5 Ways to Negotiate the Best Physician Employment Contract

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I probably made every mistake in the book when I negotiated my first employment contract as a newly minted family physician. For starters, instead of even thinking to negotiate my starting salary, I remember simply saying, ‘Thank you.’ The medical director blinked at me in confusion. ‘Uh, I think we can go up a little on that,’ he said, immediately adding another 20% to the initial number.

To learn the best ways to negotiate a fair employment contract, I spoke to Dennis Hursh, a physician employment attorney who literally wrote the book on the subject. He told me that my mistake is not uncommon for new physician graduates. “You have to be super competitive to become a physician, and when you get your first job offer, you think, ‘Oh I want to make sure I get this.’” But Hursh says that physicians must learn to shift their mindset from trainee to professional. “You’re not competing anymore. The race is over—they want you.” While adjusting to this new mindset can be a challenge, Hursh says that there are simple tools that can help us achieve the best employment contract.

Do your research.

The most important starting place for negotiating a contract is to know your worth. Attorney Hursh urges physicians to review salary data from the Medical Group Management Association (MGMA), available for purchase individually or through your contract attorney. The MGMA database breaks down salaries by specialty, type of practice, and geographic area. The data also includes information on signing/ relocation bonuses, vacation and CME time, amount of CME paid, and call schedule, all of which are generally negotiable. Hursh says that knowing this information ahead of time is essential. “If you’re being offered below median for your specialty and area, there has to be an explanation as to why.”

Hursh also advises physicians to research their prospective employers by talking with current employees or reviewing anonymous reporting websites, such as Rate Your Healthcare Employer. He also encourages physicians to work with a local contract attorney who may be able to provide insight based on experience. For example, Hursh notes that there are two competing health systems in his area. “When one health system gives a contract, I usually don't hear from that physician again,” he says. “But when the other one does, usually in three years, they're contacting me, like ‘I’ve got to get out of here; my contract’s up, I can't stand it anymore.”

Don’t be afraid to negotiate.

“By the time a company is offering you a contract, they want you,” says Hursh, noting that this offers room for negotiation.“ Most employers don’t come in and say, ‘This is my final offer,’—most have some wiggle room.” Hursh says that even academic institutions have salary ranges, and that employers rarely start an offer at the top of the range. “They may say, ‘We have a fixed salary for that position,’ and they do, but it's not to the penny. It's somewhere within a range.” Negotiation should include not only salary, but also paid time off for vacation and CME, as well as reimbursement for CME and medical society and professional association dues.

Hursh also reminds doctors to include malpractice tail coverage in contract negotiations. “Sometimes the language is really kind of nebulous, but try to really nail them down.” Hursh says that he particularly urges hospitals to pay for tail insurance under certain circumstances. “Just in general fairness, such as if you die or become disabled, I think your tail should be paid,” he says. “If they terminate you without cause, they should pay your tail.”

While physicians may feel anxious about asking for more, keep in mind that before you sign a contract is usually the only time that you have leverage. According to Hursh, employers invest heavily in physician recruitment, sometimes paying headhunters up to three months of physician salary for signing a candidate.“ Few physicians realize how much an employer has invested in hiring them. Once the offer has been made, you are the prize.”

In fact, unwillingness to negotiate could be one reason to walk away from employment. “If they’re really hardcore in negotiations, you really have to think about that,” says Hursh. “This is the nicest they are ever going to be to you. Once you’ve signed the contract, it’s going to be, ‘Read your contract, doctor.’”

Factor in work-life balance.

Hursh is adamant that physicians take care of themselves, including pushing back against unreasonable work expectations, which he says are increasing due to narrowing profit margins in medicine. “If I’m a hospital administrator, I can’t run the MRI machine 24/7. I can’t push my union workers because I’ll have to pay them overtime. But you know, I can just keep hammering those physicians. They may complain, but they will always take care of their patients.”

Hursh says that the best argument against excessive work and unreasonable call is to focus on patient safety. “A physician will just work until she drops. So, the pushback I usually give them is that at some point, quality of care is going to be affected. You cannot have somebody not sleeping, working 19 hours a day, day in and day out, and expect that person to give the quality of care that they would be capable of if they had some rest and relaxation and could recharge once in a while.”

To ensure adequate work-life balance for his clients, Hursh pushes employers to limit patient contact to 32 hours per week. “That is still very much a full-time schedule, because you are going to be working more than 40 hours per week even though you are seeing patients for 32 hours, not counting call.” While he isn’t always able to get 32 hours, he generally achieves contracts of 36 patient contact hours.

Another work-life factor to consider is your no-compete contract. In the event of employment separation, a larger radius may mean having to move to another city, disrupting your family and support system. Try to negotiate the shortest distance and time frame for your no-compete, and reconsider accepting employment with a company that severely limits your future options.

Get it in writing.

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Hursh cautions physicians not to verbally accept or agree to contract terms without fully understanding the implications. “Employers will sometimes take you out to dinner and say things like, ‘Now, we all sign a covenant not to compete. You’re okay with that, right?’ And without looking at it, you think, ‘Well, sure, if everybody else signed it, yeah, I’ll do that.’ And then you get the contract and it’s, ‘You won’t practice medicine within three states.’” In addition, Hursh warns physicians to beware of letters of intent. “They may say it’s non-binding, but once you try to negotiate details, the employer is going to argue that you’ve already agreed to the terms,” says Hursh. “If you go back to them with, ‘My attorney looked at the MGMA and your offer is $20,000 below median,’ they’re going to say, ‘No, you signed a letter of intent, we’ve agreed on the salary.’”

Rather than making verbal or preliminary agreements, Hursh recommends getting details in writing. This can include other aspects of employment, including work hours and supervisory arrangements with non-physician practitioners. “If you are going to be required to supervise, you should be compensated,” says Hursh, who recommends that physicians avoid being paid by productivity for supervision. “I prefer a flat amount—usually it’s between $10,000 to $18,000 a year for each midlevel you supervise.” He also recommends that the contract indemnify the physician for nonphysician malpractice.

Physicians who have concerns about safe supervision of nonphysician practitioners should include contract language that allows them to opt-out. “I’ve had some physicians that took a hard line and said, ‘I will not supervise midlevels,’ especially when they are first coming out of school and want to get their feet on the ground,” says Hursh. He thinks that it’s reasonable to include the option of terminating supervision in the event of care quality concerns.

Know your worth.

When negotiating your contract, Hursh urges physicians to know their worth. Hursh jokes, “You know, I could have been a physician, too. There are really just two things that prevented it. One is, I'm not smart enough. And two is, I didn't want to work that hard. But other than that, I could do what you do.” Hursh says to keep this in mind during negotiations. “When you’re talking to someone in a hospital chair, never forget who you are. They may have the big seat and the big view, but they could never do what you do.”

To remind administrators that you earned your title, Hursh recommends that physicians insist on being called ‘Doctor.’ “The administrator may say, ‘Hey, can I call you Rebekah?’ And it sounds nice and friendly, but right away, now you and I are kind of peers, we’re both first names,” says Hursh. “I think it has a different impact if you say, ‘If it’s okay, I’d prefer Dr. Bernard.’ I think it helps the mindset in the room.”

He also warns physicians to avoid falling victim to something he calls ‘hospitalsplaining,’ which involves justifying unreasonable work demands for the sake of the ‘business.’ Hursh experienced this when he was negotiating an excessive call schedule requirement for one of his clients. “I was told that the schedule couldn’t possibly be changed because as a business, the hospital needed flexibility.” Hursh says he was struck by a sense of disdain for his client’s well-being. “I think what she expected was for me to slap my forehead and say, ‘Oh, we never knew that! Well, if it’s a business, then my silly physician should just do 24/7/365 call. She doesn’t need to sleep,’” says Hursh.

Rebekah Bernard, MD, is a family physician in Fort Myers, Florida, and the author of four books, most recently Imposter Doctors: Patients at Risk. You can watch her entire interview with attorney Dennis Hursh on her YouTube channel, Patients at Risk.

[This article was originally published by our sister brand, Medical Economics.]