Hospitals are institutions in which private physicians admit their patients to receive care that could not be provided at home. In order to understand how the organization of such hospitals can function, it is necessary to be clear about the distinction between two types of medical practice.
Health care professionals (including doctors, nurses, therapists, etc.) may engage in private practice with patients who choose to be treated by them and with whom they have a private, confidential relationship. Or they may be employed in treatment institutions (mainly hospitals) in which they provide professional services under prescription by a treating physician.
The implications for physician executives are discussed, with illustrations of the types of authority that they require to have an effective working relationship with treating physicians.