By Dr. Margaret Curtis, WCI Columnist
Finding your first attending physician position is a milestone, both exhilarating and a little bit frightening. You will be pleasantly surprised by how many people want to hire you, and how much they want to pay you. You will have plenty to consider in your job search: academic vs private practice, employment vs partnership track, and location. You will also have to find the right culture.
Many of the elements of a physician contract are straightforward. You probably feel pretty prepared to evaluate job offers based on salary and benefits. But there are other contract clauses that you may not have considered—or even heard of—that can be just as important.
6 Things to Ask For in a Physician Contract
Below is a list of six common contract items that can have an outsized effect on your happiness and financial success as a physician. (You will notice this list doesn’t include compensation. The topic of how physicians are paid—salaried vs productivity or some combination—deserves its own post, or maybe several.) You may be able to negotiate some or all of them, but at the very least you should be aware of what you are signing on for. Obviously, nothing here replaces the advice of a good contract lawyer who is familiar with physician employment agreements.
#1 Non-Compete Agreements
These limit your ability to practice medicine within a certain distance from your current job, and for a certain period of time. Non-Compete Agreements (NCAs) also deserve their own blog post (or you can read more about Physician Non-Compete Agreements) but the gist is: you might be able to get out of your NCA but you shouldn’t count on it. Consider asking your new employer to reduce the distance or the duration of your non-compete. This is especially important if you are tied to your geographic area for family or other reasons.
#2 Restrictions on Other Work
Moonlighting might be explicitly disallowed or may be included in your non-compete. If the ability to moonlight is important to you, ask for this clause to be removed. Your contract may also include language stating that any work you create while employed—even if you did it on your own time—is the property of your employer. If you plan on writing the Great American Novel on the side, you need a clause explicitly stating that any intellectual property you create is yours alone—and that anything you earn from it belongs to you, not the practice.
#3 Sign-On Bonuses and Student Loan Repayment
These may make you giddy, especially if they come as a lump sum that is more than your annual fellowship stipend, but look closely because they often have strings attached. A “bonus” might actually be a loan that is forgiven over a period of time (say, two or three years). If you leave before the full amount is forgiven you will have to repay the remainder. Student loan repayment might work the same way. If you are offered a bonus or loan structured this way, make sure you have enough cash reserves to pay back what you owe should you leave before the specified term is up.
#4 “Tail” Malpractice Coverage
Tail malpractice insurance covers you for malpractice claims brought after you leave your job, for events that happened while you were employed. You have to have it. Some employers cover tail insurance only after you have been employed for a certain number of years—this is similar to a sign-on loan and is meant to keep you at your job. It’s worth asking your employer to cover 100% of your tail insurance from day one as it can become quite expensive. Or, you can get “occurrence” malpractice insurance which will cover you for claims that arise even after you have left a job. If you can’t negotiate this, again you should keep cash on hand to pay for your tail insurance if need be.
#5 On-Call Commitment
Of course, you know how call works: everybody does it, no one likes it, but at least it comes out even, right? Nope. In the not-so-egalitarian world of private practice, physicians within the same group can take different amounts of call or have different weekend and holiday schedules. If someone leaves the practice or suddenly can’t take call, your call burden will increase.
In addition, employers can define “call” however they see fit: I once had a job in which call included weekend clinic hours and covering the NP clinic if one of them called out. I had to (almost literally) kick and scream to have my weekend clinic hours limited to acutes only—I was seeing check-ups on Sundays and holidays. I hope that other practices aren’t this exploitative/daft, but just in case: ask what call entails, how it is divvied up, and what will happen if there are changes in the call pool (will everyone get a “call bonus”? Will locums be used?).
#6 Termination
No one wants to think about how the job they are starting will end, but sooner or later it will. Some questions to ask: can you be let go without cause? If so, your job might be vulnerable, especially in the era of COVID and hospital budget deficits. Do you have to give advance notice if you leave, and if so how much? 4-6 months is typical, shorter is obviously better for you. Does the hospital have to give you notice if you are being let go? Under what circumstances will you get severance, and how is severance calculated? If you are paid based on productivity, your contract should specify if severance is based on most recent productivity, an agreed-upon benchmark such as MGMA, or some other metric.
All of us want to find that perfect job right out of the gate. Most of us won’t: the majority of physicians don’t stay in their first attending job. This isn’t necessarily a bad thing, but changing jobs is stressful and can be expensive—especially if it involves a move, loss of partnership buy-in, etc.—so you should at least maximize your chances of success. When you have the right contract in hand, you can focus on your real job: becoming the attending you always wanted to be.
What tips do you have for a physician contract negotiation? Comment below!
Well done.
You get what you expect and negotiate. Not what you deserve.
Don’t be fooled by the “standard contract” defense you may face.
I have had all 6 of these and more changed in contracts after being told they can’t be changed.
Exactly. A contract is just an agreement between two parties – it can contain any (legal) provision they can come up with. “This is the way it’s always done” or “we can’t change this” is a stonewalling tactic. Congratulations on negotiating past that!
All very important aspects to negotiate in your contract. Philosophically, it’s also so important to remember that you are trying to creat the best contract for YOU. It’s natural to compare with others but you’re only competition is yourself. If you are happy with it, you win!
I agree. Your circumstances and needs are unique to you. There is no one-size-fits-all contract or job.
1- women apparently are more likely to accept an offer without negotiating- contributing to gender pay gaps over a career. Don’t do that!
2- have a lawyer review the contract, possibly a specialist in physician contracts. (I’ve been happy with local general attorneys but I wasn’t hoping for a 50 year career anywhere, and at one place the news that none of the local attorneys could review a contract since they all worked with the docs trying to ‘hire’ me was a wake up to look VERY carefully, which led me to discover the hospital would give me the same salary guarantee without a cut going to that group, and that the group’s part in hiring me seemed to just be a kickback from the hospital for them)
3- tail can REALLY bite you in a tender spot. 2000 or so I did a one year contract- military spouse and knew we’d be moving then- and based my bid on tail quotes given at the start. Some market contractions the next year made the malpractice company double the cost of tail in a few day’s time when I went to pay it. Really made a dent in my net pay from that work, and as it was a college job with minors I wouldn’t risk our life savings by going naked (as financial advisor- ok my brother- suggested). I had negotiated that they would cover tail if they let me go without cause, but not any shared risk of tail cost doubling overnight!
One thing to keep in mind, if you are job seeking in a competitive area and the original contract is fair, you may want to be careful here. Our group always has had multiple, well qualified, highly talented applicants the last several times we have hired (we don’t even job post because of the high demand). Our contract is very fair and is the same with every hire we make. I will be honest, it is okay to ask for changes to the original contract, but if the applicant gets too aggressive, it may come across as not being a team player and has makes us start to wonder if this is the type of partner we want to have long term. We have never broken off discussions because of contract requests, but it has made us start to wonder if we picked the right hire if they are demanding something more than what the hiring group of doctors have. We have never granted any contract change requests.
I would guess your negotiating power boils down to supply/demand of applicants, size of the group, who ultimately is in charge of deciding what’s in the contract (admin of a large organization vs small group of doctors that you will be working alongside), fairness of the original contract offer, and whether the group has allowed changes to the contract in the past. I think it is important that an applicant do their full research to understand the situation and understand how much negotiating power they really have before becoming too aggressive with their asks.
Sounds like you are part of a desirable practice with a fair standard contract. Practices that offer unreasonable contracts (see my point about call) tend to churn through physicians quickly. While that isn’t a good business strategy for them (with the cost of replacing physicians ranging from $500k to $1million), they can continue to do this as long as there is a ready supply of unwary applicants (often new graduates).
Sometimes physicians have more leverage than they realize, and sometimes they have very little. I agree that physicians applying for positions should research their market and do an honest accounting of what they could bring to a practice so they know their relative strength going in to any negotiation. Having now been through a few different physician contracts I wouldn’t go into a negotiation with a laundry list of demands, but I would be on the lookout for these employer-friendly clauses. As I said, you may not be able to negotiate any of these items away, but at least you should have no unpleasant surprises after you sign the contract.
I remember when we were looking into moving to San Diego. turned out the best way to be a competitive applicant was to have a couple of languages I had never been offered in school like Mandarin and Vietnamese, and knowing medical Spanish was almost a given.
Interesting, and makes sense. There are lots of non-clinical skills that make an individual both more valuable and a better fit for a particular practice. Good reason to keep polishing up on whatever skills interest you.
#1: yes, this has been shown to be part of the gender pay gap. The items I mention aren’t as big-ticket as salary but they can definitely contribute to overall finances. Don’t be afraid to ask for what you want/insist on what you need.
#2: so the group was trying to hire you and then sub you out to the hospital? or take a cut of your salary from the hospital? I will give them the benefit of the doubt without knowing the story but I don’t like hearing about physician groups trying to take advantage of other physicians…..don’t like at all….
Yikes, hadn’t heard of #3. Add that to the list of items to check: see if you can get a guaranteed quote for tail insurance up front.
#2 For some reason the 3 docs were going to fund my practice launch for me, but actually it was the hospital doing so. And going directly with the hospital (as offered after I turned down the group’s offer), if I earned more than their salary guarantee I got to keep it, but via the 3 docs any profit was theirs, loss the hospital’s! The hospital’s recruiter was in on all of it from the start, which made me leery of the entire relationship and decline for that and other reasons.
Has anyone gotten a prorated bonus? Having the lump bonus in year 1 causes a big tax issue for me and I wonder has anyone taken a prorated bonus like profession sports players and get a fraction of the signing bonus each year over several years
My sign-on bonus was structured as a loan that was forgiven over three years. I paid taxes on the forgiveness every year but not the lump sum. Since this wouldn’t make any difference to your employer (other than a little additional paperwork) it’s something to consider.
It’s interesting. I didn’t think employment contracts existed but for a really highly specialized field such as the medical field, I didn’t know that it was common. Learned something new today.
Any advice for employed physicians about when and how to ask for a raise or changes to your existing contract?
Yea, it works best if you have another job offer on hand. In industry like tech and finance, everyone is always looking for their next job. But we never do in medicine. If you’re going to be an employee, this is the way it works.
Good advice. Had a big bait and switch at my first employer and found out that my “bonus” was indeed a forgivable loan but that the loan actually accrued interest until it was repaid!
Blame the IRS.
Great post! I’m curious to hear if you (or anyone reading this article) has had success negotiating one or more of these items at a “major (pediatric) academic center” (let’s say a top 10 children’s hospital per US News and World Report) as a young faculty member.
Good morning Academic Physician! I can say for what we have seen at Contract Diagnostics most of the time there is little wiggle room in a ‘true’ academic job. If it is 95/5 clinical with a 20 page contract and production numbers and bonuses, it may be a different story.
We have seen success depending on the type of physician. If another hire in a department of 20, most likely it’s standard and not likely to change. If however, you are the only sub-specialty Pediatrician and starting a program (or filling a gap they have had for 2 years) you may have more negotiating capital, yielding their willingness to budge on certain items. Just our experience! Good luck!