The Successful Physician: Understanding Contract Elements

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CAROLE: Hello and welcome to today's webinar The Successful Physician: Understanding Contract Elements. I'm Carole Lambert, Vice President for Practice Optimization, here at the Cooperative of American Physicians (CAP). Joining me today, is Gwen Spence. Gwen is a Senior Membership Representative here at CAP, and it's our pleasure to be with you today. Gwen brings a wealth of experience in the contract negotiation area, as well as underwriting, and I've been involved with a successful physician and the residence program here at CAP for more than 8 years. So we look forward to sharing with you some of our perspectives and insights on negotiating contracts and making contracts work for the employer and the employee.

As a way of setting the stage for what Gwen is going to share with us in a little while, let's talk briefly about what happens to physicians when they move from being residents to being physicians in practice, a huge change right.

GWEN: It’s a huge change. They’re accustomed to being taken care of when they are in their residency programs. They don't have to worry about medical professional liability. They aren't in private practice; they aren't in group practice. They’re basically practicing in a learning or training environment. So when they come out and start to get into the real world it's completely different.

CAROLE: It is and there are there are a number of people who've written authoritatively about the evolution from residency to practice. One of them, Dr. Drexheimer in Nashville says, “Now you're responsible for the whole puzzle. Once upon a time you were a part of a team where people had shared responsibilities, but once you put on that white coat and open that office, you are responsible for the whole puzzle.” Dr. Tobar on Kevin MD talks about tips for adjusting to life after residency, from student to clinician. No more a learner, but now a practitioner. Ah, she's very funny. From bread eater to bread winner. Lots of people depending on you all of a sudden.

GWEN: Exactly.

CAROLE: From life on hold to life on the go. And as those of us know who have made the transition from student to working professional. You know Leonard Cohen said once, “the light at the end of the tunnel is the light of an oncoming train.” So there we are. From not being responsible for the business to being entirely responsible, both for the knowledge and expertise, as well as for running the shop.

GWEN: Absolutely, and you know, I've heard, many residents say that they had wished that they had had more business experience or training while they were in their residences to prepare them for the business part of running practices.

CAROLE: Well that's true and then from an internal focus on how I'm doing to an external focus on what am I doing, and as well as how. And from being obligated to oneself, getting through the program, preparing one's self to obligation to others. Suddenly you have other people depending on you.

Dr. Tobar goes on to talk about lifestyle changes, not just in the thing itself, but in everything that surrounds the practice. From a set curriculum, meeting other people’s benchmarks, other people’s standards, to creating one's own life and one's own way of continuing to learn. From having advisers assigned, to choosing one's own group of mentors and colleagues. You know, I think it's always important to remind ourselves that asking for help is not a sign of weakness. It helps us create a network of support. From a curriculum that tells you how you are doing to a life filled with unknowns.

We'll say it a number of times during this webinar, but the unknowns can really take you by surprise. And from others approval of you, again meeting someone else's standard, hitting someone else's mark, to determining one's own worth and one's own legacy. How do I want to live my life? How do I want people to think of me and remember me?

So, you know, there is this difference of when you're new to practice, not having a tremendous historical vocabulary of experiences. So you're thinking about what you know and you are looking at something you may never have seen before. How does that match up with what you do know? If you are fortunate enough to have had a lot of rich experiences as a resident, you might have a greater repertoire of responses to draw upon. You're beginning to fill your experience library and things to look back on.

One of the challenges for people who are new to practice is getting what one of our physicians called being “cognitively fixed”. That one thing works and you know one thing very well, so you try to make other things fit that pattern and it doesn't always work. It's not always accurate. But that favoring of a certain diagnosis because you're most familiar with them can happen. And then, of course, there is how we learn. Staying open, realizing that there's plenty left to learn and that lifelong learning is a commitment to yourself and to your patients.

GWEN: I find that doctors that communicate with their patients also do very well in practices. We find that the instances of lawsuits occur less frequently for those doctors that communicate very well with their patients. So if a physician comes out of a training program equipped to communicate, they’re on the right road already.

CAROLE: That's excellent advice.

So Dr. McGuire in her article on smoothing out the transition from residency to practice, talks about the eye opener that being the lone decision maker is. Suddenly the physician has to navigate the world of business, the world of payment or lack thereof of, the medicine, the practice of medicine itself, and then their family who has this strange idea that they want to have time with them at the end of the day or on weekends.

In my experience and I'm sure in yours to, physicians do not go to medical school to become HR experts, or billing experts, or accountants. So this sudden demand that you know about these things in an authoritative way is very challenging.

So the environment and certainly the healthcare delivery environment continues to evolve. So the changing payer mix. Who are you going to contract with? Who is going to be reimbursing you? What are those requirements going to be like? Information technology--it continues to accelerate the pace of change. Telehealth, telemedicine, ePrescribing interoperability, or the lack thereof. Huge challenges. Moving from volume to value, that is an evolution that is only going to pick up speed, it's not going to go away. Reimbursement amounts. We certainly hope for physicians to be paid what they are worth and what their work is worth, and it's one of the challenges in you talking about communication and documentation, and Getting paid and keeping the money you earned, and surviving an audit. And then, of course, changing physician-patient relationships. How many times does a patient go to a physician with what they've printed off the Internet, right?

GWEN: It must be very frustrating to the physicians for the patients to come in and they've already diagnosed themselves.

CAROLE: Right, and what they will and won't take and what they will and won't do. And again facing the unknown.

GWEN: Now that the doctors have completed residency and are out there ready to go to work, ready to save lives, ready to heal people. Where are they going to be headed? The things that have to be thought about are: will they be establishing a practice on their own, or will they be working for a large organization or group? And medical malpractice, medical professional liability coverage--how will that be handled?

So doctors have had an opportunity to provide treatment in their training, and fellowship, and residency programs, so they should have a good feel for what type of a practice they want to go into. If a doctor is a self-starter, if they don't want to be told what to do, if they like to have their own autonomy, then they may be more suited for a solo practice. For those doctors that really don't want to worry about overhead or how their patients are going to come to them, they may be more comfortable in a large medical environment or a hospital situation. So these things must be taken into consideration when looking for employment following training.

Doctors need to have a basic understanding of medical professional liability coverage before they apply. Medical professional liability covers acts, errors, and omissions of physicians and surgeons, hospitals, and allied healthcare professionals. Here are the types of coverage:

· Claims Made is when a claim must be made against the insured and reported to the insured during the policy period for which the coverage applies.

· Claims Paid is when a claim is triggered at the time the claim is paid.

· Occurrence coverage is when a claim is triggered at the time the injury or damage occurs. Tail coverage is included with occurrence and that's why it's a little bit more expensive than the other types of coverage.

Now, we're going to talk about the limits of liability. Limits of liability is a stipulated sum or sums, beyond which an insurance company is not liable for payments due to the third party. For example, one million over 3 million means that as a result of a claim, no more than one million will be paid for any individual claim per year, and no more than 3 million will be paid for any individual in aggregate for multiple claims in any given year. Now there's Tail Coverage. Tail Coverage is a provision made for claims made policies which allows the insured to report claims that are made after the policy has lapsed or terminated.

CAROLE: You know one of the things that comes up so often informally, and it really is a challenge, is the idea of confidentiality and it's not just about patients and a HIPAA regulations. All the information that we learn about each other and about our organization is in fact protected and no sharing is permitted. And I'll tell you we forget where we are. We're on the escalator. We are in the elevator. We are talking by our cars in the parking structure and we forget how our voices carry. And because we are so comfortable with what we are doing, we ask each other questions about specific people and forget that everyone else in the environment is really not entitled to that information.

GWEN: Right.

CAROLE: So that's a real challenge, is to be so comfortable with what we are doing that we forget where we are. Covenants not to compete are usually not valid in California. Again, I think this harks back to your discussion and the points you made about good communication and establishing a positive working relationship, so that we can have that shared goal, that shared objective of protecting one another as well as protecting the patients. And if we need to part company, parting amicably, so that we don't injure one another inadvertently, let’s hope. Termination, you touched on, I'd like to develop that idea just a little bit. We always, we travel hopefully.

GWEN: Yes.

CAROLE: We're going to start a relationship in the most positive way looking forward to what we're going to accomplish together. Circumstances change, lives change, the world changes, and it may be necessary for us to part company. Ideally, as I said just a moment ago it can be done amicably that we agree to part company as circumstances have changed. There is appropriate notice given, there's appropriate compensation, and we regretfully say good bye. So that's one thing and depending on the specialty or sub specialty it may take a while to replace someone, to find an appropriate candidate so there again that's a matter for negotiation.

Termination with cause, for cause. That is more complicated and I don't want to get into the weeds with that because it really requires the support and participation of a human resources professional to understand what's required to initiate termination for cause on either side. Either from the physician, or from the group, or the facility. What has happened? What is the documentation like? We talked about the contract being analogous to informed consent on the part of the patient. You've talked about good communication and now here we come to documentation.

Has something gone wrong? Is it a one off, inadvertent and it's been corrected? Or is it a series of events that have not been corrected? So now it is time to address it formally. Are those instances in writing? Has our participation in the discussion, our understanding of the necessary remedies been made clear to us? And somehow we are not measuring up. We've not been able to make the correction. Well then we have not hit the marks. We've known what was expected of us and we've not hit the marks.

So on either part. The physician develops areas or instances of concern. The group addresses them in a formal way. The physician is not able to heal the breach. Or, on the physician's part, the group has failed in the obligations it undertook to the physician. There has been an attempt to remedy the situation and those attempts have failed, then it is time to talk seriously and formally about termination, and that is where professional hel

So, among the things, and these can come from either side. Is patient safety an issue? Well? Can we fix it? Can't we fix it? If it's a matter of attitude, skill, knowledge, perhaps it can't be fixed. Unfortunately, physicians, clinicians do run afoul of the law for whatever reason, and that breach cannot be cured by the physician. Then, as I said, it is time to engage the professionals and to make as smooth a transition as possible.

Disability is an issue. There are legal and regulatory requirements, and here again we need an HR professional. People need to have their due process protected, both the employer and the employee. Because, the point is for there to be a clean break and agreed upon remedies.

If you are leaving a group, a facility and you are going in an agreed upon manner, then your last day is specified on your compensation, as of that date, is specified. If you are leaving for cause or in some cases, if you are going to a direct competitor, you are usually done that day and your compensation to that point is provided to you. And that again, changing jobs is not necessarily a judgment. It is a person is offered another opportunity and it's time for them to go. So going to a competitor can be dealt with that way.

GWEN: And I always say. In a professional environment, don't burn bridges.

CAROLE: Absolutely.

GWEN: And we've mentioned a couple of times earlier in our presentation that communication is the key. A lot these issues can be overcome if dealt with in an amicable way and communicating.

CAROLE: And there is, you know, very few things are forever, I think we can safely say that. And the wheel may turn. The calendar may turn, and at some point it becomes desirable to employ that person or to go to work for that organization again. And you want to have left in a way that when you get in touch with them again, they remember you positively and are interested in talking with you further.

Of course we do run into disputes which cannot be resolved amicably, so the most we can hope for is mutual respect and courtesy and that's where things like mediation and arbitration and even going to court come into play. Hopefully, we don't reach that point. But if we need to again, professionalism, respect, and courtesy because the issue is to resolve the conflict, not to burn bridges or leave lasting scars.

GWEN: Also, while completing an application for medical professional liability coverage, there is always a section entitled professional disclosures, and in this section you will be asked to be really truthful. You need to disclose anything that may appear on a court check. Has there been an incident where you've been arrested for a DUI or any other problem that you've had that there will be a documentation in court records that we would be able to find?

It's common now, I hate to say that doctors come to us with DUIs and it's something that happened when they were young and in residency. You're in medical school and after finals they decided to go out and party and get in the car and drive, unfortunately. But as long as the applicants are truthful and they come to us with a written explanation and that they are contrite and they've completed all the penalties, a requirement as set forth by that arrest. Things happen, you know, my mantra is that doctors are people too. They make mistakes and they make up for their mistakes and they never occur again.

CAROLE: You know; I can think of two particular instances slightly different from each other. One had to do with a young physician who really had no idea how allergic he was to alcohol. And his first experience with drinking beer resulted in his being stopped while driving and he had, of course, the insight and the self-discipline to make a change in his life from that point forward, but he simply had no idea until he actually had some alcohol, how allergic he was.

And the other instance that comes readily to mind is a young woman physician who was employed and the organization got involved in things that didn't stand up to scrutiny and she was affected by that and it showed on her record. She was exonerated, but still there was that experience in her background so her name was associated with an even though she'd been exonerated. It didn't prevent either one of them from getting professional liability coverage and from going on to conduct very meaningful and positive careers.

So what do things cost? Always, always, a question, and what do things cost? Where are you going to work? What specialty are you in? What kind of challenges are you going to be meeting in your particular environment? So malpractice, medical professional liability, does cost. What's your specialty or sub specialty? Where are you going to be? There are parts of the country that are much more litigious than others. Whoever you decide to go with is going to have made those calculations and going to be able to tell you their predictions about your working in that area.

And of course, years of experience. You know it may seem counter intuitive that the longer you work the more likely you are to have a claim or a lawsuit. But if in fact you think about becoming more and more expert and having a larger and larger practice. If you become the go-to person in your specialty or in your neighborhood, you're going to have volume and complexity that's going to increase your risk. So it's not unreasonable, even though it seems counterintuitive, that as you go through your career, you will probably pay more as your career matures. There are new to practice discounts as you are getting started and that helps a person get established.

And let's just talk once more about nose to tail because that continues to be, how come nose coverage is looking behind you and tail coverage is looking ahead of you? But that has to do with tail coverage projecting into the future when the policy is no longer active but protecting you for that period of time or joining a group or an organization that says “Hey, let’s look back in time and let’s protect you before you ever got to us.” So very, very useful ideas both.

And again, the more you practice, the more your exposure increases so the price grows up. The price goes up. And as you mentioned, moving from one setting to another, you can be required to carry higher limits of liability which will cause your bill to go up and that's just real. That's just a reality. So I think we've tried to cover the details as well as some of the broader brush strokes of getting involved in contracts, negotiating contracts, and signing contracts. Above all, reading contracts.

GWEN: Yes.

CAROLE: So this is where I think of the parallels in terms of professional experience and the patient experience. Know what you're getting into. Take the time to do a little research. And in fact, before you ever go for the interview, take some time to look at what the organization is like and what people in the industry think of the organization. But above all, I think the forth rightness, the genuineness of establishing the relationship and being very clear on both sides. What are we looking for? What are our deal breakers? Yes, what are your deal breakers? What will our families absolutely not agree to? And where do we feel we can make the most the most difference? So, I think it's a fascinating topic, and it lends itself to lots of discussion and thanks, so much for joining me today.

GWEN: My pleasure. Thank you for the invitation.

CAROLE: Ok, great. Thank you again for joining us for; Understanding Contract Elements, an Essential Part of Being a Successful Physician. On behalf of the Cooperative of American Physicians, Inc., thank you so much and we hope to see you again soon.