Physician Negotiation Basics

By Dennis Hursh | Physician Contracts

Nov 18
physician's contract review

The following is an excerpt 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 your first position. 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, analyzing compensation structures and contractual terms for physician employment agreements is 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. The first contract you accept 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.

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.

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About the Author

I am a healthcare attorney with over 34 years of experience, focusing on physician contracts, regulatory compliance and sales of medical practices.

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