If you take a position as an independent contractor, all of this is moot, as the law prevents the employer from offering benefits other than malpractice coverage. Speaking of malpractice coverage … have you seen the cost of tail lately? Do not be stunned if you are asked to earn your tail over time in smaller groups. In those states where occurrence MP is available, this is not an issue, as tail is included.

But if the coverage is Claims Made, the tail is separate and can be very expensive. Never assume it will be covered. Always ask. If you must earn that coverage as a new doc or as a partner, make sure you know the formula for doing so.

Pensions

Many employers are pulling back on pensions. Because so many 401Ks and 403Bs took major hits in the recession, physicians became more interested in immediate cash as opposed to controlled investing. Most employees of hospitals and health care systems have a pension component. In most cases, the monies going into these pensions come out of the physician’s earnings. The physician can also direct how these savings are invested. For real value, look for an employer that provides a generous match.

It will be a percentage of what the physician deposits. It can really add up over the years. In most cases, you need to be an employee for at least 5 years before you are vested and can take the money with you when you leave. Some employers vest in percentage increments of 20% per year so that it takes 5 years to fully vest. Find out what the specifics are before signing on the dotted line. At the very least, a pension is an enforced savings plan.

Retirement

This is usually the last thing that young physicians consider when evaluating a compensation package. It should be first! This can easily be what makes the difference between retiring with a major chunk of change at 55-60, or working like a dog until you are 70. Ask what the group or employer is offering and, if there is a defined retirement formula, get the details. Many small, democratic groups contribute the maximum amount allowed to each physician … $48,000 per year, instead of paying up front or big annual bonuses. That is true value! But it is often overlooked because it is not cash in hand. If you don’t think this is important, change your thinking and start planning for the future.

Perks

I know of a group that has its own chef in the physicians lounge. I know of another that provides valet parking for their docs. Some get their scrubs and coats cleaned, and others have child care centers available on campus. I once had a hospital in rural Montana offer a physician a free mortgage and discount furniture. Whatever form they take, perks are simply that … perks. When it comes to decision-making between two great opportunities, this is the last category you should focus on. Perks are the category of the least true value.

Summary

Evaluating a compensation plan can be daunting. The trick is to look at your family and decide ahead of time what your specific needs will be. Some employers will negotiate to craft a package that is best for you. Make certain that when you sign on the dotted line, the package you accept is one that contains true value, not just a lot of useless coverage and empty promises.