Not sure if this a thread for the Young Ophthalmologist forum but,
I am doing an internal medicine prelim year, and have found that several of my seniors are entering contracts with rural hospitals with a guaranteed salary the first year, plus a stipend through residency, and some school loan payback. Obviously there are more details but that is the jist of it. Has anyone heard of this for ophthalmology?
Go Gators
Most of these contracts are directly done through the hospital. Due to anti-kickback laws, they must structure the contract payments as forgivable loans: you "borrow" a certain amount per month as a gross practice income which is repaid at as certain rate from practice collections over the term of the agreement, usually two or three years. The agreement to repay is usually fulfilled once the accumulated collections have paid off the accumulated debt (plus interest) during the initial term of the agreement or, any remaining amounts owed at the end of the period of guaranteed support is forgiven over a period of time--again usually two to four years--after the end of the period of support as long as you remain in practice full-time in that community. Any other arrangement, including leaving the community where you are contracting to work, or leaving the hospital staff, and you usually are agreeing to repay the principal balance in 30 days. If your practice does very well early on, you can technically be "bought out" early in the contract, before your guarantee is up. On the other hand, if practice growth is slower than expected, you can end up taking a practice income cut once the guarantee period ends. So the success of these deals depends to some degree on how well the community can support an ophthalmologist and obviously how good a job you can do to build a practice.
Usually hospitals will dangle these offers when they don't have enough doctors on their ER specialty coverage schedule, which they need to meet requirements for designation as trauma centers. Frequently there is a substantial financial incentive for a hospital to become designated, as state money usually becomes available to the hospital for establishing trauma capability. Keep in mind though, that the fact that a hospital is dangling money out for new doctors does not necessarily mean the community has a need for ophthalmologists. Hospitals can go short on ER coverage when medical staff bylaws allow senior (and well-established) staff off of ER call roster duty after a certain number of years of staff affiliation, regardless of their practice activity. In my community, the magic number is 25 years service, or 10 years for retina subspecialists, and after age 60 for everyone. It is possible that a hospital might try to attract doctors to a community where there is no specialist shortage but where there is a need to put someone on an ER call schedule. (E.R. call is not necessarily a particularly beneficial practice building activity anymore, BTW, thanks to the large numbers of uninsured persons treated there.)
I saw one hospital where there were plenty of community ophthalmologists who had nearly all dis-affiliated themselves from active staff membership (became courtesy staff) or otherwise gone off the call roster. The few doctors left were miserable and looking for their own ways off staff as they were getting pummelled by the ER, because they were on call one in three days, were frequently called in at odd hours, saw very few paying patients there but for high-risk services and where the ER demands were starting to significantly intrude into the operations of their practices. They were not happy. In case you were wondering, the maximum acceptable number of ER call coverage days is ten per month.
So it pays to research these deals and the practice climate of the particular community before signing a contract. It may make better business sense to seek a different form of financing if the hospital deals have unsightly strings attached.
