Congratulations to those physicians who are transitioning from residency into practice! We know it's been a long road. If you are reading this, you are probably already starting to picture what this next chapter is going to look like for you. Here are things to consider when choosing your first job after residency.
With how fast the transition into practice occurs, it's easy to get caught up in the allure of chasing your high income potential. That’s why it’s extremely important to prioritize taking the time to find the right practice before allowing lifestyle costs increase. This will help you to reduce the chances of finding yourselves in the dreaded "golden handcuffs" situation, where physicians feel trapped in a toxic practice due to financial obligations.
Large Hospital system red flags
When considering job offers from large hospital systems, exercise caution, especially when faced with long commitments, strict non-competes, and productivity-driven incentives like RVU bonuses. While these organizations may appear appealing at first glance, it's essential to consider how these provisions may negatively affect your practice while at the same time locking you down. Additionally, inquire about tail insurance coverage, which protects you from malpractice claims after you leave a practice. If this coverage isn't provided, proceed with even more caution, as it may leave you vulnerable to feeling locked in.
It's crucial not to choose a job solely based on the annual salary. While a hefty salary is enticing, it often comes with hidden drawbacks. In some cases, a high salary may be a red flag, indicating that the organization struggles to retain physicians. Instead, view your potential position more from a dollars and value provided per hour standpoint.
For example, Job A pays $500k/yr and Job B pays $300k/yr. Job A requires 80 hrs/wk or 4,000 hrs/yr. This equates to $125/hr. On the other hand, Job B requires 40 hrs/wk or 2,000 hrs/yr. This equates to $150/hr. Plus Job B allows you to practice medicine with a great team. Despite paying $200k/yr less, Job B sounds like a far better opportunity. And even if Job A was paying a much higher hourly rate, it’s still worthwhile to take the time to investigate the reasons behind the attractive compensation package. Speak with current and former employees to gain insight into the work environment, workload expectations, and overall job satisfaction.
Beyond financial considerations, give due attention to the culture and values of the organization and the people you'll be working with. The atmosphere and camaraderie within a workplace significantly impact your overall job satisfaction and well-being. Research the organization's mission, vision, and core values. Look for alignment between your personal values and those of the organization. Consider reaching out to potential colleagues to gauge their experiences and get a sense of the workplace culture. Are these the type of people you want rubbing off on you? Choosing a practice that aligns with your values fosters a sense of fulfillment and increases the likelihood of long-term career satisfaction.
When it comes to evaluating and negotiating job offers, don't hesitate to seek professional assistance. Hiring an expert to review your contract and provide guidance on negotiations is an investment worth considering. These professionals have the knowledge and experience to identify potential pitfalls and ensure that your interests are protected. While it may require an upfront fee, the benefits of avoiding future disasters or unfair contractual terms far outweigh the cost.
Want to learn more? Check these out:
Finance for Physicians video short (7 min): Reviewing Your Physician Employment Contract: Understanding Risks, Benefits, and Non-Competes. A conversation with Joe Appino from Contract Diagnostics
Wrenne Financial Planning is a registered investment adviser. The content of this blog post is intended for informational purposes only and is not intended to be investment advice. The views expressed in blog post are subject to change based on market and other conditions. Some information has been obtained/provided from third party sources and is believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information, and it should not be relied on as such.