Physician Employment Contracts

Varun Verma MD- Physician Employment Contracts on the JoinAndwise.com platform

Originally published on the Andwise Blog.
Andwise empowers physicians to take control of their financial future.Founded by physicians and technologists who previously launched salary transparency and career navigation tools at Doximity™, we aim to help you achieve financial independence without it burning you out.

Physician employment contracts are sometimes incredibly complicated documents. It can be difficult to understand them, and it can be daunting trying to negotiate anything. Some of us simply focus on compensation and not much else. This is a mistake. Before signing an employment contract, every physician should take time to understand key sections of the contract. If you don’t have the bandwidth to do this yourself, there are lawyers who specialize in contract review. Additionally, Andwise has built a contract intelligence tool to highlight some clauses that will be of interest to most physicians so that you can have some awareness and make more informed decisions.

The contract term, compensation, benefits, non-competes, and duties/responsibilities are the main areas of concern for many of us. Compensation models can vary widely by specialty with some including only a salary, others include a salary plus bonuses based on productivity bonuses and quality performance bonuses may also be added, and others seem to be strictly based on productivity models with no base salary. It is also imperative to be aware of geographic non-competes when reviewing employment contracts. These can severely limit your ability to earn a living where your family is settled (think about your house, the importance of your kids in their current schools, your extended family and friends in the area, and/or your spouse/partner’s job).

Here’s a few other things to look out for based on my previous experiences being an employed hospital physician across a dozen healthcare systems:

1/ Termination without cause

Every contract will list a ‘Termination for Cause by Employer’ section that has many reasons your employer may fire you – lapses or ineligibility to renew your medical license, certain violations reported to your state medical licensing board, if you lose medical staff membership or clinical privileges at any partner hospital/clinic, if you’re convicted of a felony or serious criminal offense, if you are struck down with total disability and unable to perform your job role, and many other things. Read this section carefully, and act accordingly.

However, there is also another section that you should read carefully. Despite having a one- or two-year contract signed, there is usually a legal way for either party to terminate the relationship early that has nothing to do with your ability to do your work. Remember that this may be a blessing or a curse depending on your circumstance. Since you have no idea how day-to-day life as an employee may be just from a site visit and interview, you may find yourself unhappy, overworked, and keen to move on and find other opportunities. This kind of clause can help you escape your misery without having to ‘tough it out’ for the entire contract duration. Also, many unforeseen things happen in life such as marriage, divorce, illness etc. that may necessitate you having to leave your current job.

On the other hand – your employer may decide that although you’re technically competent, haven’t broken any of the bylaws, haven’t lost your license or failed a drug test and hence they can’t fire you ‘for cause’ … you may just not be a good match for their organization. Or something else may have changed on their end – maybe they need to slash the budget, close down your service line, or have decided to replace with you an advanced practice provider – this clause gives them the ability to get rid of you without having to keep you on for the full duration of the contract.

When negotiating the number of days – remember that getting credentialed at any new job can take some time (especially if you’re moving out of state). 90 days seems standard in many contracts I’ve seen, I would be wary of 180 day clauses because being forced to stay in an unpleasant situation will make it even more unbearable. However, I would be careful in trying to negotiate this clause down below 60 days because even if all your ducks are in a row for your new job – bureaucracy and delays within credentialing committees aren’t uncommon (and most places only have such teams meet only once a month). If you don’t rely on your clinical income to pay your bills and live life – and you value the freedom to walk away – then maybe a fewer number of days is ideal for you.

Look for something similar to this: “Termination Without Cause by Either Party. Either Party may terminate this Agreement without cause by providing XX  days written notice of termination to the other Party.”

 

2/ Who covers the cost of tail malpractice insurance

Tail coverage is liability coverage for physicians that extends beyond their previous ‘claims-made’ medical malpractice insurance coverage. If you had an ‘occurrence based’ malpractice policy in force while you were working, you will not need tail-coverage when you change jobs or retire.

The reason you need tail coverage is because States have different statutes of limitations to bring forward medical malpractice claims. You could get hit with a malpractice claim years after your employment. It’s likely in your best interest to make sure your employer will pay for this since depending on your specialty it can be very expensive. If your contract doesn’t specify who will pay – that isn’t a good sign, and it will undoubtedly create confusion, lead to disputes, and ultimately you may find yourself on the hook. One of my plastic surgeon friends had to split the cost of $38,000 with his former employer because the employment contract failed to specify who would pay and neither party was interested in ‘lawyering up’ and suing the other.

Look for something similar to this: “Employer shall purchase on behalf of Physician appropriate extended reporting insurance coverage (“tail coverage”) for claims, demands, or actions reported in future years for acts or omissions during the period Physician is employed by Employer.”

3/ Limitations on your side gigs/“exclusive engagement”

Since employers expect you to be focused on your time at work – they can and often do stipulate that you need written approval ahead of time for any outside work as a healthcare professional. If this is something you are interested in pursuing, perhaps it is best to have the conversation ahead of time and have it written into your employment contract. You won’t have much recourse if you sign the employment contract with prohibitions, and if your request is denied at a later time.

An example of the language is: “Physician shall only provide professional, clinical, managerial, directive, consultative or other services as an employee of Employer, and shall not provide professional, clinical, managerial, directive, consultative or other services to or on behalf of any third party, whether or not for compensation, without Employer’s prior written consent.”

Also, obviously your employer will not cover the malpractice insurance for your side gig and they often have terminology to outline this: e.g. “ Physician understands that in the event Physician provides such services to or on behalf of any third party, Physician shall be responsible for securing insurance coverage for any such services and shall not be covered in connection with such services by Employer’s provided insurance coverage.”

 

4/ Royalties and intellectual property

Have an awesome idea for writing a book or invention? Don’t get ahead of yourself since your employer may lay claim to a percentage or all of your work. If you’re a full-time employee, your employers are paying for your full time effort and you may have a hard time proving you didn’t use company resources while working on the project.

They may specify that you’re only eligible for a fixed dollar amount of profits, or a percentage, or all of it goes to the institution.

Examples of such language Institutions include to stake their claim:

Fixed Dollar Amount

e.g. 1 “If Physician, with the prior written approval of the Employer, generates honoraria, royalties or other revenues in connection with giving lectures, writing books or articles, or carrying out medical/legal reviews, Physician may retain only such revenue up to a maximum amount of XX Thousand Dollars ($XX,000.00) per year. Employer will be entitled to any amount more than XX Thousand Dollars ($XX,000.00) per year.”

Percentage

e.g. 2 “In general, royalties on Inventions, Copyrightable Works, and Tangible

Research Property, net of certain expenses attributable to protecting and licensing the

property, are distributed as follows: 25% to the Creators, 25% to the Creators’

Laboratory or Unit, 25% to the Creators’ Department or Service and 25% to the

Creators’ Institution.”

They own it all.

e.g. 3 “The Medical System owns all Intellectual Property, whether tangible or intangible, developed by an Employee within the Scope of Employment or using Medical System Resource”

Varun Verma M.D. is a board-certified internal medicine physician, patient advocate, entrepreneur and author.  He is a co-founder of Andwise – a company dedicated to helping physicians thrive. Dr. Verma graduated from New York University, Rutgers Robert Wood Johnson Medical School, and returned to New York University for his internal medicine residency. Since then he has worked in a dozen hospitals, across five states and three countries. In addition to his clinical pursuits – he is a published author, has co-founded a venture-backed healthcare IT startup, and serves as an advisor to startups. His interests include patient advocacy, patient safety, physician burnout, healthcare professional wellness, healthcare startups, healthcare IT, and quality improvement.

 

The information contained in the Andwise blog is for educational purposes only. It  should not be considered financial, legal or medical advice. The author and Andwise Inc. disclaim any and all liability to any party for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of the blog. The blog is provided as is, and without warranties.

Advice For New Physicians: Thriving During Your Residency Odyssey

Even though my own internship was a decade ago, I vividly remember the transition from student to resident. Residency was monumental in my path to becoming a physician. There were obvious changes; people now called me “doctor,” my misshapen short white coat was upgraded to a comforting full length one, and I was often the first one paged to respond to patient problems. Coupled with the positive aspects though, I also faced some challenges. I struggled with depression, my relationship with my girlfriend was strained, and I felt overwhelmed as I contemplated switching specialties after my second year (from ophthalmology to internal medicine).

Despite the stress, I look back with fond recollection and a realization that the tremendous experiences and camaraderie can never again be replicated. As a resident, I was privileged to help take care of an underserved population in New York City, learned from inspiring teachers, and worked hard alongside talented co-residents (some of whom will undoubtedly be lifelong friends, and one of whom I married).

This is my advice for thriving during your own residency odyssey:

Take Care of Yourself.

This sounds obvious but not enough residents make this a priority. News headlines and blogs are exploding with discussions about physician burnout (and sadly also the prevalence of physician suicide). It’s imperative that we begin investing deliberate effort into physician wellness. My four cups of coffee per day, depression-fueled binging on cookies at midnight, lack of exercise, and suboptimal sleep did not make for good health. By the end of residency I weighed nearly 15lbs more than at the start. The simple fact is that if you don’t take care of yourself, then you won’t be able to effectively take care of your patients. Whatever challenges you face, you must seek help from loved ones, peers and professionals to actively manage them. Too many highly-functional intelligent professionals try to power through obstacles and then one day shatter because they refuse to tackle problems in the manner as they would advise their patients.

Be Interested in Others.

This starts with your patients. Mrs S is not just “some demented lady in bed 3.” Taking time to truly learn about the patient will help you maintain empathy, and get you through the brutal paperwork, bureaucracy and inefficiency that is omnipresent in healthcare. This attitude should also extend to your coworkers, nurses, techs, and all the non-physician professionals that make healthcare possible. You’ll have to interact with these nice folks for at least a year (and maybe 7 years if you become a neurosurgeon). Finally, learn their names and introduce yourself. As Dale Carnegie teaches “a person’s name is the sweetest sound to that person.”

Make Time to Learn.

Realize it takes time and effort to acquire knowledge. A brilliant critical care attending once barked at me “reading UpToDate is not the only reading you need to do.” I scoffed at the time because I was looking for a quick-fix, but of course he was right. Making a sincere consistent effort to learn despite your difficult day is a real challenge. Did you do well in medical school and on Step 1, 2 and 3? Congratulations, but now all of that is behind you. Having a baseline knowledge is a prerequisite but not the end point. Remember that you’re not being judged by your performance on a multiple choice test anymore… real patient lives are on the line.The best residents I’ve seen begin reading board review materials as they go along during their training, rather than trying to cram in learning at the end. Malcolm Gladwell notes that 10,000 hours of “deliberate practice” are needed to become world-class in any field.

Don’t Abandon Your Other Passions.

Repeat after me: I will have a life outside of being a physician. You of course already know that there are no guarantees in life and time only moves in one direction. I am telling you very frankly that physicians can become patients at any moment, and that the future is actually quite uncertain. During residency I made it my mission to go overseas during every single vacation I had. I ate a lot of instant noodles to save up for these adventures, but it was well worth it. I also made time every week to reunite with old friends for a relaxing dinner. Many people do make time for things they love, but there are a few that seem to never escape the pull of the hospital. These physicians seem to be at greater risk for burnout. Plus, neglecting the outside world doesn’t guarantee that you’ll be smarter or save more patients than if you step away to energize during your time off.  I implore you to not abandon your other passions for your medical work. Make sure you live all aspects of your life.

Learn the Rules.

Every place you will ever work will have its own culture and set of rules. If you’ve made it this far you’ve probably realized that healthcare can feel like a dog-eat-dog world; with a hierarchy and rituals that must be respected. Dr A likes labs presented a certain way, Dr Z likes interns to be at the front and center of case presentations, but Dr Q wants you all to shut up, be invisible and listen to the attending. All of it is irrelevant in the end, and yet all of it is vitally important for your survival in training. Millions have come before you through this gauntlet. Learn the rules of the game, and you will thrive.

Realize That Criticism Is Not Personal.

When I was an intern, I responded to a rapid response that turned out to be a presyncopal episode in a patient that had just finished dialysis. I examined the patient, analyzed the labs, talked to the nursing staff, and initiated an appropriate plan (a small bolus of IV fluids). Immediately after I was finished, the private attending appeared and berated me in front of everyone. “You are the worst intern I have ever encountered!” I was frozen, I felt like crying, and I could feel my entire face quivering. What had I done that was so terrible? I knew I wasn’t encyclopedic in my medical knowledge but “the worst” seemed harsh. He was basically angry that I had touched “his patient” despite the fact that it was my job to go to rapid responses. Many will undoubtedly recall similar stories of people unloading their frustrations. You have little control over the personal lives or toxic personality traits of others. Learn from your mistakes, pay attention to actionable criticism from superiors, but don’t let random angry ramblings get you down.

Resolve to Be Better.

Having now worked as a hospitalist in a dozen different hospitals around the US – I’ve made it a goal to improve my interactions with coworkers. Despite this, I’ve had my momentarily despicable episodes. In one of my first attending jobs I became extremely irate with a nurse after she openly questioned my management in front of a patient’s family. I cut her off mid-sentence, presented her with the science, reiterated my sound treatment plan and then stormed off rather dramatically. However, I returned to the unit 10 minutes later to apologize for my actions. I remembered how horrible some of my residency interactions made me feel and realized that she was speaking out in the interest of the patient’s safety. I obviously should have acted differently. It takes conscious effort to not become that which you despise.

Remember Your Oath.

The Hippocratic Oath may have been conceived in ancient times, but it is still sacred and relevant. Every year the media is flooded by some inconceivable story of professionals doing bad things: scandals, billing fraud, unnecessary procedures, taking kickbacks… the list is endless. Strive hard to not to become one of these people. It’s bad for your career, it’s horrible for your family, and it is a complete waste of your talents and sacrifice.

I wish you well in your journey!

 

Varun Verma MD is a board-certified Internal Medicine physician who works as a hospitalist
Dr Verma


Varun Verma M.D.
is a board-certified internal medicine physician who practices as a hospitalist. He believes that healthcare is a human right, and has worked across the US and internationally in resource-limited settings. You can read more of his posts at his blog, and connect with him via Twitter or Facebook.