Negotiating Work Contracts As An Aesthetic Physician

We receive requests information or advice from physicians, many of them looking to partner with other doctors or businesses in some way. 

Here's one we received this week that has also been posted in the medspa forums:

I am in talks with a fellow physician to be hired as an employee of (an existing aesthetic) practice. He is going to spend time training me (in addition to the training I already did with American Academy of Aesthetic Medicine) for a period that they say can be from anywhere between 3-6 months. Is that considered to be a long time to be trained? After they were comfortable with me doing different procedures I would then be seeing patients on my own.

Although they were advertising this job they keep asking me how much I want to be payed for both the training period and then after. I'm not even sure what would even be considered appropriate. Hourly? Salary? Percentage of revenue? They also are asking me to sign a 3-5 year contract.  Is this reasonable? This job is in (withheld) to give you any needed geographic references. I would appreciate any help that you guys could offer...

There is always a lot of confusion about this but most questions can really be divided into tow camps:

  • What is the fairest method or structure for compensation? (The business question) or
  • What is the best legal structure for medical oversight or liability? (The medical/legal question.)

The legal structure is always going to depend upon location since every state or country is different. In some states you can provide medical oversight legally even if you're not on-site, in others you have to physicially be at the location when any treatment is performed that you're extending your medical oversight to, and there are some states where a physician has to actually perform the same treatments that estheticians' are allowed to perform pretty much on their own. Countries differ even more with some treatments (laser hair removal is one example) being classified as medical treaments in some countries and not others. That being said, it's pretty easy to find out what your requirements are based on whatever location you're operating in.

The compensation issue is much less straightforward and can actually be impacted by some of the legal strictures that your location imposes. A couple of issues that might be of concern for you:

  • Direct referrals from other physicians may be seen as fee-splitting. (Fee-splitting is designed to prevent physicians from getting kick-backs for sending patients to other physicians.)
  • Non-physicians can not employ physicians in the US. (There are corporate relationships that are used effectively to get around this.)
  • Who is providing the medical liscence and oversight?
  • Who is providing malpractice insurance and has the legal liability?
  • Where/how is revenue being generated?

You can see that these issues all compound and none of them are trivial, but these business decisions and negotiations are much more clearly defined since every business deals with them. They're basically defined by the market and what it will bear. I'll post some thoughts later on all of these questions one by one and we'll work through the list.