Ins and Outs of Negotiating a Private Practice Job

Ins and Outs of Negotiating a Private Practice Job Paul E. Wallner, DO, FACR, FAOCR, FASTRO, FACROSenior Vice President for Medical Affairs21st Century Oncology, LLCAssociate Executive Director for Radiation OncologyThe American Board of Radiology

Practice Experience • Academic • Private practice • Federal government • Corporate employee Not recruiting and not representing either 21st Century Oncology or the ABR

Wallner’s “Rules” of the “Game”

Rule #1 Relax and try to enjoy the experience!

Rule #2 If the “perfect” job did exist, I would be an applicant!

Rule #6 Make no assumptions!

Rule #7 Bay-area ethnocentrism works: if you live in the Bay-area and are ready to retire!

Initiating the Job Search • Timing – it’s never too soon! • Look in a mirror – consider your goals and needs • Cast a wide net • Get the word out – Chair, Program Director, faculty, friends, contacts • Muster your resources – update your resume • Avoid “cold call” recruiters • Sign nothing! • Role of rotations? • Due diligence is critical

Post-training Opportunities • Academic • Government (Federal and State) • Private Practice • Solo, Group, Partnership, “Corporate” • Corporate (non-clinical)

Private Practice Definition “a professional business (such as that of a lawyer or doctor) that is not controlled or paid for by the government or a larger company (such as a hospital)” Source: Merriam-Webster On-Line “the work of a professional health care provider who is independent of economic or policy control by professional peers except for licensing and other legal restrictions. Source: Mosby Medical Dictionary

Location • Consider your nuclear and extended family • Consider non-work opportunities • Consider your “fit” into a community • Consider cost of living • Consider schools • Consider opportunities for spending • Consider the practice and practice environment • Fantasy might be better than reality

Business Relationships • Employee - without partnership opportunity • Large corporation model • Ideal for part-time employment • Employee – with partnership opportunity • Don’t expect guarantees and be aware of past history • Partner • Understand the risk versus benefit ratio • Understand the legal implications • Partnership is not (necessarily) the Holy Grail • Owner/operator • Sub-contractor

Contracts (general considerations) • Get local legal advice – YOUR OWN! • Make no assumptions! • Everything is not necessarily negotiable • Oral commitments are not necessarily binding

Contracts (specific considerations) • Term (length) • Financial Terms • Benefits • Termination • Non-compete/ restrictive covenant • Coverage • Future relationship • Residency requirements • Board certification requirements • Dispute resolution

Term (length) • Initial contract is typically for one year • Beware of long contract terms • Review roll-over language carefully • Salary increases • Bonus (incentive) increases • Vacation increases • Expense reimbursement increases • Change in benefits

Financial Terms • Salary • Incentives • Are goals measurable and attainable • Who controls attainability • Payment schedule • Non-clinical activities • Total package value • Payment schedule • Increase at roll-over

Benefits(Employee versus sub-contractor) • Pension/ 401(k) – contribution(s), vesting • Profit-sharing - vesting • Insurance – health, life, AD&D, general liability, umbrella • Automobile • Meetings • Journals • Memberships • Medical/other licenses • Medical liability insurance

Termination • Notice period • For cause • Specify • Remediation details and period • Multi-site group issue • Not for cause (employee at will) • Restrictive covenant waiver • Payment of money owed

Restrictive Covenant(non-competition) • Types: non-competition, non-solicitation • Review local laws and decisions • “Rule of reasonableness” – physician/patient harm • Specific practice prohibitions • Hospital privileges – co-terminus? • Distance • Specific mileage • County • Proximity to practice • Medicare region • Term • Typically 18-24 months

Coverage/Call • Frequency • Distance – especially for multi-site practices • Back-up – for unfamiliar issues

Future Relationship • Length of subsequent contracts • Partnership potential • Precise nature of partnership • Partnership valuation • Buy-in • Buy-out (departure versus death) • Asset potential

Partnership: The Holy (or holey?) Grail? Understand exactly what you are getting into! Understand all details of this particular partnership Types of Partnerships General Limited

Partnership Issues • Consider both cultural and financial aspects • Review existing partnership documents • Get everything in writing • Consider the issues as you would any financial transaction • Consider risks and benefits • The offer is great for the ego, BUT remember, this is just a business transaction

Partnership Considerations • Long-term implications to you and your family (divesting can make a divorce look easy) • “Buy-in” periods and amounts • Partnership “culture” • How are differences handled • How are decisions made – “entrenched leadership”

Financial Issues of Partnership • Average income: trailing 5+/- years • Accounts receivable • History, patient base, payer base, procedure mix, 90-day aging • Overhead and debt load • Look for shadow employees and costs • Goodwill • Real Estate and equipment optional or required • Review of the practice environment

Board Certification Requirements • Typically three years from anniversary of eligibility or hire • Current meaning of “Board Eligibility” • Hospital rules/regulations • Managed care relationships/contracts

Dispute Resolution • Method • Litigation versus arbitration • Specify details • Costs • Venue

Transition Considerations • Relocation expenses – fixed, total, timed • Rent versus buy • Health care coverage – COBRA payment • Revenue stream issues – household budgets • State licensure issues • Hospital privileges

Questions?

Ins and Outs of Negotiating a Private Practice Job