Job Seeker LIbrary with Cejka Search

A Look at Employment Contracts for Orthopaedic Surgeons

January 21, 2015 13:57 PM (GMT-04:00)
Healthcare News

By John Gramer, President, Cejka Search

A Look at Employment Contracts for Orthopaedic SurgeonsAmidst the rise of hospital employment of physicians, unfolding reform policies and tightening reimbursement, medical practices need actionable data that can be used by practice managers and surgeons to help find, create and promote more beneficial practice opportunities. A survey by Cejka Search of 118 orthopaedic surgeons reflects the most common and, therefore, expected benefits, incentives and terms of hospital employment contracts.

Employment Landscape

As background, about 40% of those surveyed have been in practice for more than 21 years, with a fairly even split between self-employed and employed practice arrangements. In our experience as physician recruitment consultants, orthopaedic surgeons are not as active as primary care physicians and some medical specialties in seeking to be employed. Nor are they at the very top of the list of physicians whom health systems most want to employ due to affordability, but the trend is moving upward.

Of the 49% of respondents who are employed, the majority (67.9%) worked for a hospital or health system, 17% for a medical school or university, and less than 8% were employed bya physician-ownedmedical group.

The Benefits and Incentives of Hospital Employment

Included in the contracts of nearly all employed orthopaedic surgeons in our survey were malpractice coverage and pension/401K plan (95.9% and 81.8% respectively). The majority (61.2%) also received paid vacation. Other common benefits associated specifically with recruiting were relocation assistance and signing bonuses, which were each noted by about one-third of respondents. About a quarter are paid for on-call coverage, which we believe is a growing due to the scarcity of talent and aging physician population.

Orthopaedic Surgery Hospital Contracts Include:

Malpractice coverage: 95.9%
Pension/401K: 91.8%
Paid vacation: 61.2%
Relocation assistance: 34.7%
Signing bonus: 34.7%
Payment for on-call coverage: 26.5%
Loan forgiveness: 12.2%
Other: 10.2%

(Source: Cejka Search Survey 2013)

Common Contract Terms

Beyond benefits and incentives, common terms for an initial hospital contract include:

  • Salary guarantee with production incentive for the first two years
  • Shift to full production in year three, based on work RVUs and other “citizenship” criteria, such as patient satisfaction scores, keeping charts up to date, etc.
    • Non-compete clause
    • Requirement of no vested interest outside of employer, such as surgery centers, physical therapy service lines, etc.
    • Average contract length is four years or less

Looking Forward

The primary factor in determining a physician’s income today is production. Lower volumes of RVUs are paid at a lower rate than higher volumes and typically adjusted on a quarterly basis. In the future, non-production bonuses will determine a larger percentage of total compensation. These incentives are based on patient satisfaction/HCAPS scores, practice growth, margin goals, utilization, and compliance with organizational goals, such as EMR, coding, recertification, and meeting attendance.

The bottom line is that orthopaedic surgeons and physicians overall will have to meet greater requirements in the future to earn the same amount of income as they do today.

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