Determine the right position for you and negotiate successfully for it
After spending 10 years in medical school, residency, and fellowship, most new orthopaedists feel appropriately trained to perform surgical procedures. However, little of that education is devoted to some of the most important aspects of the profession, including how to find a job that fits the individual, how to navigate the negotiation process, and how to develop a foundation for a strong practice.
Currently, 70 percent to 80 percent of fellowship graduates change jobs within their first 2 years of practice. Although academic orthopaedic surgeons frequently serve as mentors to younger surgeons, about half of all orthopaedic surgeons in the United States are in private practice.
This article provides an introduction to basic concepts that will assist the young orthopaedist in making a more informed decision. It should not be seen as a step-by-step guide on how to find the right job, nor should it be viewed as a substitute for the advice and counsel of a mediator or an attorney.
The three primary practice models include private practice, hospital employment, and academic medicine. Along with hybrid practices, other practice types include a military commission, as well as positions with health maintenance organizations or locum tenens companies. For simplicity, we will focus on the three primary practice models.
Private practice models
An orthopaedist in private practice may be a solo practitioner, a member of a single specialty group, or a member of a multispecialty group. Solo practitioners essentially function on their own and manage their own billing and collections. These physicians must have a good understanding of their markets, overhead, and expenses to survive, along with a firm grasp of regulatory issues, electronic medical records systems, ancillary sources of income, staffing, and efficiency.
Typically, a single specialty group may represent the various fields of orthopaedic surgery or may focus on a specific treatment area, such as hand, spine, or sports medicine. In addition to orthopaedic surgeons, the group may include complimentary specialties, such as physical medicine or pain management doctors. Single specialty groups offer many advantages, including economies of scale and increased leverage in dealing with hospitals and insurance companies.
Typically, multispecialty groups are larger groups of general practitioners such as family medicine doctors and internal medicine doctors. These groups will often hire specialists, such as orthopaedic surgeons, to capture additional revenue from their referrals. Employment may or may not involve equity in the practice or ancillary income sources. One of the benefits of joining a multispecialty group is the automatic referral base that will assist in starting a practice.
Benefits of belonging to a private practice include the high income potential as the practice develops as well as the ability to use the practice and many practice-related purchases (such as a car, cell phone, computer, and educational expenses) as business expenses.
In hospital employment, the orthopaedic surgeon typically receives a salary and potentially a bonus. Because many hospitals are not-for-profit organizations, a certain percentage of their patients may be uninsured or unable to pay the physician's fees.
Often, hospital-employed physicians are reimbursed based on their productivity as measured by work relative value units (wRVUs). The Centers for Medicare & Medicaid Services assigns each procedure a certain number of wRVUs. For example, in 2015 the number of wRVUs for a total hip replacement was 20.72. Typically, hospital-employed orthopaedic surgeons are paid a contractually determined multiple of the number of wRVUs they produce.
The benefit of hospital employment is that the surgeon is not responsible for managing overhead and other employees. Today, many employment contracts offer higher initial salaries than those offered by private practices. However, hospital employment may limit the income of highly successful surgeons by capping pay or restricting access to ancillary income streams.
The third major practice type lies in academia. Functionally, many academic surgeons are hospital-employed physicians, subject to other metrics (such as the education of medical students or residents) in addition to production. Compensation may also be tied to academic tenure or productivity in research. Academic surgeons often enjoy a flexible work schedule, enabling them to engage in nonclinical activities.
Hybrid practices may include administrative duties. Also, many single specialty orthopaedic surgery groups have affiliations with academic centers. These groups may reward teaching and research along with clinical production while preserving opportunities for ancillary income. Applicants should have a very good understanding of what the practice goals are prior to joining the group.
Contract and employment evaluation
Deciding where to practice (location as well as practice type) is just the first choice a young orthopaedist faces. The employment contract is a complicated document that should be read carefully because it covers much more than just "the bottom line." Although we, as orthopaedists, can readily absorb medical jargon, the "legalese" of a contract is often a foreign language. Having the contract reviewed by an attorney is advised.
Value can be defined in many ways. Many hospital systems and practices determine value as quality of health outcomes divided by cost. This precisely applies to future employees and partners. The value of an orthopaedic surgeon may be based not only on surgical skills but also on less tangible components.
For example, having the only fellowship-trained oncology surgeon in a given area not only is a marketing tool for patients with musculoskeletal tumors but also can contribute to the goodwill of a hospital or health system. This will improve the brand equity of the orthopaedic department. Alternatively, a new orthopaedist might be the only one in a market area who can perform a hip arthroscopy. A new hand surgeon might be the only orthopaedist in town who did a hand fellowship at a particular institution. These qualities will enable a hospital to enhance its brand. Because these aspects have value, the orthopaedic surgeon must understand what he or she brings to the table when discussing a contract.
To assess appropriate compensation, the orthopaedist can turn to various sources that report income medians. These include the Medical Group Management Association (www.mgma.com), the American Medical Group Association (AMGA) (www.amga.org), and many recruiting firms. For example, according to the AMGA's 2013 compensation report, the median pay per wRVU for orthopaedic surgeons was $66.63. Depending on the practice type, this number can vary.
Practices that have collection-based income arrangements are not necessarily concerned with wRVUs. Academic practices may offer payment based on academic appointments. Payment may vary by region as well as population density. The challenge of recruiting physicians to more rural areas may mean larger salaries for hospital-employed physicians. However, orthopaedists employed in large urban areas can also attract large salaries.
Salary should not be the ultimate consideration, however. Even if a job pays $2 million per year, the terms of employment and the people the surgeon will work with are also of great importance.
Understanding value will give the surgeon confidence in his or her negotiations. The surgeon should have a personal list of which contract terms are negotiable and which are not. If an impasse is reached or the employer or partners are unwilling to negotiate on certain terms that are of critical importance, the surgeon may choose to politely walk away.
In addition, beware of yearly renewal contracts, especially those over which the orthopaedic surgeon has no control.
There are two major types of malpractice insurance: claims-made and occurrence. Claims-made insurance is less expensive and offered by many groups and practices. To be covered, the physician must carry the insurance policy not only when the event occurred but also when the claim is filed.
For example, during July, an orthopaedist treats a femur fracture with an intramedullary nail. If the practitioner quits in August, losing the claims-made insurance, and gets sued in September, he or she is not covered for that claim and is essentially putting all assets at risk.
For this reason, orthopaedists should obtain additional insurance coverage when the claims-made insurance policy lapses. This additional policy, known as tail coverage, is expensive, usually 150 percent to 300 percent of the cost of the claims-made coverage. The surgeon's future employer may also purchase "nose" protection, which covers incidents that occurred before the orthopaedist started his or her employment and for which a claim has not yet been made.
Occurrence insurance is more expensive because it protects the physician regardless of when the claim is made, so long as the policy was in effect when the incident occurred. Based on the previous example, an orthopaedist who performs a femoral nail procedure in July, leaves the job in August, and gets sued in September would be covered by the previous employer's occurrence policy. Often, large hospital systems that are self-insured will carry this coverage.
Other considerations must be taken into account when evaluating medical liability coverage. For example, some institutions will try to have named individuals removed from a lawsuit so that the lawsuit is against the institution. This has obvious benefits to practitioners because lawsuits and settlements are reportable to the National Practitioner Data Bank. The state of practice also has a bearing on coverage. States with tort reform laws often have lower malpractice rates than those without such regulations.
Restrictive covenants, which govern where a surgeon can practice after the termination of his or her contract, can often be a challenge. Surgeons who wish to remain in a particular geographical area should insist on defining the terms of restrictive covenants in advance.
Another consideration to discuss before finalizing the contract is ownership of intellectual property. An employed surgeon who develops a marketable device may find that the hospital will attempt to claim ownership of that idea. These terms should be defined prior to employment.
Young orthopaedists must realize that if something is not explicitly written in the contract, it will not happen. A handshake or verbal promise is insufficient. If the practice manager handling the contract negotiation is fired the day after the orthopaedist signs the contract, any previously made verbal promises may be challenging to enforce.
Remember that, when an orthopaedist negotiates for a hospital or academic position, he or she must negotiate for a support team, and be sure to get it in writing from the start. Think about an administrative assistant, nurse, physician assistant, medical assistant, cast technician or any other roles you may need filled to make you efficient and productive.
Negotiating contract terms can be extremely uncomfortable, especially if the prospective employee is dealing with people he or she views as mentors. Hiring an attorney to review the contract or an intermediary/negotiator to help with the terms of a contract may be beneficial. It is critically important that the details of the contract and employment opportunity are outlined explicitly prior to signing any contract.
During the search for employment, a surgeon may wield significant power. It is important to be thorough in an employment search and honest about expectations of specific contract terms. Understanding the basics of business and contracts is critical to securing the right job opportunity.
Bishoy Gad, MD, MS, MBA, is chief resident in the Cleveland Clinic Department of Orthopaedic Surgery, and chairs the AAOS Resident Assembly Practice Management Committee. He can be reached at email@example.com. Paul Saluan, MD, is an assistant professor of orthopaedic surgery and director of pediatric and adolescent sports medicine at Cleveland Clinic. He can be reached at SALUAN@ccf.org. Alan W. Davis, MD, is an orthopaedic surgeon at the Cleveland Clinic. He can be reached at DAVISA1@ccf.org
Editor's note: This article provides general information and should not be viewed as legal advice; for legal advice, consult a qualified professional.
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