Welcome to the first edition of the ASSH Business of Hand Surgery Newsletter. We will periodically push this practice-related newsletter to ASSH members through-out the year. The following article comes to you from KarenZupko and Associates, Inc. We welcome your feedback regarding the Newsletter. Thank you,
Daniel J. Nagle, MD, ASSH Practice Management Director
Co-chair, Business of Hand Surgery Committee
Lionel G. Brown, MD
Co-chair, Business of Hand Surgery Committee
Your First Employment Contract: A “Top Ten” List For Hand Fellows
By James G. Stuart, JD
Introduction:
In today’s healthcare environment, it is common for hand surgeons to join a group as opposed to going solo. This is largely driven by the fact that the patient intensity is high, often with more than average amounts of trauma care, coupled with the frequent sub-specialization in many markets. For this reason, it is likely that you will find opportunities within existing medium to large multi or single specialty group practices. There are, however, in certain markets, small groups of three to six surgeons who exclusively focus on hand surgery, and this calls for a somewhat different analysis of the issues set forth below.
Think about the physician pay plan. According to the Medical Group Management Association median compensation for orthopaedic hand surgeons is $478,464—lower than it is for spine, joint and sports medicines specialists, but more than pediatric and foot ankle doctors make. Plastic hand specialists’ median compensation in the 2006 report is $448,225 with general surgeons reporting a median income of $300,800. It’s important to know how you will spend your clinical time, how your group’s pay compares to national norms, and precisely how the plan is devised.
The following is a Top Ten list of issues that you should look into before signing any Employment Agreement. You will notice that a number of these issues deal with matters external to the contract terms. Rather, they deal with whether or not the targeted group will be a choice that suits you in years to come. It’s our experience that these sorts of initial inquiries are too often skipped over by physicians coming out of training. Instead, they usually fixate on the financial terms of a given opportunity and assume the best as far as these types of issues are concerned or they fail to realize their importance. This can prove to be a costly error in judgment, and we urge that you consider these preliminary issues. For more details in this area, please see the author’s article ”Before and Beyond the Contract” appearing in the May, 2007 issue of The American Journal of Orthopedics, in addition to a three-part article “The Employment Agreement: What Every Doctor (junior and senior) Needs to Know” in The Journal Of Medical Practice Management Vol. 15 & 16, 2000, downloadable from www.karenzupko.com.
Top Ten List
1. Examine the payor mix in your target market. Determine what rates the top payors offer for your most frequently done procedures. Are such rates comparable or better than those offered in other similar markets? You don’t want to find yourself in a market with above average Worker’s Comp cases, but paying a below average rate.
2. Do a typical supply and demand analysis of each market. Ascertain the degree to which the market has a need for and will support an additional hand surgeon. The dynamics will be somewhat different, depending on what kind of group you are joining. For instance, if the target group is a four physician “hand group” getting most of its referrals from PCP’s and other specialists in the market, you need to know if those referrals are, in general, growing and can be expected to continue to do so, and the extent to which the existing four hand surgeons in the practice are fully booked. Also important is when does the senior hand surgeon in the group plan to retire? If, on the other hand, your target group is a 20+ physician full multi-specialty or orthopaedic group, then the competition will likely come from outside the group, and the referral sources may come from both inside and outside your group. Some competition may come from others trained in hand surgery, but whose practices have this as a minor rather than a major clinical focus.
3. Determine if the groups you are looking at have an income distribution policy which includes an equal share component no matter how small. If so, you will be one of the beneficiaries since your partners will likely be generating larger collections than you can reasonably produce due to the disparity between reimbursement for hand procedures compared to spine for instance.
4. Governance: How effectively is your target group managed? Orthopaedic groups tend to be somewhat larger than others such as general or plastic surgery groups. Such size can exacerbate governance issues for the simple reason that there are more doctors at each meeting to find fault with the way in which the practice is being managed. You will want to inquire if the groups’ physicians each undertake to supervise a distinct functional area of practice operations, e.g., finance, coding, reimbursement, data processing, etc. This will normally result in higher efficiency. Governance and oversight are important areas frequently overlooked by young physicians exploring initial opportunities.
5. “Group Think” – This term refers to the importance in any medical group practice for its members to hold firmly to the principle that what is good for the group is good for its individual members. One of the potential problems in a larger group is the increased chance that not all of the partners will embrace the group think principle. Determining the hard facts in this area is not easy. Probably your best resources are through alumni of the group, or hospital personnel and nurses who usually have a pretty good ear to the ground with respect to group culture.
6. Is the call schedule fair and workable? It’s incumbent on a hand recruit to explore whether there are adequate hand specialists (orthopaedic, general surgery or plastic surgery) for a hand call group, plus whether you will be expected to participate in general call as well.
7. What’s the story on ancillaries? Is imaging, both x-ray and MRI, done in-house? Is the quality to your standards? Is there an ambulatory surgery center owned by the practice’s partners or in conjunction with other surgeons or with the local hospital? Will you be invited to become an owner in such facilities? Is there an affiliated rehabilitation facility? Does the practice employ physical therapists or occupational therapists? Do their skills match up to your expectations? Is physical and occupational therapy profitable? Ancillary services can provide a significant enhancement of a hand surgeon’s income. It’s important that you know how advanced your target practice is in this respect.
8. Ascertain the quality of the group’s management personnel – especially the Group Administrator. Arguably, large groups require greater management skill than some other physician groups due to the larger number of sub-specialties and the diverse needs and subcultures presented by them.
9. How efficiently are the various steps in the reimbursement process managed in your target group? Do all the surgeons have up-to-date coding skills, and do they agreeably code their own cases? How well and recently trained is the coding staff? How aggressive is the accounts receivable management? These are important areas for potential managerial breakdown due to the diverse number of procedures performed by large groups and the sheer number of patient encounters. Determine if the practice is maximizing technology in this process.
10. Ascertain the degree of technological sophistication in the practice. Have electronic medical records opportunities been examined, compared and pursued? Many groups talk about EMR, but fail to take meaningful action to get such a program launched. Hand surgery is one of the ripe areas for significant improved efficiency from a well chosen EMR system.
If the reader will address the 10 items described above and pursue satisfactory answers then, and only then, should he or she turn attention to what is contained within the initial Employment Agreement? For details about this latter subject, once again, take a look at the three part article written by the author in the Journal of Medical Practice Management in the June, August and September, 2000 issues, downloadable from the KZA website.