As the physicians of the baby boomer generation approach their golden years, many have achieved career and financial success and are looking for an arrangement that will allow them to ease into retirement. While you may not be ready to hang up your white coat permanently, you may be interested in working fewer hours and taking less call. Retirement requires more than simply removing your name from the office door, however. If you are a physician nearing retirement, it is important that you plan, discuss and make contractual agreements that will allow you to accomplish your goals and changing needs.
Departments » Legal Matters
In my January 2011 column (“A Seller’s Market: How to prepare your practice for sale to a hospital”), I described the growing trend of physicians selling their practices to hospitals and large health systems and then working for the hospital or health system. This trend is expected to continue in full force through 2012. As I noted in my January article, the physician’s post-sale arrangement is the driver for the growth of the physician’s practice within the hospital or health system.
As tenants of medical office spaces, physicians often create special leasing issues. Medical tenants use hazardous materials, generate biomedical waste, demand confidentiality of patient records and require compliance with occupational safety standards—all unique aspects of the medical profession. Yet, often, physicians will sign “form” medical office lease agreements provided by the landlord without the benefit of legal counsel. Typically, the landlord provides a standard fill-in-the-blank lease form with the tenant’s name and the general business terms (including the term of lease, rental rate and commencement date). Tenants may gloss over the legal boilerplate provisions included in the lease agreement, assuming that these terms are standard to all leases and are not subject to negotiation.
The science of medicine continues to expand rapidly, and this is obviously good for humanity. The art of medicine, on the other hand, has been largely forgotten. This skill is the basis of the time-honored physician-patient relationship and is an important aspect of good patient care. So why have so many physicians forgotten this basic skill? Why would a caring physician disregard any expertise that would benefit his patient?
Physician extenders, commonly referred to as mid-level providers or practitioners, often offer financial profitability for the practice as well as efficiency, improved quality of care, enhanced flexibility for physicians and greater patient satisfaction. When you hire an extender, it’s important to go beyond a handshake and clearly define the terms of the relationship in a contract. Below are some of the key issues that should be addressed in a mid-level provider’s employment agreement.
An increasing number of physicians are venturing onto the web, and, in particular, into social media. Recently, my client Dr. M was advised by a consultant to update his practice’s website, create a Facebook page for his practice and join Twitter. The marketing consultant cautioned Dr. M that there are legal concerns for health care providers associated with the Internet and social media. While social media can be a beneficial marketing tool, it is important for physicians to have in place a specific media policy that addresses the proper ways to use this outreach both in and outside the workplace.
Physicians who join a medical practice often have the opportunity to purchase an equity interest in the practice after some period of employment with the group, an issue that is usually addressed in the physician’s employment agreement. If you think you may be interested in such a partnership, you should carefully review your employment agreement before signing it. The amount of detail in the employment agreement regarding potential ownership will vary depending on the practice and the negotiating power of the individual physician. Clearly, the more specificity found in the contract, the better you will be served.
It’s 2011 and the pendulum is once again moving toward private practices selling to hospitals or affiliated foundations. Several years ago, the same phenomenon drove the medical market. Management companies and hospitals went on an acquisition frenzy, purchasing practices at breakneck speed. Soon, hospitals were dissatisfied, management companies went broke and physician practices went private again. Physicians simply proved to be less motivated and productive when employed by hospitals or affiliated with management companies.