Is your practice or employer confronting financial pressure from the growing pandemic financial crises?
Are you facing reduced compensation, furlough or termination without cause?
Practice or employer insolvency?
Successfully navigating the ensuing chaos and the complex relationships surrounding physician employment agreements and compensation requires an adroit hand. This is true for both hospital-system employed and private practice physicians.
The ongoing financial hemorrhage is exposing deep multi-layered troubles and growing stress. Health systems and medical providers continue incurring substantial financial losses. Urology, despite being a high demand specialty, is no exception. The COVID-19 pandemic is causing real problems and understanding what’s important is critical.
As consultants and advisors to private practice and employed physicians nation-wide, PRS Consulting sees first-hand the decimating financial reality and growing impact. We are uniquely positioned to help navigate the ensuing turbulence. In this environment, innovation combined with realism is imperative. Simply, how you deal with the unprecedented challenges will define the future.
Recent experience with multiple urology groups provides an interesting window to the new Pandemic reality.
Two different groups ranging from 2 -16 physicians and APPs, highlights the ongoing struggles, pathways, and solutions. Both groups are confronting significant financial pressure and lifestyle changes in an increasingly stressful environment.
Situation. Large established group practice with a primary metro central location and 3 satellite offices. The group’s financial position was weak and facing declining revenues. Then the COVID-19 pandemic. Short version: Cash flow was not supporting operating costs, credit-lines largely tapped and rapidly deteriorating organization cohesiveness. Simply, the group was overleveraged and limited turn around experience. Add the Pandemic situation and the combined effects were not sustainable. They group furloughed large number staff including employed physicians and terminating contracts with others.
Physician employment agreements are generally short-term contracts and in the current environment, little notice and financial ramifications quickly become problematic. Physicians need to consider the following when negotiating new employment agreements:
Employment Agreement Key Points
- Compensation Model
- Productivity, bonus threshold, payment timelines
- Facing furlough or termination with/without cause
- What if furloughs become permanent?
- Employer Financial Penalties and Covenants
- The financial impact of non-employment
- What if you have medical issues?
- Exit options
The complex relationships surrounding physician employment agreements and compensation requires an adroit understanding of key points and situational reality. Being employed now has its own growing risks.
Highly skilled physicians are being furloughed, facing reduced compensation and instances contract termination driven by reduced patient revenues and potential insolvency.
If you would like our help please let us know. We understand the issues and ongoing healthcare business turbulence. We can help.
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