05 August 2010

Advice for EM Senior Residents

Fellow blogger and EM senior resident (how time flies) Graham Walker asked me if I had any opinions about how a graduating resident should approach the job search, and if I had any advice on how to avoid getting screwed.  Silly Graham! Of course I have opinions!  And having been prompted, I will happily share them. 

1. Know what you want. 
There are so many practice types out there and so many options that an undifferentiated job search is almost hopeless. There are academic hospitals, community hospitals, big hospitals, trauma centers, little hospitals, urban, suburban, county, rural hospitals. There are small groups, multi-hospital groups, national groups. There are democratic partnerships and oligarchies. There are places where you can be a partner, an employee, or an independent contractor. There are places which are poorly compensated and highly compensated and everything in between. 
 
Define your priorities and develop a search.

If you are particularly invested in, say, a certain geographic area, that may restrict other variables.  The southeast, I hear, is highly penetrated by large contract management groups. The pacific northwest has almost no academics. If you know what the most important variables are to you, you will be able to refine a search strategy that will get you in the best possible place. There is no such thing as a job which will be perfect for everybody. So you need to filter out the ones that might be fine jobs but are not right for you, and you need to know in advance what's negotiable to you.

2. Never take a job just for the money. 
Relative salaries are important and should be considered, but there is so much more to a career than a paycheck.  Consider your overall goals, and try to figure out where you will be happiest and most fulfilled. If you're well paid but hate your partners, or don't trust them, that's a terrible situation to find yourself in down the road.  

3.  Beware the lure of academics.  
It seems like every resident I interview wants to stay in academics, and offers up a regretful explanation for why they are settling for practice in (shudder) the community. Why? Because academics are all they've ever known. They went to college, med school and then residency, and have never worked outside of a teaching environment. So they think that's the whole world of medicine.  But there are not as many academic jobs as there are graduates, they don't pay as well, and there are almost no academic jobs in our neck of the woods, so graduating residents have to "go native" and practice in community-based ERs.   This is, however, a feature not a bug: there is way more to medicine than you will encounter in the ivory tower, and it can be highly fulfilling and important. Academic practices are right for some, but it shouldn't be the default position, and there's no need to feel guilty about leaving the teaching environment.  

4. Determine your market position.
By which I mean, is your desired job in a buyer's or seller's market? Every interaction with an employer is a negotiation, and knowing your relative position is critical to knowing your strength in the give and take of recruiting. You need to know how much leverage you have and tailor your strategy to the situation.  Are you an exceptional candidate or a marginal one? (This kind of self-insight is very hard, BTW.) If you are applying for a job which is highly competitive or if you are a candidate without distinguishing features (or with blemishes) you will need to work harder to market yourself and you will have much less leverage to make requests/demands from a potential employer. On the other hand, if you are applying for a position where they have a harder time recruiting you have more capability to ask for sweeteners (or reject unfair requests).  Remember that the employer is ultimately in the stronger position and if you come on too strong or seem arrogant then they may well walk away. Refusal to negotiate at all is in many cases a red flag, but do recognize that some factors are non-negotiable to some groups. You can't negotiate a higher salary than the rest of the partners in a true democratic group. But maybe you can decrease the amount of time you will have to spend on the night shift before you become a partner.  You're unlikely to get a employer to cut a special deal for you on the malpractice premium, but you may be able to get a signing bonus, moving expenses, or schedule parity. Whether and how hard to press for concessions depends on your position.

5. Avoid recruiters
I say this with some hesitation, anticipating the flood of objections from the recruiting profession. But in my experience, they add little value from the point of view of the applicant. Bear in mind that the typical fee for a headhunter is about $25,000 for an emergency physician. That's a ton of money that in reality will be deducted from your signing bonus and first year salary. (If you are applying without a recruiter, it's not a bad idea to ask the employer if they are also using recruiters and would be willing to apply the recruiting fee to a signing bonus/moving expenses/debt repayment etc.) There are some cases where a recruiter is useful, especially if you don't know or care where you want to work on a geographic basis. But also bear in mind that the groups that need headhunters tend not to be the best practices (which is why they need to use a headhunter) and that you should approach them with a sense of wariness to understand why it is they felt they needed to engage the services of a recruiter.  Recruiters can offer value if you don't much care where you work, geographically, but have particular requirements for the type of practice you are willing to consider. Caveat emptor.

6. Understand the potential employer 
There are a ton of models of emergency medicine practices. Some are hospital employees (fewer these days) or employees of hospital owned practices. Some are private partnerships, or corporations owned by one or a few privileged docs. Some are corporate chains.  Know who the employing agency is, and who owns it and in what degree. Know who is the contracted agent with the hospital. Understand the employment model (employee, partner, IC, etc).  Understand the governance of the group.  Understand the compensation model and boil it down to a figure which can be compared to other potential employers on an hour for hour basis.

7. Read the contract.
I cannot emphasize this strongly enough, but read it and be comfortable that you understand it. Strongly consider having an attorney read it for you, especially a longer or more complex contract. Do not agree to work without a contract. One old time concern for ER docs was noncompete clauses; this is less of a concern now, as they are generally not enforceable. However, I would still ask for a noncompete clause to be removed from the contract. It is not unreasonable for there to be a noncompete clause with regard to the hospital contract. (i.e. you cannot bid against the group for the hospital contract.) More salient are termination clauses: how much notice is required on either side? "For cause" termination should be highly restricted to really bad things, like felony conviction or exclusion from medicare and watch out for catch all "good behavior" clauses. Termination without cause should have reasonable notice 3 or 6 months) and generally the notice requirement to quit should not exceed the notice the employer can give you to fire you without cause. Most critically, any promises the employer makes in the interview (especially with regard to compensation, partnership, and scheduling) should be reflected in the contract or accompanying documentation. If the employer is not willing to put these assurances in writing, that is a big red flag. 

8. Practice Stability and Strength
Basically you want to know if you sign on to a position whether it will be there and materially the same in the first year or two.  You'll never get a direct answer to this question, at least not in a troubled practice. But there are some proxy questions you can ask and get verified. For example, the tenure of the medical director. How long has he or she been in place? Why did the old one leave, if it was recent? How many medical directors have there been in the last five years? Obviously high turnover in critical leadership positions is a concerning sign. Similarly, you should ask about the tenure of the contract; a longstanding contract is reassuring (though no guarantee). Ask the number of recent physician departures and why. Can you contact recently departed docs? They are in a position to give an unvarnished view of the practice.  What's the relationship with the hospital adminstration? Broad questions like this will get nowhere -- ask the employer to describe recent challenges with the hospital CEO and how they worked past them. Ask the employer for a roster for all their docs and if you have permission to contact any of them. Ask whether the practice receives a subsidy from the hospital and what the basis is for that subsidy. (Large subsidies may destabilize a practice.) Does the practice have other business lines (an urgent care clinic, or a billing company for example) and how is the revenue from those lines shared among the docs? What is the practice manager's plan for the future of the group? What are the group's biggest strategic threats and biggest opportunities?   

9. Transparency
Many groups give their non-partner physicians the mushroom treatment. As a potential applicant you have some freedom to ask awkward questions and expect an answer. Ask whether the group has open books for all partners to review.  What is the pay differential between new hires and partners? Do all partners get paid the same? Do all partners have the same schedule priority? How do physician adminstrators get paid? The Medical Director/managing partner deserves compensation, and in some groups this compensation is substantial, but should be transparent.  Are board meetings open to all interested docs, or partners-only, or board members only? What are the requirements for being able to serve on the board? How often to these positions open up?

10. Practice Management
How well the group is run, the attention to the detail and the professionalism that the administrators bring to the practice will have a large effect on how stable and profitable the practice is.  So these are salient (and often overlooked) points to hit:  Who does the coding/billing? Who owns the billing company? Self coding (which is now uncommon) should be a red flag both due to lost revenue and poor compliance. If the parent hospital does the billing (also now uncommon) this is also a red flag; generally hospitals don't much care about the pro-fee, which is much smaller than the facility fee, and they leave a lot of money on the table.  What's the cost of billing and coding? Anything under 5% of gross revenue is disturbingly cheap, anything over 11% is too rich.  What's the group's overhead costs? If more than about 25% of gross revenue is going to expenses, you need to wonder about the group's management.  Also get the details of the malpractice policy. How is the premium calculated? Per patient, per physician? What are the limits? Who provides it? What's the malpractice environment in the state, and how many carriers operate there? Who provides the policy?

11. Compensation
This could be a whole other post on its own. The permutations of ER physician compensation are seemingly infinite. They boil down to: fee-for-service, productivity, and hourly.  Fee-for service is where you literally get to keep the revenue you bring in from the patients you see. You see an uninsured patient, you work for free. You see a fully insured patient, you get paid. This model is less common outside of boutique practices and independent contractor practices these days. Productivity is a model where there is a formula (usually of bewildering complexity) which relates the dollars you bill or the RVUs you generate to the practice's net revenue. Therefore, you get paid on a piece-work basis in a manner which is more blinded to the payer status of an individual patient.  Hourly is just that, a flat hourly rate.  Then you have the hybrid models. For example, you could have a practice where 70% of your compensation is a guaranteed hourly base, 25% is productivity, and 5% is "citizenship" or some such fluff.  For all intents, I would consider any model where more than 50% of income is a flat rate to be "hourly."  The spread between low and high producers is so attenuated in such "base pay" systems that it really kills the incentive to be productive and efficient. If you're making $150/hr you've very little incentive to break your back to make an extra $3/hr. The behavior of the partners in such systems is effectively identical to the flat rate systems. Not that this is a negative -- for some groups, a flat rate does work best (especially groups with a lot of single coverage). Just recognize it for what it is.

Also, know how the compensation is paid, temporally. I know a practice which pays a very low monthly salary and amasses a huge pile of money which is distributed in the form of "bonuses" on December 31. Our group tries to pay out every cent as it comes in. There's no wrong answer to this, but each has implications. When you keep the bank account empty, you are susceptible to cash flow problems should the revenue fluctuate (which it always does).  When you defer income, you need to learn to live on a smaller monthly budget and also there is a temptation for those in power to be less than entirely equitable in the distribution of that huge pile of money.

12. Ways in which employers can attempt to screw new hires:
Sadly, there is a long history in the field of medicine, including emergency medicine, of screwing the new guys. They're naive and they don't have access to the data, so they have to "pay their dues" until such time as the partners decide to (maybe) let them into the club and share the revenue (in part generated from screwing the next generation of new guys).  It's a vicious cycle, and unless you end up with a truly democratic group, you may have to suck it up and endure it.  Some tricks the practice can pull:
Partnership.  It's not guaranteed, and shouldn't be. If I hire someone and I don't like them or they fail their boards, I am not going to make them a partner and no promise I can make on the day of hire will change that. BUT, there should be an upper limit on how long I can drag my feet, as an employer. One to two years is reasonable. Longer is highly dubious (especially if non-partners are paid less). By the end of two years an employer knows if they want to keep you around or not, and if they are not willing to make you are partner at that time it is just because they want to keep stealing from you for another year or two or three.
Buy ins. If you are buying into a practice, you may have to cough up a significant chunk of change. That's reasonable. The practice has a net value, and if retiring partners take their equity with them that has to be replaced by new partners contributing their share. This can easily be $100K or more. However, if you were paid less than the value of the revenue you generated in the "trial period" before you became a partner, that should be offset against the buy-in costs. Otherwise, once again, the partners are simply using their position to steal from you. They buy-in should represent no more than the fraction of the real value of the accounts receivable that you will own once you are a partner -- it should not be inflated. You should feel free to ask for supporting documentation for the valuation of the buy-in.
Equity games. What is "your" fraction of the corporation?  If there are x partners, you should be offered the ability to buy 1/x the outstanding shares. There are some practices (EMP cough cough) in which a few senior partners own a million shares and new partners can buy a few thousand shares. This is simple math -- how many outstanding shares are there? How many partners are there? How many shares will I be eligible to purchase?
Schedule games.  It's no secret that the older you get, the more obnoxious night and weekend shifts become. Younger docs may well be asked to work more than their fair share. I do not endorse this practice, and I think that if a doc is required or asked to take on this burden it should be compensated. If it is not, be certain there is a distinct time frame in which schedule equity will be established. One to two years is tolerable. "Until old Bill retires" is not.
Shift loads. Make sure your contract spells out how scheduling will occur. Specifically, is there a guaranteed number of shifts you will get? It's easy to sort-of fire someone by just not putting them on the schedule. Also, if your practice is over or understaffed, how will the extra shifts or short shifts be distributed? This should be explained in writing, either in the contract or in a written addendum. Will you be required to work a resident-level number of shifts at first?
Salary games. Some practices have compensation schemes which are deliberately obtuse.  When you interview they will vaguely describe the complex mechanism, which will probably make some sort of sense based on their practice model. But it creates a situation in which it's almost impossible to make an apples-to-apples comparison of one practice vs another. A potential employer should be able to answer this simple question: what was the hourly compensation of your median physician last year, including salary, retirement, health, CME and vacation benefits?
Benefit games. Benefits can be complex. Doctors are in high tax brackets and there is good reason to use the benefit structure to minimize the docs' tax burden.  So to have very large healthcare or CME accounts makes sense, and retirement plans can be huge -- some plans allow you to put away almost $50,000 a year!  As a young graduate you may not want that, but it does make sense. Be sure that as a new employee you have the same access to benefits as all the others, and that there is no staged-vesting plan that will tie you to the group for an excessive time.  1-3 years is reasonable. Anything more is concerning.
Notice and termination. The contract should spell out how much notice you need to give to quit and how much notice they need to give you to fire you without cause. Ideally, these should be symmetric. It's unfair if I ask for six months' notice if you want to leave but I can fire you with 30 days' notice. 90 days is pretty standard.

Don't worry about being too inquisitive. If there is a practice which for some reason is uncomfortable answering this sort of detailed question, I have to wonder why. Even if the reason is benign, you should ask yourself whether you are comfortable working with partners whom you cannot fully trust. Moreover, I judge applicants not only by their credentials but also on the questions they ask. A candidate who has done his or her homework and knows which questions to ask is more impressive than one who is willing to sign whatever piece of paper I put on the table. And if you have to get screwed, which may be the case if there's only one practice hiring in the city where your wife's family lives, at least you will know what you are getting into ahead of time rather than receiving a nasty surprise a year and half into your new job.

These are the items which occur to me off the top of my head that graduating residents should be mindful of when they hit the interview trail. I'll add more as they come to me.  Now if you'll excuse me, I have to go interview a candidate now and see whether he'll be one I can screw.

That's a joke.




1 comment:

  1. Wow! Fantastic post! This answers so many questions I have about jobs and the job market for EM. I'm sending links to the other senior residents in my program about this post.

    Now if only there was a how-to guide for the oral boards...including such simple things that we take for granted like asking EMS to stay, checking for medic alert bracelets, going to CT scan with ill patients. I just know something stupid like this will trip me up.

    -dex

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