Negotiating physician employment agreements

What you need to know about negotiating physician employment agreements BEFORE you get too deeply involved in the recruitment process.
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It is vital for you to understand that  negotiations of a physician employment agreement begin with the first recruitment call.  Too many doctors “give away the farm” before the first offer is even produced.

Becoming totally passive and pliant about the negotiations of a physician employment agreement is not recommended.  Your employer is likely to conclude that you just don’t care very much about provisions in the contract that are naturally important to the employer.  Once that conclusion is made, your chances of getting a reasonable offer are greatly diminished.  Obtaining just the right balance between firm but amicable can be difficult for physicians attempting to negotiate their own employment agreements.

I’ve been reviewing and negotiating physician employment agreements for over 30 years, and I’ve seen some provisions that were truly atrocious.  I’ve also had the benefit of 30 years of negotiations, generally between attorneys who truly care about getting the best deal possible for their client.  Win-win negotiations produce variations that work for both parties, and the benefit of these work-arounds can be used in future negotiations, so that the last contract an experienced attorney works on can really be the best one yet.

The “secret” known to all experienced physicians’ attorneys is that all physician employment contracts are negotiable.  I have obtained concessions on important provisions from massive health systems, as well as small private practices.  When the person you are dealing with tells you the first draft is the “standard” contract for all physicians, he or she is either misrepresenting the situation or is misinformed.

You have developed a massive amount of knowledge and experience in your medical specialty, but that specialty is the practice of medicine – not the business of medicine.  You are about to sign the biggest deal of your life.  Don’t leave money on the table, or get trapped by a contract you will hate for years.

The purpose of this blog is definitely not to encourage you to “do it yourself”.  However, you should understand the basics, so that when you engage an attorney to negotiate your physician employment agreement you are fully aware of the importance of the points the attorney is negotiating on your behalf.  Just as your patients will enjoy better outcomes if they become involved in their medical care, you will enjoy a better outcome if you are knowledgeable about the key aspects of your physician employment agreement.

By the same token, you aren’t the right doctor for every patient and every ailment.  You have likely concentrated your efforts on mastery of a relatively small field of medicine, and will call in a specialist for issues outside your expertise.  Don’t rely on a “jack-of-all-trades” lawyer in this important negotiation.  Be certain to engage an attorney who concentrates his or her practice on physician employment agreements.

Most importantly, don’t ever make oral commitments to the recruiter or anybody else you are dealing with.  Nobody doubts your ability to be quick and decisive in medical situations.  Don’t feel that you need to demonstrate these qualities in physician employment contract negotiations, where you haven’t had the massive training you’ve had in medicine.  Even an experienced physicians’ attorney won’t make a snap commitment – they will always condition any concurrence on a review of the documents.

Don’t put yourself in the position of feeling that you can’t let your attorney negotiate a point in your physician employment agreement that the attorney says is unfavorable.  The “dumb doc” often gets the best overall contract, without straining the relationship with future colleagues.

You may also be interested in my posts about physician productivity compensation, medical record provisions in physician employment agreements, letters of intent in physician contracts, physician covenants not to compete, and call coverage requirements.

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Dennis Hursh

Dennis Hursh

Dennis Hursh has been providing healthcare legal services in Pennsylvania since 1982. Since 1992, he has been a physician's lawyer serving as Managing Partner of Physician Agreements Health Law. Dennis has devoted his life to serving physicians and physician organizations, such as POs, IPAs, CINs and medical practices. He is the author of the definitive book on physician contracts "The Final Hurdle - a Physician's Guide to Negotiating a Fair Employment Agreement, and a frequent lecturer on physician employment agreements.

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