Would you sign a contract if you know for sure you are staying in the area?

[LUCPM]

So the hospital my residency program is associated with has already started recruiting and some residents already signed a contract as early as in the beginning of their 2nd year. They give sign-on bonus upfront as well as monthly stipends and they also pay half of your student loans with a salary guarantee for the first 2 years, etc. We have kids and we really liked the area, which is one of the reasons I ranked the program #1 to match. The sign-on bonus and monthly stipends are also enticing at this point....

If you know for sure you are staying in the area, is it too early to sign a contract? Also, what kind of things in general should I watch out before I sign a contract?

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[witzelsucht]

can you contact a recent grad who did one of these deals and speak to them about if they would do it again? no free lunch.

 

[VA Hopeful Dr]

No. If you decide differently then you have to pay back all that money

 

[SLC]

No. If you decide differently then you have to pay back all that money

Not always. I have a similar agreement, and its prorated based on how much time I put in. As long as I do 2 years, I won't owe them anything. If I only do one, then I'll owe 50% of it back.

Plus, it's attached to working for the company, not that particular area. I could even transfer to a more metropolitan office and complete the two years and not owe anything back.

 

[VA Hopeful Dr]

Not always. I have a similar agreement, and its prorated based on how much time I put in. As long as I do 2 years, I won't owe them anything. If I only do one, then I'll owe 50% of it back.

Plus, it's attached to working for the company, not that particular area. I could even transfer to a more metropolitan office and complete the two years and not owe anything back.

So if you don't do it (ie work those 2 years) you have to pay it back. Kinda like I said. Prorated repayment is still repayment

 

[SLC]

So if you don't do it (ie work those 2 years) you have to pay it back. Kinda like I said. Prorated repayment is still repayment

Yes, kinda like you said, but not exactly.

I was commenting on the fact that you said that if you "decide differently then you have to pay back ALL that money.".

Maybe that's not what you meant, but it is what you said. I'm just trying to point out that you often don't have to pay it ALL back. It's usually prorated for fraction of contract completed.

 

[VA Hopeful Dr]

I thought the implication was clear, but apparently not so I'll try again:

Since the question was posed by a resident about signing a contract in residency, if you decide before you start the job that you no longer want to stay in the area (since residency graduation is the most common time to move for physicians) then you will almost always have to pay back the money that they have given you to date.

In addition to having to pay back a lot of money, the tax implications can be unpleasant.

Beyond that, the AAFP has data that shows that in the first, I think, 5 years post-residency most FPs go through 3 jobs.

In short: no, I would not sign such a contract. The chances are very good you won't want to stay either at the end of residency or within a year. To my mind, its not worth the financial hit you would take in such a scenario given historical data on the subject of job stability for FPs.

There, is that good enough?

 

[SLC]

I thought the implication was clear, but apparently not so I'll try again:

Since the question was posed by a resident about signing a contract in residency, if you decide before you start the job that you no longer want to stay in the area (since residency graduation is the most common time to move for physicians) then you will almost always have to pay back the money that they have given you to date.

In addition to having to pay back a lot of money, the tax implications can be unpleasant.

Beyond that, the AAFP has data that shows that in the first, I think, 5 years post-residency most FPs go through 3 jobs.

In short: no, I would not sign such a contract. The chances are very good you won't want to stay either at the end of residency or within a year. To my mind, its not worth the financial hit you would take in such a scenario given historical data on the subject of job stability for FPs.

There, is that good enough?

So sensitive!

But yeah, that's a hell of a lot more clear. Now we all know what you were talking about!

 

[FrustratedFamDoc]

There can be good and bad aspects of this so be sure you're going in with your eyes open. As has been pointed out, there is never something for nothing. The GROSS (not net) "bonus" given will have to be paid back, usually in a prorated form if there is early termination of contract.

I did this and am currently in my last year of my 5 year contract. Looking back, here is some advice I can offer:

1. a 5 year contract is a long commitment. Looking back, 3 would of been better. Never underestimate the bargaining power of being able to leave after a a couple years if you don't like the situation.

2. Beware the teaser salaries and the productivity you'll be expected to maintain after such a period is over. I was dropped in and had to build a practice from scratch and after my 2 year guarantee was over, my salary I took an immediate, brutal, $38,500 pay cut. I've done well in building my practice and am now full 4 1/2 days a week but that really hurt. Really look in to the situation that you're going to be dropped in to. Do they expect you to build or are you going to have a full panel come day 1.

3. No salary can make a really a really sucky/toxic environment less sucky/toxic. Does your practice style jive with the norm of the where you're going to be? It can get old arguing with patients about early refills/narcs/benzos/my last doc did this, etc. My practice is pretty good in this regard, some aren't and getting tied in to one long term would be a nightmare.

 

[SLC]

There can be good and bad aspects of this so be sure you're going in with your eyes open. As has been pointed out, there is never something for nothing. The GROSS (not net) "bonus" given will have to be paid back, usually in a prorated form if there is early termination of contract.

I did this and am currently in my last year of my 5 year contract. Looking back, here is some advice I can offer:

1. a 5 year contract is a long commitment. Looking back, 3 would of been better. Never underestimate the bargaining power of being able to leave after a a couple years if you don't like the situation.

2. Beware the teaser salaries and the productivity you'll be expected to maintain after such a period is over. I was dropped in and had to build a practice from scratch and after my 2 year guarantee was over, my salary I took an immediate, brutal, $38,500 pay cut. I've done well in building my practice and am now full 4 1/2 days a week but that really hurt. Really look in to the situation that you're going to be dropped in to. Do they expect you to build or are you going to have a full panel come day 1.

3. No salary can make a really a really sucky/toxic environment less sucky/toxic. Does your practice style jive with the norm of the where you're going to be? It can get old arguing with patients about early refills/narcs/benzos/my last doc did this, etc. My practice is pretty good in this regard, some aren't and getting tied in to one long term would be a nightmare.

Excellent post.

My situation seems to hit all the points you highlight as important.

- 3 year contract.
- Residency stipend and sign on bonus considered fully paid back at 2 years of employment.
- There is a guaranteed base salary, that's where I start, and can never go below. There is no high "teaser", and I only go up if I meet productivity numbers to warrant it; but it's guaranteed in the contract that my base annual salary is set at a hair below $200k, which is where I start on day 1. Now I'm sure that if I never meet productivity that justifies that salary, that will become an issue eventually, but I'm at least insulated from having my salary drop below where I start.

To the OP. The other thing I'd look closely into if considering a contract is the terms of the non-compete clause. Most contracts will stipulate that you will not be allowed to work in a position with any other office or hospital that is a direct competitor for a period of time after your contract is no longer in effect.
Since you mentioned you know you want to stay in the area, this will be critical. You don't want to hate the job, leave early, and be forced from the area for a huge chunk of time due to an unreasonable non-compete clause.

 

[Bacchus]

SLC, if it helps re: productivity, I'm running an avg of ~20% above what I was estimated at for the past 5 months as a first-year attending. The office I work at essentially gave me a panel and I've grown it by 100 to 150 or so patients so far.

 

[SLC]

SLC, if it helps re: productivity, I'm running an avg of ~20% above what I was estimated at for the past 5 months as a first-year attending. The office I work at essentially gave me a panel and I've grown it by 100 to 150 or so patients so far.

Yeah, I don't worry about it too much. I'll be covering ED, and inpatient service some of the time too. This is a rural county, served by 8 FM docs (of which I'll be one) and a Gen surgeon; all the FM guys are averaging 300-350k annually. They're working their butts off, but RVU's are not in short supply I'm assured.

As for the OP, I say that signing a contract early can be a nice thing (it's certainly helped me to have some extra funds in residency), and it's nice to have 1.5 years to plan for a full-spectrum job. I can choose electives based on additional experiences I want to have (I'll probably do a trauma elective, and maybe CCU as an example). I've also got early access to CME funds so I think I may try to get an ultrasound course and ATLS in since I think I can get my job to pay for it.

But whatever you do, be very careful! It wouldn't be hard to get screwed over. Have a lawyer look things over, and run the plan/contract by faculty and get their input too!

 

[hiplikeahippo]

Would anyone be willing to share their residency stipend & signing bonuses? I was offered one but not the other and am wondering how it compares in total.

 

[SLC]

Would anyone be willing to share their residency stipend & signing bonuses? I was offered one but not the other and am wondering how it compares in total.

Stipend: $2000/month
Bonus: $25k

 

[JonMonkey]

I thought the implication was clear, but apparently not so I'll try again:

Since the question was posed by a resident about signing a contract in residency, if you decide before you start the job that you no longer want to stay in the area (since residency graduation is the most common time to move for physicians) then you will almost always have to pay back the money that they have given you to date.

In addition to having to pay back a lot of money, the tax implications can be unpleasant.

Beyond that, the AAFP has data that shows that in the first, I think, 5 years post-residency most FPs go through 3 jobs.

In short: no, I would not sign such a contract. The chances are very good you won't want to stay either at the end of residency or within a year. To my mind, its not worth the financial hit you would take in such a scenario given historical data on the subject of job stability for FPs.

There, is that good enough?

I think VA Hopeful mentioned it...then clarified his point and it seems that no one is picking up what he is putting down still.

Yes a signing bonus and a monthly stipend is great and helps but it is a risk. For example, are you on a loan repayment program? I am and I pay 10% of my income so if I did this I would have an extra $200 a month added to my payment not to mention the added amount from the sign on bonus that you would have to report.

The biggest issue is what VA said you will most likely change jobs 1.6 times per year based on the averages of the FPs surveyed by the AAFP after graduation from residency....so that is 3 (3 year contract) to 5 (5 year contract) times depending on the length of your contract. How well do you like the hospital your residency is associated with? Have you worked in any other facilities in your area? Do you know what else is out there? I am skeptical of someone willing to pay me any money...let alone $2000 per month for services that I have not yet provided. Which makes me think why are they willing to do so much for someone that has not started working there? I can assure you they are not doing it out of the kindness of their hearts. So are they desperate for physicians? Do they have high turnover? Are they looking to tie you up for the duration of your contract by having a large repayment burden hanging over your head?

The non-compete issue is huge as well given that you "know you want to stay in that area". How big is the area where you live and how far away is the nearest place that would allow you to do what you plan to do at this place? I live in Houston so 20 miles in any direction and I am still in the city but if you are rural you might have to relocate significantly further away. Also it is important to consider how big is the system that you plan to sign with because the non-compete might put a distance from any or all of their locations.

Be stuck in something you find out you don't like is not the best idea, it is not good for your patients, your family or yourself.

 

[cabinbuilder]

Beyond that, the AAFP has data that shows that in the first, I think, 5 years post-residency most FPs go through 3 jobs.

This is the most important statement here. I personally went through 5 jobs before throwing in the towel and doing locums for 5 years because I was too skittish to sign again until a year ago. No two jobs are the same and I left for different reasons each time. Be so super sure that's where you want to be because a toxic workplace is just not worth it.

 

[SqEdSaint]

Beyond that, the AAFP has data that shows that in the first, I think, 5 years post-residency most FPs go through 3 jobs.

By that does it mean changing job location/company or changing "jobs" (ie from primary care to urgent care to hospital medicine)?
How financially prudent is it for FP doing primary care to change job location/company every few years? My guess is that it isn't wise because one would have to build a patient panel from scratch, which could mean decreased salary.

 

[VA Hopeful Dr]

By that does it mean changing job location/company or changing "jobs" (ie from primary care to urgent care to hospital medicine)?
How financially prudent is it for FP doing primary care to change job location/company every few years? My guess is that it isn't wise because one would have to build a patient panel from scratch, which could mean decreased salary.

It doesn't differentiate, it just means different jobs. It could mean 3 different outpatient clinic jobs, or it could mean hospitalist to urgent care, to occupational health.

 

[BigSib]

Sounds legit if you wanted to stay in the area for sure. Would definitely shop around before signing anything though. Although it's atypical, there's a good number of residents who sign contracts during PGY2.

 

[VA Hopeful Dr]

Stipend: $2000/month
Bonus: $25k

So that means that if you decide to leave after 1 year (which 60% of my residency class did), you're on the hook for $36,500 back to the hospital. That's an awful big risk.

You can also take an extra 2k/month pretty easily with moonlighting. Some of my classmates did urgent care at $100/hour. 8 hour weekend shifts, so one weekend gets you 1600. I did disability exams for the same price and hours, so 2 Saturdays a month got me the same.

 

[SLC]

So that means that if you decide to leave after 1 year (which 60% of my residency class did), you're on the hook for $36,500 back to the hospital. That's an awful big risk.

You can also take an extra 2k/month pretty easily with moonlighting. Some of my classmates did urgent care at $100/hour. 8 hour weekend shifts, so one weekend gets you 1600. I did disability exams for the same price and hours, so 2 Saturdays a month got me the same.

Yes, I thought about that; but I live in a state with one of the absolute highest medical malpractice suit rates in the country. I'd rather not expose myself to more of that risk than absolutely necessary while still in training if I don't need to. (The contract I signed is in a different state.)

I also can't moonlight until at least 3rd year anyway because I'm not eligible for an unrestricted state license until finishing two years of residency in this state.

Additionally the company that I signed a contract with is consistently rated one of the top 15 companies in the country to work for(Forbes).

Finally I very much plan to stay with this company for a minimum of five years because they have a Physician pension program that I will be vested in at that point.

And look, most of the time I would agree with you on this. And believe me, I did not take this decision lightly I've been mulling it over since March 2016.

I'm just saying that there are occasionally situations where signing a contract during residency can be a win-win. I think my situation is a good example of one of those times.

 

[teacherman84]

There is something about having options that is just so enticing...esp for someone who is under a contact and has multiple years left.

I started med school with a new baby and wife. I signed a contact that sounded too good to be true...2.5k/month during all of med school, tuition and expenses paid for. then about another 2.5k/month above typical resident salary all through residency (though you can only do residency in 1 of 6 cities)
Then I only owe 4 years post-residency...the caveat being it could be anywhere in the works they want to send me, with or without my family.
Very different contracts obviously, but I live and work around nothing but people under contacts, and there is something about not being able to move/quit when your fed up, the lack of bargaining power when someone owns you.
It might be a great deal, great job, great location, but be sure before you take any money. Talk to as many people as you can at your future job, what's it really like. don't write of the disgruntled ones. Also a lot can change in 2 years of residency, plsns, practice goals, fellowship aspirations.

 

[Makati2008]

There is something about having options that is just so enticing...esp for someone who is under a contact and has multiple years left.

I started med school with a new baby and wife. I signed a contact that sounded too good to be true...2.5k/month during all of med school, tuition and expenses paid for. then about another 2.5k/month above typical resident salary all through residency (though you can only do residency in 1 of 6 cities)
Then I only owe 4 years post-residency...the caveat being it could be anywhere in the works they want to send me, with or without my family.
Very different contracts obviously, but I live and work around nothing but people under contacts, and there is something about not being able to move/quit when your fed up, the lack of bargaining power when someone owns you.
It might be a great deal, great job, great location, but be sure before you take any money. Talk to as many people as you can at your future job, what's it really like. don't write of the disgruntled ones. Also a lot can change in 2 years of residency, plsns, practice goals, fellowship aspirations.

Agree with this. Had a similar set up. I was paid extremely well there during my previous career and they offered to pay for Med school with living expenses.

Took them up on the offer and administration changed as I was finishing school.

Pay changes (I can make almost double 45mins away, with better schools, and more to do), health insurance subpar, m-f with possible Saturday's and some restrictive requirements involving my personal life have me highly likely to buy the contract out. It's a bitter pill but it's life. Plus I'll be free at the end of the day. I can pay the debt back in 3years if I live like a resident and my SO works as she is now.


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[BidingMyTime]

Since the question was posed by a resident about signing a contract in residency, if you decide before you start the job that you no longer want to stay in the area (since residency graduation is the most common time to move for physicians) then you will almost always have to pay back the money that they have given you to date.

This.

Keep in mind op, that whatever sign-on bonus you are given will have taxes taken out of it, before you get it.....yet to get out of the contract you will have to pay back the full amount (including the part that went to taxes that you never actually had.) In other words, in spite of the bonus, you will be in debt at the beginning.

Which doesn't mean you shouldn't sign a contract, just be aware of the taxes going in. I was not when I took my first sign-on bonus, thinking I would put the money into savings and would just pay it back if I decided I didn't like the job, it was a chilling feeling to realize that wasn't how it worked and that because of taxes, it would cost more money than I had actually received to get out of the contract.

 

[SLC]

This.

Keep in mind op, that whatever sign-on bonus you are given will have taxes taken out of it, before you get it.....yet to get out of the contract you will have to pay back the full amount (including the part that went to taxes that you never actually had.) In other words, in spite of the bonus, you will be in debt at the beginning.

Which doesn't mean you shouldn't sign a contract, just be aware of the taxes going in. I was not when I took my first sign-on bonus, thinking I would put the money into savings and would just pay it back if I decided I didn't like the job, it was a chilling feeling to realize that wasn't how it worked and that because of taxes, it would cost more money than I had actually received to get out of the contract.

The contract I signed isn't that way. There are no taxes being paid on the signing bonus until the end of each year of the contract. (Half the bonus is taxed the first year, and the other half the second year).