Dr. Amit Parekh on factors to weigh in hospital contracts


Spine and orthopedic surgeons should be able to clarify their personal goals and approach potential hospital contracts with thoroughness, according to Amit Parekh, MD, of Miami Orthopedics.

He told Becker's Spine Review what he's learned navigating contracts throughout his career.

Note: This response was lightly edited for style.

Question: What are key considerations spine and orthopedic surgeons should know when thinking about entering contracts with hospitals?

Dr. Amit Parekh: As a new spine surgeon who has made mistakes in this area, here are some lessons I have learned the hard way and advice for myself and others just starting out:

1. Life goals
You need to make a clear list of your priorities in life, write it down and have it in front of you while reading a contract so you can check off whether it aligns with your vision of your future. For example if building a high net worth is a priority, calculate your current net worth and map out its potential change per year based on your contract.

2. Be risk averse
Numerous private practice settings and hospital job postings will attempt to persuade you with future income potential and “large referral base.” Do not fall for this trap. You don’t hit peak earnings until at least five years into practice. For most new surgeons, the crushing level of debt you begin your career with needs to be dealt with. Your family needs food, clothing and shelter. You need a protected practice environment to give your patients the best possible outcome given your limitations as a new grad. A salary guarantee and senior partners and mentors in your specialty should be a high priority.

3. Know your worth
Don’t ever forget that every step of the value chain in orthopedic or spine surgery exists only because you have developed a specialized skill set to help people using your mind and your hands. If a group or hospital tries to pressure you into taking a less favorable deal, slow down, close your eyes, and visualize every person involved with the care of your patient (medical assistant, nurse, scrub tech, anesthesia, neuromonitoring, X-ray tech, radiologist, industry reps, pain management, hospitalist, floor nurses, the hospital itself, C-suite, shareholders, insurances and more) how they financially benefit from the deal you are about to make and how you benefit from it.

4. Do your research
Invest in a Medical Group Management Association or find someone with a current copy. You need to know the average starting salary for the region you want to live in. In reviewing contracts, never accept anything less than median MGMA for the region the job is offered in, unless you have extenuating circumstances.

5. You have no friends
By definition, all parties involved in a contract are protecting their own best interests. CEOs and senior partners alike will try to charm you with likeability and willingness to accommodate your needs and promise you the world to ultimately gain your trust and play into your own ambition and greed. In negotiating a contract, no one is your friend, and only trust what is printed on the page. No detail is too minute. The paragraph that hurts you the most will be inserted with smiles over dinner and drinks. Handshake deals are a relic of a bygone era. Always get a lawyer.

6. Red flags are actually more gray than red
Unless you are wise enough to plan out the third and fourth order events related to your deal, you won’t know if you have signed a good or bad contract until you are well into your obligation. For example, if the main benefit of a contract is a high salary, you won’t realize how crippling the relative value unit threshold is or how small the bonus percentage is until you try to reach it, or you realize the infrastructure needed to support higher volume is not there. Or,. if the main benefit of a contract is the percentage of collections you keep, you are foregoing financial stability and delaying gratification for at least one to two years, and you won’t understand referral patterns until you’ve been in the community long enough.

7. Time is your only finite resource
Always consider how a contract will affect your time. How happy will you be with a million-dollar starting salary when you are taking calls every other day? Will your daily commute, administrative burden and after hours call absorb precious time with your family? Are there provisions in your contract to address the demands on your time?


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