Physician Contracts Explained: Navigating Risk, Reward, and Disability with Jon Appino

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Join Daniel Wrenne and his guest Jon Appino as they delve into the complex world of physician contracts, with a specific focus on disability considerations. In this informative and engaging show, they discuss the intricacies of negotiating physician contracts while addressing the importance of disability provisions.

You’ll walk away with these takeaways:

  • Customize contracts to align with your unique story, considering disability-related factors.
  • Leverage high demand in the physician field for better negotiating power, with a focus on disability provisions.
  • Maximize financial benefits by utilizing bonuses, while understanding how disability-related clauses can impact compensation.
  • Embrace flexibility in contracts to adapt to life’s uncertainties, including potential disability-related challenges.
  • Seek expert guidance to navigate the complexities of physician contract negotiations, with a specific emphasis on disability provisions.

Join us for insightful discussions, practical advice, and real-world examples that will equip you with the knowledge and tools to make informed decisions regarding your physician contracts, including considerations for disability-related matters.

Don’t miss out on the opportunity to gain a deeper understanding of this crucial aspect of your career, ensuring you have the necessary safeguards in place.


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Physician Employment Contracts and Compensation with Jon Appino

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Full Episode Transcript:

Daniel Wrenne: Hey guys, hope you’re having a great day Today I’m gonna be talking with John Aino from Contract Diagnostics again. We recently had him on to dig into compensation and contracts and things to think about in regards to negotiating. John runs this company, contract Diagnostics, who specializes in helping physicians to review contracts and also review compensation arrangements.

So John has a pretty extensive knowledge and tons of experience around this specific subject. So today we’re gonna be talking about some of the. potential, non-compete changes that have been proposed at this point? Nothing’s actually changed, but there’s been some like proposals made, and some talk around non-competes getting eliminated, and so John weighs in on his thoughts on how that will shake out.

We also talk about how important. Some of the big features of a contract are in regards to your options if things don’t work out. In particular, we talk about the non-compete, or the Non-solicitation agreements, in restrictive covenants. Those are super important parts of your contract, and they’re kinda like the ways that employers will.

Lock you down, from being able to go to a different place. The second big part we talk about is tail insurance. That’s another big, aspect that can oftentimes get you locked down. And then the last part we hit on is some of the, arrangements, like bonus arrangements and in training pay that oftentimes employers will throw out at you.

But typically they come with some sort of lock-in provision as well. I personally tend to advocate for more flexibility and limiting the amount of lock-in. I’ve seen a lot of people get stuck in situations they don’t really enjoy, or have to leave a city, because if something like that, so that’s even more reason to really scrutinize these contracts on the front end and have like a company like John to review that for you.

so. The end of the day, it’s just about being aware of these things. A lot of times people go in, you know, you got a lot going on and you just kind of go in and, and just knock things out. but yeah, we’ll jump into that conversation today and, hope you enjoy it. it’s always enjoyable for me to dig into this kind of thing.

I know compensation. Well, especially contracts. Maybe you’re not the most enjoyable thing to dig into, like it’s a legal contract. How enjoyable can that be? But I think the part about the compensation and the livelihood, like your job is a huge thing. And, understanding this stuff, at least the basics is super important and can ha will have a really big impact on your life.

So we’ll jump into our show and, do that now.

Daniel Wrenne: John, what’s up buddy? 

Jon Appino: Hey, man. Always good to see 

Daniel Wrenne: you. Yeah, man. I see, you’ve gotten all fixed up and seems like you got lots more movement now and all that, physical therapy and work has paid off, right? Yes, 

Jon Appino: yes. My nine screws and however many centimeter plate in my right collarbone is, it’s, I don’t think it’s necessary.

I think they can take it out here soon, but I’m all healed and, uh, exceeded the physician’s expectations. So it just goes to nice to show you what a great physician, a team, and then a proper plan as you know, all kinds about planning, right? About what a good plan can do for accomplishing a goal. 

Daniel Wrenne: Can you feel the weather now with your screws?

I hear people say they’re thinking 

Jon Appino: I can’t. I can’t, but I don’t know. I guess I don’t pay attention to the weather, so, but, nice. I mean, it rain the other day and I’m like, I, yeah, I guess I didn’t notice it, but we’ll see. We nice. I didn’t go to an airport the other day and I, and I, I’m like, oh wait, they never gave me like little card.

I thought it was gonna go, but I, if it’s like the, I dunno what it’s made out, but they didn’t off. Maybe it’s like titanium and the titanium go off or something. I don’t know. But it didn’t go off where the metal detector was broken or anything like that. Yeah, So who, nice. I was pleasantly surprised with that too, so, um, nice.

But no, I’m looking forward to getting all that hardware taken out and then I gotta find something to do with it. We should survey the, the listeners on what John should do with his, his medal and 

Daniel Wrenne: his screw. Yes. you gotta keep that as a momentum for sure. Make a bracelet or something.

Make a bracelet or something. Something like that. Well, We were catching up last time and there were some questions, follow up questions, that came up that we were gonna hopefully talk about today. And along the lines of negotiating, your compensation and some of the arrangements with these employment contracts.

And John is the man when it comes to employment contracts and compensation. your company has. All kinds of experience and expertise in analyzing compensation agreements and helping even like, handholding through that whole process of like walking through the negotiation process because, so we’ll talk about it and, you know, we can kind of teach you how to do these things yourself or, or you could even Google and learn these kinds of things.

But a lot of times it’s nice to just ha will save time, but also have that reassurance of having a person along the way to help you, handhold you kind of through that experience. And that’s, that’s what John’s company does really well. And it’s, it’s a great service. 

Jon Appino: Yeah, no, there’s so much good stuff out there online and we put a lot of it out there for free.

Mm-hmm. but we believe that every story matters and the story of the, you know, you can look at something online for a clause, but it doesn’t lead into the physician story or their family story. So, you know, why is the position. Open, how many colleagues do you have? You know, what happens if a colleague takes off?

What’s the history of the program? How does your story about I wanna be there for one year and move, or five years and retire, or go part-time in two months, or mm-hmm. You know, have a child, like all those pieces of the story, right? They all play into how you should view some terms, whether it’s negotiable or not.

And that’s one of the things that they get with a service like Contract Diagnostics, is they get that personal approach that says, you know, this is how we can customize it to your story, not just some generic, something that you read online, which again, we put out a lot of, but something, how we can customize it back to the position.

So we have a blast doing that here, as you know. 

Daniel Wrenne: Yeah. And the families we work with that utilize that service, across the board, have better experiences. I guess the worst case scenario is that people are like, in a pretty good spot. Like, I get this confirmation that I’m in a really good spot.

but more often than not, it’s more like, Improvement upon where they kind of envisioned things going or awareness of some like landmines that were out there. So it’s a big deal, to. Like your job is a big deal, and these physician employment agreements are complicated and and there’s a lot in there and it’s a lot of foreign language and yeah, it’s a big commitment.

It’s your income. 

Jon Appino: It’s, it’s your biggest asset. Your biggest asset is your earning potential as a physician, you know, and, um, well, well aware on how a physician can protect themselves from, you know, with insurances and disability and life and investments in the future. But, but making sure that you’re earning the appropriate amount of money, you know, or the most amount of money that you can, is high for hyper important.

That’s what we do every single day. People always look for you, how do I, how do I save a couple bucks here on my taxes? Or how do I, you know, save a percent of, uh, interest off my home purchase? But they’re looking at like, I haven’t had a raise in five years, or, I don’t even know if I’m paid fairly. And you’re trying to save a thousand bucks on something and you’re being paid underpaid for three grand a year, 

Daniel Wrenne: or Right.

Let’s, let’s focus on the low hanging fruit. It’s 

Jon Appino: a super important thing to dig into. Which is why we have fun here, so we get to talk. Yeah, there’s lots great people, smart people about very, very important things. 

Daniel Wrenne: Yeah, there’s definitely lots to talk about. I think the good starting point is this whole, I think in, in with physicians there’s a lot of, turnover and a lot of, burnout or whatever you wanna call it.

Like it, a lot of. Physicians that are unhappy in their work. And so there’s, you know, lots of desire to leave and, but then sometimes you realize there’s surprises with contracts. Like, I don’t know that everybody goes in eyes wide open on like what their contract limits them in terms of their ability to leave and what the obligations are and, if they can open up or go work for another practice nearby or those sorts of things.

And they end up like getting the surprise on the back end when they’re like six months in, they bought the really nice house and the city that they grew up in and, life is good, but work sucks. And they’re like, I need to go work for the other place because this place is terrible. Like I can’t do this.

Mm-hmm. And then they go to read their, through their contract again and they’re like, crap. Like I got nothing. I got no option. I gotta leave, I gotta move away. In order or else I’m stuck here. so non-competes, you know, locking in, in people bonuses that are tied to working a certain period of time.

I think that’s our super important area of contracts that sometimes are overlooked. And then there’s some changes brewing too on in the world of, well, not changes. There’s some talk brewing around the non-compete world about, yeah. Potential changes We were kind of getting into before we started recording, so maybe we can start there.

Like what’s going on with the non-competes? 

Jon Appino: Yeah. Well, I mean, to kind of say, you go back to what you said earlier, I mean like, you know, burnout’s real and there’s lots of different recommendations coming out now by companies like MGM with new survey data that just came out, which we have contract diagnostic, updated data, But there’s all kinds of new talk about burnout, about retention rates, about, yeah.

How do you keep a physician around? Because everyone knows to turn a physician over, it can cost, you know, a hundred, 200, $300,000 in everything when you look at loss, productivity and locums and recruiting and adding up someone on and, you know, signing incentives and everything. So, Burnout and retention is super important to, and it’s becoming more and more important to employers.

And I think rightfully so. I think a physician, there’s obviously things that they can keep an eye out for. So they don’t do that because again, your earning, your earning ability, your income, your physician’s salary is, is one of your biggest assets over, you know, 10, 20, 30 year career. now how that plays into your contract and what happens if you’re burned out, what happens if you wanna leave?

The termination provisions are vital. If you have buy tail insurance, that could be a hundred thousand, you know, 5,000 to $150,000 payment on termination that you may or may not have. And it’s not easy to finance tail insurance because unlike your, your, your new boat, the bank can’t go take your boat back with your malpractice insurance tail purchase.

Right? So you can’t. Just go back and you have to pay for it in essence. So it could be a costly, then how do you, it’s insurance and then like you said, those are super important things. 

Daniel Wrenne: What are some example costs for tail? I, I can throw out some examples, but like you have a lot more experience. Like what’s a typical like range of costs?

Yeah. And for tail insurance, I know it’s a big 

Jon Appino: range. Yeah, it all depends on the type of the physician, right? And to some degree where they’re practicing and to some degree their, their history, right? So just like an automobile, if you have a, you know, an older van, front wheel drive minivan, you know, that’s worth a thousand dollars or $5,000 and it doesn’t go very fast and, you know, what are you 

Daniel Wrenne: trying to say about front will drive minivans?

Jon Appino: No, nothing. I’m kidding. I’m saying that insurance is cheap so they’re good purchases. but if you have a super fast red convertible sports car, Right. probably gonna be a little more, if you get a lot of speeding tickets, so you’ve got a track record of speeding tickets and driving recklessly in accidents.

It’s probably gonna be a little more, yeah. So just like with car insurance, it matters if you’re a hospitalist seeing 15 patients a day, or if you’re a high risk OB physician delivering babies every single day. Or if you’re a neurosurgeon poking around at someone’s brain or spine.

Right? Yeah. So, those different, you know, so if, if, if you’re seeing a diabetic, you know, with, with, for their, their glucose levels and prescribing, uh, diabetes medications all day, it’s much different risk level than if you’re, sticking needles and Yeah. Scalpels and cutting people open.

So I would 

Daniel Wrenne: say it’s safe to say it’s like the averages in the tens of thousands. Would you agree? Like on average. Yes. 

Jon Appino: but so typical. So the way that any physician can do a rough calculation is, and again, the cost per year. So you’re, you have to buy your malpractices just like if you, you have to buy your car insurance every year.

But then tail insurance is, if and when you leave, you may or may not have to buy it. So, a, a good way to kind of calculate that if you don’t know, is to find out how much your malpractice premium costs every year. So that’s a question that you can call the broker who sold you the policy or you know, your office manager.

Or you can call the HR department if, if you have one, and say, how much does my malpractice insurance cost you every year? If the physician’s not the one buying it, which is the common way, is that the employer provides it. Yeah. And then take that number and multiply it by 1.6 to 2.5. And it all depends on how long you’re there.

So if you’re just there for a year, it’s gonna be on the lower end, 1.2, 1.4 times your premium. If you’ve been there for a five year period, a tail, a malpractice insurance typically matures over five years. So just to use examples, it might cost a family practitioner 6,000 year one. 9,000 year, two 15,000, year three, 18,000 and year four, and then 20,000 in year five.

And then it might just stay at 20,000, right? Or maybe I got around maybe 6,000, 9,000, 11,000, 12,000, 15,000. And then it stays at 15,000. And so to tail out, you would generally take that 15,000 and the example and multiply it by two to 2.5. Yeah. So 15,000 means 30 grand, right? And that’s a rough estimate on what you need to come to the table if you have to buy your tail insurance.

Yeah. Um, upon termination. And again, depending on the state, it might be different depending on where you’re going, what’s your employer you’re going to, that may be something you can negotiate, that might vary. So again, the story matters. So doing an internet search on, tail insurance cost, might give you some really, really good information.

And I encourage everyone to do that. But finding out your story and how does it matter, for example, if you’re in Kansas, staying in Kansas or Kansas, moving to Missouri, but Kansas City sits in the, on the state line. So if you’re a mile in in Missouri versus staying in Kansas, how does that impact your malpractice insurance?

It does. People think state income tax, state income tax, but there’s also a patient compensation funds in various states that matter as far as like how long you’re there and how they cover tail and how they don’t. And it’s just a lot of nuance. No different than public, uh, student loan forgiveness, right?

And I have to be at this facility and work this many hours and if I do that for so long then, but an asterisk and an asterisk. And so again, that’s why it’s good that there’s folks out there that can help physicians through these times that maybe things aren’t as cut and dry or black and white or binary if you’ll in a contract.

I think the key takeaway, all that we 

Daniel Wrenne: with the tail insurance is like, being aware of how it affects you if you were to leave on the front end, like ideally when you’re going in mm-hmm. You’re aware of how that’s gonna Yes.

Who’s gonna cover tail first of all? Yes. Whether it’s your employer or you. Yeah. And second of all, if you’re gonna cover it, roughly what it’s gonna cost or some ballpark of what it’s gonna cost. Cuz if you’re, you end up in the burnout situation, like, I gotta leave, like you need to know. It’s a, cuz what I, I have worked with people on multiple occasion.

It’s just, It is what it is. You got a lot of stuff going on. You kind of don’t, gloss over the tail and then you end up having to leave and it’s a pretty big number. And it’s like, we didn’t have that in the, the picture. Mm-hmm. And it just, if it’s 50 grand, you’re gonna owe a tail.

That’s just another big factor, in the mix. Non-competes. 

Jon Appino: Yeah. Well, it, it comes, it comes down to risk. And that’s why, and I think it’s a good segue into the non-compete because when you’re signing your contract, even if it’s non-negotiable, right? They give you a contract and they say, here, don’t even bother having anyone look at it because we’re not gonna change anything.

It’s non-negotiable. You still gotta know your risk, you still gotta have it looked at. So you know what questions to ask because you know, again, so risk whether they’ll negotiate anything or not. Risk. Can you get out? How do you terminate? When can you, what about malpractice tail insurance? What about a non-compete?

What about how you’re compensated on termination? What about, you know, risk of things that aren’t in the contract, like caps on call or PA coverage or you know, resource, et cetera, et We could go on and for hours, but portion of that risk. Which is again, should be done on the front end. People call us and they’ll say, John, I signed this thing two years ago.

Can you help me get out? We’re like, well, what do you have? And they’re like, I don’t know. No, nobody looked at it. I just signed They’re like, oh, crap. And if those are the ones that you’ve gotta break news, say like, look, it’s gonna cost 60 grand to get outta this. They go, oh, $60,000. So I say all that because the risk assessment, right?

And anything as you’re an investment guy, anything is risk and reward, right? I’m gonna risk having less money today for the reward of having more money tomorrow. I’m gonna risk losing my money and my 401k, or in my directed plan from a professional like you guys. I’m gonna risk that might go down, for the benefit of it might go up and hopefully I hire good people, like, like Rent Financial and I, I can, you know, have more benefit than risk.

Yeah. It’s the same thing with contracts. What’s the risk, right? Well, termination, non-compete, tail insurance, yeah. Cetera, et cetera, et cetera. What’s the benefit? Well, it’s about money. It’s about benefits, like vacation time. It’s about, you know, retirements accounts. It’s about, you know, income and bonuses.

But if we go back to that risk piece, that non-compete is a big portion of the risk and it’s vital that a physician understands, not just the non-compete, but the restrictive covenant. So the restrictive covenant would be, you know what you can’t do either during or after the job, most likely both.

So a restriction could be you can’t work you know, you can’t moonlight while you work here, or you can’t own a pizza company while you work here unless you get our permission, depending on how the contracts supported. Another restriction would be, you can’t hire one of our employees or contractors after you work here.

Another restriction would be you can’t solicit the patients. They’re ours, not yours. So if you leave. you can’t take the patients with you. You don’t own the patient. those are all types of restrictive covenants that are not non-competes. Now, you may also have a non-compete and non-competes would say, for this, they’re time-bound, right?

So for so many months or so many years, they’re geographically bound. You can’t do something in a certain area, whether it’s a certain number of counties or a certain radius you know. And then obviously the more specific, the better. It’s specific to your specialty or not. How detailed is it to your specialty?

Is it, you know, what’s the time zones? I think that’s all super important for a physician to understand the non-competes. because we seem in most contracts and even the states that don’t have contracts, we don’t see, I know there’s been a lot of talk. You know, the FTC and you know, president Biden, you know, before Trump and like what they wanted to do with non-competes and maybe Biden can pound a gavel or wave a pen and everything goes away.

And we, I didn’t think that was gonna happen when he announced it. I was of course cheering part because I think it’s good for our positions. but I didn’t think it was gonna go through. We don’t really have a whole lot of new data yet. I don’t know that we’re gonna, with the pending election and all the stuff that’s gonna come out, it might be a talking point for some of the candidates.

But as far as like, you know, president Biden waving a wand, And magically, you know, dissolving every non-compete for every worker in the country. I just don’t think it’s gonna happen. and I think even if there is some federal regulation, I think there’s gonna be some different state changes and asterisks and everything else.

I know one of the proposals was, okay, we’ll do it with non-competes, but nonprofit institutions can have them, and you and I both know lots of hospitals tend to be nonprofit. or they might just be, you know, exempt. Right? So, you know, a non-exempt employee would be under that rule. So maybe no non-competes for somebody who works at Starbucks or somebody who works at Home Depot versus Lowe’s or something.

Right. Because they get paid hourly and they’re an exempt person, for a physician. Wouldn’t be a physician. They only, they don’t get 15 minute breaks every four hours of work. They don’t, they’re not entitled to an hour long lunch break. So they’re, they’re exempt from some of those regulations, laws, rules.

And so therefore, I’m assuming that there would be an asterisk for some of those employees, which would be physicians, or maybe it’s people who earn over a certain dollar amount per year or have compensations. So the initial dollar amounts that I’ve seen would yield all physicians out of whatever carveout they would do, except maybe a part-time pediatrician.

And then again, how does that impact nurse practitioners and PAs, because they’re, it gets complicated, but they’re starting to make a whole lot more, it’s so interesting and to, to kind of figure out what’s trying to project what’s gonna happen. Yeah. Who does? But at the end of the day, nobody knows.

And I think even if something does go through, it’s gonna be superficial for somebody to get some good press on it. And then I think it’s not really gonna roll down to position. And if it does, I think that would be a good thing because I think the physicians who, you know, are dedicated to a community because of family or because the kids are in school or, or some reason then they don’t want to leave the community, but they want to leave the employer and there’s an option, they just.

Can’t, I think that would be a, a great option for them. Again, as you de-risk any agreement, right? So if that non-compete represents 10% of your risk or 20% of your risk in a deal and you just booth take it out, that’s great. Your benefit to risk ratio dramatically improve just by that. But will it automatically increase salaries?

Are physician’s salary suppressed because of non-competes? A lot of people say yes. I don’t know. you know, the new M G M A data is just out and we’ve been analyzing it for, for weeks over here, and I know that Massachusetts is one of the lowest paying states when it comes to specialty and primary care pay, and yet Massachusetts hasn’t had non-competes in decades.

and I look at the states that are paid the best and there are states where non-competes are very active. so again, if a physician could just leave one job to go to the next because of a $2 per RVU difference, I think if they could do that, which they have been able to do that in certain markets.

I realize there’s lots of other stuff going on from, from payer data and access and market demands and everything else, but we don’t see salaries flushing up in states faster than others anyways. Or even in the highest paid states, in states without non-compete. So how would it directly impact physician compensation?

I don’t think for the, for the masses. I think the answer is it doesn’t, for that highly, highly trained surgeon, I think the answer is it might for that super productive, pulmonologist. I think the answer is it might. Because they could go back and say, look, if I can’t get three bucks more per rvu, the hospital next door will give it to me.

Right Now. Again, there’s so can you solicit the patients? Maybe not. You know, so again, just because there’s not a non-compete doesn’t mean there’s not a non-solicitation. And yeah, you, patients may or may not follow in. You may or may not continue to generate 12,000 RVU a year. So there’s so many, like 

Daniel Wrenne: non-competes, but non-competes are, pretty strict and solid.

And non-solicit is kind of a little bit, I’m using simple terms, it’s much more complicated, but like non-solicit is a little bit more dialed down version. It’s less restrictive, but you still can’t go after your patients. non-compete is like, nah, nothing in this area. Yeah. Like, you can’t do anything.

So that’s the, and they’re pretty common, like the non-compete. So that’s important I think. The takeaway with non-competes is that everybody should know like what their non-compete limits them to and ahead of time before they even sign. Because if you’re going to an area, especially if you’re like going to an area, well I, I mean I think anytime, but like if you’re going an area like I grew up here or my family or whatever, it’s especially important.

And I have known many worked with many people that ha basically kinda like had to leave an area because a job didn’t work out. And that’s like kind of not fair. I mean, it’s like, Your job dictating your or do law comes for a year? Yeah. Or had to go away and come back, which is a, just a mess. 

 (Mid Roll) how willing are employers to budge on these non-competes in your experience? 

Jon Appino: yeah, that’s a great question. And, and I think it depends on the situation, right? I think again, why is the contract terminating in the first place? Is the service line just not busy? So you’re not making as much money as you’d like, so you’d like to do something else.

They might be fine letting you go and forgiving it. Noncompete because they’re not doing what the, the program’s not doing what they thought it would. Is the reason that, you know, you would like to stay in time with because they don’t have the technology. Well that might be different. Do you wanna open your own practice?

Compete, so would stay on at the hospital and, yeah, but I mean, again, there are some contracts have carve outs for private practices. So they’ll say, you can’t work within 25 miles of my hospital. However, if you want to stay on staff at my hospital and open a private practice, you’re more than welcome to, right?

and again, it depends on the specialty, but if you’re gonna stay on staff at my hospital and admit your patients to my hospital, or if you’re a surgeon, you’ll do your cases at my hospital and you’re going to open a private practice and run your private practice like you want to, which means I don’t have to pay for your malpractice insurance and I don’t have to pay for your staff, and I don’t have to put you on my EMR system, et cetera, et cetera, et cetera.

The hospital’s like, I’ll take that every day. So for the most part, again, every story matters, which is why it’s important to call somebody like contract diagnostics, but that’s where. I think, you know, when it comes to, even if you want to get out of a contract, like, you know what you said, like read your contract.

No, no. Like read your contract, but call us or call somebody like us and say, here’s my story, here’s what the contract says. What do you recommend? Because we might be able to get very creative with ideas and strategies and tactics around helping a physician transition from one position to the next, or leave a position and, and ask for forgiveness around the restrictive covenant or the non-compete.

Mm-hmm. So that creativity that we’ve learned over those 12 years on what’s possible, I think is something that, that we love sharing with everybody. And that’s why whatever the situation is, the physician should definitely seek help and ideas because maybe you’ll read it and you’re just, you think it’s so solid, it’s so concrete.

You can’t work for 25 miles. But maybe it says you can’t do a certain portion of your job. Or maybe it says you can’t be a hospitalist, that you can go be an internist or maybe, you know, uh, and again, telehealth has kind of blown a lot of other things up too. So, yeah. How does it, how does it deal with telehealth?

I mean, so there’s so many things that matter when it comes to restrictive covenants that it’s not just No, most of the time it’s not as simple as 25 mile non-compete from the office at on history. And it’s much, much more complicated than that. even if it appears to be simple, they’re generally, you know, a half a page to four pages long in a contract, even though on the surface you might think it says you can’t practice for a year within 25 miles.

but it takes them four pages to write. That mean there’s a lot more to the story. Mm-hmm. And then a lot more creativity can come, can come on the backside of it. When, when we’re helping a physician come up with creative solutions to a, a situation that they’re not happy in and they’re looking for a transition.

Daniel Wrenne: Yeah. Another thing that I would be cautious about with contracts related to contracts that can cause big old problems if you’re leaving unexpectedly is the front end bonuses, like the forgivable uhhuh loan as they call ’em. But they’re, they’re, they frame it as a bonus, but it’s really forgivable loan based on saying a certain period of time.

And those can be big surprises. they can also be big surprises tax wise, even if you do stay, a lot of times that’s not quite clarified and all of a sudden you have a tax surprise. Yeah. But understanding what those terms are, preferably so like I mean like in a perfect simple world, which is never the case, but like ideally your employer covers your tail insurance, ideally there’s no non-compete.

And ideally like the bonus is just your bonus and it’s not tied to any level of service that never happens. Right. It’s always gonna have baggage attached. Like they don’t just typically, I mean like it’s typically got some baggage attached. Yeah. If they’re gonna write you a big check. Yeah. And sometimes they’re a long commitments, like I’ve seen like five year.

Jon Appino: Yeah. It’s all risk and reward, right? Yeah. The, the risk is you might have to give us money back if you quit in one year, five years, three years, whatever. It’s the reward is we’re gonna give you money right now, 20,000 bucks, put down on a house or buy vacation or to give the charity, charity or whatever 

Daniel Wrenne: you like to do with your, the problem, the problem with, a job, especially new job, is you’re basing it off an unknown.

Like, and the unknown is like, am I gonna hate my job? Am I gonna love my job? Am I gonna be somewhere in the middle? Yeah. And if you hate your job, in my opinion, it doesn’t matter how much money you pay me, it’s not worth it. Like, it’s not worth it cuz you spend so much time in the job, The majority of your time living is your job.

And if you’re gonna spend tons and tons of hours in a job that you hate, it doesn’t matter how much money we’re talking, it ain’t worth it. So like you have to be careful when you’re going into an unknown, especially, you know, brand new. I’m thinking people starting in practice for the first time or transitioning to a new location or whatever, like you’re going to a brand new employer.

You don’t know what their culture is, even though everybody’s gonna tell you these things like, were great and everybody’s happy, but like you don’t really know until you get in there. And things can change always. And these really long, you know, especially the long ones, like, like I’ve seen like five year commitment period on, or like a big bonus, big all bonus on the front end, five year commitment period.

That can be like paralyzing, like just, and it amp amps up all this burnout stuff too. It’s like if you’re unhappy six months in and then you realize you’ve used that bonus to buy a house. And real estate’s been stagnant and interest. And interest is 

Jon Appino: accruing, 

Daniel Wrenne: and interest is accruing, and interest is accruing.

It’s like I got no choice. Yeah, but to like grind it out. Yeah. 

Jon Appino: Yeah. Now, and again, there’s ways that you, you can be creative with those types of things. You know, if someone’s offering you a hundred grand for a five year commitment, you could say, guys, I’m willing to do a two year commitment and for that I’d like $40,000.

But then I’d like retention payments of $20,000 after year two and after year three and after year four, or at the beginning of year three and the beginning of year four, at the beginning of year five. Knowing that they may want, you can, and you can tie each of those to a one year repayment. That way maybe at the end of two and a half years, you know, you’ve received $60,000.

but you only have to give back 10,000. You know, much more palatable, much depending on taxes in the state and, you know, your income and how you take it and everything else. Much different tax situation. Having a hundred grand upfront tax and then accruing interest for five years that you may or may have to give back at the full rate plus interest even after you pay taxes on it.

So lots of interesting. Ways that you can approach a situation like that. And that’s just one of them, so. but Ian, like, it’s, it’s, it’s, that may be proposed on the surface, but there might be some creative solutions to not, not saying I want 120,000, or I want the hundred thousand forgiven over three years, but I, I want a hundred thousand over five, which is all, which is, you said it’s non-negotiable.

I’m taking a hundred over five. I’m just cutting up how I receive it. Right. And that may be negotiable 

Daniel Wrenne: and that much more psychologically like tolerable, I guess. Like, it’s really difficult to get a hundred thousand dollars. Yeah. And psychologically like, not forget that you have to pay it back.

If you leave, it’s just because you’re gonna tell yourself like, I’m good. It’s gonna work out. Like everything’s gonna be fine. That’s just what people do. They justify their thing, what’s going on. Yeah. And so, and we can’t, yeah. And we 

Jon Appino: can’t predict the future. No. You know, So that’s what’s tough. 

Daniel Wrenne: That’s what’s tough. What do you think about, in training stipends?

Jon Appino: Again, I hate to say it depends, but it depends. it’s dependent on the situation, right? The position who wants to go back to rural Kansas, where their family is and where they grew up and they wanna serve the community there for 20 years and they’re offering a stipend to sign now and you know, you’re gonna sign anyways.

I think that’s a good idea. but again, I think it’s also, it’s the risk and the reward, right? So again, I, every story of the physician matters and that risk and reward for each individual physician may be a little bit different, which means it may not make sense for everybody, but in general, I think that they’re a good idea.

I think they’re smart by the. Hiring entity to get their physicians locked in. You and I have both seen and talked about the SU supply, demand shortage in physicians and the, you know, how much, how many more physicians, you know, we need, I just, I just did a negotiation deal this morning for a urologist and the hospital’s trying to hire five of them.

And, you know, I told the hospital like, you’re offering a signing bonus that’s really not competitive and you need five with all due respect. You’re not gonna, you’re not gonna get any if you don’t make this package more in line with what your, the competition is offering. Right. And how did they respond to that?

So, oh, we’ll, we’ll see. but again, they. You know, but all those things matter. And I think because of, of an employer knowing, look, we need more, uh, urologist or more fill in the blank and we’re gonna need them over the next five years, there’s nothing wrong with them signing a 2026 candidate, which we’ve seen, we’ve seen 20, 26 contracts come through already, so physician who’s starting a contract, starting practicing as an attending in 2026, they’re already signed.

Yeah. So, but again, I thought I made sense for that position. if a hundred people gave us 20, 26 deals this week, I would, I would think something sounds weird, because I don’t know if that would make sense for a hundred people all at the same time, because it’s such a unique story. Yeah. But I do like the bonuses.

And I do think, again, depending on the situation, maybe you’ve got three kids, maybe need some extra money. Maybe you don’t wanna rack up credit card debt. Maybe you want to give more to charity or you wanna start your retirement savings earlier, start paying down your student loans. There’s so many things that, that additional money, typically a thousand to 2000, we’ve seen up to 3000 or more per month.

Every single month of extra money. So you know what a resident and a fellow makes, and you add two or three grand on top of that every single month. It’s a significant change to the way that they can live, especially if they have a family and financial 

Daniel Wrenne: needs. Yep. Now it is, like you said, it’s risk play there.

So you gotta consider the fact that it could blow up on you, you know, like the employer could become a mess or your family could move and you’re moving there for that reason. And then all of a sudden you’re like, 

Jon Appino: the hospital could sell on the new, the hospital could sell out and the new owners.

Mm-hmm. The jerk and you, you know, the, the medical director that you thought you were gonna work for leaves and you don’t like the new person and I mean, yeah. So much can happen. I mean, you’re a surgeon and you expect it to be one in four call and it now becomes one in two call. There’s so much stuff that could happen that’s just outta your control.


Daniel Wrenne: I would generally advocate for flexibility and not, you know, locking in. Cuz there’s all already, it seems like, especially for physicians in the career track, it’s almost like. Everything leads them to be more locked in. It’s like, like it starts the day that you start medical school. When get your first student loan check, that’s already like a first stage lock in.

You know? Cuz you now have a debt that you gotta pay back. It’s tied to gotta make a living to pay that back. And medical school is necessary to get there. So, and then you get into training and then you get into practice and you start signing contracts and bonuses and it’s all trying, you know, a lot of times it’s lock kinda locking you down hard and I think you gotta advocate mm-hmm.

For some flexibility because life doesn’t work out like you said. And, yeah. And with P S L F, that’s another thing man, that, that I have a lot of unhappy families that we’ve worked with, that were kind of like doing the thing cuz of PS l F. and ideally though, you, you’re in a position where you can do things based on what’s best for, like you said, your story.

And not based on the money, like the money comes secondary. Mm-hmm. Not to say like don’t be doing Yeah. Dumb things with your money, but like your story first. Like live your ideal life, then do all the money stuff, the contract stuff around that. That’s the key. And that’s, I think, really what I love what you’re saying is about your story.

It’s like you gotta remember to put that front and center about like what do you want your life to look like? What’s most important to you? And then shape all the stuff around it. And that’s what you guys do. And you can kind of like tailor it right. 

Jon Appino: Yeah. And that’s why, again, I think, you know, you, I think there’s so much really good information out there.

There’s so many great books that are written on physician contracts, you know, and now we have, chat GT and all that stuff. Oh, yeah. Which we’ve got a really cool video on that if you have They can do, do contract. I 

Daniel Wrenne: saw it. It’s on, uh, they can do contract reviews for you for free, right?

Isn’t that what It wasn’t that your conclusion that Chad GT replaces you, they ca. 

Jon Appino: No, they, yeah, they can do it for free and it be wrong. It was the conclusion, which is hilarious. I mean, and again, I encourage anybody to look up the video that we did, and I think it’s on like you social media and YouTube and that stuff.

Yeah, I’ll link to it. I mean, literally you ask a chat, g pt, you put, you know, you take all all the pri private information of course, and you put the contract in there. You say, Hey, gimme five red flags. And they, it’s all wrong. And they say, well, do I have malpractice insurance? There’s no mention of malpractice insurance, even though section five says malpractice insurance, right?

Mm-hmm. And then you say, and then you say, well, how much am I gonna get paid? And it says, there’s no mention of compensation, but Exhibit A says they get paid 40 bucks in our view. And then you ask Chad, g p t, well, what should I make this. Compensation is so difficult to negotiate, we don’t even know. And they say, well, who do I negotiate with?

And they say, we don’t know. Maybe the c e o, it could be somebody else, but we don’t know. And you’re like, oh my gosh. You know, come on Jackie. Bt you’re supposed, I encourage anyone to play around. Yeah, yeah, yeah. And I encourage anyone, and we, believe me, we’re building our own tools here at Contract Diagnostics that are going to supercharge and help the physicians go through our system.

But I’ll tell you, there’s lots of really good stuff online, but just like I can go to WebMD and I can look up our right, but nothing’s gonna replace. The judgment of a trained professional and the 12 years of trial and error that we’ve had and figuring out what, what works with employers and how to negotiate and what’s the right question to ask.

All that stuff is something that’s not done when you can find online. You know, because again, every story matters. So that’s what we love working with physicians. It’s our passion and, uh, and it, we have a, it’s why we have a free consult on our website. Anyone can go to contract and set up a 15 minute free consult and just talk to us for free and tell us your story.

We love to 

Daniel Wrenne: hear ’em. Yeah, I think that’s great. And you have a couple of, different service models to where you can do kind of a more full service handholding through the negotiation process. and then more of just like a less. Intensive review of compensation? 

Jon Appino: yeah, a few hundred bucks. Just look, we’re just gonna send you some compensation data and talk to you about how you’re getting paid and if it’s appropriate or not, then give you some ideas of strategies, a few for a few hundred bucks, or, you know, a more expensive package. Or we go through your contract and we call the employer and we creating pages of notes and we, you know, we do the help, we help you do the process so you can focus on what the physician’s good at, which is providing care to their patients, and then they can be with their family in their spare time.

So, yeah. And everything in between, of course. But,

Daniel Wrenne: if anybody’s listening and you’ve had ume, if you’re in practice and it’s been a really long time, since you’ve looked at anything, and especially if you have some suspicion of like, maybe you’re being underpaid or like maybe there’s some, like I would say three years.

Jon Appino: Three years is, I would say every or longer, I would say every two, two or 

Daniel Wrenne: three years. So if you’ve been sitting on your contract for five years, And just definitely chilling. And you’ve heard some, gossip about other people getting paid more, like whatever it is. If you just, maybe just, if you’ve just not even looked at anything in five years, like that’s where at minimum something like that, compensation RX would be like a good starting point to at least kind of like test the waters on where you’re at.

Jon Appino:

It’s no different than you, you know, you check your cholesterol because you don’t, you know, like you hadn’t checked a while back and it was low or it was high, but you do it, you still do it every year. Every other year. Yeah. because you want to get ahead of it. if it needs attention, you want to be ahead of a 

heart attack.

Daniel Wrenne: Right. And the worst thing it says is like, you’re doing pretty good. You know, you’re solid. Yeah. Um, I guarantee the worst thing is, yeah, odds are super high that y’all are gonna have like, stuff to, there’s always things 

Jon Appino: to improve, but, well, I would say think of the employers. We generally think employers mean well or physicians and, you know, they don’t want to burn them out.

And even though some of the physicians that we work with, disagree with us on that. but we generally think the employers want the physicians to succeed and be happy and work there for a long time and everything can to accomplish that. However, their job is to maximize revenue and minimize expenses.

Physician salaries are expenses, right? So you know, they want their bonus and their bonus is based on. Top line growth, right? Profits and obviously the way to get that is to work your positions more and pay them less. So the interest of the administration is to, obviously we’re, I, I would assume keep great talent and keep them happy and everything else, but squeeze it as much as they can.

Yeah. So they can maximize their, their bonus. And again, which is fine, right? That America healthcare capitalism, it, it is what it is, like it or not. However, I would say that just like you check your cholesterol or you get your oil change in your car, to avoid a catastrophic uhoh, you should call contract diagnostics and look at your compensation data.

But not just go to dosimetry and say, what does a family practice doctor make in Chicago? Okay? That’s, doesn’t take into account your story. So again, because your story matters, that’s where we give you the data and we do a 30 minute call with you so we can hear your story and then we can customize an approach.

Cuz I can give you a number all day, right? you should have a total cholesterol under 200 and LDLs a seven. Okay. But it doesn’t take into account my family history. What about if my HCL is 120? Does that matter? What if I’m on a ketogenic diet or a vegan diet? what, if I’m a smoker, I don’t smoke.

if I exercise or I don’t exercise, right? What if I’m a male or a female? So all those things, you start putting that in there and then all of a sudden, 70 starts looking, or 170 starts looking better or worse, right? So the story of the patient matters is no different than the story of the physician matters when it comes to compensation, understanding it, negotiating it, and everything in between, which is why we’re here.

Of course. 

Daniel Wrenne: Yep. I’m a big fan of what, what you guys are doing, so keep up the good work and always good to have a conversation about contracts. I mean, at the end of the day, the contract itself is kind of boring in legalese, but like it’s really important to have we have fun with it. No, we have, I fine.

I mean, we make the best of it, but at the end of the day, it’s like what pays the bills? It’s like that’s the gasoline to the engine. I mean, that drives the ship and so it’s. Important to pay attention to what, what your compensation looks like and how all that’s structured. So John, I appreciate you coming on as always.

I love the deal. 

Jon Appino: absolutely man. Anything we can do to help your guys, your gals, just reach out if they have a question for me, ping you. I’m sure they know your email address and Yeah. Yeah. Keep questions coming. You can, 

Daniel Wrenne: or any questions at any time. Yeah. Keep the questions coming if y’all have particular areas you wanna dig into.

Um, we’ll keep, keep the conversation going and it’ll be fun.