Initial Job contract

[drzeus777]

I am an interventional cardiology fellow now currently looking for a job. I am interviewing with this solo practitioner who is also an interventional cardiologist. He has associated with a hospital who will be paying me my first year salary as an “income guarantee” which essentially is a loan to me and in return I have to work in the area for 4 years. The issue is the private practice cardiologist will not be sharing any of the revenue that I bill for him the first year and in the second year will give me a base salary plus 205 of billed revenue. My worry is that if after 1 year I decide to leave the practice, then I have essentially racked up a debt from the hospital income guarantee aka “loan” that they have given me, as well as I have worked for free for this cardiologist. Is this normal? Or should I ask him to be responsible to pay back the hospital if I should leave before the promised 4 years.
Thank you

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[dotdash]

Maybe you should post this in the practicing physicians forum or cardiology? It's pretty specific...

 

[cardiocyte]

That sounds very familiar, is he not in Chandler ?

Your concerns are right: so called income guarantee is in fact a loan. Without him opening the books to your accountant you have no guarantee what your actual production will be and you are right that you can end the first year with an internal debt to the hospital. In the case you would produce above the guaranteed salary in the first year, the income should go to YOU after deducting the practice overhead (?50%) that would be only fair.

Also the second year - only 20% ? That means that 30% of the revenue goes to the other doctor's pocket.
Also, is the a partnership track and if so, how certain you are that you will become a partner ?

As interventional, you should have more options even in today's market.

 

[Lonestar]

Looks like your "partner" is not really your partner. More like a master. Think about it. The math simply doesn't add up. He is milking you for all your hard work. After a year, you should eat what you kill.

 

[edmadison]

You are entering into one of the most important transactions in your life. You need to find an attorney who specializes in professional organizations to review everything. If this is a partnership tract deal, you absolutely need to look at the books.

The information you give is pretty sparse. Who is paying for your overhead? You said that in year 2 you get base + 20% of billed revenue. What does billed revenue mean? To me, that means 20% of what you billed before expenses. If so, that's a good deal. I suspect that's not what the contact really says. More likely it is 20% of what you collect net of expenses. These distinctions are HUGE!

Everyone out there, be careful! Partnerships are full of landmines. Good accounting is critical. Don't even consider entering into a partnership tract contact with someone who won't open their books. Also, be wary of buy-ins. Paying a reasonable amount for hard assets (real estate, equipment) is OK. Good Will is essentially useless. In these days of managed care, especially in areas with too few specialists, simply being a network provider will fill your patient panel.

Ed