Article Date: 12/1/2010

You're Telling me you Want What?
fix this practice

You're Telling me you Want What?

Use these guidelines to help you negotiate agreements with associates.

Richard S. Kattouf, O.D., D.O.S.

Q For several years, I have been thinking about bringing an associate optometrist into my 23 private practice. However, in interviewing five perspective candidates, I am miffed by many of their demands. Can you provide a breakdown regarding what is fair and equitable to both the owner and the associate?

Dr. M.T. Kemp
via e-mail

A: It's educational to compare the wants of young doctors with those of doctors/practice owners who are several decades their seniors. Attitudes of employees — even doctors — evolve through time. So, remember that what was requested in an associate agreement 20 years ago has changed drastically. Below are a few suggested guidelines for compensation.

(First, if the associate is defined as an independent contractor, he/she receives the agreed-upon compensation with no perks.)

When the associate is a full time employee, consider peripheral compensation as follows:

► Continuing education (C.E.) allowance. At year one, this could range from $0 in states that don't require new grads to attend C.E. for one year. Otherwise, a fair start would be $500 in year one, with potential increases as the associate increases his tenure. Cap this allowance at a pre-determined level.

► Paid time off. It is this consultant's opinion that this perk should be earned after the associate has served the practice for twelve months. The reason: You may end up with an associate who works a few months, takes their paid time off and leaves the practice.

► Paid vacation. I believe that this too is a benefit that must be earned by first working 12 months. Again, you don't want to risk having the associate work for you for only a few months and then take his paid vacation and leave the practice.

(Note: Some associates want immediate gratification. The concept of earning perks is foreign to them.)

► Retirement programs. You may choose to offer a 401K or simplified employee pension plan. Before offering any retirement plan, however, it is my advice to wait until the associate has exhibited loyalty to the organization. This could be defined as a one-year completion of employment.

► License fees. Paid by the owner at the onset of full time employment.

► Subscription fees. Paid by the owner.

Many young associates request they be compensated for being “on call” for medical emergencies. Unless this is a situation in which a practice has a history of multiple emergencies in a short time frame, the new O.D. is out of bounds with this request. This service should be shared by all O.D.s in the organization.

► Bonus or profit sharing. This is a must to motivate the associate to build his/her portion of the practice. Consider a bonus after the associate reaches three times her salary in collected revenues. For example, with a yearly compensation of $80,000, the associate would receive $X for every $10,000 over $240,000 in collected revenues. The X ranges from $500 to $1,000 and is paid only after 12 months of employment.

► Malpractice insurance. Paid by the owner as long as the associate is full time.

When developing an associate agreement, all these issues are negotiable. The key is to make the agreement fair to all parties. OM


DR. KATTOUF IS PRESIDENT AND FOUNDER OF TWO MANAGEMENT AND CONSULTING COMPANIES. FOR INFORMATION, CALL (800) 745-EYES, OR E-MAIL HIM AT ADVANCEDEYECARE@HOTMAIL.COM. THE INFORMATION IN THIS COLUMN IS BASED ON ACTUAL CONSULTING FILES.

Optometric Management, Issue: December 2010