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Breach of Contract: Protecting Doctors During COVID-19 (w/Kyle Claussen) - YouTube
Channel: ZDoggMD
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Hey Z-Pac it's Dr. Z,
ZDoggMD if you're nasty.
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Check it out, I recently did a rant
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that went viral talking
about how physicians
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during this COVID epidemic are struggling
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to have a voice.
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So many things are moving right now.
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From their income stability
to changes in what,
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they signed up for a particular contract
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and now they're being asked to do things
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that are way out of contract.
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How can we do better in an environment
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where all the forces are
making it so confusing?
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Well, Kyle Claussen who's an attorney
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and co-founded a company, he's the CEO
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of a physician-founded called Resolve.
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They worked with the White Coat Investor
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and Physician Moms Group
and all these other groups
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to help doctors empower
themselves to actually
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take control of contract
negotiations and in situations
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where they really feel lost.
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Because we're never
trained to do this stuff.
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And Kyle reached out and
he's like, I saw your video.
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I want to support an episode where I help
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to teach you guys about
tools that are available
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to actually support you
during this difficult time.
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So Kyle's here.
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Kyle Claussen, welcome to the show.
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- Thanks for having us.
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- Now, did I miss anything
in that introduction
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about what you do or your background?
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- No, you were spot on, you got it.
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- No, formal training. (laughs)
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- Zero yeah, zero.
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- So tell me when we got
on a call because I'm
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always skeptical.
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You're a lawyer and doctors and lawyers
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it's like dogs and cats
living together mass hysteria.
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There's always been this tension
because we're not trained
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in the legal aspects,
in the business aspects
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and that kind of thing.
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And yet, we're sent out in the world
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to go man the front lines
with big organizations
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now that do have all these legal resources
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and contractual stuff that favors them.
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So, how did you sort
of get involved in this
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and what sort of drives you in this?
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- Sure, so Resolve interestingly
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was founded by a physician,
you mentioned that earlier.
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And he shared the same,
I think opinion of most
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attorneys that you just laid out.
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And he thought it'd be a really good idea
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to form a company that
would supply physicians
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with the information that they need.
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So when you're going through
these contract discussions
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you've got someone who's seen
thousands of these contracts
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and can tell you what's
normal, what's not normal.
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What your compensation
number should look like,
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what they shouldn't look
like and really empower
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you guys, because if you all
get the right information
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you make good decisions.
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And so it's not, we don't
feel like we're doing
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anything other than providing
you with that ammunition
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to go into those discussions.
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- And what is, so this is something,
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when I signed up with my
big multi-specialty group
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straight out of school.
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They gave me a big old contract
and it had a ton of stuff
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in it including a noncompete clause,
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including call schedule
and other things like that.
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And partnership tract and all this other.
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I could not figure it out.
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My brother-in-law who was a lawyer,
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but he was a bankruptcy
attorney kind of look at it
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and said, there is so much
stuff in this contract
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that is terrible for you.
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You need to go and negotiate it.
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And I said, I don't have
a clue how to do that
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and you're all the way in North Carolina,
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what do I do?
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And I just ended up
signing it like a dingdong.
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And so are you seeing this?
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Are physicians just
singing on the dotted line
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not knowing they have
actual leverage here?
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- I think absolutely.
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The statistics would support that too.
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You know roughly 50% of all physicians
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leave their first jobs and
a lot of that is because
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of what you just mentioned.
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They sign a contract that doesn't work out
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or the promises aren't being fulfilled.
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And so know what we're seeing today
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with all this COVID employment issues
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that are happening is
really just a testament to
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why you need to have a contract
that fits your situation.
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- Yeah, now what's going
on in COVID specifically
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because they're so much happening now
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that has thrown everything into disarray.
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Give us the scoop on
that and how we can have
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resources to help that
because people are scared.
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- Sure, so physicians
are just, they're seeing
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for the first time right, a situation
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where they're not being supported,
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whether that's though PPE,
whether that's through
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other administrative
decisions and what we're
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seeing contractually is
folks that have signed
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contracts that they have
either a base salary
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or certain production numbers
or certain hour guarantees
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that they're just being told unilaterally,
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you're comps being cut in half.
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So you're no longer making
x number of dollars,
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it's 50% of that.
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So, you know this is crazy because my wife
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and I were talking this
morning and I'm like,
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you know people's salaries are being cut,
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people are being furloughed.
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Things are happening right now
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because the revenue-generating
machine in this country
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is elective procedures.
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So big physician groups don't make money
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on primary care.
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It's a loss leader.
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They don't make money
on preventing disease,
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that's a loss leader.
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In fact, preventing
disease costs them money.
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Elective procedures are
what makes them money.
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And when those have gone
away because they have,
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the entire house of
cards starts to crumble.
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Who is gonna suffer,
the frontline physicians
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because even though
they're there in contract,
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they're being told exactly what you said,
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that their salaries are being cut.
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And so is this a violation of contract,
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I mean how do we deal with that?
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- Yeah, nearly every contract that we see
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has a clause in it that says this contract
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can only be amended in writing
signed by both parties.
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Okay, and so a unilateral
decision on that would look
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to most of us like a
breach of contract, right?
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If you haven't signed off
on this new comp scale,
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they're supposed to continue on with what
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they promised you last year.
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- Yeah, but so what leverage do we have
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if they are saying that they can't pay you
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are they gonna then just
fire you or lay you off
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is that a violation of the contract?
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- Yeah, let's walk through your options.
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I think option one is you
agree to sign it right
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and then your compliant and
you've lost compensation,
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option two is you don't sign it,
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which forces their hand
to continue to pay you
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or negotiate with you to find some terms
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that are agreeable or
they've gotta let you go
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and they've gotta follow
the termination procedures
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of the contract.
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So minus one of those
three things happening,
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you know it looks like
they're in breach of contract.
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- And so are you advising
physicians now in the setting
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of COVID on these things
that are coming up?
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- Yeah, absolutely,
we're receiving hundreds
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of emails and calls right
now about these situations.
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Hey, I'm being forced
to take paid time off
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but they're still wanting me to take call.
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My compensation just got cut in half.
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I was supposed to be up
for partnership and now
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I'm no longer up for partnership.
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They're pushing that off.
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My Q1 production bonus, I just killed Q1
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and now I'm not gonna be paid this bonus
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like I was supposed to be.
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All these questions are
flowing in and rightfully so.
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It's a time when physicians are,
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you know for the first
time I think feeling
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some financial pressure
from the institutions
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that are supposed to protect them.
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- This is really fascinating to me,
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because I've heard stories
about people who were
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signed up on salary
plans and are being moved
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to productivity plans where
they eat what they kill
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in a situation where there
are no elective visits.
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And I want to say one
thing because I think
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it's very important that
people understand this.
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Our system is so screwed up
that we're paid to do things
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to people, we're paid for volume,
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we're paid fee for service
or we're paid in these
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contracts that involve
doing a lot of stuff
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that isn't really helpful for patients,
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when that house of cards
starts to crumble, right,
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and we're contractually bound to be paid,
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they just can't pay us.
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They just won't pay us.
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And so the ultimate
ethical and moral question
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is shouldn't that system be changed?
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Yes, but in the meantime
we're gonna need help
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to protect frontline
physicians who've invested
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so much of their lives
and their blood, sweat
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and tears and are now
putting their lives at risk
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to have their contracts violated.
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And look, I actually have some compassion
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for the administrative side in that,
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if they don't have the money,
they don't have the money.
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But the problem is, they
had years to plan for this.
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No one did.
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We knew a pandemic was coming, no one did.
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It's their job to prepare
us for this, they didn't.
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Now what's gonna happen, the same lambs
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that go to the slaughter
every time, the frontline
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clinicians are going to slaughter.
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And it's just not fair.
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- To play off of that.
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You know you think about
2019 for the first time,
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there were more employed
physicians than there
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were physicians in private practice.
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- That was just in 2019 that that--
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- 2019, it's finally surpassed
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and so for that situation I
think there's a lot of reasons
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of why physicians are going employed.
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But of them was for
this financial security.
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You have a ton of student loan debt,
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you need a high guarantee amount,
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you don't want to mess with
billing and administration
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and all that so they went into this thing.
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Hey, these large systems,
and we all know who
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they are, you can protect me right?
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And so when you generate
profit over the last
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five years of a billion dollars a year
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whether you're profit or nonprofit,
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that's fine you keep
it, I'm okay with that.
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But now the first time,
the last two or three weeks
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we finally have a little
financial pressure,
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you're gonna throw me out the window.
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And that to me is the
entire employment model
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is gonna have to be addressed.
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- This, what you just said is so important
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because these people had one
job, that's why we hired them.
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That's why we gave our lives,
basically to work for them.
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They had one job, which was to
support us during this thing.
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Now they are trying I think,
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but they failed at that one
job and now we're laid out.
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So here's the question,
so if a physician comes,
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okay, they're in this struggle,
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how would they then gauge
resolve, to actually help them
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because what's the practicalities of that?
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- Sure, yeah so right now
we're offering actually
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some free consultations
for this type of thing.
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It's our only way to
help during this crisis
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and so they can certainly email that over
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to [email protected] any
questions they've got
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we're happy to try to answer those.
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- We'll put those links in yeah.
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- The other thing that
I would want to come
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of this discussion is just that physicians
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would start to take a
look at becoming a little
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more empowered right, in their employment.
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And having some leverage
and actually being able
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to exert that.
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Because through all the
negotiations that we see,
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we can give you the information.
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You can say, hey, you're
being underpaid by x
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number of dollars a year
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and 8 out of 10 physicians tell us,
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well, I don't want to
push too hard, right.
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Well, they've treated me really well.
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I don't necessarily want to do that
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and so that's fine until
things like this happen
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and now you're seeing how you're getting
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treated in return and so I think it's
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extremely important to
keep that free agency,
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to keep the noncompetes
which I think we need
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to talk about out of the contract.
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Because ultimately that's your leverage.
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Your leverage is to be able
to walk across the street
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and say, fine, if you want to terminate me
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and cut my pay, that's okay, right.
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But I'm gonna go across the street
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and I'm gonna compete with you.
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I'll just take my pink slip them.
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- Oh, this is brilliant so
this is what I really want
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to dig into now.
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Because I have said to the
Z-Pac and I say this to nurses.
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Now you don't deal with
nurses, nurse practitioners,
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PAs do you is it mostly doctors?
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- So we were founded by
a physician and we work
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mostly with doctors but we do
work with nurse practitioners,
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PAs, etc. on a more limited basis.
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- Right, got it.
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Okay, (laughs) I tell
people, Kyle, that if your
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organization is not
treating your correctly,
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if they're violating your contract.
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If they're behaving in a way
that isn't very health 3.0.
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You are morally obligated
to walk to a place
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that will fulfill that calling
that you signed up for.
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And they exist.
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What stops that and I did a rant on this
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that I haven't released yet
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What stops that are noncompete clauses
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that these entities put
into their contracts.
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Now, from their standpoint,
I'd imagine they say,
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I'm investing a lot in
recruiting a doctor.
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We're training him up.
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We've giving him epic training,
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we're spending all this money.
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We're supporting them with benefits.
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If they go walk with all
that operational knowledge
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to a competitor or something else,
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we've lost all this money.
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So we put the noncompete
in to keep them from doing
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that for some period of time.
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But what's your take on this?
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- So my take is that
non-competes are allowed
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in society in general
for places like Google
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and Amazon that you don't
steal the secret sauce, right?
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You don't pull it away and
they've lost all their RnD money.
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Healthcare is a different animal.
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It's a public interest,
it's a public service.
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Patients are supposed to
have the right to choose
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their doctor and if their
doctor has to get kicked
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out of town, it seems like
those things don't coexist
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real well and, you know there
are certainly some states,
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California being one of them that has said
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for physicians you can't have noncompetes,
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you're not supposed to allow.
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It doesn't mean that they're
not getting put into contracts
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and physicians are still
scared on whether they're
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enforceable or whether they're not.
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And so it would be extremely wonderful
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if all the physicians would get together
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and just say, hey, we're
not signing these anymore.
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Right, we're forcing
the employers to allow
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us to be free agents in the market.
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So that way if you fail to
protect me in the future,
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like you're doing right now,
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I'm able to go wherever
I want and find these
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other organizations you're talking about
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that are actually run well.
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- I agree 100%.
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Like I think we need full liquidity.
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'cause like you said,
it's not an IP issues,
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it's not an intellectual
property issue here.
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This is a service industry.
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Unless they're doing
research or they're doing
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something super secret,
really a noncompete
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makes no sense.
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So, you would review their contracts.
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You would say these are
the clauses that you should
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have them take out.
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You should say here's your leverage,
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here's how you approach this.
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Is that how you guys work?
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- Yeah, absolutely.
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So we would say, here's what
some other organizations
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the ones that maybe run well are doing
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with their noncompetes.
[807]
Right, they're giving you
carve-outs for if there
[810]
is a merger.
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Right, if you're terminated
without cause like what might
[814]
happen right now and
you're able to go wherever
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you need to.
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You can have a noncompete
and still massage it
[820]
so it's fair for both parties.
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Because there are certain
examples when a physician
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would come into town,
build up their patients,
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take all the guaranteed money
and then walk and compete
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that doesn't seem 100% fair.
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But the situation we're
in right now is not that.
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I mean this is a completely
apples to oranges discussion.
[836]
- Right, are you seeing
a lot of physicians
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leaving employed groups
and going into say, direct
[842]
practices, direct pay
practices, kind of going off
[844]
the grid or is that non a phenomenon
[846]
that you're experiencing.
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- Well, it's not a trend previously.
[850]
I think it's gonna be really
interesting in the next
[852]
6-12 months after this thing
kinda gets a little calmer
[855]
and you know Mark Cuban.
[857]
I'm a sports guy, so he made a comment
[860]
about how employees are
gonna remember how their
[862]
brands and how their
organizations treated them
[865]
during this and I think
healthcare is going to certainly
[868]
see that exact thing happen.
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- 1000% yes and that's exactly what I said
[873]
in my video.
[874]
I said we will not forget
what you did when the ish
[878]
hit the fan.
[879]
We're gonna remember how we were treated.
[881]
And that also mean, that also means right,
[884]
because I want to give
a shout-out to people
[885]
who are doing this really well
because they're out there.
[887]
And they are and these are
even some MBA administrators
[891]
that are up all night trying
to keep the lights on,
[893]
trying to keep from furloughing people,
[895]
trying to find resources.
[896]
It's happening.
[898]
So we cannot paint them
all with one brush,
[900]
I don't think that's fair
but we will say this.
[902]
That we'll remember the
good and we will remember
[904]
the bad and what's nice,
the reason I wanted
[907]
you on the show when we talked,
[909]
because remember I was skeptical.
[911]
I'm like wait, lawyers doing what?
[912]
What are you trying to do?
[913]
I got a call with you and within
a minute I was like (snaps)
[916]
yes, because you can provide the leverage,
[919]
the support and the
training for people who then
[922]
allow themselves to
express with their feet
[927]
and their skills and their
heart, where they want to be.
[930]
So, they will go to the
organizations that are good
[932]
without this friction of
contract and confusion
[936]
and fear and sort of false loyalty.
[939]
Almost to Stockholm
Syndrome, where you start
[940]
to believe and love your
captor, do you agree?
[943]
- I totally agree and
so I brought one prop
[946]
with me for this discussion okay.
[949]
You know who Curt Flood is?
[950]
- [Dr. Z] I do.
[952]
- Okay so Curt Flood was the
guy who challenge free agency
[955]
in sports.
[956]
He was the leader, he
lost, but he was the leader
[959]
and now obviously free
agency is so common.
[961]
The decision by Lebron
and this stuff, right?
[963]
Well, if physicians
didn't have noncompetes.
[967]
If they had data that showed
them the entire market.
[969]
Here's every job you can
have, here's all the contract
[972]
details, boy, it'd be
pretty tough for the bad
[976]
administrators to have
an argument against that.
[978]
And I totally agree there
are some great administrators
[980]
out there, there's some great
health systems out there.
[982]
So I don't want to paint it
with a broad brush either.
[984]
But you know, when all we
see is the bad coming in
[987]
sometimes, it's hard to give
them the benefit of the doubt.
[990]
- No, no, no I hear you.
[992]
And you know you and I
are in the same boat.
[993]
I get thousands of messages now per day
[997]
from people in terrible
situations and these are,
[999]
you can tell just how they're writing.
[1001]
These are passionate
physicians, nurses, respiratory,
[1005]
people on the front lines
who are getting abused
[1008]
and look, if they're
misperceiving the abuse.
[1012]
In other words, if like,
no these are guys are
[1014]
working really hard to help them,
[1015]
then the communication is lacking.
[1017]
Because they're not getting the message,
[1018]
which means that's bad leadership.
[1020]
That's an organization
that is not integrated
[1023]
with a team where it's
co-led by every single
[1025]
member of the team,
[1027]
which is an organic management
style that we oughta
[1030]
have in healthcare.
[1030]
'Cause healthcare, especially
when we talk about 3.0
[1033]
is everybody practicing
at the top of their game.
[1036]
Co-leading an organization.
[1038]
Right now it's this dominator hierarchy
[1040]
of some business people who
are tasked with making money
[1044]
and again it's not their fault.
[1046]
They're doing what they're
incentivized to do.
[1048]
They're actually good people
[1050]
in a bad incentive system.
[1052]
So, I think what you guys are doing
[1054]
and it looks like all the fee structure
[1056]
and everything is on
your website so people
[1057]
can go poking through the website
[1058]
and see what is going on there.
[1060]
So we talked about noncompetes,
[1062]
we talked about what's
going on with COVID,
[1063]
these violations of contract.
[1067]
What do you think, so
the longer term issue
[1069]
is free agency for nurses as well.
[1071]
For every member of the staff,
[1073]
that liquid workforce so that you go
[1075]
where your fit is.
[1077]
'Cause there's no one-size-fits-all
[1079]
and that's a crucial piece as well.
[1080]
So hopefully your efforts
will help to sort of open
[1084]
the door for that for a lot of people.
[1086]
- Yeah, no, we totally agree
[1088]
and the hierarchy you talked about.
[1090]
Everybody's seen the
charge about the ramp up
[1093]
in administration versus
the ramp up in providers.
[1096]
You know that structure changes
[1099]
and I think you'd have
better communication.
[1100]
You would haven't to hop
through eight people,
[1102]
you'd hop through one person,
right, to get your information
[1105]
you need to make the request you need.
[1106]
And so I couldn't agree more.
[1107]
I mean it starts with the positions
[1109]
and it trickles all the way
down to the nursing staff
[1111]
and communication is obviously key.
[1114]
- Yeah, I'm with you 1000%.
[1116]
Any other words of advice,
[1118]
we'll share all your
links and things like that
[1120]
for people going through
this difficult time.
[1122]
- No, I just want to say
thanks and we appreciate
[1124]
you, who continue to push that message
[1126]
because we do think if
we put the physicians
[1128]
back in control, everyone is
gonna see better outcomes,
[1131]
patients and administration.
[1134]
I mean I think there's
not gonna be a shortage
[1136]
of revenue and people
that need to be seen.
[1137]
So it can work, it's just it needs to work
[1139]
in a different way.
[1140]
- I'm with you 1000%.
[1141]
Every single incentive needs to change.
[1143]
We need to grow the pie
instead of trying to grab
[1145]
pieces of a shrinking pie.
[1148]
We need to support, love
and care for each other
[1150]
as part of this organic system
[1152]
that is healthcare.
[1153]
Instead of this assembly
line that is health 2.0
[1156]
and this matrix that we're living in.
[1157]
And it will happen and COVID will actually
[1159]
be the catalyst, I'm convinced of it
[1161]
if we don't drop the ball,
which is why I'm really
[1163]
glad to have you on the show.
[1164]
Kyle Claussen thank you, Resolve.net,
[1167]
we'll put up links.
[1168]
I want to thank everybody
in the Z-Pack who's working
[1171]
on the front lines right now,
[1172]
despite all the uncertainty, all the fear,
[1175]
all the financial turmoil that everybody's
[1177]
going through right now.
[1180]
It's unimaginable what your asked to do
[1184]
and the fact that you
do it every single day
[1186]
despite all the odds, we
will all never forget this.
[1189]
All right guys.
[1190]
So, do me a favor, share this video,
[1192]
check out the links and we out peace.
[1195]
Stay safe.
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