Episode 1: Physician Employment Contracts and Physician Employment Contract Review (Transcript)

SPEAKER_01: Welcome to the Heroes of Health Care podcast special edition. I'm your host Ted Wayne. Our guest today is Roger Bond's CEO of PhysicianCareerAdvisor.com. He has advised physicians on their career for over three decades and has reviewed over 3,000 physician employment contracts and physician partnership agreements with private practices, hospitals, academia and managed care companies. He speaks at medical seminars and conferences with over 2,000 presentations attended by over 150,000 medical and health care professionals. We're excited to have Roger here. So let's jump right in. Roger, I understand there are different types of physician employment contracts available. For example, when a physician is presented with an employment contract, can they just have an attorney review it? Also, large health care systems often say they have what they refer to as a single format contract for all their physicians. Should they just accept that?

SPEAKER_00: Well, that's such a great question because if you've seen one contract, you've only seen one contract. There's every kind of contract you can imagine out there. The majority of course, what you see are full-time employment contracts nowadays. It used to be that way, but it is. Now, then of course you'll also see those that are independent contractors. They're not their employees. And so we have various types that fall under this. And you can have a full-time employment contract such as working for a managed care company. You're working for a hospital. Maybe it's a private group. It's a university and so forth. And those typically can be anywhere from eight pages to 20 pages or much, much longer. And then for the independent contractor, that may be that you're going to contract directly with a hospital and perhaps you're going to be doing some sort of segments of work for them. Maybe it's going to be PRN. That's going to be hourly as needed. Perhaps you're going to have a local tenant actually going through a company for that sort of agreement. And with these contracts, they can be very thorough or they can be very brief. You can take many of the university's so-called contracts. And it's a hiring letter. But it's the same thing. And we use the word contract, by the way. That's a very broad term. Don't get too upset about that. It's an employment agreement of some sort. And so with this employment agreement, say with the university, that's a hiring letter. I have one of those on my desk right now. It's eight pages long. It basically describes what the work is. But not with a lot of detail. And so we're having to ask a lot more questions to be able to ascertain if this is the right position for this academic physician or not. But then you could also maybe at that same institution or maybe it's going to be at a different small or large hospital or practice that they could have a very extensive agreement with. Now the best ones are not going to be overly extensive. I mean, they're like 12, 18 pages, something like that. By the way, I give away bad contracts. There's plenty of them out there when they get terribly long. I had one last week. It was 29 pages long to start with. And there is all sorts of different information we were asking for. And when you have these super long employment agreements, why do they have to have that much information? It is to sew you up in so many different ways, different directions. And notice when you read those, they'll repeat themselves. It'll sound like they're repeating themselves, but they'll come at it from different angles trying to limit you, to control you as their employee. So what we're going to be looking for in these is what is the scope of practice, of course. And some contracts will have that in detail and some have absolutely nothing about that. And they're going to give us some of the basic details, such as the location and the hours and so forth. But all of this can make a huge difference as far as the type of entity that you're going to work for. It could even be, say, that you're going to work for a pharmaceutical firm. Maybe it's a medical equipment firm. All of those agreements can be quite different. And we have to have that depth of knowledge to be able to compare these. I hope you're going to have more than one of these agreements that you're going to be able to compare to. That's what's best for you when we're trying to politely negotiate. Now, I've trained tens of thousands of individuals on the employer's side on how to contract, compensate and employ physicians. And in talking to them about their so-called contracts, their agreements that they have with the physicians of all sorts of agreements, they'll often talk to me about, well, we have this set format, what can we negotiate or which we ask the powers of D that we can change or not change. So I hear it from their side. But then also, of course, from your side, the individual physician, I work with you every day. I do about 150 of these so-called contracts per year. And we see these large organizations will say, oh, we have a standard contract. We don't make any changes. And listen, everybody's willing to make some sort of change if they really want you. Now here's a secret to this. They may truly have a written agreement that's fine. It comes from the powers it be that they're not allowed to change, but they're so much to what we do that's off contract. So it says there in the agreement that you're going to have call coverage, or maybe it even says call coverage is going to be evenly distributed. But what you know is we better get careful definition about that call coverage. How often does that call? Well, even distribution, you thought it was going to be one in six. And you find out that the two senior physicians, they don't take calls at all. So it's one in four. Glad we asked. Wait a minute, who takes the first call? Is that just yours or someone else? How many locations are we talking about for calls? What if you work all weekend? It's super busy and you're a surgeon, general surgeon, and you're at these two hospitals going back and forth, taking care of everything. Are you supposed to be in the clinic at 8am on Monday morning? Or are you going to have it at least that morning off? What about if you take a call that's going to be on a holiday? Do you get the next day off or just you shorten? They shorted you on that. So lots and lots of variables. So when we're taking a look at what they say is the contract is what's in that agreement, that's true. And we analyze every word. But we look at this agreement as a catalyst for us to respond to and then we ask all the fill in the blank us sort of items. We also try to get clarification. In my experience, you could have a contract and agreement that means one thing on this side of the street and then their competitor over here means something else. By the way, you could take one of the very large health organizations with many, many hospitals. That it means one thing in Texas, it means something else in Florida. So we've got to ask for those clarifications. Also, even if we think we know what the answer is, such as they told you verbally, oh, it's this or that, if we think about, well, wait a minute, that's incredibly extensive, important information that it may be that we want to get that in writing because we don't know if that manager is going to be around. He said, oh, the hospital CEO told me that. Hospital CEOs turn over frequently. Let's get that in writing. And that goes in your file. If anyone ever tells you that, oh, if it's not in the contract, it doesn't count. They don't know what they're talking about. If an employer tells you that you signed the contract based on what they told you, you can take that all the way to court. Okay. We're talking about them giving you some money up front. And it could be, first of all, that it's truly going to be a signing bonus that they're going to give you the money as soon as you sign. Many will misuse that term. They may not have been trained in this or not aware that if they don't give you the money until you start the job, it's called either a starting bonus or a commencement bonus, either way they're giving you some of that money up front. Also we typically, if it's broken down by month, let's say you're signing a year ahead of time and they're going to give you one-twelfth per month, and we call that a monthly stipend so different terminology for giving you this money up front. By the way, this is separate from relocation money. If they try to roll in the relocation money, so be it, but we've got to separate it back out when we're thinking about it, is it fair? Okay. How much should this quote signing bonus be? And if you look at my research, it's 5 to 10 percent of the base. You know, we've had to establish these common measurements, this data, across the nation, because these metrics, no one had ever looked at it. And so now we know it's 5 to 10 percent of the base, so it's become standard around the country. And so with that, if you're going to be paid 400,000, then 10 percent is going to be a 40,000 dollar bonus that they're giving you, whether they pay it to you right away or later on or they divide it up into 12 payments. Of course, 5 percent is going to be the proverbial $20,000. That's in addition to any other money that they might give you. Sometimes they're going to give you the signing bonus, let's say, when you start, but they're going to give you a monthly stipend on top of that. Okay. So the question also included about are they going to have this as a forgivable loan? Very common that they want you to come there and stay for some period of time. And they're going to forgive that loan over that period. Let's say that you have to be there for 24 months, 36 months, even 60 months. And so what we typically do is the employer or the hospital, the clinic, what have you, is going to forgive that for each month. You've been there. It used to be there for 36 months, and each month they forgive 136 of that. You can take other entities like some of the big managed care companies that employ their physicians' closed panel medical staff. And they don't give you, quote, a signing bonus, but what they do is loan you money against your earnings. So you're borrowing money against your future earnings and it is still written up like a loan. And you're going to have a loan document or some sort that you're going to sign for any of these written up properly. And so that's okay if you're being paid enough for this. But we have to look at this, what's it rolled in with? Again, they may have the relocation amount in there as well. Red flags within contracts, I deal with this seven days a week. There are so many red flags that we're looking for. And oftentimes it's literally in the written word. You can just see it right there and anyone could recognize it. And sometimes though, it's because they left something out of the employment agreement. And so we have to know enough to ask questions so we can fill in the blank on this. It could be, let's say back to the question on call that they say it's going to be evenly distributed among the physicians. And you think there's going to be eight physicians who are involved with the call. And two physicians don't participate in the call. Where you find out that this call schedule for some are to take care of this region of these particular hospitals. But the one you're going to be involved with is taking care of these other hospitals. I'll give you a case out of Los Angeles. And so what she was being asked to do was to cover once we got the details and you'd ask the questions. To cover seven locations. Four hospitals as well as these very large ambulatory surgery centers. And so she had the seven and that's given on any night could be a weekend could be a holiday. And so when we looked at that, we said, wait a minute. Is it possible to even do seven, especially someone who's brand new. And so we asked them, would you start with two or three? They said, no. Well, could you start with a couple of these and add one, then add one, then add one. And the answer was no, no, and no. So what do you think she ended up doing? She said, no. She wasn't going to take that position. There are plenty of positions out there. You don't have to compromise your life and allow these contracts to control you. So be very careful. Another item that we have to look at in these bad contracts. They try to sew you up as far as perhaps it's the location. Perhaps it's going to be hours. Perhaps it's what you're going to have to do to support other physicians. They're thinking, well, you're the new, maybe younger physician or maybe you are 45 years old, but you're the new doctor and you're going to have to earn your stripes. You're going to take care of this. You're going to take care of this location. You're going to take care of this particular pair mix, such as the Medicare medications. And it's wonderful if you are, but that can also be a massive burnout over time. And because...