Exclusive contracts and hospital privileges--a hospital perspective

Hospitals are increasingly entering into exclusive contracts with physician to operate a hospital department. Physicians who are not parties to the exclusive contract are foreclosed from providing any of the covered services and, in most instances, from access to the hospital equipment and facilities necessary for rendering such services. This article focuses on the substantive and procedural legal issues that arise with regard to physicians whose privileges are reduced or terminated as a result of an exclusive contract arrangement and factors that will be considered by hospitals in negotiating exclusive contracts.