Watch out for disguised or indirect non-compete clauses in physician contracts
One of the biggest issues new hires of medical groups deal with is misunderstanding the enforceability of restrictive covenants and non-compete clauses. Add to this the trickiness of employers telling them “we do not have restrictive covenants” when other provisions exist that essentially act as restrictive covenants. For example, an employer may offer a position with “no restrictive covenants” but the physician contract has a termination fee that acts as an indirect “restrictive covenant buyout.”
Watch out for termination provisions that can cause significant consequences
Negotiate restrictive covenants by offering palatable alternatives
Most physician contracts for employment relsationships or partnership agreements use language that is designed to protect the employer’s interests. A common provision used for this purpose is a restrictive covenant. These covenants provide much needed protection for the employer and they are a legitimate method used to prevent the business and its partners from experiencing unnecessary financial loss. For example, an employed doctor could build a successful practice by leveraging the stability and reputation of an existing group, later terminate the relationship and then, pull existing or prospective patients away from the group. Additionally, privileged information originated and maintained by the existing practice may benefit the terminated doctor in a way that causes unwanted competition. Continue reading…
Have clear objectives during physician contract negotiation.
If you do not have clear objectives when discussing your agreement with your employer, you could be signing an agreement that will cause uncertainty and unhappiness in the future. You should understand your own objectives and express them to your potential employer during negotiation to achieve an agreeable compromise.
Give immediate, continuous feedback to the employer.
Make an investment in your career with professional counsel to avoid future pitfalls and negotiate better terms
Before you sign on the dotted line, protect the foundation of your career with a physician contract review by a physician contract expert.
Signing physician contracts for employment relationships, partnership agreements, business formation documents and lease contracts is common for physicians who have completed their training. According to the 2010 Physician Retention Survey by the American Medical Group Association and Cejka Search, about 50% of doctors leave their first employer within three years and about 60% leave within five years. Therefore, it is recommended that doctors have a plan in place for dealing with multiple physician contracts. Continue reading…
Ask what type of malpractice insurance is provided before signing on with a new employer
Employers typically provide physician malpractice insurance and it should be evaluated before signing.
Most employers provide professional liability insurance, also known as physician malpractice insurance, as a part of the employment benefits package. Even if a physician is employed as an independent contractor, in most cases, the corporation or group covers the cost of this benefit. But what exactly are they likely to cover?
On the surface, physician malpractice insurance seems simple enough, but there are many factors that must be taken into account. A working knowledge of how this type of insurance works is required to accurately assess the coverage being offered. Continue reading…
The specialized nature of a physician’s occupation requires a specialized plan for protecting their most important asset – their “intellectual capital and ability to work.” Therefore, selecting the right disability insurance is a strategic choice in a physician’s overall risk management plan.
The Case for Adequate Coverage
In most cases, a physician’s career spans 20-30 years depending on when they finish their training. Over those years, a physician can earn $10 – $20 million, which is the return on their investment in their medical education and commitment to their patients through the years.
Get ready to evaluate upcoming job opportunities/changes before running out of time
Begin interviewing and evaluating employment/partnership opportunities one to two years before finishing training or at least six months before the initial term of your current contract.
Residents and fellows have often told us that they receive very little training in the business and financial areas that are critical to beginning their career after completing training. Many find their last year and especially the final months to be a sprint, having to cram many very important things in all at once. Such as… Continue reading…
Be prepared for employment interviews by knowing what to look for, what to ask, how to compare and start the negotiation process
Since physicians are trained to practice medicine and not to interview or negotiate, it is common for many to find themselves unsure of exactly what to look for in a potential employment relationship.
A key indicator of this problem is that about 60% of physicians who leave their employer do so within the first five years, according to the 2010 Physician Retention Survey by the American Medical Group Association and Cejka Search. Continue reading…
Letters of Intent within Contract Negotiation Process
Be careful not to “tie your negotiation hands” when signing an offer letter.
Many employers use a Letter of Intent, also known as an Offer Letter, to get new physicians to agree to certain terms before they draft the actual employment contract. This is a routine part of the negotiation process, but it should not be treated as such.
Sometimes the Offer Letter is written in such a way that it is binding and other times it is not. The key point here is to make sure that when signing an Offer Letter, the employer knows that you are signing it without settling on the final terms until you have reviewed the entire contract. It is advisable to consult with an experienced contract attorney early in the process, even before a letter of intent is on the table, so you can address key terms up front. The longer you wait to bring up concerns and areas of negotiation, the harder it will become to get the employer to consider alternate terms. Continue reading…
Using Multiple Offers for Contract Negotiation
Having multiple employment offers provides additional leverage during contract negotiations
When physicians are considering more than one employment offer, they often have additional leverage during negotiations. The reason for this is that the physician can utilize the strengths of each offer as a way to request changes in the competing offer(s).
For a very simplified example, all else being equal, Employer A offers a compensation package of $200,000 with a signing bonus of $20,000 while Employer B offers $215,000 and no signing bonus. Continue reading…