PHILADELPHIA—“Every contract is like a good recipe; it has certain things that should be in it, and certain things that should not,” says healthcare attorney Joan Roediger, a partner with the Philadelphia law firm of Obermeyer, Rebmann, Maxwell, & Hippel, LLP, and member of the firm’s Healthcare Practice Group. Roediger led the session, “Contract Negotiations for Young Physicians,” presented at the ACR Annual Scientific Meeting in October 2009, by summarizing key issues for young physicians encountering their first foray into employment contract negotiations. Three other presenters at the session addressed opportunities in the industry, private practice, and academic sectors.
You Might Also Like
Explore This IssueFebruary 2010
Also By This Author
All the Zeroes Correct
Understandably, young physicians eagerly peruse their first employment offers to “make sure all the zeroes are correct” in their compensation packages, said Roediger. But other ingredients are just as vital in the recipe of a good contract, and can have consequences that are as far reaching as the base salary and bonuses. Most commonly, the employment process begins with a letter of intent, a document that sets out the terms of the prospective employment agreement. Make sure those key words, “not legally binding,” appear in the letter of intent, Roediger advised physicians, lest you be held to the terms of the letter. She urged participants to consult with an attorney and to ensure they feel comfortable with its terms before signing. “It’s bad form,” she said, “for you to sign the letter of intent and then come back and try to renegotiate the points you already agreed upon.”
Additional legal assistance is mandatory for negotiating a hospital assistance agreement, she asserted. “Nothing gives me more gray hair” than these complex agreements, she noted, because they are often three-way contracts between a physician, a practice, and the hospital that agrees to underwrite the costs of bringing the physician to the community. But watch out: in return for paying moving expenses, a signing bonus, helping with malpractice insurance, and other costs, the hospital often extracts commitments from physicians to stay in the community, and may demand reimbursement if the situation does not work out.
Employment agreements should always clearly state the term of employment and the start date—and make sure you allow yourself some leeway after training and do not have to show up July 1 at your new job, Roediger advised. Other typical clauses address contract renewal periods; termination with and without cause; and stipulate additional expenses to be paid by the practice (medical and Drug Enforcement Administration licenses, hospital staff fees, continuing medical education and society dues, and pager and cell phone costs tend to be standard, Roediger said).
The best bet for handling contract issues is to seek experienced healthcare legal advice. The American Health Lawyers Association (www.healthlawyers.org) is one place to start.
A Well-Informed Decision
Although going into industry tends to be a road less traveled for new rheumatologists, Gregory Dennis, MD, senior director of medical affairs at Human Genome Sciences, Inc. in Rockville, Md., believes such a career can be fulfilling for those interested in research. Applicants can consider careers in general research, clinical trials, medical affairs, and patient safety.
Dr. Dennis underscored Ms. Roediger’s advice on contract negotiations during his presentation at the session. He urged everyone to break down the terms of his or her employment offers, and to clearly identify any areas for desired improvement. He cautioned against making strong demands. Delivering ultimatums regarding employment terms can backfire with prospective employers, he said, because at this stage in their careers, “most individuals are viewed as dispensable.”
While base salaries, sign-on bonuses, and initial stock options are usually negotiable, the annual bonus targets and annual stock option–restricted awards are less so. Since it’s important for physicians to make well-informed decisions, Dr. Dennis displayed several slides enumerating base and mid-level salaries for the general research, clinical research, and medical affairs arenas. A fellow who joins a pharmaceutical company at the individual contributor level in preclinical research can expect a base salary in the $120,000–145,000 range, plus a typical bonus that is 20–22% of the base salary (thus boosting the total annual pay to $140,000–170,000). Base salaries for individual contributors in clinical research are higher, starting in the $205,000–225,000 range.
Eyes on the Prize
Herbert S.B. Baraf, MD, is managing partner of a 12-person, single-specialty rheumatology practice, Arthritis and Rheumatism Associates, in the Washington, D.C., area. He believes private practice offers one of the most satisfying career paths for rheumatologists. His advice: avoid multi-specialty practices, which can be problematic for rheumatologists. “There are complex divisions of revenues and expenses when you mix cognitive and procedural physicians in the same place,” he explained during the session. Better to be in a single-specialty practice where all the physicians are dealing with the same issues.
At their core, contracts are about relationships, said Dr. Baraf, and for that reason the first condition of joining a practice is good chemistry between you and the partners. Make an effort to meet all of the partners, he advises, and do due diligence by checking references, researching their reputation in the community and being “a fly on the wall” among patients in the waiting room.
The contractual arrangement—the nuts and bolts of how you affiliate with and bond to a company—must be fair and equitable, but “it shouldn’t be open ended.” In addition to delineating work hours, call duties, and hospital coverage, the employment agreement should also contain language regarding buy-in to the partnership. As an employee, you are guaranteed your salary, Dr. Baraf reminded his audience. As a partner, you will share in profits as well as risk, so you should also familiarize yourself with the partnership’s overall management and compensation structure. Dr. Baraf’s parting advice to his audience: “Do your homework, select the right practice, read your contract, hire an attorney or accountant or practice consultant, and keep your eye on the prize. The initial contract is a means to an end; that is, partnership status.”
Physician, Know Thyself
Young rheumatologists can achieve satisfying careers in the academic arena as well, said Steven B. Abramson, MD, senior vice president and vice dean for education, faculty, and academic affairs and chief of the division of rheumatology at NYU Hospital for Joint Diseases in New York, during his presentation at the session. However, if this is the path they choose, they must ask themselves, “Am I really equipped, in the major domains of research, education, patient care, and administration, to be successful?”
“A lot of us entered practice when you could be a wonderful teacher, educator and researcher,” recalled Dr. Abramson. But achieving success as the “triple-threat” rheumatologist “is increasingly hard to do, particularly if you want to be successful as a researcher,” he cautions. To successfully land National Institutes of Health funding for their research, physicians now have to choose which of the career paths best suits them. Whether they choose to join academic units as clinician-educators or as investigators, young physicians must have their “eyes wide open” when evaluating prospective divisions and institutions, he said. For instance, does the division’s culture foster tenure-track advancement? Does the division offer three-year fellowships and a pathway for obtaining a masters degree, which is increasingly necessary now for clinical research?
This model has worked well in the rheumatology division at NYU, said Dr. Abramson. Also important, he said, is that mentoring committees be composed of outside faculty who can monitor your career pathway and give objective feedback to your division chief about your career trajectory. To succeed in their research careers, academic physicians must secure employment contracts which allow for at least three years of protected time before they are required to secure their own grants (this allow for 75–80% of their salaried hours to be spent in research) and which provide administrative and monetary support for research technicians and supplies. Not every academic unit is the same, so you must investigate the health and infrastructure of the department. Does the unit, for instance, have the bioinformatics support and strong collaborations with other researchers that can foster your own growth?
During his talk, Dr. Baraf told the young doctors in the audience, “you are at a fork in the road.” He and the others in this afternoon session agreed that sufficient background research, in combination with the appropriate advisers and mentors, can help them find the right fit and a path to a fruitful future. And, Dr. Dennis noted, while salary, bonuses, termination clauses, and other contract details must be attended to, other considerations—such as job satisfaction, security, and happiness—are also important factors in the decision-making process.
Gretchen Henkel is a freelance journalist based in California.