Interviewing for Setting Up Practice

My husband and I are in the preliminary stages of deciding where to set up practice. We get two or more phone calls a day from recruiters who seem like a cross between a telemarketer and a used car salesman. We finally went on one interview, and we are just really confused. Who has been through this, and how did you make the decision? He is PGY3, and we need to decide something soon!

[mommax3]

Jennifer,

I think a lot depends on where you both want to live and the type of practice your husband wants to have.....those are the minimum questions you need to answer before you start dealing with the recruiters.

What specific questions do you have? There are a few of us here who have made the jump (finally!) to attending status, and I am sure that somewhere in our experiences are some things that would help you.

Sally

We have pretty much decided where to go, but beyond that the biggest decisions are private practice vs. group practice. How did you decide that, and what kind of hours should we expect with that. It sounds like the 80 hr work week is here to stay!

Hi,

I can tell you from expirence is to make sure the person you are planning on going into practice with has the same work ethic your husband has.

My husband has been in private practice for 15 years. about 10 years ago he took in a partner. The partner LOVED the income but didn't like taking night call....YEA right. An OB doc that does not want night call

It took a couple of attorneys to sever that nightmare. He just recently spoke to another private practice Doc who is out of residency now for 3 years about joining his practice (we have 3 office and it's VERY busy).
This guy has one small office that has not gotten off the ground yet.
He was interested for a 50% cut
My H was willing to eventually make him a partner but to start out at 50% after her has done all the work the past 15 years just was not gonna happen.

As a RN I have seen alot of practices fold because of differences in work ethics. Make sure if your H is a hard worker that he does not get taken advange of. Make sure he goes in with some good questions about the group or Physician he is interviewing with scheduling and their expectations of him.
Good Luck

[Meenah]

My DH is in pricate practice with no partners and he prefers it this way. He has coverage with several docs and it works well. Half of his practice is hospital based and half ofice based. Good luck.
Luanne

[Amiens]

JenniferB,

We're not in a situation where we set-up practice per se, but when my dh was interviewing with anesthesia groups, someone gave him a list of questions that I think could be tweaked and applied to any specialty. If you are interested, I can either email them to you or post them here.

If you have a chance to read it- I wrote an article for this month's MDFamily on how we made the job decision.

Crystal

[mommax3]

I posted again to you a week or so ago, but I guess it never showed up!

I would echo the post that advised your husband to be very careful about his partners. Work ethic is huge, bedside manner (I guess somewhat dependent on the specialty) is also a biggie, and competency also should be verified. My husband owed the military 4 years after he finished residency, and had no control over the doctors he worked with, although their clinic functioned much like a private practice. All of the areas I mentioned above were issues at one time or another, and my husband made the decision early on to look for a small group when he entered the civilian world, even though it would mean more call. He really wanted to know his partners well before committing to work with them.....it is a LOT like a marriage, really. There is no way he could have gotten to know all of the partners in a large group well enough during an interview process.
What he ended up doing was joining a multi-specialty group that is mostly family practitioners, with a few specialists in different areas. His "partner" is a guy he knew from residency who also just left the military. They both have an 18 month income guarantee (which they do not have to repay) to support them as they build their practice. It has only been six weeks since he started, but so far, he is very happy with his choice.

We got a lot of good information that wasn't too specialty-dependent at the Medical Economics Magazine site (http://www.memag.com) Click on the "Advice for Young Doctors" link.

Let us know how it goes! It is an exciting time that can also be really overwhelming.

Sally

JenniferB,

when my dh was interviewing with anesthesia groups, someone gave him a list of questions that I think could be tweaked and applied to any specialty. If you are interested, I can either email them to you or post them here.


Crystal

Yes! Please email me or post it. I am looking for any help I can get!

Thanks!

Sally,
Thanks for the website link! I really appreciate all of your help!

[Amiens]

Here are the questions. I am sure you could tailor questions to suit your specialty needs- such as How many total anestetics per year, you could change to you number of cases, number of patients, etc. It definitely opened our eyes up to issues we hadn't even thought about while in residency.

Hope this helps,

Crystal

Get a Job!
A short pocket guide to evaluating your new (prospective) job
Moeed Azam, M.D.


*The Practice *
How many total anesthetics per year?
How many anesthetizing locations?
How many hospitals/surgicenters? How far apart are they? Do you have to travel to multiple sites in the same day?
How many practitioners? Partner Anesthesiologists, Non-partner anesthesiologists, locums, CRNA’s, AA’s.
Is everyone collegial?
Are CRNA’s and AA’s under the group or the hospital?
Where is their income (and loyalty) derived from?
Has the number of providers been stable over past few years?
How many are planning on retiring?
Any major turnover? If so, for what reason?
Plans to expand or downsize?
Has there been difficulty in attracting CRNA’s or AA’s due to a tight market?
What is their income level?
What is the case load? Trauma, OB, Neuro, Vascular, Thoracic, Peds,
NICU, Chronic and Acute Pain, Outpatient/Sameday, Regional, Ortho, Office based, Remote (radiology, endoscopy, etc)
Will you be asked to work in any division/area more than others? Is there a commensurate difference in reimbursement for differences in work hours?
Technical support? Lines, turnover, re-stocking supplies, drips for
cardiac or VT.
What is the average set up time, average turnaround time between cases? Where does the technical support staff’s income come from?
What about technical equipment specialists for airway, anesthesia machine, monitors, etc?
Is the equipment/technology up to date?
Is there an experienced practice manager? Business officer? Someone
skilled at compliance issues?
What is the overall income trend over the past few years? Any changes on the horizon with the hospital, managed care, payor mix, etc.?

Overall, during the visit you must talk with as many people as
possible, including support, CRNA, locum, etc. And most importantly remember, your goal is to win the job first, and then see if it’s an offer you want to keep.

*Day-to-day *
Do your own cases or supervise? What is the usual medical direction
ratio?
Are there residents or CRNA students? How many rooms do you ever cover at once?
Are there floaters to get you out for a break or to eat?
What is a typical day like?
Is there an even distribution of cases?
Do surgeons pick who they want to work with?
Is there “new guy” scut with undesirable cases?
Do you do inpatient pre-op’s? How well are outpatients pre-op’ed?
Does anyone feel undue pressure not to cancel/postpone a case due to poor pre-op workup?
What is the relationship with the surgeons?
Other duties: follow your own acute pain patients, post-op epidurals, floor codes, etc,?
On call arrangements- In house versus at home?
Trauma, OB?
Do you have to live a certain distance from the hospital because of home call arrangements?
Late schedule?
Back-up?
How often do you get called in? How is the call schedule made up? Who gets priority?
Can you “buy” or “sell” call?
What happens post-call?
How often do you have to work post call?
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*Page 2*

*Partnership *
What is the structure – corporation, partnership, limited liability
company, limited liability partnership? There are large differences in your liability, tax/benefit issues, and governance structure.
Average age of partners?
When was the last time someone made partner?
When was the last time someone on the partnership track was rejected? Why? Can you contact these individuals?
How is partnership achieved?
What is the voting arrangement?
Do some have more votes?
Are there different classes of ownership interest?
Is there an imbalance of power?
All groups have some factions/divisions. For example, cardiac vs. peds,
FMG vs. US grads, older partners vs. young associates. Is there an unhealthy relationship between the different factions in the group or in-fighting?
Do the partners have too many privileges such as: choice of cases, different work schedule, lighter weekly hours, better vacation schedule, less call, no weekend call, priority for holidays?

Buy-in
1. Outright cash outlay to purchase partnership stock, ownership if
Physical facilities, etc.
2. Sweat equity, or the amount of money your labor is worth.
One way to evaluate different practices with different time frames and
incomesthe years to partnership) x (income difference of avg partner vs non-partner)
For example: Three years to partnership, Avg partners make 350,000 and avg salary during first three years is 200,000…then you have an effective “buy in” of 3 x 150,000 = $450,000.

*Financial Stability *
Look up the hospital with American Hospital Directory at AHD.com. It
will give you all the financial details including total revenue, profits, and losses.

Who does the billing?
What is the annual accounts receivable?
Has the revenue been increasing or decreasing?
What percentage is Medicare? More importantly what about
Medicaid? They may actually take a loss on those cases. Managed care
contracts?

*Politics *
How does the group stand with the rest of the hospital? Are there any
members who have served politically important roles in the hospital administration? Is there representation on various hospital committees? Are there any competing anesthesia providers in the system? How long has the group had a good relationship with the hospital? Has there
ever been a total restructuring of the group or replacement with another group?

*Benefits *
Overall package can be worth over $50K (malpractice, disability, health, and retirement),so factor that into the salary offered.
Retirement
Profit sharing - when are you allowed to start participating and how
long till vested 401K
Money purchase pension plans
Vacation, sick leave, maternity/paternity – what is allowed? What
happens if you don’t use it all?
CME, conference travel, time for educational activities
Employee perks – parking, memberships in professional associations

*Page 3*

*Contracts *
General Points
Everything discussed needs to be in specific writing
Attachments need to be /incorporated into the text of the contract by
reference/ and attached. Include things like formulas to calculate compensation, outline of benefits, specific policies and procedures guides, Important items need to survive termination of the agreement with specific mention in the contract –e.g., access to medical records once you left the group. Watch for limits on your access or burdensome requirements or costs. This could be difficult if you leave the group and need to access records for a suit, for example.

Specific definitions of all terms. Everything needs to be specifically
defined – e.g., “providing anesthesia services”…does that include pain and ICU? Don’t presume ordinary meanings apply. The duration or term of the agreement is only as long as the notice period for termination Example: signing a one year contract where you can be terminated with two weeks notice, only gives you two weeks of security. Negotiate as long a notice of termination as possible for job security, but realize that it may limit you making a swift exit if things really don’t work out.
Is the contract automatically renewable; and if so, does it include
language for escalating compensation over time? Are there mutual rights to block both automatic renewal and termination at the end of the agreement term. Does it specify that ending the agreement needs to be done in writing?
How subjective are the grounds for termination? Can you be terminated
“/without cause/”?
What are the defined reasons for termination “/with cause/”? Is there a
Periodic performance evaluation? What are the performance standards? Any clause that states that you should provide that “highest level of care” is dangerous, not only for your position with the group but also in terms of malpractice. You could be binding yourself to providing a level of care beyond what the law requires or that your malpractice policy will cover you for.
Is there a “notice and cure” provision which requires both parties to
identify a problematic breach of the contract and time to fix it, with independent third party review of the efforts to fix the problem.
Do not agree to indemnify the other party. Most professional liability clauses do not cover “contractually assumed liability.”

Generally a clause along these lines will have you indemnify the other party to broadly cover any expenses incurred related to your actions or services provided, even if you acted totally appropriately or provided acceptable services. If the other party insists of a clause of this nature you need to specify the amounts of your liability, and obtain a rider on your liability insurance to cover that amount. On the other hand, you want to be indemnified against any liability relating to administrative or on-clinical services you provide (e.g. Hospital committees, etc) –and you should be covered under the other party’s liability policy or have them pay for a rider on yours. Also if you will be in a position to hire and fire (other anesthesiologists, CRNA’s, techs) under direction of the group, then you need to have this direction spelled out and be indemnified against wrongful termination or discrimination suits.
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*Page 4*

Look for a requirement that any amendments need to be signed by both parties. Frequently managed care contracts state that the contract can by changed unilaterally with written notice of the change. If the other party can change the agreement at any time, then any negotiation you do is worthless. Look out for provisions that allow “assignment of rights” or transfer of rights and obligations to another organization/party. These are more common with managed care and hospital contracts, but do show up with anesthesia groups. If an assignment occurs, you could be working for a very different entity. You want advance notice of any action and for the contract to be binding to all assignees. Note the governing law and venue of enforceability – some areas may be in proximity to several states or jurisdictions, which may have different implications (e.g. such as enforceability of non-compete clauses). Dispute resolution with arbitration – an alternative to expensive litigation if there is disagreement. Is it binding? Can you still go on to litigate? What is the appeals process? The contract should spell out who pays for the dispute resolution costs.

The Employment Contract
Should specifically spell out: time commitment; call responsibilities, termination and restrictions after you leave, regulations on outside employment (moonlighting, funded lectures that you may give, expert witness participation, etc);
Post termination restrictions – look out for “tying” or “clean sweep” provisions; ie. That upon termination of the agreement, there is also termination of all staff appointment or privileges at the hospital.
Non-compete clause or restrictive covenants – there is variable enforceability by state with respect to time and geography. Does it specify ambulatory surgical centers or office based anesthesia? What about employment in administrative or non-clinical positions?
Does the contract spell out precise details on your responsibilities and time? Amount of time spent at various clinical locations (eg., you may want to join with the expectation of doing a variety of cases and then find yourself getting stuck with OB or surgicenter all the time) How is part time defined with respect to weekends and holidays? Does it specify the scheduling and call priority?
Does it specify a geographic limitation for taking home call?
Compensation – Equal or production based? Fee for service or “eat what you kill”?
What is the exact formula for calculating compensation? How is productivity measured? Does it include non-clinical time? Is the risk of payor mix included?
Do you get the actual income from each case you do, or is it all pooled and divided between all? Will a particular formula lead to competition for certain cases due to better reimbursement; or conversely, dumping of complex cases since they all pay the same? As the new person will you get the “leftover” low reimbursement cases? Is there a bonus? If so, what is it based on? Is there a requirement to share other income, eg. honoraria.
How is partner/shareholder compensation calculated? If it is based on a group’s net income, how is “net” defined?
Fringe benefits should be explained. Know the extent of employee
contributions (pre vs.post tax)
The compensation payment must be specific. For example, /not/ “employee
will be paid $150,000 per year” but rather “employee will be paid $150,000 per year in equal semimonthly installments on the 15th and 30th of each month effective immediately upon the beginning of the employment term”

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*Page 5*

Does the contract specify the opportunity for advancement/partnership/etc? What about details for voting rights, compensation increases, and the buy-in? Note: if the group has a contract with a hospital that can be ended with short notice, then the buy-in should reflect that precarious position. In other words you don’t want to spend a lot to buy into a group and then have the group lose its contract. Even if specified, realize that the promise to advance you is as short as the notice period for termination. You need to look at the historical practices of the group Credentialing - Any additional or special requirements? Group contract with hospital
Ask for a copy.
How long does it last? When does it expire? When is it renewable? When is it cancelable? Is it terminable without cause? Does it restrict the group (and you) from providing service elsewhere? Are there competing anesthesia groups in the same hospital system?

*Insurance *
Malpractice
1. Occurrence – coverage for the services you provide during the time the policy is in effect, no matter when the claim is made.
2. Claims made - coverage for the services you provide only as long as you have the insurance policy. So when the policy ends (eg. when you leave a group) you have no coverage for any claims relating to clinical services that were provided while you were under that policy. To cover yourself you need a nose or tail policy. With a claims made policy you need to consider the total cost, which would be the cost of the policy /plus/ the cost of any tail coverage you would have to purchase later (tail may cost additional $10-30K).
Varieties of claims made policies:
A. Pure – as above
B. Nose/Tail
Tail provides retroactive coverage for claims relating to things that happened while you were under your past policy. Nose coverage is from you new insurer. Does the group pick up the tail or nose coverage if you leave?
C. Modified – reporting a suspected adverse incident triggers lifetime protection on claims arising from that incident. How is the cost calculated? Is there a low intro rate with escalation later? You are a low risk as a new physician and your residency covers all things that
happened there, so this may not be a good choice. What will the “mature” rate be? How is the tail rate calculated? As a percent of the expiring year’s rate (better) vs a percent of the mature rate? If you change coverage three years out, you don’t want to buy a tail whose cost is based on a mature rate. Is there a free retirement tail? At what age? Is there portability of coverage? Who is the agent selling you this insurance and how are they compensated? Independent (more objective) vs captive. What are the policy limits?
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*Page 6*

Is there coverage from getting sued for other professional activities and work you do? Moonlighting, professional association, volunteer work, committee work (a D&O policy - directors and officers) Administrative or quasi-clinical – for example if you make decisions on QA, peer-review, or any employment decisions for OR/Pacu personnel
What are the exclusions to the policy?
Does you employment contract or the contract between the anesthesia group and the hospital have “contractually assumed liability” which indemnifies the hospital from all blame? Usual clauses state that the group has to pay all costs associated with claims relating to anesthesia and pain services provided, and hold the hospital harmless. Basic professional liability or malpractice policies are unlikely to cover this gap. How eager is the carrier to settle fast rather than litigate? This is important in cases where you may not have done anything wrong, but the carrier sees it cheaper to settle that go thru the legal process – in the end you still lose since your premiums can go up or your record can be tarnished with a “malpractice settlement.” Even worse in the current insurance climate, you could easily become uninsurable as a high risk.
Disability
“Own occupation” is a must
What exclusions?
How is disability defined?
When are benefits payable? How long are benefits payable? Short term vs long term vs mixed?
How are premiums payable – pre or post tax? If the payments are post tax then the benefits are not taxable.
Should cover “residual” or “partial disability” - if you can still be
an anesthesiologist but can’t work the same hours or do all the same procedures.
Should be an “inflation rider” - benefits increase with inflation, preferably tied to CPI (consumer price index)
Should have “guaranteed renewability” and be “non-cancelable”
Should have “future insurability” – allows you to buy more coverage without a physical exam?
Does it have “return of premium” – where you pay more each month but the company invests it and pays it back after a certain number of years - don’t necessarily need this.

General Liability
Covers ownership and operation of physical facilities, eg. pain clinic,
Ambulatory surgicenter
E&O - Errors and omissions insurance
Growing insurance field that covers mistakes and oversights for billing errors, erroneous Medicare claims, and possibly for private payor audits.

Health insurance
Pre or post tax? How restrictive is it? Can you see the physicians you want to go to? Family coverage? Cumbersome reimbursement process?

Wow, Crystal! That list of questions is fantastic. Thanks!

[DCJenn]

Wow-

and sadly, we'll never get to ask any of them...

Hooah- Go Army!

Jenn

Wow I agree ..The list is wonderful.

As the person that would be on the receiving end to those questions.
proceed with caution on a couple.

The questions regarding partnership are great. BUT usually groups or solo doc's will have a year or 2 before the "new" doc has an oppurtunity
to "buy in" reasoning is they need to make sure he/she fits in or works to the level the group wants....Bottom line do they like the new guy.
My neighbor has gone through 3 potential parnters in 5 years. A larger group here (4 obs) seem to go through a new doc a year. All were hired as potential partners.the other thing if you get to the point of a contract for partnership.. GET AN ATTORNEY !!! I know many that have been doing a buy in only to be fired the year before it's complete. Doctors are not business men..no matter how smart they are.


Collections: the question is very good. But I can tell you private or medicaid you will get evasive answers. They can let you know what they have brought in on an adverage. But it take months to collect on patients even with the big companies ( we take everything) contracts are really stipulated on what Medcaid is paying seriously it's not much more. This is why 20 years ago a doctor received 5000 for a normal vaginal delivery today it's around 560.00 global total care is 1200.00 yes this is what Blue Cross/ Blue sheild pays or and thats whether it's Vaginal or c-section.

The termination question will make them squirm. Docs are emotional people and if they are in charge I imagine they will have a termination package (severence) The best thing to do it to interview with every partner in the group. This is were I have seen this nasty. You have brushed one of the partners the wrong way and then it can become the beginning of the end. STILL this is a good question. My H has given night call to Doctors who were fired "At Will" and would have starved otherwise.
These guys/ girls have been in business for awhile they would have a business (Medical practice) Attorney. They will be protected either by the states labor codes (small business) or the contract will have clauses to protect them. You will be a very well paid employee they will not want to keep you if it doesn't work out. GET A LAWYER to review the offer and make changes to protect you. One that specializes in Medical practices.
You wouldn't go to an OB Doc if you broke your arm would you ?

I can't believe how thorough the question list is...I am very impressed
Just remember if the group is hiring they are in need and excited. Don't trust it ..get protected in case things unravel.
Good luck

[Amiens]

I forgot to mention that one of the groups that Matt interviewed with, one of the junior docs gave this list to Matt. Also take in mind a lot of these are geared toward issues that are encountered in anesthesia.

Matt wanted me to remind you that not all of these questions would you just ask outright during the interviewing process. There are ways of finding out information. Some we found out the answers to through the offered contracts, asking hospital admins, doing a little research on the hospital, etc. For the most part on the "sticky" questions docs were helpful, and would commend Matt on asking them for the information; then again it could be a specialty thing. The biggest piece of advice that we got was to go with your gut- if a group/practice seems a bit fishy- meaning you ask a question and the answer doesn't seem completely honest, then cut the line right there. Everyone we have spoken with who didn't go with their gut, got screwed over by a group, and ended up leaving and starting over.

Matt even asked to speak with docs who had left the group recently and wanted to know why. We didn't encounter any problems with this approach. As Matt would tell them- I want to make a balanced and well-made decision, and find a group that is going to fit me and my family. Everyone was pleased with this comment.

I agree, if you know someone or can hire a contract lawyer do it. We were able to get some points, albeight minor, points in Matt's contract either changed or have the group president explain why it was written a certain way. Don't be afraid to negotiate either, anything can be negotiated. We were offered reimbursement on moving expenses, and Matt took a shot and asked to be given the entire amount as a sign-on bonus. The group was perfectly fine with this request.

You can look up the stats on Medicaid. We used this tool. http://www.kff.org/medicaid/

HTH,

Crystal

This all really great advice, and I am really appreciative. I would be interested to know how you guys sought good legal help. Did you just open up the yellow pages?

One interesting thing about this group is that the partnership is an optional thing that you just "do" if you want, there is no buy-in. Is that way too weird?

It is so scary for me, and I have told DH that this is probably the worst of everything we have gone through. I literally think I am about to lose my mind!!!! :!