Physician employment: How to find the right fit

November 28, 2018
Ray Pelosi
Volume 95, Issue 23

Before physicians decide to join a practice or a hospital, they should know if doing so aligns with their professional and personal goals.

Before physicians decide to join a practice or a hospital, they should know if doing so aligns with their professional and personal goals. This is an important decision, and before they take it, doctors should do the necessary research to determine if their prospective new employer is right for them. 

Understanding the culture of a large practice

Doctors should get a feel for the culture of the new employer-i.e., its internal dynamics, how people relate to one another, how personalities mesh, and if there is life after office hours.

“You’re looking at whether or not you like the individual physicians in the group,” says Russell Still, CVA, CHBC, executive vice president of Medical Management Associates, a healthcare consulting firm in Atlanta that provides management resources and counsel for physicians in private practice. “You want to find out if they’ve had other employed physicians and, if they’re not there anymore, you want to talk to them to find out why they left.” 

The new doctor also should understand the work ethic is of the physicians who lead the organization. “If you’re looking for balance in your life, do they have balance in theirs?” asks Still. “Are they just working all the time?”

How decisions are made, and by whom, and how much autonomy and decision-making power doctors have is a critical cultural issue.
“Ask if decisions are made by physicians or by business people in the boardroom,” says Robert M. McLean, MD, FACP, president-elect of the American College of Physicians and medical director of clinical quality for the Northeast Medical Group, in New Haven, Conn.

While McLean thinks that non-physicians may be qualified to make those decisions at times, he nevertheless says that “frequently, doctors have more trust in physicians making the big management decisions. That often is a major cultural factor.”

If doctors want to be part of the management structure, they should say that up front.

“You should be very clear that you want to be more participatory and exercise some leadership,” says Scott Joy, MD, MBA, FACP, medical director of Colorado Care Partners and chief medical officer of the Continental Division of the HCA Physician Services Group in Denver.

“During the negotiation, ask what committees you can serve on-such as EHR or quality improvement,” Joy says. “You’re going to have better opportunities to be on committees by making that part of the contract that you negotiate.”

Doctors should ask the practice leaders why they want to hire a new member. “You’d be surprised, but sometimes people don’t ask why they’re looking,” says Wanda Parker, a principal with the HealthField Alliance, in Danbury, Conn.

Parker also suggests doctors ask prospective employers about their expectations for a new employee or associate-i.e., what duties do they want the new doctor to assume? How many and what types of patients do they want the doctor to see? What are their long-term goals for the doctor? What are the quality metrics they want the doctor to satisfy? How will the doctor mesh with the other physicians and non-physician members of the staff?

Culture also includes what doctors are allowed to do aside from seeing patients. Can they teach or do research or donate their services elsewhere?

“Sometimes they don’t want people to do outside activities because they feel it detracts from their commitment to the practice,” says Parker. “In other cases, the practice will be absolutely thrilled if the doctor volunteers for the local football team to be their sports medicine doctor.”

Buy-in vagueness and other red flags

Investigating the organization’s culture also should help doctors detect any problems that might dissuade them from signing on. A huge warning sign is any vagueness or reluctance about spelling out the precise conditions, and costs, of becoming a partner in the future.

“The big red flag for me is when they won’t talk about the ultimate buy-in to the practice,” says Still. Doctors who get nothing more than a general promise of partnership someday may never attain that status and end up feeling like victims of a bait-and-switch ploy.

If doctors have particular expectations about when and under what circumstances they would become partners, they must protect themselves by getting those expectations spelled out in the contract.

Another potential problem is that the fee a physician ordinarily must pay to become a partner could be prohibitively expensive, where a doctor might have to borrow money to do it. “Doctors should always know up front what the buy-in’s going to be and how it’s going to be calculated,” Parker says. “And what happens when one of those partners leaves? Will they have to buy that person out?”

Frequent turnover, either among staff, the leadership or physicians, is another worrisome indicator, according to Joy.

“If your average tenure of a doctor is a year and a half, that’s not good,” he says.

Average tenures can vary, where doctors leave for personal reasons, differences with the practice leaders, or, increasingly, the desire to remain independent instead of staying with groups that affiliate with hospitals/health systems. There really isn’t a set average tenure for group practices, though Still suggests a new doctor may be with the practice for two to four years before becoming a partner.

“Doctors should ask about how long the practice manager’s been there and what the average staff and physician turnover are.”

A parallel concern is when a practice that may be financially pressed skimps on staff to save money and thereby makes it harder for physicians to do their work.

“If you don’t have enough care coordinators or medical assistants to do some of the data management legwork, it’s going to be really hard to meet some of the quality metrics,” says McLean. The best way to find out about staffing levels is to ask and, if given a tour of the office, request a tour during work hours, be aware of how many staff are present, take notes and ask about staff functional responsibilities. Focus particularly on the front desk and clinical assistants – the staffers who are essential to the patient’s office visit.

Compensation and contracts

Not only should doctors know what their pay will be and how it’s determined, they should understand exactly what their contract means, and what issues the practice is willing to negotiate up front.

Still says it’s possible to find out the local pay rates for physicians who do similar work, and advises hiring a consultant who has access to survey data or works in physician hiring not only in your specialty but in the local market. That information might also be available online from sources such as the American Medical Group Association or a compensation and benefits analysis firm such as Sullivan & Cotter, or at a local library.

Moreover, doctors should know what formula a prospective employer uses to determine salary and other benefits. “How much of the formula is balancing productivity expectations versus other things-around quality and value, data, oversight and management-that take time and energy?” McLean says.

Also, is some of the compensation formula based on quality bonus payments and shared savings contracts? In that regard, McLean offers a hypothetical example: If the insured savings that totaled 70 percent of a practice’s shared savings in a given year are completely gone the following year, would the practice try to compensate for that loss by cutting back or eliminating quality bonuses.

Determining the compensation isn’t always as simple as quoting a flat-rate salary.

“Sometimes, if you have a higher guarantee, you’ll be paid at a lower RVU rate,” says Joy. “If you want a higher RVU rate, you get a lesser guarantee. You also want to ask about signing bonuses and CME bonuses that are available.”

Flat-rate salaries sometimes are offered, but many practices offer additional pay based on collections in excess of a threshold-- usually the new physician’s direct costs divided by the income rate.

Contract stipulations such as restrictive covenants (i.e, contract provisions restricting the future conduct of the doctor, such as competing with the practice for a certain period after leaving it, or soliciting or engaging with patients of that practice after leaving it) and non-compete clauses might seem problematic, but Still says doctors should expect them, and not sign an agreement if they intend to break it later on.

“If you don’t think it’s fair, then don’t sign,” he says. “Work it out or go somewhere else.” And not all such covenants and clauses carry the same legal weight. “Are they really enforceable in your state based upon precedent?” McLean asks.

To find that out, doctors should consult attorneys with specific experience litigating that type of contractual language. Also, enforceability can depend upon factors such as the practice specialty and location, the specific circumstances of a doctor’s termination, and if a court feels that a non-compete clause  is unreasonable (e.g., preventing a doctor from practicing in a territory that’s much larger than the area from which a practice derives most of its patients).

Termination clauses can be deceptive, as when doctors negotiate multi-year contracts that they think keep them safely employed for that period.

“What they don’t realize is the contract is only as long as their termination clause, so if the termination clause is 90 days, then your contract is really a 90-day contract,” Parker says. “And then what happens if bonuses are due and the person is terminated?”

While a no-cause notice provision might seem to undermine the value of having a contract, there are ­other aspects of the relationship that require contract protections for both parties, such as designated responsibilities and salaries. “With no contract, doctors could be fired at any moment,” Parker cautions.

Both no-cause and for-cause termination clauses can be tricky. Doctors should particularly beware of broad statements like “failure to follow the policies of the practice,” because they might be unaware that they’ve done anything wrong. Ideally, those policies should be spelled out.
Still advises that if there is a vague, unclear or confusing contract clause that could create a misunderstand, where a doctor could unwittingly violate a policy, the doctor should seek contract language to clarify the meaning of the clause. Otherwise, the doctor is subject to the practice’s interpretation of the provision in question.

To sidestep these potential contractual minefields, doctors should hire a healthcare attorney who is steeped in healthcare law to review the contract and assist with the negotiations, says McLean.

Hospitals can be a different story

In some ways, working for a hospital can be like working for a medical practice, but in other ways it can be quite different. In weighing the relative merits of joining a private practice or a hospital, doctors should take those differences into account.

A hospital might be less accommodating than a group practice in the way it treats a doctor. “You go to work for a hospital and it’s all about business decisions and profitability, and if things aren’t working, they’re more likely to fire you than a practice would,” says Still.

As with a medical practice, it’s important to know if physicians or non-physicians are calling the shots at the hospital. McLean implies that hospitals headed by non-physicians may be lower in quality.

“Are enough physicians making decisions to have a medical perspective on healthcare delivery?” asks McLean, who notes that studies show that most of the top 100 healthcare systems are led by physicians. “Having physicians in charge might make doctors more comfortable.”

Contract terms likely are less negotiable with hospitals. “In a hospital situation, where you might have 50 employed doctors, you’re going to get a cookie-cutter contract which says you’ve got four weeks of vacation and one week of CME and here’s your salary,” says Parker.

Sometimes, doctors can have the best of both worlds by joining a private practice that has close relations with a hospital by virtue of having its offices on the hospital campus. These can include perks like preferred parking, free meals in the physician dining room and CME classes, as well as opportunities for personal growth.

Joy, who works on a medical center campus, says doctors in larger and specialty-based practices with that kind of proximity to a hospital can develop productive relationships with the hospital leadership.

While this wouldn’t necessarily involve admitting patients, doctors instead could get to know hospital leaders through service on committees and participate in the leadership’s outreach into the community. In that way, physicians could make themselves known in that community.

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