Paper Sample: Understanding the Essentials of Enforceable Contracts and Fair Market Value Compensation for Physicians

Topic 1

An enforceable contract is one that can be imposed by a court of law. The involved parties cannot breach the contract, and if the terms are violated, the contract becomes void. Five crucial elements make a contract enforceable, namely, offer, acceptance, consideration, contractual capacity, and lawful purpose (Wolfson, 2018). An offer is a proposal where the involved parties will mutually assess and be in acceptance or in denial with it. The payment, service, or object presented in exchange for what is in the contract is referred to as consideration. Contractual capacity is the ability of the parties to enter into a contract legally. The last element is the lawful purpose, which is to ascertain whether the contract is for legal or illegal intent.

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In a contract with a vendor to purchase a new CT scanner, the vendor of the CT scanner must first table an offer. The buyer would then accept the offer if suitable, thus binding the contract. At this stage, the contract is considered valid because the parties involved have the contractual capacity to agree. If the offer is exchanged for money, the buyer will make the necessary payments to the vendor as pledged. The vendor will then deliver the CT scanner as specified in the agreement. The final part is the lawful purpose for the CT scanner, which is legal and will be used for health purposes. In the contract, I would include; the method of resolving disputes in case any arise, a privacy policy to ensure the contract remains confidential, circumstances that mark the end of the contract, and finally, a state law to overseer the contract.

Topic 2

Although there is no clear definition of fair market value, it can be equated to the open market price. The main advantage of paid physicians being compensated with fair market value is minimal over-utilization of revenue and the boosting of sharing savings. Hospitals have shared-saving programs with physicians, and the funds are allocated with regards to the most current market values. Besides, to young physicians, such salary models even without bonuses are stress-free and offer security. It is also an easy governing model since it is based on economics. After catering for all the expenses, the remaining revenue is divided equally among the physicians.

However, the cons of obtaining a fair market value on the compensation paid to physicians include fluctuations (Hofstra, 2020). When supply is not increased, a rise in the demand for a product potentially causes an increase in the market value. If supply is raised to quench demand, the market value significantly drops. In both instances, the model negatively affects the market value, depending on the product's demand. The above information can be used to make doctors flexible when negotiating compensation. In the formation of a contract with the provider, the physician can request an income guarantee, especially when working in firms that pay for additional services such as the rate of productivity, from the regular salary.

References

Wolfson, S. (2018, June 12). Contract Basics for Librarians and Others in Higher Ed. https://digitalcommons.law.uga.edu/speeches/114/.

Hofstra, P. S. (2020, February 19). Physician Compensation – Fair Market Value - Food, Drugs, Healthcare, Life Sciences - United States. Welcome to Mondaq. https://www.mondaq.com/unitedstates/healthcare/895060/physician-compensation-fair-market-value.