New job? Read the fine print

There are many factors to consider when weighing a job offer, but most physicians tend to focus on two: Will I be happy working at this practice, and how much money am I going to make?.


There are many factors to consider when weighing a job offer, but most physicians tend to focus on two: Will I be happy working at this practice, and how much money am I going to make?

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“They typically don't focus on other things that, in the long run, are more important,” said Michael F. Schaff, a health care attorney and partner at Wilentz, Goldman & Spitzer in Woodbridge, N.J. “They don't think as much about ‘What happens if it doesn't work out? How do I protect myself? And how can I transition elsewhere if this doesn't work out?’”

Besides salary and benefits, physicians need to focus on longrange goals, said Mr. Schaff. Young doctors, especially, might think a job won't make or break their careers since they'll hold multiple positions in the years ahead. “But they really need to take it seriously because a wrong decision made can cost them tens of thousands of dollars or more down the road,” he said.

Get good advice

One decision physicians need to make up front is whether to hire an attorney to help review a proposed contract, or even to negotiate a contract for them. Depending on the extent of the lawyer's involvement, fees can range from several hundred dollars to several thousand, or perhaps more. Getting a lawyer who specializes in physician employment contracts can help, according to some hospitalists with fresh experience in the job market.

“If you're going to seek legal advice, I think it's important to have the right attorney,” said Jordan Lovy, ACP Member, a hospitalist at Memorial Hermann Hospital–Texas Medical Center in Houston. “You need a lawyer who's familiar with the local market and understands physician employment issues.”

Dr. Lovy said he once took a familiar route and relied on an attorney friend to review the language of a proposed contract. His friend was well-meaning but not experienced in dealing with physician contracts.

He hired a health care lawyer in 2006 when he gave up his own private hospitalist practice at Memorial Hermann to join a group practice there run by IPC The Hospitalist Company, a national company headquartered in North Hollywood, Calif. He said the lawyer helped him realize the value he was bringing to the IPC group and helped him consider “the worst-case scenario. What would it look like if I had to leave the practice? How far away would I have to go and would I be able to keep my referral base?”

Zakir Hussain, ACP Member, an internist in Knoxville, Tenn., is using a lawyer to negotiate a full-time position with a hospitalist practice where he works part-time. He said the negotiations are somewhat complicated because they involve issues of partnership and financial buy-in.

“I wanted a lawyer to be involved in this because the group I was negotiating with was a group I was already working with. I didn't want to jeopardize my current working relationship with them,” said Dr. Hussain. “I thought it would be better coming from a third person. It helped to put another person in the mix and be able to put my demands right up front.”

Ask questions

“It's important to remember that a good contract delineates the rights and responsibilities of both the employer and the employee, so it's important for the employee to understand what they're getting into and what they're not getting into,” said Bruce Armon, a health care partner at Saul Ewing LLP in Philadelphia.

How to negotiate a contract, sort through legal terms and assess the pros and cons of a business opportunity are not things most physicians learn in medical school. Brad Jones, an attorney and president of MedAccord, a Charlottesville, Va., company that analyzes contracts and negotiates for physicians, said physicians presented with proposed contracts shouldn't take anything for granted, whether it be the terms of a restrictive covenant or specifics on malpractice insurance.

“Employers are counting on being able to enforce exactly what is written and everyone should be clear on what that is,” Mr. Jones said.

Some physicians assume that an employer's contract is standard— or perhaps they are told that when interviewing for a position— but shouldn't think they're being handed a boilerplate document that doesn't allow any room for negotiation. “There are all kinds of agreements out there,” said Craig Fowler, vice president, training, recruiting and public relations for Pinnacle Health Group, a physician recruiting company in Atlanta. Even within a group practice, individual contracts may vary.

Pay close attention

Here are tips on several key contract areas that physicians need to consider:

Timelines. A contract should have firm start and expiration dates and also address how renewal will occur. The timelines for termination (both with or without cause) and non-compete clauses also should be clearly spelled out.

Restrictive covenant. Physicians need to assume that the employer believes the non-compete and non-solicitation clauses in the contract are legally enforceable and that the employer will enforce them if they are contested by the departing employee. Deciding to worry about a restrictive covenant if and when the time comes could be costly both in terms of legal bills and the time required to reach a resolution.

While laws relating to restrictive covenants vary from state to state, “reasonable” is the guiding principle. Reasonable means the time and geography restrictions are not overly burdensome to a physician who needs to make a living and the public at large that needs to get care. In a rural area, it might be reasonable to restrict a physician from practicing within 25 or more miles for a year or two; in an urban area, a few blocks or a certain ZIP code may be reasonable. In the case of hospitalists, a restrictive covenant could be specific to the institution where the doctor is employed.

If a hospital is providing funding to a practice to help recruit a physician, employers must follow Stark Law regulations on the use of restrictive covenants—a legal point that it might be wise to get expert guidance on.

“Tail” coverage. It's critical to know if the malpractice policy being offered covers the “tail.” In general, there are two types of malpractice coverage. Under an occurrence-based policy, a physician is in essence covered for any event that happens while she has the insurance, even if the lawsuit is filed after she is no longer covered by the insurance. With a “claims made” policy, the coverage stops when a physician's policy ends, no matter when the action occurred. “Tail” coverage protects physicians from lawsuits that arise later but is initially more expensive to buy.

“Walking out the door, a physician might suddenly discover it's going to cost you $10,000, $15,000, $20,000 to pay your tail coverage,” said R. Jeffrey Taylor, president and chief operating officer for IPC, which provides tail coverage to its employees. If an employment contract does not provide for tail coverage, a doctor might have to take out a loan to pay for it or try to convince a new employer to pick up the cost, not necessarily an easy task.

“Any contract not only sets you up for that job but sets you up for future opportunities, too,” said Mr. Armon. “Nothing can be taken for granted. You need to understand every word, every sentence, every paragraph.”