Today, I would like to welcome Jon Appino to The Frugal Physician. Jon has been a great resource for me personally for contract questions. Additionally, Contract Diagnostics is a sponsor of this site. He is here to give us a few pointers when reviewing our employment contracts.
Jon Appino of Contract Diagnostics
Jon Appino started his first company at the age of 17 and another at 19. Mr. Appino obtained a BS in Biology, Chemistry, and Economics with a Pre-med focus but after deciding on a business career over medicine he has spent the next 12 years working in both large and small scale Pharmaceutical and Biotech companies in multiple roles as well as start-ups in the healthcare field. He completed his MBA in 2006 and launched his most recent company and passion – Contract Diagnostics, in 2011. He is passionate about the education of physicians with regards to the non-clinical (business) aspects of medicine. He currently lives in the small suburb of Kansas City, Missouri with his wife and two young children.
Four Red Flags in Your Physician Contract
As the saying goes, “The devil is in the details.” When it comes to your physician employment contract, you absolutely want to pay attention to the details. Those pesky details can spell the difference between a great contract and one that you will regret.
This is especially true when you see red flags—details that warn you to stop, pay attention, and address the issue at hand. Here, we will discuss four potential red flags to watch out for when it comes to your contract. We will also take a look at termination provisions and general expectations in your contract.
Red Flag #1 No Clear Termination Provisions
What happens when you quit and move on? How do you handle this, and how does the employer handle this? Those details need to be clearly spelled out. If they are not, you could find yourself in the middle of a very unpleasant situation—legally, emotionally, or financially.
Red Flag #2 No Clear Definition Around Compensation
If your compensation is based on salary, how does it change? This needs to be clearly spelled out. If there is a bonus provision, how does it work? Sometimes these are discretionary, meaning that you get it only if the employer wants to give it. That may not be something you can change in the contract. I wouldn’t say the bonus issue is landmine, but it’s an opportunity to ask some clarifying questions.
Red Flag #3 No Clear Details About How Malpractice Insurance Is Paid
This is yet another area that you absolutely want spelled out in the contract. Additionally, how is tail insurance covered?
Red Flag #4 No Clarity on How Bonuses are Paid on Termination
If you are terminated, will you receive a bonus? How much will it be? When will you receive it? Those may not seem important at the beginning of your employment because you are naturally not thinking about termination then. But it does happen, and you need to think ahead so you are not caught off caught in the event you leave voluntarily or are terminated.
A Few Thoughts
Understand the termination provisions in your contract
We’ve taken far too many calls from physicians who feel like they’ve been wronged at the end of a relationship. Sometimes that does happen, but it’s more often the case that they have not been wronged—they just did not understand the termination provisions and how dollars or bonuses were paid or repaid.
In this case, it’s not that they were misled by the organization. They just didn’t understand the policies, or they didn’t ask the right questions. We take calls more often than one might expect from people who feel that they’ve been ripped off or wronged by their former employer, which may be the case. However, sometimes they just didn’t understand something. Having good granular clarity around those things is critical.
Contracts are for expectations.
We always tell people, “Contracts are for expectations.”
At a very high level, contracts answer the question, “What are you going to do for me, and then what am I going to do for you? What happens if we want to go our own way or we want to end our relationship?”
Let’s dive into “What am I going to do for you?” for a moment.
Here is the bottom line: You are going to give them your time and your expert opinion. We always tell physicians there should be lots of details about your work schedule, location, and other items related to what they expect because you will need to follow through on those if you want to stay employed. It is totally fair that those details should be in the contract.
Now let’s consider “What are you doing for me?” for a moment. Of course, that deals with compensation. You want to make sure that the contract has much detail regarding your base salary, bonuses, other items related to compensation, and how those are paid if the relationship goes awry.
This is not intended to make you suspicious of a potential employer. We only want you to be aware of various ways that your employment relationship can become strained because of different expectations on both sides. These four red flags, plus the other items we discussed, will be a huge help in making sure that you and your potential employer are on the same page when it comes to your contract.
Contract Diagnostics is the only firm in the country with a 100% focus on assisting physicians in the understanding and negotiating of their employment agreements and compensation structures. They review over a thousand contracts a year and have been focusing their time and passion for nearly a decade in this line of work. Their proprietary system has earned nationwide accolades for being results-based and (believe it or not) fun. Contract Diagnostics offers a wide range of review packages with varying price points. They offer flexible, interest-free payment plans over 5-10 months for Residents and Fellows as they complete their training.
Standard Disclaimer: Not meant as individualized financial or medical advice. This is a sponsored post.