company, physicians will often be asked to set up a PC or PLLC to protect both parties against the corporate practice of medicine infractions. This is called a “Friendly PC” model.

Under a Friendly PC, professional services delivered by a licensed medical professional are performed under a distinct legal entity (the PC or PLLC) that is separate from the company that owns the digital health technology.

When a prospective physician executive first hears about a PC arrangement, there may be concerns that the tech company is trying to shift liability onto the doctor. But in practice, adhering to these laws protects the physician from violating the law as well.

How a Friendly PC works:

• The physician executive registers a professional corporation in the state(s) the physician is licensed to practice medicine.
• The newly established PC will deliver all of the professional services, i.e., contract with other clinicians to deliver the case alongside the technology.
• The physician executive is sometimes referred to as being the “PC Owner.”
• In parallel, the digital health company and the PC agree to a master service agreement (“MSO”) that outlines the “Friendly” relationship between the new professional company and the technology company.
  

The physician executive as a bridge

This Friendly PC structure allows the digital health company to help support the PC's administrative overhead while allowing the clinicians to maintain independent clinical judgment.

The physician executive is the bridge between these two organizations, often serving in a medical director capacity to set and oversee the clinical process, protocols, and guidelines.

The physician executive also acts as an ongoing feedback loop bringing the clinical experience back to the technology team to continuously improve the product to create the best possible user experience for the patient consumers.

Risks and Rewards for Physician Executives in Digital Health

While offering one of the most rewarding and challenging opportunities in medicine today, the role of the physician executive can also present some legitimate risk.

It’s important to remember that, prudent decision making at an above-board technology company combined with a solid master service agreement outlined at the relationship’s onset, can protect physicians from unnecessarily elevated risk.

If you are considering a career as a physician executive, don’t let the risks overshadow your passion. The digital health ecosystem needs more innovative doctors to help shape the future of healthcare. And combining medical expertise with technology innovation can help improve the lives of millions, instead of the thousands impacted 1:1 in traditional medical practice.

Information gathering is an important step in any process. Learn more about the pros and cons of starting your own telehealth practice.

Want to join the next generation of digital healthcare leaders? Contact us to learn more about physician executive opportunities and telehealth care delivery with Wheel.