Career Planning Seminar

David Obert, DO FACEP, FAAEMAssistant Medical Director

Assistant Clinical Professor of Emergency MedicineUNSOM Emergency Medicine Residency Program

University Medical CenterLas Vegas, Nevada

Today’s Goals

Develop an Organized Approach to the Job Search

Review Some Common Pitfalls in EM Positions

Look at Basics of the Business of Emergency Medicine

Why Do This Talk?

Success is Planned

Failure Just Happens

The CV is done……….Now Identify Priorities

Have you discussed what is important with your family/significant other?

Are your priorities the same?

Important Factors

Location-put the dot on the map

The number one priority of most graduating physicians

Important Factors

Money?The second most important factor…..

How are you paid?You must compare apples to applesHourly plus benefits = Total

Compensation

Important Factors

Employee vs Independent Contractor relationship?

Have you thought about the differences and which you prefer

Independent Contractor a. Minimal control issuesb. Paid gross hourly wage

(you pay your own taxes, FICA, benefits)

c. Freedom to work without restrictions

d. Identity questions- -Who do you work for/Loyalty?

e. Ownership/Equity unlikely

Employee Status

a. Rules/Policies to adhere tob. Employer controlledc. Net hourly pay

-Taxes deductedd. Can have restrictions on outside

worke. Stronger identity to

group/hospital (employer)f. Stability and benefits

Important Factors

Work Environment?Time offShift length

Shorter shifts mean longer career Healthier lifestyle for you Shorter shifts reduce your risk of suits Shorter shifts improve patient satisfaction

Work Environment Importance

How happy is the staff?

How good are the supporting departments?

How friendly/supportive is the medical staff?

How Happy are the Patients?Low patient satisfactions may reflect underlying

problems

Work Pace?How many patients per hour

are you expected to see?2.3-2.5 reasonable in average environment

What is the admission rate?Reflects acuity therefore work/stress load

What interruptions must you suffer?Codes out of the ED?Emergency deliveries?Writing admission orders?

How do you document your work?This is a speed vs risk management issue

Important Factors Summary

You must decide what is important to you

Discuss the factors and get family input

List them in orderMust haveWant to have

You may not find the utopia where a job meets all your criteria

The Phases Of Finding A Job

Identify potential opportunities

Email/phone call screening Acquire general information

Narrow the search to 3 to 5 places

How Do You Identify Potentials?

Print AdsMailingsConferencesInternetColleague

referrals

What Should You Expect From The Potential Employer?

Travel for you and significant other covered for one visit

Reasonable expenses covered

Time to meetDirectorPartnersHospital leadersCommunity tour

Employer Trends Are Location Dependent

In high demand areas or vacation spots, trip expenses may not be coveredUnless you sign

What Do They Expect From You?

Show up as scheduled

Be open and honestExpress your desires/expectations

Don’t lead them on

Schedule adequate time to evaluate the practiceSee the communitySee the hospitalMake an objective evaluation

After The Visit

Phone call or emailIn, out, on hold

Thank you card always a nice touch

Now…………to the 7 Stories

1. Malpractice

You are recruited to a nice group in a nice city, but find the job just isn’t what you expected. Like 63% of new grads, you decide to look for another job about 21 months into your career.

You find you do not have “tail coverage” and it will cost you $43,000 to leave…

Or

You go to a group where malpractice and tail are covered, but when malpractice premiums go up, the group asks you to sign a new contract whereby you assume the responsibility for your tail.

Malpractice: Claims Made vs. Occurrence Insurance

Occurrence: you are covered when the event occurred regardless of when the claim is made

Claims made: you are covered if you are working and paying premiums when the claim is made

Tail coverage required to cover you after you leave a job

Make sure coverage is guaranteed by your employer

You Must Know about Tail Coverage

This is an absolute “must have” …

Must be clearly addressed …who pays? If you leave voluntarily If group fails, gets bought or loses their contract If you get terminated for any reason

Tail Coverage…Why The Big Deal?

Normally 2 ½ times annual premium

Could be over $20,000 in your first year

Must be paid up front, sometimes in three to six installments

Can you afford

$3,000-$9,000 per month

for 6 months?

Is Tail Coverage Required?

Medical Liability Insurance is required

Some groups make you agree to buy tail coverage

Bottom Line

I would not take any position where this issue is not clearly

addressed !!

Assume if it is not mentioned in your contract you don’t have it!

2. Wealth Building/Retirement

You get a job offer which provides health and retirement funding.

1) You find out after moving that you must work a full calendar year, and be there the last day of the year, before you enter the retirement program, or

2) You find out you must be there 5 years to be fully “vested” if you leave

Retirement Program Issues

Delayed entryWhen do you get funded?

VestingWhat does this mean???

Can You Maximize Contributions?

The Cost of Not Funding Retirement

Failure to Fund Fully is a Huge Loss

in the Future

$30,000 invested now could be >$480,000 when you need it at age 65

Why do you need to start early?

Rule of 72Divide your average rate of return into 72That equals doubling the time of your investment

6% return takes 12 years to double

8% return takes 9 years to double

12% return takes 6 years to double

Financial Return Examples at 8% average

$29,000 invested at age 30 could be $464,000 at age 66

If you add an additional $15,000 401k contribution:

$44,000 invested at age 30 could be $704,000 at age 66

What is Vesting?

Retirement is funded, but you get a reduced % if you leave In many programs you must stay 5 years to be vestedRemember … 63% of us change jobs in the first 2 years

If you join an organization with a vesting schedule retirement program, you need to stay for the duration!

Questions to Ask about Retirement

When do I get funded?

How much gets funded?

Who directs the investments?

Is the Money mine if I leave?

How do you Build Wealth?

Avoid big “buy ins”

Avoid big “buy outs” (tails)

Fund your retirement fully

Get a piece of the pie

Be a distance runnerBe in this business for the long term

3. Open Books

You are made a very nice offer to join a physician owned, “democratic” group.

You work there several years, and when you ask about partnership, you find out one or two guys own the contract.

1)You then find out he gets paid substantially more by the hospital than he is paying you and your colleagues.

or

2)You find the owner has “retired” but still manages a very nice living “managing” the group. His son-in-law is one of your colleagues, and he seems to be making a pretty good living.

What are Open Books?

Each physician should be able to determine: - Where the money came from

- Where the money went

- Billing costs

- Management fees

- Salaries

- Expenses

Why are Open Books Important?

It’s YOUR Business!

It’s YOUR Money!

Open Books keep everyone honest- Are all partners equal?

- Is everyone compensated the same?

- What are you paying your business manager?

- Are you getting the best deal on benefits and services?

What is a Democratic Group?

Is it one doctor one vote?

What gets voted upon?

How are votes conducted?

What is the Ownership Structure?

Questions to ask about Ownership

- Who are the owners of the group?

- What % does each own?

- How is partnership offer determined?

- Has anyone not been offered partnership, and if so, why not?

- What does ownership cost, and what does it get me in return?

- Are the books open and when?

4. Equity

You are recruited to a group with the promise of $120/hr for clinical time, and a reasonable buy-in to partnership at 2 years for “about $40,000.”

You actually get paid about $100/hr, and the buy-in will be $120,000.

For that $120,000, you get to share bonuses … but you are not told how much they are.

or

You keep getting promised partnership “next year,” and when it is offered the buy-in is $250,000 … after you have been there 5 years … and you find out there are tiers of ownership.

What is Equal Equity?

Equity is ownership and has some value

In most groups, that value is realized - through periodic bonuses

- as a buy out when you leave

In most groups, the Equity is the value of the Accounts Receivables

Example of AR Calculation

Average Collection per patient = $100

Average volume is 2500 patients/month

Average billing company has 3 months collections pending (ARs)

8 members of group

AR Calculation

$100 x 2500 = $250,000/month

$250,000 x 3 = $750,000 good ARs

Less 12% for billing = $660,000

net good ARs

$660,000/8 = $82,500 each

Reasonable Questions Related to Equity

What is value of ownership per share?

How is that distributed when I leave/retire?

How has value trended?

What is cost of buy-in?What is that money used for?

What is the Return on Investment for the buy-in?

5. Contracts and Non-Competes

You join a group, and after becoming a partial shareholder they get bought by one of the publicly traded mega groups.

To get your share of the buy out, you must sign a restrictive covenant which prohibits you from working in any county in the US where the new group or one of their affiliated companies has a contract, unless you work for them.

OR

You join a single hospital group. They lose the contract, and the new group offers you a position. The former group enforces a restrictive covenant which prohibits you from staying and joining the new group. You must relocate and start over in another city.

Three Important Clauses

Restrictive Covenants

Non-Competes

Non-Interference

Contracts

Restrictive Covenant

Physician agrees not to directly or indirectly engage in, solicit or perform work in Emergency Department of hospital or other ED, except pursuant to the terms of the existing contract agreement. The restrictive covenant may survive the term of the agreement for one or more years.

Restrictive Covenants

May restrict you from a geographic areaWherever the group has a business anywhere in the

countryThat is the catch of affiliated company

You either work for them, or you don’t work in that area

May cause you to relocate

Contracts

Non-Compete Clauses

Physician agrees not to engage in obtaining the contract or rendering services in competition to existing contract. Must state time limitations and geographic boundaries.

Non-Competes Example

You agree not to compete against your group or hospital for a defined time in a specified business

Competing urgicare center

Contracts

Non-Interference

Will not persuade Hospital or other party to terminate group contract, or conspire to take over ED contract individually or with others.

Non-Interference

You can’t undermine the group’s contract

6. Fairness in Compensation

You get hired as a hospital employee. You subsequently find out they hire whoever they can get, pay everyone based upon a straight salary, and in fact pay the fast track doc the same as you.

There is no incentive for working fast, and you quickly discover you are carrying the load when it comes to “moving the meat.”

Incentive Compensation

Have you ever followed the guy who is slow and is always backed up?

How about the guy who makes everyone mad?

Is it better to follow the guy who is fast?

Should everyone earn the same amount?

Incentive CompensationVaries group to group, but …

Compensates based upon some performance criteria:

Patients per hour

RVUs per hour

Percentage of charges generated

Questions about Pay for Performance

What are the rules of the game?What metrics used?

When are you in a pay for performance relationship?

7. Fairness and Equity in Benefits

You and 4 other docs join a group at the same time. You become friends, and find out each of you has a different deal … different benefits, different pay, different moving expenses.

All five of you leave within a year.

This Summarizes Everything Above!

In an Equal Equity Open Book Group this wouldn’t happen- Equal pay- Equal time off- Equal benefits

If everyone is trained alike, they get the same package- Any differences in compensation should be

performance based

In Summary

- Do your homework

- Compare apples and apples

- Never say never

- Don’t burn any bridges

- Be a distance runner

Resources: Job Bank Web Sites

www.aaem.com, “Job Bank”

www.acep.org, “EM Career Central”

www.emra.org, “Job Search”

www.edphysician.com

www.emedhome.com

www.practicelink.com

www.napr.org, (Nat’l Assoc. of Physician Recruiters)