Look around you… If you are the lowest-informed individual at the meeting, you are not at the table- you are on the menu! Don’t make the mistake of being under-prepared or under-informed.
Author: Robert A Felberg MD
Topics: Doctor Career Advice
Keywords: Doctor Contract, Physician employment, Doctor negotiation tips
As physicians, we truly understand the value of information, skillsets, and competence. We may not think of this in formal terms, but I do every time I consult a specialist for my patients. I recognize a patient has an illness that is outside of my area of expertise- not just general knowledge but expertise. I recognize that the skills, knowledge, and experience of someone else will add greatly to expected outcome. I also understand actively or at least tacitly, that this consultation costs resources. The patient will pay in terms of financial compensation, travel, and time. Physicians understand that these transactional and financial costs are a fair trade in the pursuit of better outcomes. As a matter of fact, you are considered to have a duty to consult and can be held professionally and legally liable if you don’t.
Introduction: This is part of a series delving into complicated professional and medical business skills that are vital to physician success, but are not covered as part of your training. Presented by physician advocates LLC , this is not intended to replace legal advice. Please sign up for our newsletter to keep informed. Please consider joining us for our upcoming CME approved seminar.
Yet, at the same time Physicians are notorious for refusing to seek expert advice for non-medical matters. We sign contracts without legal review, we accept salaries without knowing market conditions or learning how to negotiate, we make disastrous financial decisions without seeking professional financial advisors or learning from the many available resources (see WCI for examples), and we constantly degrade the value of our practices through poor third-party payer agreements and inefficient or outdated billing or medical practice management.
It’s really shocking and points to three problems- 1. We are used to being the smartest in the room and just assume we know a lot about everything. 2. It’s an ego thing. If I can save a life, then surely I can understand a 53-page contract without ever attending law school. Asking for help would be an admission of vulnerability. I’ll just Google up the word “perpetuity” … 3. Since physicians have a reputation for being under-informed and overconfident at the same time, they are considered easy targets by the sharks of this world. In response, physicians have become skeptical of every professional.
There is one situation where every physician automatically and without question calls in a third party expert consultant- when they are facing a lawsuit. Why now? You never asked for legal advice when you signed that terrible contract or when purchasing malpractice coverage. The reason is obvious, you risk potentially irreparable financial and reputation harm in an arena without sufficient expertise and in the immediate future. You’d happily pay 40 to 50-thousand in legal fees to avoid a 500-thousand-dollar settlement against you.
Consider how this applies to your daily practice– you’d avoid spending a few thousand in expert advice at the time of negotiating and signing your new contracts only to lose thousands to tens of thousands annually for the next 35 years of your career. The same can be said when you plan your agreements with third party payers. Being underpaid 15% for every single patient can really start to hurt after the 3,000th or so visit… Try that for the next 20 years! If you apply the “immediate future” screen to long-term financial disaster, the pressing need for expert advice becomes evident- especially if you consider the loss of opportunity to invest that money at compounding interest over the course of your career.
There are several situations where a physician should consider the advice of a consultant. There are some shared characteristics:
- The party with the best information has the advantage.
- The other party is dealing within their area of expertise while you are the less-informed or less-experienced party.
- There is high potential for costly error- either immediate or long-term
- The other party stands to benefit from a mistake on your part giving them incentive to be less transparent and possibly encourage you to stay uninformed.
So when should you seek consultation? Here are some common scenarios:
- Salary negotiation: You may know you deserve to earn more, but were never taught how to bargain at an expert level. At the very least, you would like to know if you are getting a fair deal or when it’s time to walk away and seek employment elsewhere. Obtaining solid market data, developing a negotiation strategy and receiving physician specific negotiation training makes a lot of sense.
- Most physicians can master negotiation after formal review. However, sometimes hiring a negotiation agent makes sense. (Note: This can be tricky. Contact me at physician advocates LLC if you want advice along these lines)
- Contract Review: You’ve negotiated hard and have come to a fair offer. Before you celebrate by signing on the dotted line, you need a professional to review your contract. Long story short, you want to be sure the contract says what you think it says, that you are protected if the relationship sours, and that you are being treated fairly compared to your peers or the legal standards in your state. As a physician, your life will be dominated by contracts- get the best and brightest on your side. This is particularly true for complex relationships like practice buy-in or partnerships.
- Financial planning: Lots of physicians become financially savvy and many of them have great blog sites. However, there are times when paying for financial advice is the best option. You want to look for fiduciary advisors – they are legally required to act only in your best interests. Since they will not earn embedded commissions, they charge you a flat-fee up front. Any other relationship with an advisor runs the risk of them benefiting through exorbitant fees at your disadvantage.
- This is especially true when:
- You are new to financial planning. Consider paying for the flat-fee fiduciary planner while you learn the ropes. The mistakes you make early-on tend to be the costliest.
- You have a large debt burden. Determining the best payoff plan while also investing for retirement and making large purchases can be complex. A fiduciary advisor can review your options and give you solid footing.
- You are buying a house or car through financing or borrowing. No matter what your real estate broker may be telling you, there is a wise limit and amount to spend on housing and several different ways to approach the loan.
- You are starting to invest through tax-deferred vehicles or buy insurance products. Many physicians become expert investors and you can also. But, when you first start out, getting professional advice on funding your 401 k, choosing which funds and amounts to allocate, and whether you should invest in a Roth IRA or 457(b) can make a lot of sense. Again, these decisions are usually made early and the mistakes have decades to compound. The same is true with life insurance, disability, wills and trusts. Some physicians are very knowledgeable in these areas. If you are not, fiduciary advice is more than worth the cost.
- You are dealing with third-party payers: Nothing affects your success more than maximizing your incoming revenue. Dealing with insurance companies can be very difficult, they often seem to hold all the cards. You need to learn how to negotiate at a very high level. You also need to develop an understanding of your market, your revenue streams, and your alternatives. It’s often the highest level of negotiation most physicians and groups will ever face. Getting a consultant is sensible. The level of complexity and risk presents this as a potential career-killer. (Note: contact me at physician advocates LLC if you need advice on this topic)
- Revenue Concerns: If your practice is just not generating profits compared to your peers or aspirations, it’s time to bring in an expert. Your billing, documentation, staffing, or office procedures may be costing you thousands in lost income every day. A practice management consultant can bring in a fresh review through the lens of experience, often making small changes for large gains.
Every doctor knows when to refer their patients for a specialty consultation. The wisest physicians know when to consult an expert for advice on non-medical issues as well. If you found yourself as the low-information member in the room it is time to call in the experts. This is money wisely spent and often pays back in multiples. The knowledge obtained from these resources will also often be useful time and again as you face similar events in the future. Always have the best and brightest team fighting for you.
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What do you think? Have you ever called in a specialist? Do you feel comfortable making the decisions above? What pay scale did you use for advice? Let us know your thoughts in the comment section.