In this episode of BackTable ENT, Dr. Varun Varadarajan speaks with Michael Johnson, a business lawyer, about evaluating and negotiating physician employment contracts in private practice and academic settings.

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Reflect on how this Podcast applies to your day-to-day and earn free AMA PRA Category 1 CMEs: https://earnc.me/nqV1Cs

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SHOW NOTES

First Michael explains how hiring a contract lawyer can help physicians understand their employment contracts and prioritize their negotiations. He notes that there are pros and cons to all of these contracts, but they are not written to be read very easily by people without legal backgrounds to understand. He adds that although local lawyers may have intimate knowledge of the geographic area, finding a physician contract lawyer is most important. Then, he explains the “trinity of physician contracts”, which are the three most important factors of employment: compensation, obligations, and exit strategy. Additional clauses include non-compete clauses, non-solicit clauses, and malpractice tail expenses. He explains that accepting a base salary does not prevent future salary negotiations.

Next, Michael talks about private practice contract considerations, such as business risks, salary growth, the potential of selling the practice, private equity, and partnership tracks. He advises delaying partnership track if buy-in is too high or if the physician has different financial priorities. Advantages to partnership include more decision-making, autonomy, and ancillary revenue. Other factors he advises to research before signing a contract include payer mix distribution and the distribution of patients. He briefly explains what hospital recruitment agreements are. Although they may offer more competitive salaries than a stand alone private practice contract, they are often more complicated to understand.

Then, he discusses academic medicine contracts, which can offer different opportunities than just increased profits. He warns physicians to be aware of changes in administration and department turnover, as these events can lead to unplanned and unwanted shifts in obligations. He also notes that through the RVU system, teaching and administrative duties are not compensated. Thus, one of his goals is to protect physicians from being overworked.

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RESOURCES

Michael Johnson’s Website:

https://www.michaeljohnsonlegal.com/physician-contracts/

Michael Johnson’s Instagram:

https://www.instagram.com/physiciancontracts/

Episode 45- Private Equity: Savior or Existential Threat?

https://www.backtable.com/shows/ent/podcasts/45/private-equity-savior-or-existential-threat