A. Employee of a Medical Institution Health Care Organization
A medical physicist may be an employee of a hospital, clinic, medical school, university, or health care organization. The association with radiologists, radiation oncologists, other physicians and a wide diversity of support staff provides a broad base for expansion of interests and expertise.
In many institutions, the medical physicist holds a professional appointment in the department of radiology or radiation oncology and is a member of the medical or professional staff. Some large institutions may have an extensive staff of medical physicists organized into separate divisions. In many such institutions, the facility may require the medical physicist to possess a doctoral degree in order to be considered a full member of the faculty or staff. Some institutions do not require a doctoral degree; however, a master's degree in an appropriate discipline, as defined by the American Board of Radiology, is considered a minimum requirement.
The work required of the medical physicist will vary depending on the size of the institution and the number and specialty of the physicists on staff. In smaller facilities the medical physicist may be responsible for the physics support of all areas including therapy, diagnostic nuclear medicine and radiation safety. In larger facilities, the medical physicist may only be responsible for the support of one of these areas. Even then, the responsibilities could include clinical support, teaching and research.
B. Membership in a Radiology or Radiation Oncology Group
A medical physicist can be a member of a radiology or radiation oncology group. Any agreements concerning employment should strive to parallel those of physician members of the group as much as possible. In particular, the medical physicist should be considered one of the professional members of the group.
In a group practice, the medical physicist is responsible to the group and not to a hospital, which may not understand the functions and needs of the medical physicist as well as it understands those of the radiologists.
As a professional member of the group the physicist has access to the managerial, legal and accounting services of the group. In addition to saving a lot of the physicist's time, these professionals can also provide legal advice and financial management advice.
Group practice takes many forms. Several radiologists may practice together in a loose association for convenience in consolidating billing. They may bill together in a hospital facility, but each may have additional radiology or radiation oncology practices, such as a private office or consulting agreements with other clinics or offices.
The practice may be in the form of a partnership. In one form of the partnership, all professional members of the group become equal partners (either immediately or after a short trial period). In another form, there may be one or more senior partners, and one or more categories of associate partners. In either case, the medical physicist should discuss partnership mechanisms available.
The group may also have a corporate structure. Usually the particular form of corporation adopted by medical groups is the Professional Corporation (P.C.). There are several benefits of corporate structure that are not available to loose associations or partnerships. These include limited liability for errors by other members of the group and tax consequences for certain benefits. All professional members (who are usually stockholders in the corporation) are employees of the corporation as are members of the non-professional staff. Only stockholders have voting privileges, and it is desirable for the medical physicist to be a stockholder if this is legally permitted.
C. Private Medical Physics Practice
This type of practice refers to the medical physicist who is self-employed or is a full partner in a medical physics consulting group. In this context, the medical physicist is responsible for all aspects of conducting a private business. The variety of contracts involved with this type of practice can be quite diverse; so can the business arrangements for profit sharing, retirement, vacation coverage, and other such benefits. General guidelines to consider for this type of practice will be presented in a subsequent section.
As with any other type of employment, there are advantages and disadvantages to this type of employment. A major consideration that needs to remain constantly in business negotiations is that benefits such as medical insurance, retirement, disability, continuing education, and coverage during any absences are as much a cost of doing business as automobile expenses, office supplies, equipment, secretarial expenses, etc. These costs must be factored into contracts and hourly or daily consulting fees.
Possible advantages of private medical physics practice:
- Scope of work can be strictly defined
When formulating a contract with a client, the scope of work needs to be as precisely defined as possible. If additional services are required, any changes can then be negotiated. In other words, if additional equipment, new modalities or new facilities are added, the contract coverage and compensation can be modified. In an employee relationship, this ability is rarely an option, since one is usually asked to do more with less.
- Immediate vesting in a retirement plan with complete control over investments
As a solo practitioner, the medical physicist can establish a pension or profit sharing plan, which has major tax benefits. Most employers require a minimum of five years to become fully vested and may charge substantial penalties for withdrawal of any pension funds prior to retirement age. Frequently, this penalty applies even if one changes employers and desires to roll existing retirement funds into a new fund.
- Potential added income tax benefits for the self-employed
Many expenses may be directly deducted as "business" expenses including meals, travel, office equipment, professional equipment, supplies, telephone, business gifts, entertainment, etc. Even though one may encounter these expenses as an employee, many are not eligible for deduction as "employee related business expenses" and, if they are eligible, they are subject to the base deduction criteria.
- "Client" benefits are greater and more cost effective
It may be more advantageous for the "client" to deduct the medical physicist cost as a contractor rather than an employee. In addition, the client may not require a full-time physicist, but may only need specified services (e.g., diagnostic equipment acceptance testing, performance evaluations, radiation safety services, shielding design, temporary assistance to in-house physicist). However, the professional medical physicist has an ethical responsibility to inform the client when full-time or additional medical physics services are required. Inadequate or incomplete coverage due to an overwhelming workload or a lack of understanding by the client about the scope and responsibilities of medical physics is not an acceptable practice.
Possible disadvantages of private medical physics practice:
- Medical insurance is frequently more expensive
Medical insurance outside of large group plans is usually more expensive for small self-employed practices. This is rapidly changing, since more opportunities are becoming available for small firms and medical costs through corporations are becoming more expensive.
- Professional liability insurance is mandatory
A medical physicist in private practice must have professional liability insurance. This insurance was previously difficult to purchase, but it is now readily available through the AAPM. Some employers’ professional liability coverage may provide adequate coverage for the employer but insufficient coverage for the employee.
Therefore, medical physicist, as employees, should consider purchasing professional liability insurance and consult a tax expert on the ability to claim their expenses as a tax deduction.
- Disability insurance is an "added" expense
Disability insurance is frequently an "employer provided benefit," and the self-employed must purchase independent disability insurance. Again, employer-provided disability insurance may be inadequate for one’s needs. If purchased independently from "taxable" dollars, the benefits from an independent plan are usually non-taxable. In addition, there are independent disability plans, which become effective if you are no longer able to practice your profession, whereas with most employer provided plans, one must be unable to work in any type of job before being able to collect.
- Uncertain job stability
Contracts with clients are subject to termination, competitive bidding, and, if nothing else, the hassle of negotiating contract renewals. The terms of contracts may possibly be lengthened in order to reduce the frequency of this process and the grounds for termination specifically defined. This process may, in fact, provide a more stable environment for a specified period of time than employment especially under an "employee at will " situation.
- No sick leave, vacation, or professional development time
If provision for this time is not included in contracts, then acceptable temporary coverage must be provided. This expense should be included in the final contract price.
- Areas of authority and supervision may be uncertain
In a clinical situation, the authority of the medical physicist as well as the supervisory role (e.g., supervision of dosimetrists who are hospital employees and any authority over technical staff) is often unclear and may lead to conflicts. These relationships should be identified in the professional services contract (Ref paragraph IV, C,3).
- Private practice business operations
Conducting the "business" operations of a private practice does take time. Details pertaining to expense accounting, insurance, retirement plans, equipment purchase and maintenance, contracts, attracting new business and maintaining current business, etc. are time consuming.
Types of private medical physics practices:
- Solo medical physics general practice
In this type of private medical physics practice, the medical physicist is the sole proprietor of the business and operates independently of any other physicist. The medical physicist provides services to multiple clients under separate contracts. The form of private practice with the simplest administrative structure is the individual physicist. In this case, there are no inter-professional problems within the practice, and it is obvious to all that will provide services to the client. This is a common form of private practice. It calls for the widest range of both physics and business skills. Despite working alone, the individual physicist should investigate the possibility of incorporation, particularly if there are plans to employ or contract with others for specialized clerical or physics needs. If an individual physicist does use other physicists for substantial periods of time, the practice resembles a group practice more than an individual practice. Many individual practitioners have found it convenient to join a radiology or radiation oncology group or a group of other physicists. In both cases, the purpose of grouping is to share resources and expenses. The flavor of independent practice can still be retained if clients are kept separate and shared services are prorated.
- Solo medical physics institutional practice
In this case, the medical physicist has a professional services contract primarily with one institution or one company. Care must be taken to assure that the Internal Revenue Service requirements pertaining to an independent contractor are met. For example, "independent contractors" must control their own hours and schedule, and must not receive employee benefits from their institution. Guidelines and references concerning "worker classification" may be available through the ACR Legal Department, the IRS, or your personal attorney.
- Group medical physics general practice
In a group practice, multiple medical physicists have joined together to combine their talents and resources to provide a broad-based practice. It is definitely recommended that this type of practice strongly consider incorporation especially for liability reasons. Consultation with an attorney who is intimately familiar with professional practices is highly recommended. In a group practice, work and income are shared. The formulas for sharing vary from group to group. Due to their nature, certain activities will require specific assignment to individual members of the group. Other activities may be shared. Some groups prefer rigid assignments, while others employ a more flexible agreement.
Options for sharing the group’s income are many, but may be limited by either current tax laws or the group’s incorporation charter. The personal preferences of the members of the group for salary and types of fringe benefits are also important. It is desirable to have some flexibility in remuneration to allow for fluctuations in the group’s income. Whatever formula is used, it should be well understood and agreed to by all members of the group.
Often, groups start with a "handshake" agreement. Unfortunately such agreements frequently lead to problems later on when circumstances change. It is better to have a carefully drawn contract, which spells out the relationship between the parties and response to possible crises such as group dissolution, termination of one member, death or disability. No matter what form the agreement takes, it should be equitable to all parties.
Groups may be formed as partnerships or as corporate entities. The former is less flexible, and is rarely preferred. Corporations can be "public" (in which case stock is available for sale) or "closely held" (in which case the stock is held only by members of the group). A regular corporation is the most flexible, since it can invest in other companies and retain earnings. A professional or "Subchapter S" corporation is exempt from corporate taxes but cannot accumulate earnings or make investments.
- Group medical physics institutional practice
In this case, the medical physics group has a professional services contract primarily with one institution or one company. The comments pertaining to the solo medical physics institutional practice also apply in this situation.