Employment contracts are used in many industries. For the purposes of this web page we will focus on the healthcare industry. It is no secret that hospital organizations have been forming physician groups, which have been snowballing further and buying up smaller physician practices. It is not uncommon to now see hundreds of office-based physicians, as well as, primary care and most major specialties be absorbed vertically by a larger group. (Hospital ownership of physician practices is on the rise, with 38 percent of U.S. physicians now employed by hospitals and health systems, according to a new analysis released by the Physicians Advocacy Institute (PAI)).
This makes it more and more likely that new graduates and more established doctors are becoming employees in the physician groups or by hospitals. With this changing tide, physicians more commonly need to consider employment contracts.
Issues that must be considered in an employment contract are:
- Duties of physician
- Employer’s obligations
- Physician compensation.
- Reimbursement of expenses
- Employer-paid benefits and time off
- Equity status
- Loyalty and confidentiality covenants
- Disability or death
Employment agreements are often more than 20 pages in length and cover complex legal issues. Reading through a guide which highlights key issues in an employment contract or using a shared experience to make a decision in whether or not to accept one, is a good starting point but not a substitute of legal counsel. Having legal counsel to work through the agreement with you and furthermore, negotiate on your behalf will give you peace of mind that you brokered the best deal. The employment contract establishes expectations between employer and employee but also establishes the tone of the relationship going forward. With counsel you will evaluate the growth potential for the practice, the payer mix, post-termination restrictions and other opportunities for professional growth. Let us help you start down this new path in the right direction!