The New Doctor’s Guide to Negotiating Employment Contracts


Think beyond compensation to benefits that can help you avoid burnout

New doctors are more likely to work for employers rather than for themselves. As we previously reported, 2016 marked the first year in which less than half of practicing physicians (just over 47 percent) owned their own practice. Nearly a third of doctors (32.8 percent) worked for hospital-owned practices or were employed directly by a hospital in 2016, according to the most recent American Medical Association (AMA) data. That number is expected to increase, since millennial doctors prefer careers as employees rather than as owners.

What this means is that more doctors are negotiating job offers and employment contracts. And they are discovering that there’s more to it than salary—oftentimes, benefits and perks that affect a doctor’s daily workload make the most difference, and may even reduce burnout. Here’s our guide to negotiating what’s important to you.

Basic elements of a physician employment agreement

For many newly minted doctors, negotiating employment contracts is uncharted territory. “One of the failings of medical education and residency education is the lack of good business training. I have been in school and training my entire life, so this was the first time I had to negotiate important things like salary, benefits, or paid time off,” wrote Tate Hinkle, M.D., in a post on titled, “What I learned from negotiating my first physician contract.

Most doctor employment agreements cover compensation, benefits, schedule, termination, and non-compete clauses. Having a lawyer review any contract is advised.

Most employment agreements cover several basic elements, including:

Compensation: This includes your base salary, and how long it is guaranteed without adjustment. The longer the better; however, for new doctors, this period may only be one year, according to the American Academy of Family Physicians (AAFP). The AAFP recommends researching what other doctors in your area and specialty earn, such as through salary reports from Merritt Hawkins.

This section of the contract should also discuss incentive compensation and how it’s calculated. “If you’re offered an incentive payment for productivity, make sure you understand when it starts affecting your paycheck, how your performance will be measured, and what you’ll need to do to achieve productivity targets,” recommends The DO, the blog of the American Osteopathic Association.

Benefits: “In general, hospitals and health system employers offer a better range of benefits and more retirement options than private practices,” according to the AAFP. Employers typically provide health insurance; malpractice insurance (find out whether it’s occurrence-based or claims-made coverage); and paid time off, which may combine vacation, continuing medical education (CME) time, and sick leave.

Some employers may offer retirement plans and student loan repayment programs. Many employers cover the cost of CME, licensing, and membership in medical associations, noted The DO. Your contract should spell out how those allowances work: for instance, are there separate allowances for CME and licensing, or are those budgets combined?

In some cases, you may be able negotiate having the employer pay for tools, technology, or programs that promote efficiency and reduce workload, such as EMRs and patient education software. To make your case, you can point to a recent review of the scientific literature on doctor burnout in the Journal of Internal Medicine, which shows that a mix of organizational and individual solutions can reduce burnout. These solutions include addressing work inefficiencies and prioritizing and delegating tasks appropriately.

Our own research has shown that investing in digital patient education such as Rendia can streamline doctors’ time in the exam room while also creating a better experience and outcomes for patients.

Schedule and call, termination, and noncompete clauses: All employment agreements should also cover these areas in detail. Before signing a contract, consult a lawyer—preferably a health care attorney, recommended Dr. Hinkle. “It sounds like a lot of money when you are a resident to pay an attorney a few thousand dollars, but fixing a small mistake will be worth it for a contract worth $500,000 or more.”

Negotiating tips from doctors and recruiters

An attorney can also help you identify opportunities for negotiation. Understandably, many new doctors are reluctant or unsure of how to negotiate. However, “A new doctor’s first salary negotiation is particularly important because it heavily influences later salary levels,” stated Medscape. If you settle for a lower salary early on, it’s harder to negotiate a raise later. Come to the negotiating table knowing your worth. As we mentioned above, salary surveys are widely available online and will arm you with knowledge and confidence.

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A new doctor’s first salary negotiation is important; don’t get tripped up by these common mistakes.

But there are a few things that can trip up even the most qualified and confident candidate, warn the physician recruiters at The Medicus Firm. These include trying to negotiate salary too soon (such as before the interview), assuming you are the only candidate for the job, and “going to the well” too often. Said recruiter Craig Southerland, “I always advise physicians that they can negotiate back and forth no more than twice. First with the initial questions and requests, then once more with any follow-up concessions or requests.”

In Dr. Hinkle’s experience, “pretty much everything in a contract is negotiable.” Doctors should think beyond salary, advised attorney Ezra Reinstein in Medscape. “If research is important to you, ask for a research budget. If time off is important, ask for additional days off.”

And if having a state-of-the-art, customizable, digital patient education program is important to you, ask for Rendia.

Doctors are more in demand than ever. Know your worth, educate yourself, and come to the table ready to negotiate your must-haves that will benefit you, your employer, and your patients.

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