Physician contracts and the female doctor

The healthcare workplace is undergoing profound changes.  Where once a letter and a handshake were enough to create a life-long working relationship between colleagues, now the multiple work settings and relationships create many possibilities.  Understanding not only how to get into the relationship, but also what might happen when you need to leave or are forced out of a relationship is critical.

True case report:

A woman internist arrives at work one Monday morning and before she starts her schedule, one of her “partners” asks to speak to her.  The conversation begins: “Patty, we really have had a great relationship, but I am afraid we have to let you go.  We have rescheduled your patients today for Dr.  Burns.”  Stunned, she responds, “How can you do this to me?  I have been working here for 17 years.  I am really liked by my patients and I get along with everyone well.”  He says, “Well, I am sorry.  We are doing some re-organization and what with retirements coming up, we just don’t need you anymore.  Please remember that you have a non-compete clause for 18 months and a 5 mile radius.”

Unbelievable?  It happens more often than you would like to think.  Dr. Smith came to work for this group right out of residency.  She liked and trusted this group.  She felt really lucky that she had a job.  She felt even luckier that she was able to “negotiate” that she would work 4 days a week for a salary reduced by 25% but with no chance at becoming a “partner.”  She didn’t think she cared and didn’t want the hassles of “partnership.”

She just signed her contract.   She never even read her contract.  She didn’t know she was an employee “at will.”  She didn’t understand that all her hard work and investment in the practice could disappear in a moment.  She thought she would work with these physicians until she retired.

Physicians are notoriously naive and incredibly cavalier about contracts and negotiations … until they are hit with a crisis that forces them to actually read their contract, that is if they even had one.  What’s a woman to do?

More women than ever are entering the medical profession during a time a physicians shortage is predicted.  Our knowledge, skills and training carries more value than ever before.  We have the opportunity to get the “benefit” of a bargain–one of the definitions of a contract.  But in order to do this, we have to understand the power and protection a contract gives us,  if properly negotiated.

Physician contracts are different because of the many regulations in healthcare law.  Stark Laws, anti-kickback regulations, non-compete clauses, non-solicitation clauses, buy-ins, buy-outs, sharing of alternative revenue streams, and limited liability are but a few of the many issues that find their way into physician contracts.  And then for physicians employed by hospitals, the important question, “Whose patient is this anyway?”

For women, we also think about flexible scheduling, maternity benefits, career trajectory consideration, resource allocation, pay equity, and much, much more.  These  issues that have to be discussed up front, before signing on the dotted line.

Not every doctor can diagnose a rash properly, not every attorney can decipher a contract properly or complete a complex negotiation successfully.  Physician contracts are special and it is important to get the right help.  Look for a contract attorney who has extensive experience in physician contracts.

After speaking with this doctor, she was emboldened to negotiate continuing her benefits for the next 4 months while she looked for another position.  She also got an excellent letter of reference.  She was able to stay in the same city, but traveled much further to work.  Some of her patients found her, but mostly she had to start over with new patients.  This time she negotiated a contract that suited her and created a long term career with her new group.  She now understood the value of a contract.

A few critical points:

  1. Protect yourself for a separation no matter how much you like or are liked by the group.  Spell it out first.
  2. Never accept the contract that is “non-negotiable” or “standard” — everything is negotiable and nothing is standard.
  3. Understand your own value in the geographic location you are in — this will drive the negotiations.
  4. Do your homework and think about everything that you want and need and then some.

So, if you have a contract, look at it and understand it.  If you don’t understand it (and they are convoluted), get someone qualified to help.  And when the time comes to renegotiate, think what it is you want and then go into it with a positive sense that you have value that can be leveraged.  Get the right help.  More often than not, you will come out ahead.  It’s worth the investment many times over.

Linda Brodsky is a pediatric surgeon who blogs at Women MD Resources.

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  • ninguem

    Which is why noncompetes in medical employment contracts should be made null and void BY STATUTE. Every medical organization should consider them unethical in unambiguous language.

    If that “woman internist” had been a “woman LAWYER”, that noncompete in her employment contract, would have been considered the unethical practice of law in all 50 states and the District of Columbia.

    • pmanner

      I agree that this is not limited to women, but it’s also not limited to junior physicians. It applies to academic physicians, and to anyone whose practice has been swallowed up by the local hospital.
      It’s fundamentally an issue of disparity of power: a big institution or hospital can fight a legal battle and run up costs even if the legal climate is theoretically favorable to non-enforcement of non-competes.

      • ninguem

        Noncompetes in LAWYER emplloyment contracts are considered the unethical practice of law in all 50 states and the District of Columbia.

        When you read the Bar’s rationale for this prohibtion, they usually say the sort of things you have said.

        I agree with your observation.

        • LBENT

          thanks for all of your comments. the issues of targeted physicians are another story all together. linda

      • ninguem

        I’ll add too, that I’ve seen cases written up in local news media, just in my state, where noncompetes have been invoked in small town medical practices, both by senior docs, and by hospital organizations. That targeted doctor excluded by the noncompete was important to the area, and the community’s ability to access medical care was significantly compromised, covered in local press.

        In the cases I’ve read, the targeted doctor would not have affected the other party’s business at all. Rural hospital organization, if that doc goes independent, where the heck else is he going to refer patients, there’s only one hospital organization for 50 miles.

        It’s just a mentality of a spoiled child taking the ball and going home. To hell with the community’s ability to access healthcare.

        Sure……PROBABLY if that targeted doc sued, the doc could have prevailed. A pyrrhic victory, if the doc spent six figures for the right to practice in East Jerkwater USA.

        The doc just moves to West Jerkwater, or more likely, to a big city.

        There goes another desperately-needed rural doc.


    To all comments: Do not disagree re: non-competes. No matter what stage of your career, you need to know the landscape of the jobs and as soon as you are contacted THAT’S when the negotiations begin. Not outright. They begin by thorough investigation in understanding the job. Knowing this one is right for you. Understanding the culture, the resources, etc.

    As far as attorneys, I just met one in NYS who was a senior partner in a very prestigious law firm, and somehow he had a non-compete in his early retirement buyout. Perhaps it is not as absolute as we might think.

    Being prepared for the business world of medicine and getting the right help is the point of the post. linda brodsky

    • ninguem

      Come on. You can’t tell the difference between a senior lawyer with a business and a new lawyer fresh out of school, with educational debts? Same idea as a senior doctor, or more commonly a hospital organization these days, compared to a new doctor with a quarter-million-dollar debt.

      You know full well that a noncompete in a RETIREMENT BUYOUT is a world of difference from a noncompete FOR EMPLOYMENT.

      I wrote……..that If that “woman internist” had been a “woman LAWYER”, that noncompete IN HER EMPLOYMENT CONTRACT, would have been considered the unethical practice of law in all 50 states and the District of Columbia.

      To spell it out, in a retirement buyout, one party is paying another…….to retire.

      To go away.

      That retiring lawyer has a thing of value. A business. A practice. clients. That retiring lawyer is in a superior, or at least equal, position. Another party is PAYING FOR THAT BUSINESS, and implicit in that is that the lawyer is going away. As in, retiring.
      If you’re paying for that lawyer to retire the practice of law, at least in that area, I’d daresay it would be reasonable to actually expect the lawyer to do what the lawyer explicitly promised to do, that is, retire.

      But, if necessary, I guess I’ll revise what I wrote, that noncompetes in lawyer employment contracts are considered the unethical practice of law, in all 50 states and the Dictrict of Columbia, with the exception that they are explicitly allowed in retirement buyouts.


      • Margalit Gur-Arie

        You know what else is considered unethical by the Bar? Having non lawyers own any kind of interest in a law firm. Practicing attorneys are employed by themselves, by other attorneys, or directly by their only client (corporate attorneys). The only exception is the public defender’s office.

        • ninguem

          Fine with me.

          I’d relate it to the “corporate practice of medicine” laws in many states. I wouldn’t mind having that in medical association ethics codes.

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