Look out for employment contract snags

February 1, 2008

Be careful, because the terms of this agreement can have a profound impact on your career.

Key Points

When FP Brian K. Nadolne of Atlanta joined a local group several years ago, he signed what he now calls a "bad contract." Had he asked an attorney to review the document, Nadolne might have been warned about a clause that obligated any associate who left the group before the end of the contract to pay the owner a sum equal to his or her accounts receivable.

In time, it became apparent that the owner had no intention of allowing associates to buy into the practice, and Nadolne and two other doctors left. The owner sued them for the value of their A/R, which was unusually high because the group's billing agency had a low collection ratio. Nadolne, who's now doing well as a soloist, ultimately settled for $56,000.

As this story illustrates, the employment agreement you enter into-for better or worse-is likely to be a key factor in shaping your career's direction. By doing your homework, asking the right questions, paying attention to both short-term and long-term provisions, and having an experienced attorney review the contract before you sign it, you can greatly boost the odds that the job you obtain will help you reach your financial and lifestyle goals. Here's what you need to know.

To secure the best possible terms, arm yourself with facts before you go on a job interview. If you're working with a physician recruiter, that person will usually give you background information about the prospective employer and the regional healthcare market. But there's more you need to dig up yourself.

To start, find out how much in demand you are. Many specialties are in short supply, especially outside metropolitan areas. And small to medium-sized practices are having a harder time recruiting doctors because they face increasing competition from hospitals and larger groups. These market forces will help determine the compensation range you can reasonably expect and how negotiable a contract will be.

The size of the group is another determinant. Smaller practices are typically more flexible than large groups, which are usually reluctant to set a precedent by deviating from their standard contracts. Similarly, big metropolitan hospitals are less likely to bend than small community hospitals, notes David Cornett, regional vice president of Cejka Search, a St. Louis-based recruiting firm.

But there are exceptions. Endocrinologist Steven Leveston was working for a hospital-owned group in Pittsfield, MA, when a recruiter told him about a job at St. John Medical Center in Tulsa, OK. Besides seeing ambulatory patients, the position involved setting up a program to improve inpatient diabetes care. Knowing that the hospital needed him to implement its program and that he probably wouldn't see enough patients to earn a bonus, Leveston negotiated a higher salary than the hospital usually paid for a senior position.

You should also be familiar with national and regional compensation medians for your specialty and be prepared to use these figures to negotiate. This information is available in the MGMA's Physician Compensation and Production Survey ( http://www.mgma.com) or the AMGA Medical GroupCompensation and Financial Survey ( http://www.amga.com). Free information on compensation can be obtained on the websites of physician recruiting firms such as Irving, TX-based Merritt, Hawkins & Associates ( http://www.merritthawkins.com/pdf/2007_Review_of_Physician_and_CRNA_Recruiting_Incentives.pdf ) and Cejka Search, which posts the AMGA data ( http://www.cejkasearch.com/compensation/amga_physician_compensation_survey.htm).