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There is nothing that gets my eyes to glaze over faster than having to go over a contract.
I believe contracts are purposely created to make the layperson feel overwhelmed with legalese present that forces you to seek professional help to decipher.
I hate to admit it but when I was offered a contract at my current position I sort of blindly signed it after giving it a cursory once over.
Fortunately I was not burned by this method and have stayed at this job for over 15 years.
I do not advise others to take this action however as not all contracts are created to be mutually beneficial to both parties.
A trusted sponsor of this site, Contract Diagnostics, specializes in thorough analysis of physician contracts and helps you get the most favorable outcome possible.
Spending a small amount of money at the front end can save you thousands of dollars later.
Having a company that specializes in contract review allows you to enter a job eyes wide open and if I had known about them back then I would have gladly utilized their services.
The following post is from Contract Diagnostics to help you identify important points to negotiate on.
The priorities in contract negotiation will always be customized based on the physician’s goals and the employer in question.
A physician might want to stay with an employer for their whole career, or their goal might be to work there for a year and then to leave.
But there are several core considerations in any contract:
- Where are you going to work if it’s a large employer with multiple locations?
- What’s your salary?
- How are they going to pay you?
- How is malpractice insurance structured?
- Where’s the documentation on what it covers?
- Is extended reporting endorsement or tail insurance as some people call it- necessary?
- What happens if tail insurance is needed?
Those things can be very, very specific.
If things work out long term, maybe a detail doesn’t matter, but if there’s a chance that things don’t work out, then those core considerations -wages and insurance- are going to impact your next move.
Your next employer might ask you to provide proof of your prior acts insurance of your last position.
It might cost you $20,000 or $100,000 because of lost wages or misunderstood bonus pay.
Those things should be very clear when it comes to the agreement.
We’ve had many conversations with physicians who come to us and say, “I lost out on 20,000 in my last job,” or “They ripped me off $20,000” or “$50,000.”
The employer might well have ripped off the physician, or it’s possible that the physician didn’t understand the agreement and how the bonus was paid.
They might not have understood how the bonus was paid back if they left, or they might have misunderstood the expectation that it would be paid back.
Sometimes the employer acts in bad faith, and yes, they try to rip off the physician.
Other times, either the contract or the physician is just not clear on that expectation.
This is why it’s so important to have us review the minor details in contracts at the beginning of employment.
They can cost you a lot on the backend when you want to leave a contract.
You don’t want to face a situation where you’re ready to leave but you don’t even know what was included in your contract about lost wages.
When your financial compensation is at stake, you don’t want to find out unexpectedly that you have to pay for what you mistakenly thought was clear in the contract because you didn’t have it reviewed by somebody familiar with physician contract negotiation.
Frequently Overlooked Aspects
Besides clear details on wages and tail insurance, we also find lots of contracts that don’t define call.
They might not specify that call should be equitable or that call should be approved or capped.
Sometimes employers don’t want to put that in, but it’s important for the physician to spell that out.
Here’s a perfect story:
Somebody close to me, a relative actually, was signing a general surgery contract.
They had two surgeons.
He was going to be the third, and they told him, “We have another one signing at the same time as you. You guys are going to start together.”
In that situation, call will be Q4, right?
He signed, but the other physician didn’t sign.
Then they lost somebody over a couple of quality issues.
Now call’s one in two, and it’s in a location that’s not as desirable for some people, so the employer can’t find one, let alone two other surgeons.
Unfortunately, my relative didn’t have his call defined in the contract.
They’re asking him to take more call.
He’s forced, if you will, to take more call.
They’re paying him, but the rate is less than what he feels his time is worth to take call.
Now he’s got a couple of options, right?
He can leave if he wants to.
But that would cost him a lot of money and inconvenience and disruption.
They gave him bonuses and dollars up front and student loan paybacks, and he bought a home.
He can try to renegotiate, but he doesn’t have a whole lot of negotiating capital with a noncompete, and he just built a big house.
Or he can just suck it up and do the call, which does not make him happy.
His wife’s not happy, his kids don’t see him as much, but that’s the process in some contracts.
This is a real-life example of why it’s vital to include something as simple as defining your call in your contract.
When you make your contract, have your call defined.
Make sure it’s equitable, and then cap it.
Specify compensation, and make the compensation painful for the employers so they can get locums in there.
Call has to be confident, of course.
Make it really expensive for them to keep having you on call if they don’t want to bring locums in.
Something as small as that would be really important and often overlooked by physicians.
These are some sticking points that every contract should define:
Where and when you work, how and how much you’re paid, how your tail insurances and bonuses are affected if you leave, and the small but important matter of specifying call.
Avoid the pain of unexpected lost wages and lost time with family by having Contract Diagnostics look over your contracts before you sign.
If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”
Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
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