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Physician Sense

What Associate Doctors Must Do Before Signing a Contract

  • Aspiring associate doctors should have legal help when navigating the contract process.

  • Establish a window to opt out of the contract.

  • Spend as much time as you can in the practice.

Aspiring associate doctors fresh out of residency don’t know what they don’t know. The business landscape can be difficult to navigate, says Dough Graham, a senior management consultant at Doctors Management. It pays to study up.

Young physicians are stepping into a setting where they’re trying to understand complex legal language in associate doctor contracts, Graham says. To further complicate things, they’re typically doing this a year prior to completing residency. They need advice and guidance.

“They don’t get the right advice form the attendings that they are working with because they’ve been in academia,” Graham says. “If they are seriously considering going to work for somebody, and it’s going to be on a partnership track, they really should look for some type of adviser, whether it’s an attorney or some sort of consulting firm like ours — and none of them do that.”

RELATED: Signs that You Need an Associate Doctor

Graham adds that this is a time-consuming process that should begin a year prior to the end of residency. Having a lawyer or consultant to guide young physicians through the process ensures that the hiring physician’s timeline is upheld.

Aspiring Partners and Owners

If the young physician’s goal is to ultimately become a partner or owner of the practice, it’s critical that they have a rough understanding of the practice’s value. Graham says that aspiring partners or owners should keep in mind that practice value is a moving target. “When a new doctor comes on, they’re helping to grow the business,” he says. While consultants can project growth and consequently practice values, young doctors should keep in mind that these are just estimates, not guarantees.

There are also no guarantees that a young physician will ultimately enjoy private practice. While it’s common for hiring doctors to include a contractual clause under which they can terminate the contract without cause with a specified amount of notice, associate doctors don’t always ask for the same.

“After a certain period of time, it’s really in the best interest of both parties to walk away without cause, provided that they give a certain amount of notice,” Graham says.

The best way to avoid this situation outright, Graham says, is for the associate doctor to do their due diligence. Spend two or three days in the practice seeing for yourself.

“Come shadow the provider and working the office for a few days. That way you can see the staff, see the general operations and try to understand the EHR technology they’re going to be using.”

Signs that You Need an Associate Doctor

  • Your patient schedule can tell you if the time is right to add an associate doctor.

  • Look for these subtle indicators of a strong candidate.

  • Communicate your plan for transitioning the practice.

If you’re like most doctors in private practice who find themselves in the back half of their careers, you might be thinking that it’s time to bring on an associate doctor and retire comfortably. But can you, your patients, and your business handle it?

Doug Graham, Senior Management Consultant at Doctors Management, says there are several things you need to consider before deciding to hire an associate. Foremost among them is new patient flow.

“New patients are the lifeblood of a practice,” Graham says.

Depending on the specialty, he likes to see at least two-week wait for new patient appointments. If the doctor is only servicing existing patients and there’s no capacity for new ones, that’s a sure sign that they need an associate.

Get to Know Them

The next critical consideration is personality.

“You can’t really do too much due diligence on bringing on a new doctor,” Graham says. That requires more than calling a handful of references and a handful of phone or Skype interviews. When working with clients searching for associate doctors, candidates must visit the practice twice before the doctor makes a decision.

“Anybody can look good on a first visit, but the more time you spend with somebody is beneficial,” Graham says.

Interact with the candidate inside and outside of the office. The more comfortable the candidate becomes, the more their true traits and attitudes will surface. Recently, one of his clients already had a contract ready and was planning to offer it to a candidate during his second visit. But during the visit, the candidate was overbearing and rude to staff, scuttling the offer and averting a disaster.

Subtle Signs of Effective Associate Doctors

Graham says there are obvious signs of a good potential associate doctor, such as a chief residency or an Ivy League education, but often there are more subtle clues on their CVs, dating to college or even high school.

“I’ve never had an issue with candidates who were Eagle Scouts in high school,” Graham says. Other good signs include high undergraduate GPAs and service projects.

Highly motivated associate doctors like this will want to see a clear path to practice ownership. Make that apparent to them, Graham says.

“We’re bringing you on because we want you to share in the ownership and a lot of the decision making, problem solving and growth,” he says. “If there’s not a plan laid out for how you want to incorporate the new associate into the practice, that’s going to be problematic.”

An eager associate, however, doesn’t meant that you shouldn’t take proper precautions. Even after doing your due diligence, a candidate still might not pan out.

“Have language in the contract that allows the doctor to terminate the contract without cause in a certain period of time,” Graham says. The standard is 60-90 days, though the time frame may vary. “It’s more protection for the practice, because it takes a long time to find a new provider.”

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