BEFORE JOINING A MEDICAL GROUP, YOU MUST LEARN THE ANSWERS TO THE FOLLOWING QUESTIONS
1. Who owns the property where your office is located?
2. If one or more partners own the property, do they charge your Group rent for the space it occupies? To understand this, let’s say that your Group has three doctors. Dr. Senior Citizen bought the building 15 years ago, where your office is located. He’s now the landlord. Dr. Middle Aged, and Dr. Young Un’ are employees of the Group. Your Group then pays rent, as it always did to the landlord. But now, the landlord just happens to be the senior partner of the Group. In reality, he’s paying himself money from his practice for rent. Believe it or not, this is totally legitimate. He’s using pre-tax dollars to pay his office rent. He’s then receiving rent from the Group to pay any mortgage or other expenses he has on the building, like maintenance and upgrades. I’ll bet you anything that he’s making a profit on his investment. It’s a strange situation and gives the appearance that there’s something wrong with this set-up, but most times there’s nothing wrong with doing this. The senior partner could just as easily have bought a building down the street. But shouldn’t Dr. Senior Citizen at least give his Group a discount on the rent? From Dr. Citizen’s point of view, why should he? From the Groups’ perspective it seems greedy that Dr. Senior Citizen won’t reduce the rent, thereby leaving more money in the Group to pay the employees a bonus at the end of the year.
This has happened in a number of Groups and the employees wind up paying their partners for the benefit of renting space the Group or a member of the Group already owns! This tends to generate animosity because the Partners are clearly benefiting from owning the property at the expense of their associates. The employees of the group need to understand that the owner of the property deserves to be paid regardless of who the landlord is.
In most cases, it is not the Group that owns the building but rather one or two of the partners that own it directly either personally or through a corporate entity. If the medical Group owned the building then this scenario would be different, and it would be a good idea to address this point further.
3. How much time is left on your office lease?
4. How many doctors work in the Group? How many are partners? How many full partners? How many partial or non-equity partners? (A non-equity partner is someone who is held out to the public as a ‘partner’ yet does not share in the profits of a true ‘partner’ A non-equity partner will usually be paid a higher salary than when he was simply an employee. The downside is that as a non-equity partner, you have no right to, and cannot claim any portion of the profits. ) How many physician employees?
5. How many staff do you employ?
6. Hours of operation?
7. Call schedule? Do partners take equal call? Do associates take same call as the partners?
8. How many days per week are you expected to see patients in the office?
9. How many offices will I need to travel to?
10. Do I rotate through different offices or do I stay in one office?
Even before you start to negotiate your physician employment contract, you need information- lots of it. The only way to get that information is to ask lots of questions. This way, you'll be better informed, and better able to evaluate your options.
Attorney Oginski has been in practice for 17 years as a trial lawyer practicing exclusively in the State of New York. He has recently published a book that will help every doctor in residency and every doctor changing jobs to understand their employment contract. Take a look at his useful website, http://www.mdcontract.com for more information.
Over the last ten years, Gerry has developed a niche practice helping residents and physicians who are changing jobs by evaluating and negotiating their physician employment contracts. Gerry can be reached at http://www.lawmed1 @optonline.net, or 516-487-8207. All inquiries are free and totally confidential.