I have a couple of questions for the board. I will be finishing my residency in 9 months and looking for jobs. I have a potential opportunity to set up a solo practice in THE ideal location (close to family, nice area) with the backing of a small community hospital for a certain period of time. I do not know all of the details of the opportunity but the situation appears as follows:
1. They would guarantee 12 month salary plus expenses for the first year (loan)
2. Loan forgiveness over the next 3 years if you stick it out.
3. Would be practicing in office building the hospital owns, but I would be responsible for everything, hiring, buying equipment, billing.
4. I would operate at said hospital (hospital does almost exclusively outpatient surgeries)
5. No direct call for the hospital (so not sure how my call situation would settle
I am told that there is a large need for ophthalmologists in this area, and that they do not like "shipping" all of this business across town. Is this why they would sponsor someone?
What types of questions do I need to get answered because I am intrigued by this potential job opportunity?
Can the area actually support an ophthalmologist in practice without a hospital providing financial support?
You ought to wonder why no one is coming to that location even part-time, if that is the case.
Just because the hospital administrator or medical director says they hate sending cases somewhere else does not mean that they actually have enough cases to keep someone gainfully busy full-time, which is what they seem to be recruiting.
One year support is short. I suggest that if you are serious about this plan, you secure an agreement to have at least two years support. Usually a support contract provides a minimum income guarantee to the whole practice that can be scaled down as your collections come in, effectively displacing the amount that would be guaranteed. Often they will have terms that apply the sum of support paid to an account that is treated as a loan with an interest rate, and any income you collect in excess of the monthly guarantee amount will be used to pay down the loan principal. Usually that recapturing continues until the loan is paid off or until the guarantee period terminates, at which point, you are expected to support your practice yourself. Usually there are terms for outright buyout of any balance (if you personally refinance your practice) or terms that allow forgiveness of the remaining balance by a certain amount time of continuing to practice in the community (i.e., a fraction of the loan is forgiven for every month continuing to practice in the community.) Your earnback period should not exceed the length of time you were guaranteed support. So if you get two years guarantee, then the balance earnback should not exceed two years to follow the end of your guarantee period (so no three years forgiveness earnback for one year guarantee, e.g.)
Some contracts have terms that allow the hospital to call your loan at any time, which might force you to re-finance without any notice. You should seek to require that if they do so to pay you a fee equal to any accrued balance on the paid-out guarantee. You still might need to refinance for your operations going forward, but you wouldn't be under the burden of re-financing all the money paid from your start date. These days, you need to anticipate unexpected events: hospitals get bought, merge with other hospital systems, go into receivership, any one of which could change the management and your relationship with that hospital in a way that would be out of your control. So you need to build in some protections for yourself.
Often there are requirements buried in your contract that require you participate with Medicaid and other public assistance plans. Be sure that there is enough other better-paying work to fill your practice. Medicaid needs to stay a small percentage of your census if you are going to be able to make a go of things once the support agreement ends. You definitely do not want your fledgling practice to become an unwitting magnet for these plans; that can bury you in work without your being paid, sometimes at all. Do not expect the hospital to reveal these facts to you; you will need to research the payer mix yourself.
What will be your referral base, besides the hospital ED?
