Friday, May 9, 2014

So Your Physician Wants to Drop Call ... A Tough Issue for Group Practices

Drop call
A group was wrestling with how to adjust compensation for a senior physician wanting to drop call. The group’s nonproduction-based compensation structure further complicated the question: “How much is call worth?”

Planning early—before someone asks to slow down—to hammering out the tiniest details and amending employment contracts with new language. One respondent said his practice valued call coverage so highly, it became a non-negotiable item: Either you remain on the call schedule or retire outright.


It’s always been a tough issue for group practices: How does a senior physician slow down before retiring from the group completely? Traditionally, many group policies, hospital staff bylaws, and medical society traditions have made allowances for older doctors. But now, with the graying of the baby boomers, we’re faced with the largest retirement party in modern medical history. Another crisis is clearly brewing—especially for physician-owned practices.

The single most important piece of advice? Work out your group’s exit strategy long before anyone needs to implement it. Once a revered (or not-so-revered) senior member says, “I want to slow down,” the discussion loses all objectivity, and participants commonly misinterpret disagreements as personal affronts.

The closer your senior partners are to retirement, the more likely you’ll need to call in an experienced consultant who can mediate conflict and offer unbiased advice. Then be sure to use a qualified attorney to help you create new employment agreements for everyone. Don’t use a do it-yourself approach when crafting legal documents.

Here’s a partial list of details to address as you put together your pre-retirement and retirement policies:

Notice period: When must a partner declare his or her intent to enter phase-down or retirement?

Phase-down period: How long before full retirement can a pre-retiree participate with a reduced workload?

Reduced workload: To what extent can a pre-retiree reduce his or her load? Clinic hours? Night call? Weekend call?

Eligibility: At what age, or after how many years’ service, may a partner enter pre-retirement? How many physicians can enter pre-retirement at the same time?

Variations: Must a physician completely retire after the phase-down period, or can the group accommodate an alternative plan? For example, might the transitioning physician enter a part- time employment position as a non-partner?

Fringe benefits: Will a retiring physician be eligible for full fringe benefits during the transition period?

Then there’s the Big Issue: How will you alter a transitioning physician’s compensation? Once upon a time, many specialties using production- based compensation just allowed the reduced workload to reduce the pre-retiree’s pay. But that doesn’t work for most specialties anymore.

Your group must determine how much a physician’s participation in the call schedule is worth. It’s clearly worth more to the organization than the revenue earned by treating patients presenting at the emergency department. However you calculate its value, do your best to achieve a consensus among the members. You can research how other similar groups have settled the issue, but your group will finally have to develop a system that reflects your particular goals and values.

Which brings us back to the practice whose members identified call coverage as the most important thing its physicians provide for one another. They refused to allow any partner to reduce his or her call obligation—no one was willing to take more call for any amount of money. To them, call coverage is like they say in the MasterCard commercials: “priceless.”

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