Could signing job contract early in residency work as a hedge?

[Booze Aldrin]

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While compensation could well stay the same or even increase by 2023, there are enough trends pointing in the other direction that trying to sign a contract at today's rates while those rates are still being offered appeals to my sense of risk averseness. It would be truly difficult for me to overstate just how much emphasis I place on being able to work for a few years at good hourly rates versus just about every other aspect of the job to include location, working conditions, etc. I'm utterly determined to escape my loans and build a financial foundation while the healthcare and taxation climate in this country still allows it.

With all that said, does signing a contract in residency guarantee anything? I know signing a contract that gives you a stipend during residency commits you to work a certain number of years for the CMG after graduation, but does it also commit the CMG to hire you and pay you a certain rate or can they just cut ties with you at their discretion? Let's say I signed a contract with a CMG as an intern in 2020 to work for $240/hr in Buttocks, Nebraska starting in 2023. If the unthinkable happened and single payer decimated physician pay by the time I graduated, could the CMG just bite the bullet on the stipend they paid me during residency and refuse to hire me since it would make no sense to pay $240/hr in a job market where the prevailing wage is now $140? I know every contract is different, but I'm curious to know if anyone who has either signed such a contract early in residency or been offered one could speak on how binding they are and whether hedging your pay in the manner I described is even possible.

 

[deleted497653]

One- If you take a sign on bonus whether in residency or after, you owe the time you agreed to or you owe a refund to the CMG.

Two, a cmg or any employer in “at will” states can fire you at any time for any cause or no cause. The contract will specifically mention termination etc.

Three- compensation is hard to predict for the future. Be careful and interview at as many jobs as you reasonably can before committing. Always talk to existing physicians at places you’re interested. Consider being in a place with lots of other hospitals in the area so you have a back up of the job doesn’t pan out. You will see with time money is not “everything”. Try to get a good job right out of the gate.

Four- the key to eliminate debt is to live cheaply the first few years. You don’t have to necessarily make the highest income; just spend less of what you make.

 

[GonnaBeADoc2222]

Yeah. They can lower your rate at any time by effectively terminating the current contract with 90 days notice, and giving you the opportunity to resign for less, or bye bye,

 

[Tenk]

Contracts mean almost nothing in terms of the future. Whatever you do, don’t spend any money if you sign one early. If you need to bail, you’ll have to pay it back.

 

[FrkyBgStok]

I would also argue that, at least in my experience, the jobs that are going to offer a contract in residency are the places that anticipate an opening multiple years from now. It could be for multiple different reasons but there is a reason Buttocks, NE wants to sign now to lock you in.

And while it sounds great, coming from someone who was offered a contract in residency for after fellowship, the contract can be mutually beneficial but it is going to be weighted towards the hospital/group and typically not the individual.

 

[cyanide12345678]

You'll also have significantly more bargaining ability in your 3rd year. I don't know how many groups will offer jobs to interns, but you need a few competing contracts to get the best possible contract.

Also, salaries as a whole have been fairly stable despite all the people saying otherwise. The very high locum rates of 300+ have dried up. But otherwise salaries aren't that bad. I'll bring in ~ 435k for 140 average hours a month. Contract was signed maybe 3 months ago. I can live with being top 1 percent of income earners at age 30. The job market isn't as grim as sometimes this forum makes it seem.

 

[GonnaBeADoc2222]

Really no advantage to you signing so early, unless its with an amazing group in a highly desirable location for you.

 

[emergentmd]

Unless you really need the extra money in residency, there is no good reason accepting the golden Chains around your neck.

Your better off taking out a personal loan, moonlighting, selling plasma.

No way to predict the future, no way to hedge with an EM job as there is no guarantee. EM contracts typically have 90 days no fault termination with immediate termination clause.

Take 100K now could cost you dearly when you sit in a gang infested neighborhood county hospital single coverage making 100K less than the nice community hospital across the street.

 

[hundreddaysoff]

Well, I signed a 2y CMG contract at the end of PGY1 and so far it's worked great for me. Locked in a rate of $275/h (was the regional average back in 2016, now it's slightly above-average) and used the $36K sign-on bonus to date a lot in residency. Ultimately met my wife that way and we just had our first kid.

Yes, the site will be a crapshoot, but mine turned out great. I had a bunch of choices and ultimately picked the cushiest hospital I could find in a very unsexy city. Even so, very little turnover among docs. As a naive resident, I think the site still would've been a crapshoot had I signed as a PGY3; I just would've missed some of the sign-on bonus and locked-in hourly.

My biggest fear is that they'll try to lower the hourly when I sign on again next year, as our pt census has been dropping for over a year.

 

[DeadCactus]

People generally aren't going to pay you more when they need you in 3 years than they're going to pay you when they need you in 3 months. The places offering money now will still be offering money when you're a third year and most likely will offer more because you now have counter offers and there is less risk of you bailing or failing. This is a classic recruiting process: find trainees stressed about debt and hit them with a fear of missing out. The military is the classic example of this.

It's not a terrible decision but it's unlikely to be a net benefit to you financially. There is something to be said for some extra cash in your pocket as a resident but then you accept the possibility of major life changes creeping up between when you made a commitment and when you are called to act on it.

 

[GonnaBeADoc2222]

Well, I signed a 2y CMG contract at the end of PGY1 and so far it's worked great for me. Locked in a rate of $275/h (was the regional average back in 2016, now it's slightly above-average) and used the $36K sign-on bonus to date a lot in residency. Ultimately met my wife that way and we just had our first kid.

Yes, the site will be a crapshoot, but mine turned out great. I had a bunch of choices and ultimately picked the cushiest hospital I could find in a very unsexy city. Even so, very little turnover among docs. As a naive resident, I think the site still would've been a crapshoot had I signed as a PGY3; I just would've missed some of the sign-on bonus and locked-in hourly.

My biggest fear is that they'll try to lower the hourly when I sign on again next year, as our pt census has been dropping for over a year.

Two comments:

1) You go on expensive dates

2) You didn't lock in anything. They can lower the rate at anytime by giving 90 days notice on the contract and offering for you to resign at lower rate.. The CMG job will always ALWAYS be there, no matter what they say. There are lots of tactics they will use to try to convince you otherwise.

 

[Booze Aldrin]

Well, I signed a 2y CMG contract at the end of PGY1 and so far it's worked great for me. Locked in a rate of $275/h (was the regional average back in 2016, now it's slightly above-average) and used the $36K sign-on bonus to date a lot in residency. Ultimately met my wife that way and we just had our first kid.

Wow that's a great rate. Did you have a hard time finding anyone to offer you a contract so early in residency? And even more importantly, does your agreement have the 90 day cancellation clause most other replies have mentioned?

 

[CajunMedic]

I'm finishing a TY/TRI, headed to a categorical EM spot in June, I'm being offered a 220/day, 230/night plus RVU, monthly stipend, and student loan repayment for 2 years post-residency. I wish I didn't need the money so damn bad, I didn't really plan on selling my soul to a CMG this early.

 

[GonnaBeADoc2222]

You're not even an EM intern yet and you're already entertaining signing a contract. Why would you do this? What if circumstances change and you need to be in a different location? They can literally change your rate whenever they want from now until you graduate. All this does is decrease your own power.

 

[Groove]

Personally, I think signing contracts super early during residency is generally a bad idea. CMGs prey on cash strapped residents so they can lock you in to a work environment that you honestly have no way of evaluating comprehensively that early in your training. Also, there's a lot that can change during residency in regards to life decisions that might influence where you ultimately want to go.

That being said, I totally get the appeal and it's essentially a risk vs reward, like any investment. We have three relatively new docs that our CMG signed during their residency for a sign on in the form of a stipend, tied to 2 year contracts and it's worked out pretty well for them. Plus, most residents move on after their first 2 years out of residency anyway. Just remember though that you limit yourself and trust me when I say you'll still have plenty of options during your last year.

 

[hundreddaysoff]

Wow that's a great rate. Did you have a hard time finding anyone to offer you a contract so early in residency? And even more importantly, does your agreement have the 90 day cancellation clause most other replies have mentioned?

No, this is with TeamHealth and they offered me at least 4 different contracts just in TX. And the TX SDGs I looked into were paying much lower rates and there was the CMG-buyout threat, so I passed on them. The job I took was the best one on paper.

But job prospects seemed to be a lot more competitive in the northeast where I trained.

*Apple-F TH contract*

You mean the 90-day without-cause clause? Yeah, it's in there. I suppose TH could pull that garbage on me if they want.

How often does TH pull that? I suspect people on here will have some individual horror stories, but if they did that to too many new attendings (say >5%), I suspect word would leak out about the practice far beyond this forum. So statistically I think they won't pull that on you.

Suppose TH did pull that on me. Then I'd still be the guy who took their $36K and had a great time with it. I'd still be the guy who took $275/h of their money for the better part of a year and still has most of it in his bank account. And they'd have two choices: either they'd reduce my pay to >=$250/h, which is roughly my 2018--19 market rate, or else I'd quit and go work at one of my backup gigs that has trees and water.

Let's flip this around so we can see the risks on the other side. Suppose I hadn't signed a contract till I finished residency in 2018 because I read SDN every day and I got real afraid TH would do that to me. My only option for making $275/h in my city, where remember market rate is ~$250/h, would have been to negotiate with TH's recruiter to increase my pay by 10%. How many doctors do you know that have been successful negotiating with CMGs like that? Of those, how many of them did that when they were residents who lacked both negotiating experience and backup gigs/other BATNAs?

My guess is "not many" and my point is I agree with other comments that this is a risk/reward thing.

I'm not saying that most residents should sign an early job contract. But my advice is, if you're in a similar boat as I was, run the numbers and see if your appetite for risk matches the potential reward.

 

[emergentmd]

Early contracts does mitigate some risk. CMGs does this as a risk hedge too.

Nothing is ever done in a vacuum. In negotiations, if someone wins alittle then someone loses alittle.

CMG was willing to hedge 36K (very small amount) to guarantee a worker for 2 years. It reduces the cost of recruiting a doctor and using locums groups which are expensive. It reduces their staffing risks and coverage.

They get a great benefit and in the long run saves them money for 36K upfront cost.
You got 36K and took on most of the risks. Yes you were lucky that you happened to sign on at the peak of rate/demand. Trust me, when you signed on at 275/hr, they were probably paying the docs more than this plus handing out high bonuses.

As of 2 yrs ago when you signed the contract,, Docs at my locums sites were making $275/hr without benefits. There were many shifts that I worked where I was making $525/hr and able to pick and chose whatever days/shifts I wanted to work.

As you can't be a monday morning QB, I would say most that signed early in residency will look back and see it as a mistake. CMGs crunches the numbers and do their homework. They knew that it would have cost them 100K+ if they waited to hire a doc out of residency vs 36K to lock in one early in residency.