Physicians receive no formal training on how to evaluate their employment contract. Many make mistakes in this area. James D. Yurman & Associates, Inc. has extensive experience in this area and can help evaluate your offer to ensure a mutually beneficial experience and avoid costly mistakes.
Chances are the physician is being offered an employment contract that falls into one of the three most common categories:
- Typical Employment Arrangement
During the first stage (usually 3 years) of this relationship, the physician is employed as an employee only, receiving an agreed upon salary, bonus potential and fringe benefits. Thereafter, the physician becomes eligible to purchase an ownership interest in his Employer, and his compensation package is amended accordingly.
- Institutional Employment
One of the most dramatic changes in the medical profession during the past decade has been the transition of the physician in private practice, to the physician as part of a larger medical practice group. Today, the young physician leaving residency is confronted with many new and complex choices and issues. Very few will elect to practice alone. More frequently, the physician will choose to practice as part of a private group practice, or a large health care practice. Substantial regional hospitals, major health care organizations and even some sizable private practices have begun hiring physicians with the understanding that ownership opportunities will be non-existent.
While overall compensation packages are likely to be less lucrative than private practice, the trade-off provided by institutional employment may be more appealing benefits, such as a reduced workload, less administrative responsibilities and long-term employment stability.
- Hospital “Income Guarantee” Arrangements
A different form of employment contract is that which provides for some form of income “guarantee” as an added inducement to the physician. These contracts can be attractive and offer beneficial incentives. However, they are also complex agreements, and froth with potential negatives that must be clearly explained, and fully understood at the outset. For example, before signing one of these agreements, it is imperative to clarify what, if anything, is being “guaranteed” as well as potential liabilities the physician is incurring.
Physicians interested in “Income Guarantee” Arrangements would be well advised to seek professional guidance with James D. Yurman & Associates, Inc.
No matter which of these three-employment contract categories interest you, here’s an 8-step process to follow in your employment search:
James D. Yurman’s 8-Step Employment Process
- START EARLY. It is highly recommended that you begin the process of selecting a practice at least 12 to 18 months prior to the completion of your medical training.
- DETERMINE THE TYPE OF PRACTICE YOU PREFER. What kind of practice will give you the greatest satisfaction and professional fulfillment? General practice or specialization? Would you work better and get more satisfaction in a small or in a large group practice?
- LOOK AT SEVERAL OPPORTUNITIES. Correspond with and interview several prospective practices. It is recommended that at least a dozen prospective opportunities be explored before beginning the selection process.
- SELECT A BENEFICIAL ENVIRONMENT. Do you prefer large cities or small towns? Are certain parts of the country more desirable than others?
- ASK THE RIGHT QUESTIONS. Get the right answers. In which location will you work? What are the typical office hours? What hospitals and other health care facilities will be involved? How will the on-call hours be divided? How will your patient load be developed? What medical equipment/facilities are available to you?
- VISIT BEFORE BUYING. Take your family with you before finalizing a decision. Visit the local schools. Spend time at the hospitals where you will have privileges. Consider the churches, temples, clubs, social and personal amenities important to your future lifestyle.
- ASK FOR A WRITTEN CONTRACT. Once you have narrowed your choice to one or two opportunities ask for a written contract that covers the details.
- SEEK PROFESSIONAL ADVICE. Select a professional advisor who is knowledgeable and qualified to help you evaluate and compare your various opportunities.
Clients of James D. Yurman & Associates Inc. have long had access to experienced professionals who specialize in analyzing employment contracts for physicians. Here’s how the process works:
One of our trained experts will review your employment contract and educate you about the issues that need to be clarified, or otherwise altered. Then you return to your prospective employer to negotiate these issues and alterations. Once you’ve negotiated your arrangement, you’ll return to us for a final review before signing to ensure that this is the optimal arrangement for you. Sometimes in the negotiation process, an employer will change secondary provisions unbeknownst to the physician. We’ll make sure that does not happen to you! The complete fee for this service is only $500, and the entire process can be handled by phone.
For an additional $1,000 ($1,500 total), our experienced team will perform the initial review, and then also negotiate alterations and clarifications directly with your employer. We will then perform a final review with you before you sign your new employment contract offer.
In either case, you must be completely satisfied, or you pay nothing!
If your employment contract contains an additional ownership arrangement, please continue reading to find out more about our services.