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Beyond Pay and Benefits: The Factors Making A Successful Physician Employment Contract

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Mason Walker
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Beyond Pay and Benefits: The Factors Making A Successful Physician Employment Contract

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In recent years, the landscape of healthcare has been rapidly changing. According to a study by the American Medical Association (AMA), doctors are increasingly leaving private practice in favor of direct or indirect hospital employment. Despite this trend, private practices continue to strive for success, and a key component of this success lies in effective physician employment contracts. These contracts involve more than just pay and benefits. A host of other factors play a crucial role in attracting and retaining talented doctors.

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The Shift towards Hospital Employment

The AMA study revealed that in 2022, 46.7% of doctors worked in wholly-owned physician practices, a significant drop from 49% in 2020 and 60% in 2012. Meanwhile, 31.3% of doctors worked in practices that were wholly or partially hospital-owned, an increase from 30.5% in 2020 and 23.4% in 2012. This shift indicates a changing preference among physicians, especially those under age 45, who experienced the sharpest drop in private practice ownership. These trends suggest that private practices need to reevaluate their approach to physician employment contracts to remain competitive.

Negotiating a Successful Physician Employment Contract

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Physician employment contracts in private practices involve a carefully considered recruiting process. It starts with a detailed job description, followed by clear and consistent communication with potential new hires. An understanding of the restrictions and negotiable parts of the contract is also crucial. This process aims to make the physician feel valued beyond mere monetary compensation. The time and cost to finalize an agreement with a physician are significant, hence, it is also essential for practices to be aware of the compensation range in the region to negotiate effectively.

Strategies for Private Practice Success

Private practices can adopt several strategies to enhance their operations and achieve their fiscal goals. These include optimizing revenue, improving operations, and monitoring managed care contracts. The impact of the Calendar Year 2024 Medicare Physician Fee Schedule (MPFS) on private practices, for example, is a key consideration. Practices need to be prepared for changes such as reductions to the conversion factor and the addition of an evaluation and management (E/M) visit add-on code.

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Other strategies include a thorough review of fee schedules, assessment of the revenue cycle, detailed analysis of financial reporting, evaluation of staffing approaches, and participation in clinical research trials. These strategies can help private practices remain competitive and attractive to physicians amid the increasing trend toward hospital employment.

Physician Contracting Jobs

Physician contracting jobs are available in various locations across the United States. These include roles such as Senior Counsel, Physician Contracting, Provider Contracting Professional, and Physician Relations Specialist. Understanding the remuneration for these positions provides additional insight into the financial aspect of physician contracting, further informing the negotiation process.

In conclusion, the elements of a successful physician employment contract extend beyond pay and benefits. A considered recruitment process, ongoing communication, a clear understanding of contractual components, and an awareness of regional compensation ranges all contribute to a successful contract. By adopting these measures, private practices can remain competitive in the changing landscape of healthcare.

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