We all have blind spots. Physicians included.
Most physicians are blind to their employment contract options.
I am on an awareness campaign, in regards to this important physician employment blind spot, and how Professional Service Agreements (PSA) are an employment contract option.
Most of us depend on our employer’s legal department to create and organize this document for us. Remember they work for the employer, and not for you. They are typically benevolent to you and offer fair compensation plans, but their job is not to creatively give you a menu of options that maximize how your income flows to you. This is your job.
This is why it is critical for you to hire an agency to represent you, or at a minimum pay a flat fee for someone to review your contract with you. Please do this, it is worth every penny.
I made the mistake of not doing this.
Like most doctors, I looked at the compensation (salary plus benefits) structure and made sure it was a fair market. I was pleased with myself by including a signing bonus, moving expenses, loan payback program, etc… I looked over a bunch of legal ” blah-blah-blah’s” and made sure nothing stuck out as odd. Then I just signed and showed up at work. So many assumptions….so much naivety…so much optimism….so much desire to get started in real practice with a real doctor’s paycheck.
I admit as an attending physician, I was happily unaware of the income that I was giving away every year. Turns out it was over a million dollars! Back in the day, I actually got a physical check that demonstrated a pecking order of where my income was distributed, and my pay was always the last one on the list. I received the leftovers. It always seemed a little less than I expected, but it all seemed beyond my control. Everyone was getting their fair share, and I was earning a lot of money. Figuring out what to do with the bottom box in my paycheck seemed complex enough, let alone thinking about what was happening with the money that flowed into the top box.
Today with e-pay and direct deposit, we are even more blind to what happens to our income. We simply get a magic deposit in our bank account and then get an annual W-2 document that does show what our employer did with our “pre-tax” income, and who they paid on our behalf. For the IRS, the rest of our 1040 form is up to us to complete, but that will be the subject of a different post.
Keep life simple. Our adult lives often demonstrate a tension associated with the natural energy forces that move us to chaos and complexity. We have to be intentional to stay in the space of simplicity. So most of us seek to simplify wherever possible.
For physicians, this translates to a simple equation of working hard professionally for an employer and receiving a fair market deposit in our bank account regularly. From here, personal finances kick in as we determine what happens with our “post-tax” dollars. As high-income earners, short of making some very bad financial decisions, the good life is ours for the taking.
It is a pretty sweet deal, that feels great when you get there. Most people view it with envy, but our physician tribe knows the heavy cost associated with the journey.
The simplicity of our employment contract financial transaction brings with it a growing awareness of the opportunity cost associated with it.
- Professionally-we have lost control. Patients become less of our focus and managing 3rd parties start to consume us, and frustrate us. Well being and professional satisfaction go down.
- Personally-we begin to become more aware of the business of medicine, and our personal finances. Is it worth it? begins to creep into our thinking.
Suddenly, sweet becomes sour. So we get out that employment contract, and really look at it. This time with different eyes.
And we realize we have blind spots.
