By incorporating the concept of intrinsic motivation of physicians into a theoretical framework, this paper examines the possible existence of multiple equilibria in which hospitals differ only in terms of the work attitude of physicians, who are homogenous in all other aspects, including benevolence in their concern for their patients. Our results offer a theoretical understanding of a phenomenon observed frequently in any society, namely that of the existence of hospitals with more or less similar management environment, but with significant differences in the work attitude of physicians and therefore medical treatments provided to patients.