Associate Agreement and Employment Contract: Is it in Line With What I Should Expect, and Is it Reasonable?

This time of year is prime time for employment changes across the eye care industry.  May through August is always the busy time.  Optometrists and Ophthalmologists are completing residency programs, students are graduating, and they are all going to be reviewing employment agreements now or very soon.

Here are a few things to consider:

1)      What is the commitment?  1 year; 3 years; can you give reasonable notice if you are unhappy or dissatisfied in the practice

a.       Most are 1 year

b.      If you receive a sign-on bonus or relocation incentive expect to commit to 2+ years.  Typically, if you leave before your commitment you will need to pay back any bonus money you receive

c.       Notice periods across the nation have grown beyond the normal 2 week courtesy.  Many agreements now require 30, 60, or 90 day of resignation notice

2)      Want to associate and eventually own a practice in your home town?  Be cautious of non-competes and restrictive covenants that would cause significant headaches in the future.  Especially if your hometown is a small town. 

3)      Are you an Employee (W-2) or an Independent Contractor (1099)?  Associate positions throughout the eye care industry vary greatly.  W-2 employment is most likely what you truly are. That means the employer takes your tax withholding and takes responsibility of the daily operations of the practice.  1099 contractors are simply paid for services rendered.  If this is your status, you are required to fulfill the entire tax obligation of your income. 

·         Resource: IRS website: Employee versus Independent Contractor

4)      Production versus collections-based compensation:  You need to understand which way you are getting paid, when it is calculated, and what is included and not included

a.       Is it calculated daily, weekly, bi-weekly, monthly, and quarterly? Many optometrists and ophthalmologists don’t know when we ask them

b.      Lab Expenses:  are you responsible for all, some, or none of the lab expense?

5)      Base compensation questions:

a.       Is it permanent or does it sunset after x number of months?

b.      Is it a draw on future commission or is it a salary?

6)      Be Realistic!  Associate offerings on the East Coast are vastly different than those on the West Coast.  Make sure to understand the compensation trends and models that are common in your market.  Don’t compare offers to your friends, especially if you’re only talking % versus %.  That completely depends on the production potential based on a combination of what the practice can provide and the abilities of the associate

Other articles to explore:

·         Optometrists and Ophthalmologists - How to Find a Job After Graduation

·         Bits of Wisdom

ETS Vision is a Vision Recruiting firm specializing in finding and placing Optometrists, Ophthalmologists, and Vision Staff throughout the United States. www.etsvision.com

Optometrists - What To Know Before You Accept an Associate Position

Finding a new associate position can be a daunting process for both new and experienced optometrists.  While making a good impression on an interview is important, it is equally important to learn as much as possible about the practice. Here is a compilation of questions from job seekers who I have worked with over the years. I hope that this list will make the decision process less intimidating.

Relationship
-Employee or Independent Contractor?
-Employee at will?
-Is the doctor open to restrictive covenant in case of future ownership?
-Is the doctor open to a transition period, if needed? (After purchase)

 Type of Practice 
-What type of practice is it (full scope, pediatric, etc.)?
-Age of the practice?
-When/what do you refer out?
-How many treatment lanes?
-How many opticians?
-How many technicians?
-How much is the practice overhead?
-How long has each employee been there?
-What does the practice do to market itself?
-How many FT and PT staff?

Patients
-What is the patient pool like?
-Have the number of active patient records been reviewed?
-Is the practice growing or declining in number of patients seen, new patients attracted, and young patients?
-Average number of cancellations per week?
-Average number of patients seen by associate per day?
-How far ahead is the doctor book filled?
-How far ahead is the associate book filled?
-Discounts/Bartering/payment plans?
-PPO type of insurance? Insurances: accept all kinds or just selected ones?
-How much is the discounted price of the PPO compared to the fee schedule?
-Medicare or Medicaid acceptance?
-What percent is FFS, cash and discounted PPO?
-When was the last fee increase?
-Are the fees low, high or average for the immediate area?
-Do you offer patients credit?

Schedule 
-Days, hours, on call, etc.
-How many office hours and days per week is the office open?

Duties
-Job description (separate document) or general description

-Is the doctor responsible for pre-testing?
-What were the most of the cases being done by the associate?

Facilities
-Supplies, equipment, support, etc.?
-Is the practice EMR compliant? If so, what system is being used?
-What is the square footage of the office? Can it be expanded?
-Average age of equipment?
-Do you have a confirmation system for appointments?
-How do you deal with NO Show?

Term of contract
-How long?
-What is the required notice period should either party wish to terminate the relationship?

Compensation
-Is there a guaranteed salary, draw, daily rate or hourly rate?
-Is commission determined from collections or production?
-If collections, what is the collections rate in the practice?
-What percentage of production/collections is used to calculate income?
-Is there a chance to increase compensation in the future?
-Taxes withheld?
-How will the associate be paid? (Weekly/bi-weekly/monthly)
-How much on average was the last associate making?
-What was the average associate production per day?
-Can I get a fee schedule of the practice?

Benefits
-Medical Insurance: health and dental?
-Malpractice insurance?
-Disabilities insurance?
-Required CE courses? How much and for how many hours a year? Are they paid for/reimbursed? Is there a stipend?
-Retirement?
-Sick days…….. # allow per yr…..
-Personal days/vacations…..# per yr allow……
-Holidays?
-What benefits are given to the staff?

Expenses
-Define, list, when paid, etc…..
-Will the practice support the acquisition loan (in case of future ownership), pay the overhead expenses and afford a reasonable income?

Other Questions and Notes
-What is your practice Philosophy and Goals? For the Practice and with new patients?
-Have you had associate before? How many? How long did they stay? What was the reason for the associate resignation?
-How do you advertise?
-Who determines how long I have to spend with new patients/initial exam and record?
-Is there a particular doctor in the area who is your main competitor?
-Who sees the patient first (technician or optometrist)?
-Why was the partnership offer turned down by an associate (if applicable)?
-Will I be able to visit the office during regular working hours?

Partnership/Buy-in/Sale
-Discussion/Formula/Price
-What will be the time frame for an associate position before we can talk about partnership/buy-in/buy-out?
-Is there an option for future ownership? Are you considering a move out of state?

Restrictive Covenant
-Define

Chante Smith is the Western U.S. Account Executive and Recruiter for ETS Vision. She can be reached at csmith@etsvision.com or 540-491-9105. ETS Vision is a Vision Recruiting firm specializing in finding and placing Optometrists, Ophthalmologists, and Vision Staff throughout the United States. www.etsvision.com