December 1998 Bulletin

Don't rush to sign contract for new job

The agreement is protection when there is a failure to communicate or conflict

Laurence Chu, MD, left, discusses the essential elements of a contract with David Mauerhan, MD, center, and Roberto Diaz-Rohena, MD.

The contract you signed in residency is not the contract you sign when you're joining a practice. Do everything you can to know what's in the contract.

Read the contract thoroughly, advised Laurence Chu, MD, a panel member at the teleconference, "First Practice: Strategies for Success," sponsored by the Specialties Societies Care Coalition. The three-part program was beamed by satellite to 27 sites across the country including Northwestern University School of Medicine, The Mayo Clinic and Johns Hopkins University where residents, fellows and faculty members attended.

A panel of specialists from dermatology, ophthalmology, orthopaedic surgery, otolaryngology, plastic surgery and thoracic surgery addressed the challenges of today's marketplace where doing a good job as a physician caring for patients may not be enough to retain patient access. They provided insights on how a physician can standout among other candidates interviewing for a position and strategies for the day-to-day management of a practice.

"Don't be in a hurry to sign the contract," warned Dr. Chu, an otolaryngologist. He suggests retaining a lawyer with experience in medical contracts and familiarity with the laws of the state in which the practice is located.

"If there are attachments and amendments to the contract, be sure they are available," Dr. Chu said. "Remember, there are no standard contracts.

"The contract is not for when everything is rosy; when everyone is agreeing with everything, but for when there is a failure to communicate or when there is a conflict. Then you can deal with the situation, because what is written in the contract is what you are going to get."

The specific components of the contract must begin with the length of the contract, said panelist Roberto Diaz-Rohena, MD, an ophthalmologist. "When will it start and when it will end?" he said. "If there is a renewal (provision), make sure that it says you will be notified about the renewal, otherwise you can be let go very easily."

Dr. Diaz-Rohena, posing a series of questions covering the essentials of a contract, said, "Next are the duties. You must know what you are going to be paid for and what will be expected from you. What are the hours you will be working? What days of the week? Will this be a five-day week or will you be working seven days? Are you going to be working at satellite clinics? Will you be compensated for getting there and how many satellite clinics are there?

"What kind of patients you are going to be seeing? If this is a managed care situation, you may end up seeing all the capitated patients for the employer.

"What are the call requirements? Are you going to be on every night or every weekend while your employer takes time off?"

Panel member David R. Mauerhan, MD, an orthopaedic surgeon, listed the important benefit provisions in a contract. Under the broad term of insurance issues, he cited health insurance, life insurance, disability insurance and "if your malpractice is provided and how it is covered and does it include the tail."

Other benefits are practice development expenses, including "professional fees like medical societies, books, journal subscriptions, whether your CME and your travel is covered," Dr. Mauerhan said. "Are you provided an automobile or automobile allowance? Are your phones or pagers covered under the practice?" Also, he suggested that the physicians learn whether the practice will provide enough physician entertainment allowance "to go out into the referring community to build a practice by doing some entertaining."

Dr. Chu pointed out there are some aspects of the contract that could be held confidential such as the business practices or fee schedule of the practice. Contracts often have restrictive covenants. Dr. Chu said the physician should know the duration of the restrictive convenant and the geographic radius it covers.

Be sure to review the provisions of the contract on termination, Dr. Diaz-Rohena stressed. He pointed out that a contract that includes "termination at will" allows the employer to terminate an employee for any reason, while a provision for "termination for cause" requires specific reasons such as violation of the contract or conviction of a felony.

Dr. Diaz-Rohena also urged physicians to be sure all contingencies are included in the contract from what happens in case of a bankruptcy to whether the physician has to give notice, and how long in advance, if he/she wants to quit the practice.

"The reality is the business side of medicine is something that you not only have to be aware of, but be prepared to deal with," said panelist Steven C. Herber, MD, a plastic surgeon. "It's kind of a shock to run a business at the same time as taking care of patients. We want residents to hit the ground running, rather than finish their residencies and look around saying 'What do I do now?'"

Funding for the joint specialty educational venture was provided by members of the Specialty Societies Care Coalition: the Academy, American Academy of Dermatology, American Academy of Ophthalmology, American Academy of Otolaryngology-Head and Neck Surgery, American College of Cardiology, American Urological Association, the American Society of Plastic and Reconstructive Surgeons and Society of Thoracic Surgeons. Novartis Oncology, Pharmacia & Upjohn and Medeva Pharmaceuticals also provided financial support.

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