Empathy is a process for understanding an individual's subjective experiences by vicariously sharing that experience while maintaining an observant stance. It is a useful tool in the medical encounter as it provides the physician with a fuller, more personalized view of the patient, and it provides the patient with a sense of connectedness to the physician that may allow him/her to more freely express his/her emotional distress. The roots of empathy are explained as a process that evolves from a developmental substrate with the addition of relevant experience, memory, and fantasy. While understanding the patient alone is a worthwhile goal, the physician's empathic insight can have therapeutic impact by its reflection back on the patient, through the use of language, to express support or sympathy, to justify behavior, or to foster deeper emotional expression.

Transference is a process in which individuals displace patterns of behavior that originate through interaction with significant figures in childhood onto other persons in their current lives. It is a powerful determinant of patient behavior in medical encounters. Transference can affect the kind of physician-patient relationship a patient seeks and his or her response to interventions prescribed by physicians. The relationship is also strongly affected by the physician's own transference or countertransference. Rather than approach every patient in a uniform way, tailoring the approach to fit the relationship needs of the individual patient is advocated. Such tailoring would affect whether the physician is collaborative or prescriptive, how much personal information he or she shares, and how close or distant he or she is. Transference issues can also affect level of somatization and patient adherence to medical regimens. We discuss other problems with transference, such as the seductive patient and gift giving. By paying attention to the transference needs of patients, physicians can enhance the therapeutic alliance in which patients optimally participate in fulfilling their medical needs.

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The medical encounter, like all human interaction, is unavoidably emotion laden. Rather than viewing them as something to be overcome, the emotional responses of the physician can be analyzed for information about the patient or about the physician. The emotional states of patients arouse complementary reactions in the clinician that are diagnostic clues to important clinical syndromes such as depression or character disorders. Conversely, the physician can have idiosyncratic responses to patients that can lead to inappropriate diagnostic and therapeutic choices or to avoidance of particular problems or patients. Self-awareness is the key to utilizing these reactions to improve the patient-physician relationship.

Physicians perceive an ethical bind as they try to satisfy the conflicting demands of patients and the welfare disability system. They will frequently decide in favor of their patient's interests. This has implications for welfare policy planners.