Small hospitals face greater challenges in physician contracting due to their size. They have higher physician costs per patient and per procedure compared to larger hospitals. Justifying physician payments at fair market value can also be more difficult for small hospitals with limited resources. The webinar recommends that small hospitals standardize their contracting process, use market data to determine and document fair market value payments, seek outside help when needed, avoid being forced into overpaying physicians, automate processes to reduce expenses, and compare themselves to similar small hospitals.