The Basics of Negotiating Your First Physician Contract

Negotiating your first physician contract influences the rest of your life – beyond your professional career. Use every resource to assure the best outcome.
negotiating your first physician contract

Negotiating Your First Physician Contract

Negotiating your first physician contract can set the stage for the rest of your career. The following is adopted from my book, The Final Hurdle, A Physician’s Guide to Negotiating a Fair Employment Agreement.  Although it written with a physician’s first contract in mind, the advice is equally applicable to any agreement a physician is involved with.

Imagine that you have completed all the courses, passed all the exams, and are finally ready to take your first position. You have diligently pursued every lead, and now you have impressed the individual who does the hiring at a place you feel would be a good fit for you.

You are out at the nicest restaurant in town (possibly with your spouse, if you had time for a social life at some point in your educational career). The food is superb, and fine wine is flowing. The physician in charge is at the table, and the two of you are having an animated discussion. You feel this physician really understands the sacrifices you have made and already views you as a worthy colleague.

The candlelight, great food, interesting conversation (and, perhaps, the wine) are giving you a sense of collegiality and belonging. This job is starting to look like a lock! You are already savoring the offer that is virtually certain to come. You feel that those monstrous student loans really can be paid off, and you will still be able to live comfortably, almost luxuriously. It all just feels right.

The physician you are chatting with leans toward you and says, “You seem like a perfect fit! We’ll send you our standard contract, which we all have signed. Of course, like the rest of us, you’ll be agreeing not to practice medicine in this city if for some reason you ever leave us. You don’t have any problem with that, right?”

This seems like a no-brainer. “Of course not!” you hurriedly exclaim. It’s a great salary with great people, and everybody else has agreed to it, so why on earth wouldn’t you?

Whoa there, Doc!

It is perfectly natural for you to want to show that you are a team player at this point. After all, you worked your butt off to get where you are. You have excelled throughout your academic career, and through all the hard years of your residency (and maybe through a fellowship, too).

 Your compensation to this point has been slightly above subsistence – probably not as much as you would have been paid if you had worked at minimum wage for all those hours of studying, working, teaching, and covering call. If you are in a committed relationship, your significant other has endured much to get you to this point. Your educational loans are likely in the hundreds of thousands of dollars; you may feel that you are drowning in debt. Instinctively grabbing for the first life-preserver offered is only natural.

Still, at this point you desperately need both practical advice and expert guidance as you deal with the process of obtaining and negotiating your first physician contract. The simple fact is that the world of academic medicine is somewhat insular. Nobody would question your keen intelligence, and you have obtained, through plain hard work, an incredible amount of highly specialized knowledge. However, physician contract review  and MGMA compensation analysis are another “specialty” altogether. Just when you thought the race was over, you’re suddenly looking at an unexpected final hurdle. You can’t stumble now! You need a consult –stat!

You have sobering responsibilities, both to yourself and to those you love to make the best possible decisions at this critical juncture. Your first physician contract will influence the rest of your life – not just your professional career. It is vitally important to use every resource available to you to assure the best possible outcome when negotiating your first physician contract.

My advice? Play the “dumb doc.” Please don’t be offended – this charade is simply a negotiation tactic that can be handy in several circumstances. You can gain time to consider a proposition, for example, or you can say it’s your advisers, not you, who are critical of the offer. By explaining with a smile that you “really don’t understand this legal and business stuff,” you can take full advantage of the expertise of your advisers. By the way, you are likely to see this tactic used against you at least once during recruitment and negotiation, so just recognize the tactic for what it is and go with the flow when negotiating your first physician contract.

To learn more about the critical issues to be aware of when negotiating a physician employment agreement, you can see my podcast of the 4 most common traps in physician employment agreements, my physician employment agreement checklist or, for the most extensive discussion of the topic, my  book on physician employment agreements. For specific information on topics you might be interested in, see my posts about physician productivity compensationMGMA compensation analysismedical record provisions in physician employment agreementsletters of intent in physician contractsphysician covenants not to compete, and call coverage requirements.

If you have an employment agreement you would like us to review, you can start your review here. We also offer a free consultation on how we can help. 

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Picture of 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, the first law firm in the country to focus exclusively on physician employment agreements. Dennis has devoted his life to serving physicians 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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Physician Prosperity Program


How It Works

After purchasing the physician contract review, you will receive an email asking you to transmit the agreement and any concerns you have to me. Many physicians do this by email, but I will be available by phone, too. In three business days from the time you purchase the Physician Prosperity Program® and transmit the draft physician employment agreement along with any concerns you have about the agreement and the information I will need to perform the MGMA analysis, you will receive a detailed physician contract review letter from me.

After you receive my physician contract review letter, you will have the opportunity to discuss it with me, to make sure all of your concerns were met, and to correct any factual inaccuracies, or to point out things that were verbally promised but didn’t make it into the physician employment agreement. These discussions, and revisions of the letter following these discussions, are included in the initial fixed fee.

Once you are completely comfortable with the physician contract review letter, you transmit the letter to your potential employer.