What to assess in your physician employment contract
What to assess in your physician employment contract

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Pursuing work/life balance as a physician

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In the absence of an income guarantee or base salary, it is not easy for physicians—particularly those whom are the breadwinners for their families—to strike an acceptable balance between dedicated personal and professional time. But both are vital to achieving a reasonable quality of life.

Indeed, this inability to strike such a balance leads many physicians to terminate their private practice employment, where they had initial aspirations of becoming a shareholder or partner, to favor hospital-based employment.

However, even in hospital-based employment models, productivity-based compensation models are gaining popularity —so much so that in the near future (i.e., three years), productivity models will be universal.

Traditional compensation models and work/life balance

Under what is now the “traditional compensation model,” physician employees receive a guaranteed income in the form of a base salary so long as they are employed. (Subject, of course, to renegotiation in light of either party’s ability to terminate at any time without cause upon requisite and agreed-upon advance written notice.)

At its heart, the practice of medicine is a service business. As with any service business, compensation is a direct byproduct of the time spent providing the services that the business provides. For physicians, this has been known to lead to uncompensated call coverage, extended evening clinic hours and weekend hours.

Physicians obligated to provide uncompensated call coverage face additional impediments to spending quality with family or even time alone to decompress and relax. As professional component reimbursements trend downward (with rare exceptions), physicians are forced to dedicate more time and effort to their practice to sustain their incomes. For many physicians, practicing medicine is an all-encompassing endeavor.

A key component of the traditional compensation model is paid time off, whereby a physician has the assurance of sustained payroll disbursements during periods of vacation or approved absence, during which a physician can set aside unencumbered time to be with family and friends.

Productivity compensation models and work/life balance

Juxtaposed to the traditional compensation model is the productivity-based model. In this model, physicians typically are not guaranteed any level of income, but are compensated based on the cash collections or work relative value units (wRVUs) generated from personally performed medical services.

Accordingly, when physicians are not working, they are not generating reimbursements. And when not generating reimbursements, the physicians are not generating income. Accordingly, paid time off is not applicable to a production-based compensation model.

This is not to say that a physician in a production-based model is never able to take time away from his or her practice. Similar to how a physician in solo practice must balance time away from the practice with the need to earn a living, a physician in a productivity-based compensation model must balance time away against income.

Though prudent physicians considering employment under either model would evaluate projected patient volume to estimate their income, this is particularly critical in a production model so as not to incur the financial harm of overestimating the need for the incoming physician’s services.

In a cash collections model, regardless of how many patients are seen or procedures performed, the physician’s base income (i.e., base salary) remains the same.

However, in a production model, the physician’s compensation is a direct reflection of reimbursements generated. No reimbursements equals no compensation.

Additional considerations in identifying whether an employment opportunity presents an acceptable work-life balance are employer expectations and culture. For physicians valuing a work-life balance, as opposed to an earn-all-you-can approach, query prospective employers on the organization’s expectations of your daily investment of time.

Important questions to ask include:

  • How many patients on average are expected to be seen in clinic daily?
  • Are inpatient rounds expected to be performed after hours or before the end of the workday?
  • How many hours each week are expected to be dedicated to administrative duties?
  • How many hours, on average, do physicians in the practice/department work?
  • Are physicians encouraged to take vacation?
  • How many days of vacation are taken annually on average?
  • How many days of monthly call coverage would be required?
  • When on call, how much time is spent on the phone or in the hospital?

I find that those physicians desiring to renew a contract (versus terminate a contract in favor of subsequent employment) have achieved acceptable work-life balance.

Two key components of their satisfaction are ensuring that the services they are expected to provide are consistent with their training, and entering a role that is not laden with administrative duties. Put simply, physicians are most productive and satisfied when engaged in meaningful work.

Seeking work/life balance

In my practice, it is increasingly common for my clients to negotiate more so for an additional week of vacation or a four-day workweek than an additional few thousand dollars. Other common requests are set aside and capped time for clerical work and other administrative duties, or having a large percentage of those clerical duties delegated to other personnel.

No matter what kind of contract you accept, understand how it shapes your time at both home and work.

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Roderick J. Holloman

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