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Law firm says Spectrum Health wants doctors to sign new, restrictive contracts during pandemic

The receiving area of Butterworth Hospital in Grand Rapids.
Spectrum Health
Spectrum Health's Level I Trauma Center is located in Butterworth Hospital's emergency department in Grand Rapids.

A law firm in Grand Rapids says more than 1,000 doctors at the area’s largest hospital are being forced to sign new contracts, or face salary cuts.

The firm, PSFK Law, says doctors at Spectrum Health Medical Group have been told they must sign the “contract addendums” by today. If they don’t sign, they could face a 25% pay cut, or worse. The addendums would give the hospital group more control over the doctors’ hours, and impose a non-compete clause to stop them from accepting jobs at other hospitals.

Spectrum says the contract terms are meant to protect doctors’ jobs and compensation at a time of financial uncertainty. It says the response from physicians has been “overwhelmingly positive.”

But PSFK Law says the situation is causing “undue stress and angst” for doctors.

“When doctors have inquired about more reasonable terms, SHMG has communicated a blanket refusal to negotiate,” says the statement from PSFK Law.

The firm says Spectrum Health claims the contract changes are necessary because of the COVID-19 pandemic.

The hospital issued a statement earlier this week saying the hospital system has seen a “dramatic” financial impact from the virus outbreak.

“Our revenue is decreasing, and expenses have increased as a result of this pandemic,” the statement read. “This financial impact is far-reaching and will suppress our health system’s revenues for the remainder of the year, making a course correction imperative.”

Spectrum noted some jobs will be eliminated, though it hasn’t announced how many.

But PSFK Law says the pandemic is being used as an excuse to force doctors into new, restrictive working arrangements that could hurt their future careers.

“Many doctors have clearly communicated to administration they are willing to take a pay cut under the circumstances,” PSFK notes. “They have told SHMG they are also willing to discuss issues beyond the pay cut, but SHMG refuses to negotiate. The 5% pay cut tucked into this gunpoint offer makes it clear that this move is not really about money. And it is not about COVID. It is about control.”

In a statement, Spectrum Health Medical Group said doctors in a number of areas in its hospitals have seen a decline in patients in recent weeks, and that most of them are paid based on how busy they are.

The new contract addendums will protect their incomes, according to the hospital group.

“This investment in our physicians, many of whom are seeing fewer patients as a result of the pandemic, was to provide a safety net. In return, we asked our physicians for a commitment to protect this investment, should they decide to leave our medical group,” Spectrum said in a statement.

Spectrum says the new contract terms will help protect doctor's jobs. It says the non-compete portions of the contract are “standard in health care and many other industries.”

PSFK says it is representing some doctors at the hospital group, though no lawsuits over the contract addendums have been filed at this time.

The firm did not make any doctors available for comment, citing a concern over possible retaliation for speaking out about the issue.

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Dustin Dwyer reports enterprise and long-form stories from Michigan Public’s West Michigan bureau. He was a fellow in the class of 2018 at the Nieman Foundation for Journalism at Harvard. He’s been with Michigan Public since 2004, when he started as an intern in the newsroom.