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Competition: There's No Avoiding It, But NPs Can Prepare
JNP
Competition: There’s No Avoiding It, But NPs Can Prepare LEGAL LIMITS Carolyn Buppert
A nurse practitioner (NP) recently wrote that she has been firmly entrenched in a cardiology practice for years, with several thousand patients who regularly have come to see her. She is certified in every dimension available to NPs in cardiology. Internal medicine practices in the community refer directly to her. All has been well until the practice owner hired 2 new cardiologists. The practice owner’s objective, he said, was to get relief from taking after-hours call. Because the 2 new cardiologists, both from foreign countries, have no patient base, the practice has abruptly transferred the NP’s patients to the new cardiologists’ roster. The NP now has an empty schedule. She writes, “Should I just give in and find another job?” The answer, sadly, is, “yes.” This is not the first time I have heard this story. This is a reality of the business of medical practice. I don’t know all the details in this situation, but here is my guess about the background: Cardiologist practice owner wants relief from taking call. He could ask the NP to take call. (Perhaps he did and she refused.) Or perhaps he believes that the nature of after-hours call for a cardiologist is best handled by a cardiologist. He also believes he can bring in significant revenue through some procedures a cardiologist, but not an NP, can perform. So he hires an associate or two. (By hiring 2, he sets up a competition between them, allowing him to retain the most productive individual.) He can’t guarantee the new associates large salaries, so he offers a small salary and a percentage of the collections attributable to them. Here is the point at which
420
The Journal for Nurse Practitioners - JNP
the NP’s patients become attractive to the new cardiologists. The owner doesn’t want to tell the new hires to keep their hands off the NP’s patients, because he is then sabotaging the new cardiologists’ livelihoods. The NP has no right to those patients. If she is on productivity-based compensation, the owner isn’t paying the NP to sit around doing nothing. He doesn’t have to fire her. He just lets the scenario play out—she leaves. How can an NP prevent this type of situation? He or she can’t. The practice owner gets to make decisions most beneficial to the practice owner. Only the NP who owns his or her practice controls his or her terms of employment. NPs work at the pleasure of their employers. For most NPs who specialize in cardiology, practice ownership is not a viable option. Contracts stating the terms of an NP’s employment, including compensation mechanisms and terms of termination, can offer some protection. However, it is difficult to predict all possible scenarios and draft contract language to cover all possibilities. For example, let’s say the NP had negotiated some protective contract terms with the practice owner, such as a clause that stated: “Employer agrees not to hire or contract with additional cardiologists who would compete with NP for patients.” It is highly unlikely that an employer would agree to such language. It’s not realistic to expect that an employer would agree to restrict him or herself from growing a practice or from attempting to make profits. But even if an employer did agree to such language, it would not be a cure-all. If the employer agreed to protective language for the NP and later wanted out, he could simply wait until the term of contract ended and then change it. Some employers terminate a contract early by offering the NP a severance package in return for an early out. One NP with a fairly protective contract found herself fired when the employer learned there was a new NP in town who was looking for a job. He was able to get the new one for less money than the current
June 2008
employee. He was willing to pay severance to the current employee so that he could realize greater profits in the next few years. (Remember, profits are increased either by increasing revenues or by decreasing expenses.) As we saw in the case above, it’s not necessarily a physician who is the competition. And the competition doesn’t always lead to the NP getting fired or eased out. Some NPs have found that their employers are so happy with having an NP that the employer wants to hire more. The new NPs are in competition with the original NP for the employer’s time and attention and for the patients who visit the practice. The first-hired NP becomes disgruntled. Should NPs urge their employers never to hire another NP? Of course not. The only reasonable strategy for dealing with competition is to do your best, keep your options open, and prepare for change, even when you are happily situated. Preparation includes networking, building relationships with both patients and colleagues, refraining from burning bridges, expanding your capabilities, being open to opportunities, and being creative and knowledgeable about how to offer a profitable service. Keeping your options open includes refusing to sign restrictive covenants, or, if you do sign, insisting that the restriction be minimal. If you are prepared for competition, you can move to another practice, if you need to. The NP who found herself with nothing to do when new cardiologists joined the practice will have nothing to lose by looking for another job. If she gets another offer, it doesn’t mean she is bound to leave her current job. Sometimes NPs find themselves more appreciated by their current employers when the employer finds that the NP has another offer. And if not, the NP still has the other offer.
SM
HRN Services Inc. and Gateway To Travel are proud to recognize the impact that you have on the lives of patients and families everyday.
COAST-TO-COAST ASSIGNMENTS
Gateway To Travel
SM
EXCELLENT BENEFITS PROGRAM Company Paid Insurance Health (PPO 90/10 coverage) Dental Vision Life Free Private Housing Paid Utilities Weekly Paychecks Direct Deposit 401(k) Plan RN License Reimbursement
Carolyn Buppert, CRNP, JD, practices law in Bethesda, MD. She can be reached at [email protected].
1555-4155/08/$ see front matter © 2008 American College of Nurse Practitioners doi:10.1016/j.nurpra.2008.04.006
HRN Services Inc. has earned The Joint Commission’s Gold Seal of ApprovalTM
888-476-9333 www.hrnservices.com www.npjournal.org
The Journal for Nurse Practitioners - JNP
421
Competition: There’s No Avoiding It, But NPs Can Prepare LEGAL LIMITS Carolyn Buppert
A nurse practitioner (NP) recently wrote that she has been firmly entrenched in a cardiology practice for years, with several thousand patients who regularly have come to see her. She is certified in every dimension available to NPs in cardiology. Internal medicine practices in the community refer directly to her. All has been well until the practice owner hired 2 new cardiologists. The practice owner’s objective, he said, was to get relief from taking after-hours call. Because the 2 new cardiologists, both from foreign countries, have no patient base, the practice has abruptly transferred the NP’s patients to the new cardiologists’ roster. The NP now has an empty schedule. She writes, “Should I just give in and find another job?” The answer, sadly, is, “yes.” This is not the first time I have heard this story. This is a reality of the business of medical practice. I don’t know all the details in this situation, but here is my guess about the background: Cardiologist practice owner wants relief from taking call. He could ask the NP to take call. (Perhaps he did and she refused.) Or perhaps he believes that the nature of after-hours call for a cardiologist is best handled by a cardiologist. He also believes he can bring in significant revenue through some procedures a cardiologist, but not an NP, can perform. So he hires an associate or two. (By hiring 2, he sets up a competition between them, allowing him to retain the most productive individual.) He can’t guarantee the new associates large salaries, so he offers a small salary and a percentage of the collections attributable to them. Here is the point at which
420
The Journal for Nurse Practitioners - JNP
the NP’s patients become attractive to the new cardiologists. The owner doesn’t want to tell the new hires to keep their hands off the NP’s patients, because he is then sabotaging the new cardiologists’ livelihoods. The NP has no right to those patients. If she is on productivity-based compensation, the owner isn’t paying the NP to sit around doing nothing. He doesn’t have to fire her. He just lets the scenario play out—she leaves. How can an NP prevent this type of situation? He or she can’t. The practice owner gets to make decisions most beneficial to the practice owner. Only the NP who owns his or her practice controls his or her terms of employment. NPs work at the pleasure of their employers. For most NPs who specialize in cardiology, practice ownership is not a viable option. Contracts stating the terms of an NP’s employment, including compensation mechanisms and terms of termination, can offer some protection. However, it is difficult to predict all possible scenarios and draft contract language to cover all possibilities. For example, let’s say the NP had negotiated some protective contract terms with the practice owner, such as a clause that stated: “Employer agrees not to hire or contract with additional cardiologists who would compete with NP for patients.” It is highly unlikely that an employer would agree to such language. It’s not realistic to expect that an employer would agree to restrict him or herself from growing a practice or from attempting to make profits. But even if an employer did agree to such language, it would not be a cure-all. If the employer agreed to protective language for the NP and later wanted out, he could simply wait until the term of contract ended and then change it. Some employers terminate a contract early by offering the NP a severance package in return for an early out. One NP with a fairly protective contract found herself fired when the employer learned there was a new NP in town who was looking for a job. He was able to get the new one for less money than the current
June 2008
employee. He was willing to pay severance to the current employee so that he could realize greater profits in the next few years. (Remember, profits are increased either by increasing revenues or by decreasing expenses.) As we saw in the case above, it’s not necessarily a physician who is the competition. And the competition doesn’t always lead to the NP getting fired or eased out. Some NPs have found that their employers are so happy with having an NP that the employer wants to hire more. The new NPs are in competition with the original NP for the employer’s time and attention and for the patients who visit the practice. The first-hired NP becomes disgruntled. Should NPs urge their employers never to hire another NP? Of course not. The only reasonable strategy for dealing with competition is to do your best, keep your options open, and prepare for change, even when you are happily situated. Preparation includes networking, building relationships with both patients and colleagues, refraining from burning bridges, expanding your capabilities, being open to opportunities, and being creative and knowledgeable about how to offer a profitable service. Keeping your options open includes refusing to sign restrictive covenants, or, if you do sign, insisting that the restriction be minimal. If you are prepared for competition, you can move to another practice, if you need to. The NP who found herself with nothing to do when new cardiologists joined the practice will have nothing to lose by looking for another job. If she gets another offer, it doesn’t mean she is bound to leave her current job. Sometimes NPs find themselves more appreciated by their current employers when the employer finds that the NP has another offer. And if not, the NP still has the other offer.
SM
HRN Services Inc. and Gateway To Travel are proud to recognize the impact that you have on the lives of patients and families everyday.
COAST-TO-COAST ASSIGNMENTS
Gateway To Travel
SM
EXCELLENT BENEFITS PROGRAM Company Paid Insurance Health (PPO 90/10 coverage) Dental Vision Life Free Private Housing Paid Utilities Weekly Paychecks Direct Deposit 401(k) Plan RN License Reimbursement
Carolyn Buppert, CRNP, JD, practices law in Bethesda, MD. She can be reached at [email protected].
1555-4155/08/$ see front matter © 2008 American College of Nurse Practitioners doi:10.1016/j.nurpra.2008.04.006
HRN Services Inc. has earned The Joint Commission’s Gold Seal of ApprovalTM
888-476-9333 www.hrnservices.com www.npjournal.org
The Journal for Nurse Practitioners - JNP
421