How to Negotiate Contracts for Doctors w/ Kyle Claussen of Resolve

Welcome to another White Coat Investor webinar. I'm here with Kyle Claassen, the CEO of Resolve, a contract review company that has sponsored not only this Facebook group, but the White Coat investor for many years. Welcome to the webinar, Kyle.

Appreciate you having us.

All right, so like with most of our webinars, we're going to have Kyle present for a little bit, and then we're going to have a Q and A period where hopefully we fill in all the gaps of everything you could possibly want to know about contracts and getting jobs and contract review and all that fun legal stuff that you may only do once or twice during your career. So let me turn the time over to you, Kyle.

Sounds great. I appreciate it.

Yeah.

So let's take about 20 minutes to talk about contract risk and salary data and making sure all your watchers and listeners are treated fairly. I think it's important to just start out very high level and just think about value of physicians and worth of physicians and kind of where we quantify that. It's no different than any other profession.

Right?

Football players, basketball players, you're gonna find.

Your value in your contract.

Right.

And value doesn't always mean compensation.

Right.

There's other things that carry value.

And so we're gonna kind of talk.

Through those points and things to think about. But I also think it's important, especially today, to think about how the market is segmented and what different types of employers may mean for you in those contracts. We know that there's been a huge.

Shift towards employment over the last decade.

Private practice is certainly not dead, but.

It'S in a minority.

And when you think about contracts and what those look like, generally private practice has usually more upside.

Right.

There's the ability to be a partner at some point. Hopefully you have some ancillary revenue streams that are there. But what that means is usually you'll.

Also not see high guarantees, right, from.

Private practices, meaning high guaranteed compensation or large signing bonuses, things like that. The flip side of this is there's a ton of physicians who are employed, obviously by hospitals, health systems, academic centers, even some in private equity. Now, generally those come with less control.

Of your career, less ancillary revenue streams.

But in turn maybe higher guaranteed compensation and benefit packages. And so you certainly don't want to end up in the bottom left.

Right.

You don't want to have not much guaranteed and not much upside. That's a bad spot to be. And if you're like my daughters, you want to find those unicorns, if you can, where you're getting the best of both worlds. And so we want to talk about a strategy of how you would go about doing that. And we think that almost every client comes to us with priorities on geography. So that's the number one driver for physicians is we want to live in a certain area. Time is the second piece that people care about and then it's money.

Right.

And so we're going to talk about everything outside of you fixing those priorities today. That's, that's not for us to decide for you to decide, but we do want to say once you've gotten through those ideas and concepts and hopefully you've done your interviews, that we know and we understand contract risk, we know what.

Terms to look out for in the spot, we know what market data is and where to find that, and then also how to negotiate, you know, in good faith.

So with that, let's talk about contract risk and things that have value. And this is a kind of a one screen snapshot for you of where most of your problems are going to fall. Certainly not all encompassing.

We certainly think every document is unique.

Right.

And you want to be careful on what you're signing.

But I think if you're issue spotting on your own, this is a really good place to start. We like to think about things in categories of three. And so the first category that you should be getting right is anything that has to do with your duties and responsibilities. Scheduling, where you're going to practice, what days of the week you're going to practice, how much call you're taking that.

Drives satisfaction for a lot of clients. Right.

If you're all of a sudden working at a satellite location, or you're all.

Of a sudden taking more call than.

You thought you were, dissatisfaction is going.

To be pretty high.

And that's, that's one of the reasons we see a lot of turnover, especially.

Early career for positions.

So make sure you get that documented in the way that you want it. The second area that falls into this category is we have a lot of clients now that like side gigs, they.

Want to do something outside of just.

Medicine, whether that be, you know, social media, whether that be consulting with industry, being an expert witness, or just doing the traditional moonlighting.

Right.

All of that should be discussed in your contract. Intellectual property needs would tie into that as well.

If you have those interests, you want to get that cleared up as far as who owns those pieces, if you.

Get to keep the revenue off of that.

Right.

If you create something or not. And then finally, in this category, time allocations for One, supervising apps and or time allocations for administrative time or research.

Right.

That you might be doing, especially if you're in an academic center. We often see carve outs on FTE for those things. So that that category is really about making sure the contract matches what they.

Told you in the interview process because.

They told you a lot, right? When you interview, if the document doesn't match that, you're really setting yourself up for some decent risk down the road. Category number two, everybody cares about comp. You know, you want to make sure you're paid fairly. So what we see from a compensation structure, and we're going to walk through a slide on this in a second, is most contracts have some type of base guaranteed salary with a production model involved with that, whether that be work rvus or a collection model. They vary to some extent, but most 90 to 95% of your compensation should.

Be driven from those two buckets.

Quality has been talked about for a while. We don't see that as a major driver. Usually it's 5 to 10% of your total compensation will be tied to some type of quality metric, patient satisfaction, you know, sitting on committees, things like that. And if you're in a high demand area, which almost every physician is, there's.

A huge shortage of physicians.

And so you should be thinking about yourself as a very valuable asset. You may see things like signing bonuses, relocation allowances, student loan forgiveness, stipends while you finish training. All of those things are available on top of the other traditional benefits like vacation time and CME time.

Right.

Health insurance, retirement plans, things like that. I do think it's important to note.

In this category some benefits are group benefits and are not going to be negotiable.

So you're not going to be able to come in to a health system and say I want a different 401k.

Plan than everybody, or I want you to match a different percentage than what.

You'Re giving someone else. They can't do that. They can't change a health insurance policy for you either. But other things like vacation time, CME allowances, things like that, they will have some control over. So just be careful and understand what.

You can and can't negotiate in this bucket.

Okay?

And then the third bucket is anything that touches on termination. So if you plan your exit right as you enter into a job, I.

Think you're going to be more satisfied if that ever comes up.

Right.

And happy with those decisions that you made.

You need to understand how you can get out of a contract, how much notice you need to give for without.

Cause termination, because that's most likely going to be the scenario you're in.

It's really unlikely that you're going to be in breach of contract.

It's really unlikely that your employer will be in breach.

It's usually just that you want to.

Go do something else.

So make sure you understand how much notice you need to give and how long you're locked in for. And then once you figure that part.

Out, you need to know financially, what are the repercussions?

Right, so do I have tail coverage in place for my malpractice insurance? Do I have any repayment obligations on the signing bonuses or student loan forgiveness that I took? And then also, how is my production.

Paid out if I'm terminating midterm?

So if I'm in the bonus, so to speak, on a work RV model, how does my contract handle that? Is it paid out post termination or.

Do I have to be there at.

The time the bonus is paid to collect on that? Other things that I'm sure we'll talk about once this is reached, its conclusion is non competes. It's a very hot topic right now.

With the ftc and we can get to that in a minute.

But other things outside of just financial.

Things like that are liquidated damages on.

Non competes, making sure you try to.

Reduce those as much as you can.

And any forced majority clauses that are in your contract, it's kind of a term that came out of the pandemic. Those are detrimental generally for physicians, because.

It allows employers to just terminate or.

Modify a contract at any point in time if there's a pandemic in place, which is very hard, as we all know, to define start and stops, you know, on that type of thing. So this is again, kind of your snapshot, your big overview. If you can pay attention to these points and be careful on those, you'll be in a decent spot. So let's, let's talk a little bit about specifics around compensation and some of the games we see employers playing around that. I want to walk you through an example of just what a work RVU model looks like. You can apply the same analysis to collections and billings, but the overall takeaway is that if you're going to have.

A base salary or a guaranteed salary.

And a threshold that you're supposed to hit for production and a multiplier, meaning a conversion factor that they're going to.

Pay you in bonus, you want all.

Those to be consistent. So that way, if you're producing at the 60th percentile or 70th percentile, you're.

Also earning at the 60th and 70th percentile.

So the example here is that if your contract has a base salary of 200,000, you look at data sources and you find out that the median is also 200,000. You think, great, they're paying me fairly. Then you look at your production threshold and it says you bonus once you.

Hit 3000 work RVUs.

If every work RVU is worth $40 in your contract and you look at your peers, the data points, and it says that for your specialty, 2,500 is what's required to get to that $200,000 level, there should be bells going off right in your head saying, I'm underpaid.

Or there's something wrong here. I'm being asked to produce 500 work RVUs more than my peers. And if every work RVU is worth.

$40, that's a $20,000 gap, right?

Or a difference.

And so you can we see that game is what I'm calling it played a lot. We see it played with health systems, academic centers, private equity, private practice. It's not a, you know, only one source tries to do this. If there's margin to be had, most employers want to gain that and they're usually counting on positions to be not educated enough or not have the access.

To this information to make those good decisions.

So please make sure you're, you're understanding this and you're also getting access to.

The data points that you need to protect yourself.

Okay, now the other thing that I want to talk about specifically, that has high value and that may be going away, but as of today they're not, is non competes. Non competes are valued by the ofTC as potentially $9.3 million in your career. The reason for that is, is that if you have a non compete and.

You'Re not allowed to renegotiate your contract for fear of having to move your.

Family, it's, it's suppressing compensation by as.

Much as 37% in some markets, which is a really big number.

Okay, so if you have a non compete, what it says is that you're.

Not allowed to practice medicine for a.

Certain amount of time in a certain area. With the expansion of systems and academic centers and even private practice to multiple locations, even small restrictions can wipe you out from an entire geography.

And we know the geography is the number one thing for most positions looking at a job.

So do your best to get rid.

Of these or to limit them as much as you Can. We don't think that they should apply.

If you're terminated without cause. We don't think that they should apply.

If your employers in breach of contract.

If they sell out to private equity. Before you become a partner, you can think of a lot of scenarios where you'd want to at least invalidate the non compete if it's still allowed to be there. Post this FTC decision that came out. Okay, so those are your big value points that we want you to think about. The second step on this is making.

Sure that you review market data.

Again, three categories that I have you think about. The first one is what we call survey data. There's a handful of surveys out there. MGMA is probably the biggest one that you've heard about. Sullivan, Cotter, aamc, amga, there's a, there's a handful of acronyms that you'll hear. Most employers are going to lean on.

One or more of those surveys to.

Determine fair market value for compliance with.

Both Stark and IRS regulations.

So if they're utilizing that in the contract to know what's fair and what's compliant, you should be also utilizing something similar to that to analyze your compensation. Okay, so make sure you have access to that. The second data source is data from your peers.

Right.

And that's one of the things that you're going to find on our website is de identified confidential data. You're not going to know exactly whose compensation it is, but it will give you access to say, hey, if I'm a cardiologist in Texas, I need to know what the latest offers are out there. And I don't have multiple interviews and multiple job offers that I've gone on. It's another great resource for you to.

Take a look at.

So that would be category number two. And then the third one is just.

Hopefully you have multiple job offers yourself.

It's going to help you not only show value for yourself at that point in time, but it's also going to give you leverage. And we'll talk about that in a second with negotiations. So get access to all three of those things. I think the third one is the most important, right? Having other job offers. But certainly the data on our site and other surveys are useful as well. So this is just a quick snapshot of if you're looking to take your situation and analyze it. There are tools on our site to do that. There are scorecards you can walk through.

Where you can plug in your information.

Get some general analysis. You can get access to MGMA data with paid plans.

If you need to know right where.

You'Re stacking up and if you want to see again, details from your peers.

That'S also available to you online, very easy to use.

And so that that's where you can go to find that information because we.

Get that question quite a bit.

Final step is to negotiate. Okay. And when we talk about negotiations, we find that most physicians are a little bit uncomfortable.

Right.

In this area.

It's not something that one, you've been.

Trained to do, but two that you.

Do very often throughout your career. Hopefully it's only a few times. If you do it right, you're going to hear that every contract is standard. This is what we give to every single physician. It's tough when your sample size is probably only two or three contracts that you've looked at or that you've negotiated. From where we sit, we do thousands.

Of these every year.

Most make changes, whether it's language or comp. You're going to get adjustments if you absolutely demand them and if you have multiple offers. So you can see a little snippet here of how that gets relayed back. This contract we offered to Dr. So and so is the same contract we offered everyone. It's really good.

Right?

Lots of attorneys have vetted it. But that said, we did change our non compete.

Right.

So if you're seeing that type of language, you're going to know that if they're changing it once, if they're changing that paragraph, it's certainly not a standard agreement. They can make adjustments elsewhere as well. The other thing that we encourage is good faith negotiations, meaning if you're going to be asking for something, you better.

Have data to back it up and.

Or a justification for why it's important to you. But don't expect that type of transparency and good faith back all the time from employers. Most will, but not all of them will. Okay. And so you can see again, a little snippet here that when we were discussing compensation with an employer that they confirmed with their company, whoever that was, that they utilize a couple surveys that they wouldn't allow the physician to have.

They can't provide the analysis to you.

But just trust us that we're sincere in this and that we really want.

To continue working with the physician.

So those types of things are frustrating.

But I think are less frustrating if.

You can come in with your own ammunition, so to speak, on those points. So if the answer is no.

Right.

Let's say you've asked for everything, you've spotted all the issues, you've done a Great job. You need to understand, one, if you're capable of asking and pushing on pieces yourself or if you need help with that. And two, you need to know, even if they say no to every single item, what am I going to do?

Right.

Do I have my batten on my alternative choices? Whether that's another job or just reducing what you're doing, if it's not taking as much call, if it's not working as many days of the week, whatever it is, do you have alternatives to.

What you're asking for?

If you can go in with all that information, with knowledge on yourself of.

Whether you're willing to negotiate, we think.

You'Ll do a good job. We hope you do a good job.

If you need help.

Right.

That's what our platform does. And so please go check that out.

If you have questions, I'm ready to answer them.

All right, thanks, Kyle. Great job on the presentation. Let's start at the beginning, I think, which is if people want to hire Resolve, they can go to whitecoatinvestor.com resolve and get more information. But tell us about your packages. What do you do as a business? What do you offer to potential docs?

Yeah, so we, we offer anything from free tools, right, all the way through connecting you with expert, you know, health law attorneys to help you one, review your specific situation, take a look at the data sources that are out there.

As well as the rest of the contract in the language and help you negotiate that.

So that's kind of our specialty, right? It's what we do all day long. All of our pricing is flat fee, like you said. Go to that link on white coat.

And you can find that. Make sure you utilize the discount white coat as well.

But we, we provide information, education and access to attorneys.

That's what we do.

Okay.

So you know, you're, I mean, you can, you can get all kinds of customization to this. People can, can do a lot of different stuff, have you negotiate for them and that sort of thing. What is the typical package? What is the usual, most common thing that, that docs buy from you guys?

Yeah, I think the most typical situation is that, you know, you know, whether.

You'Re early career or mid career, you're.

Coming in with a pretty good idea of, you've done your homework, you've interviewed three or four spots and it's probably.

This one that you have the most.

Interest in and you're really wanting to one, protect yourself on risk. You want access to all the data that we talked about and you want.

An attorney to help walk you through that so you're understanding the risk appropriately and to help you negotiate that.

And so that's most typical for clients that they'll, they'll come in to say, hey, I'm ready. I've got a letter of intent.

Right.

From my favorite employer. I know there's contracts coming after that. Please assist me through this so I make good decisions on it. That's most common.

And the price level for that sort of service is usually what, around five or six hundred bucks?

Between 500 and 1,000, depending on how much attorney advice you want on that.

And support on that.

Okay.

All right. Well, let's talk about the elephant in the room. The elephant in the room is this FTC rule that's supposed to go into effect here in about four months that basically says non competes are illegal in the whole country. The chamber of commerce has promised to sue. So presumably this is going to be tied up in court for a year or two. What's your expectation of how this eventually plays out, both in the next year or two for docs looking for jobs now as well as long term?

Yeah. I think the, what you just said at the beginning is the most important thing is that there's been a lot of press on it, but it is not in effect today.

Right.

I mean, even if it wasn't being challenged, it's still four months out. And so we would just urge anybody.

Listening to this that you can't take.

Any action or, you know, walk out of your contract tomorrow. You need to see how this plays out. But you know that it's a pretty, it's a pretty broad and pretty sweeping.

Right.

Rule that came out. I'm not going to give an opinion.

On whether or not it'll be upheld.

We certainly hope it does for physicians. I mean, it's in the ruling, which is 570 pages long. Healthcare and physicians specifically are mentioned multiple times. I think if you search the documents.

Like 150 plus references to physicians.

So they're well aware that this is hitting health care. They're well aware that it's a problem in healthcare. We certainly hope that it goes through. There are distinctions between nonprofits and for profits and senior executives and not. And so there's a lot of nuance to the rule, but if it goes.

Through, it'd be a huge win.

Right.

I mean, even, even if it has, you know, an applicability of 30% on the market, that's still better than nothing.

Yeah, yeah, for sure. When I survey docs, 90% of them hate Non competes.

Right.

I mean it's clearly a huge win for employees and at least some somewhat of a loss for employers. Even just the threat of having this rule out there that's probably going to go into effect in some form should be useful in a negotiation. Right. When you're negotiating a non compete, you can point out, you know, this thing's probably not even going to be around in a few months, so maybe we ought to just take it out of the contract now. I mean, you could take advantage of this now, couldn't you?

Yeah, you try to. I mean we're already doing that and.

I can tell you the employer's stance as well.

If it gets thrown out, it won't matter anyway, so we're just going to leave it in. So I still think you want to try to negotiate as many exceptions, push the mileage down if you can get to it because until there's a decision on it, you're going to be stuck with it. So you don't want to be too hands off with those things. We also have seen employers send notification out to their entire staff at this point saying we don't think it applies to us and so don't plan on walking out on us. So they're being fairly defensive on it.

Too right now, which I think is.

Ultimately a good thing. It's drawing attention to an area that needs adjustment.

Yeah, you know, it's, it's interesting on these, the way they're applied. Sometimes if it's a big health system, you, you can't practice within five miles, not actually of where you're practicing, but five miles of any of their clinics. Have you found a lot of success in negotiating that down? So it's actually just, you know, a five or ten mile radius around where you practice.

Yeah, we do. And that, that's one of the big things you want to be clear on.

Is where are they drawing the circle from?

So it's, it's not only important to try to reduce that mileage, but it's.

Also important to apply just to one spot or maybe two.

Right.

Kind of. At most some places will put in percentages. So if you spent 20% or more of your time, for example, at a location that that's where we'll utilize it. But most are going to be very broad and they want to apply to the entire system.

So you have to be careful on that and try to reduce those.

Yeah, I had a non compete in my contract when I signed as a pre partner with my group and it was kind of ridiculous because the way it was worded initially was that I basically couldn't stay in town and practice if I left the group, which obviously makes zero sense for a hospital based specialty like an emergency physician. When I asked them what they cared about, what they cared about was that I didn't steal the contract with the hospital from the group and so we rewrote the non compete. So basically said I couldn't do that, but that if I was fired or if I left I could go down the street to the next ER and work there. What do you make of these employers that put these in place for specialties like radiology and anesthesiology and you know, hospitalists and intensivists and emergency docs. Are they just trying to like take advantage of the docs? Why do they do that? Have they not thought out that nobody comes to the hospital to see a specific anesthesiologist?

Yeah, I think that legal on their.

End is probably wanting a blanket non compete for all specialties. So they're not thinking about those hospital based.

Right.

Positions, you know, non competes in theory.

Are to be there.

So you don't take your patient population.

With you across the street and compete.

If you're a hospitalist or anesthesiologist, we know that that's not going to happen anyway. So whether a judge would actually enforce it for those specialties I think is probably less likely than others. But I do think what you did initially is helpful.

Right.

Is asking and finding out why they want the non compete.

Oftentimes it is for maybe one specific.

Competitor that they don't want you to.

Go to or they don't want you.

To steal the contract with the hospital. If that's a situation, maybe you can solve for that. Give them what they want and still give you multiple possibilities to stay in the area geographically. So I think any modification, any reduction.

Is really, really helpful.

Yeah.

Now you mentioned the geography is most important for most people. I've met a few docs that literally don't care, they don't care where they live. So if a doc comes to you and says, I'm coming out of training in Texas or in California or wherever, I don't care where I live, what would you advise that person?

I would ask them what they care about. So if it's not where you live, is it money, is it, you know, time, you know, do you like the beach?

Right.

Do you have to be there or not? I mean it sounds like not if it's. Geography is not an issue. But if, if you're Trying to prioritize just compensation.

I mean, there are certainly areas of the country where you can find some geographic arbitrage. Right. Where it's you're going to make more, you're going to have cost of living, that's less.

And there certainly are clients that take.

Advantage of that and want that situation, at least early in their career.

And so I think it'd be a fact finding session to find out what's most important.

Yeah.

Another question I have is that have employers clued in yet to the value of public service loan forgiveness? I mean, are the public service loan forgiveness qualifying employers paying less yet? And if not, why haven't they figured that out, that this is a huge value to new docs? I mean, at least half of docs are wanting to go for public service loan forgiveness. Have they figured that out yet? Are they still paying the same as people who don't qualify?

I think they are still paying the same because I do think you've got to compete.

Right.

I mean, even so, 58% of the hospitals are nonprofit.

Right.

So I mean they're, most of them.

Are going to qualify anyway. And so there's still competition, there's still a shortage of physicians that are there.

I do think that's an interesting component to think about though, because if you're trying to take a position that I.

Want to public student loan forgiveness.

Right.

Which means you have to be a non profit, but you also want FTC rules to not apply to you. But they do. They don't apply to nonprofits. I think it's kind of a conflicting position.

If you're going to decide on value, do you want, do you want the.

Student loan forgiveness or do you want.

The non compete gone?

Because those aren't going to align necessarily. We haven't seen reduced compensation packages.

I mean, back to your initial question.

Just because they are nonprofit status, they have to compete with the entire market. And they're not, they're not valuing that yet.

Okay.

You mentioned hiring somebody to negotiate for you. How bad is that? I mean, I think about how I would feel. I've been on the hiring committee for my group for many years now. And if we were hiring a doc and they brought in an attorney to do the negotiation for them, that'd be a pretty big turnoff for us. How much do you think that matters? And does it matter who you'd be doing the negotiating with? Whether it's a hospital CEO or whether it's a bunch of other docs?

Yeah, I think it does matter. I think Practice matters, the setting matters. So if you're going to go into private practice and your goal is to become partner at some point in time, we think it's important to be able.

To have those business conversations with future.

Partners to know one, how they're going.

To treat you and two, if you're.

Able to handle it right with support.

In the background in those situations.

The counter position to that, I think.

Is with large health systems, you're often.

Talking to an administrator that often have.

Legal or somebody else handle those discussions with you anyway.

And so I think if they're, if they're pushing it off to their team, there's no reason you can't do the same thing. We actually have some health systems that prefer to talk to us on it because it's more rational conversations that are happening and kind of we understand fair market value pieces and so do they and trying to find workable solutions on that. So I think it can work well in both situations. I think it's personality type and its.

Practice type that should drive that decision.

Can we talk about offer letters? If someone gets offer letters for different jobs, should they sign those before they review the contract? Do you guys review offer letters? Can you explain just a little bit about how offer letters fit into all this?

Yeah, we do review offer letters and.

We think you should be very careful.

On offer letters because sometimes that will be the only thing you sign. So especially with academic institutions and some other, even private equity, they're going to give you what looks like a term sheet, but there's nothing else that's going.

To come after that.

Right.

So you have to be okay, right.

With whatever's in that document. Most are non binding and I think that that's a, you know, a generalization.

But the problem comes in is when they are a binding document, when it is a contract and you've signed three.

Of them, you're obviously, you can't do that.

Right. You need to be under contract with one employer at a time.

So we do have clients that have locked themselves into bad situations and we.

Would certainly encourage you to be careful.

And understanding at that stage of what you're getting into and ask for the.

Full contract if you can get it.

I mean, that's going to be the.

Most efficient process for you anyway. But yes, we do review.

Lois.

And term sheets.

Why do they use offer letters? Is it a shortcut for the employer because it takes them two months to get a contract through legal or why do they do that?

Sometimes I think they want to have an idea if you're okay on the general terms, right. If you're, you know, if they're offering a compensation package that's 50% off, let's say, from what you're seeing elsewhere. I mean, I don't think they want.

To waste their time negotiating a full.

Contract if they can't get by the.

Two or three big things up front.

So certainly very common. Right. In the industry to do that. But also there are other things that have value, like non competes, like tail.

Coverage that sometimes aren't included in that loi. So those are questions you should be asking if you're really trying to compare.

You know, two offers side by side, apples to apples.

Let's talk about this standard phrase that employers use that the contract's not negotiable. Now, you and I know that's not true. Some parts of it are more negotiable than other parts, for sure. But when somebody is told that, what's the best response? What's the best strategy to continue negotiations?

Yeah, I think you're going to hear.

That early in negotiations.

I also think that you're going to have to evaluate the situation and decide how likely it is that that's true.

Right.

So we encourage people to push when they have leverage. And also there are times when we encourage people not to push if we feel like they're in a very high demand situation or high demand from a.

Physician standpoint, let's say it's San Diego. And we know that there's going to be multiple candidates that want that position.

You may want to take a less aggressive approach in that setting. And so I think it's, it's coming back in good faith with things that.

Are important to you.

Not trying to nitpick the document and not trying to pick apart every single paragraph, but saying, hey, here's the 10 or 15 things that, that are problematic.

My attorney, you know, made a recommendation to me on these things. It's important to me to get into a contract long term.

Right.

I want to be here.

Right.

Or I wouldn't be going through this process of having it reviewed.

And so I think you have to respond in a way that's professional and also letting them know that these things are potentially deal breakers that'll cause you.

To walk away if they can't change them.

I've heard negotiation classes recommend that you ask for the highest amount you can that will keep them from walking out of the room laughing. How do you know if you're asking for too much when you're negotiating compensation in a contract?

I think if you don't have access to the data that we talked about earlier, you're in a really tough spot because you don't get to pick where they started. Right. So we see some fairly dramatic changes at times because employers will come in with a lowball offer. And so, you know, it may be.

That you're asking for 50 or 60%.

More than what they offered, and that's not your fault. That's because they, they lowballed you. There's also times when we will tell clients that we think the compensation is pretty fair.

It's not that you can't push for more.

We always think there's some room to negotiate, but they're certainly making an offer in good faith based on, you know, the data points that we've got. So I think if you understand right, what median is, what, 60th percentile, 70th percentile looks like, you'll have a pretty.

Good idea on how hard to push.

How's this different? If you're not just coming out of residency or out of fellowship, you're not just coming out of training, you actually have some experience, maybe you're five or ten years out of residency. Is the process different or is it basically the same thing?

I mean, the contract terms are the same.

Right.

But I do think there's a distinction in you're no longer guessing at what you're getting into.

Right.

You're going to have things that have.

Worked well and that haven't worked well.

You're going to know what your production looks like and whether there's an ability.

To get to the level that you.

Want to be at. We do often see clients come to us for renegotiation where they're producing at an extremely high level, but they're being.

Paid closer to median.

That's a gap and a problem that.

You need to correct.

So I think you come in with more information, right. If you're mid career and renegotiating than.

You do if you're a new hire.

How about call schedules? I mean, everything's negotiable, but can a call schedule really be negotiated and when can it be? When can't it be scheduling something that you see employers changing?

Often we do and calls a big issue.

Right.

I mean, there's a certain amount of unpaid call that usually follows every guaranteed compensation package. But the question becomes, how much call am I taking? Am I the new person taking more.

Or do I share it equally with everybody? Is it capped at a certain level if people leave?

Right.

Do I force them to get locum.

Coverage for that or am I expected to take that call?

Those are the problem areas. And where we see clients really get.

Frustrated, it's not only that you want to be paid for that time, but.

Also do you even want to be.

Forced to enter into those extra call shifts. So we do see people making changes.

We do see people making adjustments both.

On schedule and call. And so if it's important to you.

And if the situation dictates. Right.

That it's potentially a risk for you, we certainly think you should have that addressed.

Can you talk about the process of contract negotiation and how long it takes?

Yeah, anywhere from two days to two to three months.

Right.

I think it depends on the employer. It depends on what you're asking for. The most typical cadence is that you're going to go through through. You're going to, you know, review the document, you know, with your attorney. That's going to take between two days and seven days generally to have that feedback. Once you've done that, you're going to have to then take the next step.

Of asking those questions, you know, to.

The employer and ask them for adjustments. They'll take it back to either a comp committee or somebody else before they get your response. And at that point, you know, there's diminishing returns with every time you go back and forth.

So you're going to see most of.

The adjustments in round one and you'll have to decide at that point if.

They'Ve made enough adjustments for you or not.

But I think if you think about a two to four week process as being pretty typical, that's what we experience.

What about for those who want to renegotiate? Right. They already have a contract, maybe it doesn't renew for a while, but they realize maybe I'm not being paid fairly or I really made a mistake agreeing to as much call as I'm taking. How do you go about renegotiating that?

Yeah, so I think there's a misunderstanding.

That contracts are set for a certain term.

Right.

So I signed a three year contract and I can't go back until the.

End of the three years to renegotiate that.

You need to remember that that termination.

Without cause paragraph really makes your contract probably a three to four month revolving document.

We see employers come in and make adjustments mid contract if reimbursements change. And so I think you should be doing the same thing.

If fair market value changes, if your call setting changes, whatever it is, you.

Need more ATP support, you should be.

Kind of raising your hand, even mid.

Contract and saying, hey, things have changed from when I've started and we need to talk about this. We need to adjust it so I'm.

In a more fair setting moving forward.

So we think anytime is a good time if things aren't working well, to renegotiate your contract.

Speaking about anytime is a good time, at what point do you get resolve involved, right? I mean, do you call you up after we have a contract, before we interview? When do we. When do we do this?

The earlier the better is my preference.

Because the clients that come in late.

Sometimes have made mistakes right. Throughout the process where they've already signed off on a letter of intent without knowing what fair market value looked like, or they said things during the interview that they shouldn't have.

And so our service is there for you.

And one of the benefits is that it's a flat fee. So it's not like an hourly meter that's running. You have access to somebody to talk.

To on this stuff.

So we prefer that probably during your interview process when you're starting to get.

Close to having that first term sheet or letter of intent, that's when you would engage us.

Even prior to that, if you're just.

Wanting to review market data, you know.

Kind of leading up to it, you.

Know, the sooner the better is the answer.

And it's. And it's flat fee pricing. So there's no downside starting early. It's not like it costs more.

That's right.

Let's go back to Call for a minute. I mean, it seems pretty variable by area and by type of practice and by specialty. But how much unpaid call is normal these days? I mean, how much should you be taking before? It's like, I want to be paid.

To be on call.

Yeah.

Well, the interesting thing is that the data sources we talked about have a component that'll tell you, right, by specialty.

What the unpaid call amount is.

So usually the most common answer is that we're going to share call equally.

Between everybody that's here.

Right.

The problem is that in certain settings.

If there's only one or two of.

You, you should have exceptions in the, you know, either in your contractor, in the hospital staff bylaws that are going to say, what do we do?

If you're the sole provider.

Right.

Usually you're talking about 1 in 3, 1 in 4.

Right.

If nobody's there is kind of being.

The normal expectation for call, and then anything beyond those numbers, generally you're seeing, you know, some type of shift allocation.

Or compensation for Those pieces.

Okay, so it's not that abnormal still for people to be on call every fourth day, at least for the patients in the practice and not be paid for it.

Correct?

True for ER call as well for those specialties that are on call for the er.

Not usually. I mean, hospitalists and ER are usually shift based. So I mean, you're usually saying I'm.

Working X number of days. Right. And so if I'm on right, I'm on.

But if I'm not.

Right.

There's no expectation there. And if I am, it's bringing me back in and paying me for an extra shift.

I mean those on call, the consultants on call for the emergency physicians, the orthopedics, the general surgeons, et cetera.

Yeah, that's more of the 1 and 3, 1 and 4 that I'm talking about. So usually with your practice call, that's a little more flexible, Right. I mean, even if there's only two of you, let's say in your specialty.

That'S generally being taken. It's lighter, right?

It's not as heavy.

The ER call is usually what we're seeing being paid for.

Beyond if you're being asked to do it more than one out of four days or so.

Correct. Okay.

Because my impression over the years that it's becoming more and more common for some specialists to not take ER call at all unless they're paid.

Paid, that would be our preference, that.

You'Re paid for all of it. The problem is that if you're going to take a look at data sources.

That are including unpaid call in them.

You'Re going to have to do some math to back out to then what.

The new median is.

And so I think you can slice it different ways.

I think you just want to make sure that if your base is adjusted.

To a level that accounts for some.

Unpaid call that you know what that looks like.

Yeah.

Okay, let's talk about outside employment. Is that something that you can normally negotiate out of or is that something where a lot of employers are like, nope, this part's non negotiable. Like a big academic medical center or something.

No, you definitely can. And some of them, like big academic institutions will have, you know, specific exhibits.

Right.

Where if there's a thing that you want to do that's extremely important to you that you can get that carved.

Out as part of.

Right.

Your initial negotiation.

So it'll clear kind of that conflict.

Of interest policy early on.

Academic centers probably have more heartburn on.

This than private practice and other places.

And so we See, you know, fluctuations.

In how this is worded.

It's either that they're going to approve.

Certain activities, they're going to allow all of them unless they materially interfere, you know, or there's some type of consent that's required that they can't unreasonably withhold.

Right.

There's different ways to frame it up.

But you obviously want as much flexibility as possible. You know, in those paragraphs, what techniques.

Or leverage factors have you seen physicians use most effectively when negotiating changes to a contract?

Yeah, the most effective one is that you have a fallback and another offer to look at. I mean, we have organizations that will even tell us if you can show us a redacted copy.

Right. Of something else, we're able to make.

This compensation adjustment or we're able to include. Right. A call rate. But if you can't show us that, if you don't have that leverage, legal isn't willing to change it on our side. And so when we hear things like that internally.

Right.

From these employers, we know it's true. The more options you have, the more power you're going to have and the more flexibility you're going to have. So we think knowing the information is the first step, but then also being.

Able to act on the information.

Right.

Is step number two.

So it makes it a little bit.

More difficult if you're mid career and.

You'Ve got a non compete over top of you.

And that's why the FTC is weighing in on that. That's it's causing the suppression.

But if you're in more of a free market mentality without any restrictions on.

You, there certainly is. There are plenty of jobs out there for physicians. You want to make sure you're knowing what's available at the time of renegotiation.

Yeah.

What about hiring an attorney? Have you seen that be particularly effective at negotiating changes or is that not as valuable?

You know, I think it is valuable. I think it depends on, you know, again, what you're pushing for, what you're asking for. But most clients that find the help.

On that or the impact on that.

Is that they would have never asked for these things on their own.

Right.

And so it's not even necessarily that.

It'S an attorney asking, it's just that somebody's asking.

Right.

Because you wouldn't have done it.

And it is easy for us, right. To interface with legal, you know, with.

The employer side and have those conversations and being objective on it.

So I do think that's helpful.

I think it's less helpful than having multiple offers though.

Can you talk about the negotiability of support staff? You know you're going to work as an ambulatory DOC of some kind in a large health care system. They say they can't budge on salary. How likely are you to be able to make sure you have adequate, you know, MAs and nurses, et cetera, assigned to you?

Most contracts are going to start with.

A paragraph that's very broad. It's going to say we're going to provide you with all the equipment and personnel and kind of staffing that you need.

Right.

And that's about it. So it's not going to have one MA in there.

It's not going to have one nurse practitioner in there.

We find that sometimes with large employers.

Or well developed practices that that's not needed.

As far as an edit, I think you can take that on good faith.

They want you to be productive, they want you to produce.

It's good for you and for them. But if you're the first person in your specialty in a location or if you're doing something that's very unique and or they verbally have told you you're.

Going to have minimum levels.

We definitely have seen employers add exhibits or change language to delineate what will be there. Sometimes you have to have flexibility around timelines as far as giving them time.

To hire because it's tough to hire.

Right now, but definitely possible.

We talk about locums contracts. Are there any red flags you should think about if you're looking at locums jobs?

Yeah, I mean, locum contracts are what they should be.

Right.

More flexible.

Right.

You're accepting shifts on kind of a.

One month at a time.

Right.

Basis usually. But kind of like your situation earlier.

With the don't steal the contract piece.

There's almost always a paragraph that talks about if you terminate this and then.

Go to work for the organization that.

We put you in touch with, there's.

Going to be a penalty.

And so if, if it's an area that you want to be in or.

You'Re, you're kind of a try before.

You buy type of thing, you want to know if you're able to do that and, or what that penalty is.

And understanding if it's something you're expected to pay or if the organization is.

Going to pay it. So those are the big ones.

Right.

Is making sure you have control over schedule, making sure you can get out.

Of it quickly if you need to.

And then also making sure your, your kind of, you know, non compete component. If we, if we think about it.

Like that, is limited or has a dollar amount, that's pretty low.

Yeah.

All right, well, we're getting to the end of our time. What have we not talked about today that you feel like people ought to know about contracts and negotiation?

Well, I think you did a great job on hitting on all the big things and the big questions that come. I would just say make sure your listeners are empowered. Make sure they utilize the resources that are out there. And if they have questions, again, my.

Email'S on this slide, too.

If there's things that they want to ask on a confidential basis, they can certainly use that.

All right. If you want more information about Resolve, if you'd like to hire them to help you review your contract or help negotiate for you, you can go to whitecoatinvestor.com resolve. You get a special discount by going through that link. And of course, you help support the mission of the White Coat Investor. Thank you so much for your time today in this webinar. And thank you, Kyle, for answering all of our questions.

Appreciate it. Thanks.

The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.