6 Things You Must Know Before Signing an Academic Physician Employment Agreement

These are the 6 things you must know before signing an academic physician employment agreement.
academic physician employment agreement

If you are considering accepting an academic appointment, you need to be cognizant of the special issues involved in contracts in academia. These are the six things you must know before signing an academic physician employment agreement.

#1 An academic physician employment agreement is usually light on provisions

Unlike most hospital physician employment agreements, an academic physician employment agreement tends to be very sparse on contractual provisions. Typically an academic physician employment agreement will just be a few pages, and the institution will have multiple outside policies governing vacation, CME, outside activities, intellectual property, etc.

I have seen academic physician employment agreements containing only two pages of text. The agreement basically just provided what department the physician would be assigned to, the academic position, and salary.

This has caused confusion with some physicians, and I have had physicians present what they thought was a letter of intent to me with the idea that I would review the “final contract.” I had to tell the physician that that slim document they had already signed was the final contract.

#2 An academic physician employment agreement should reflect your experience

Although it is not usually an issue, I have seen academic physician employment agreements that were either silent on the academic title, or provided an inappropriate title. The title is much more than an honorific. Most institutions have separate pay scales for each level of faculty.

A physician, even one just leaving training, should not accept a title less than Assistant Professor. I reviewed one academic physician employment agreement that proposed a title of Instructor for a board certified specialist. The title of Instructor is simply inappropriate for a physician.

If you are more than three years out of training, it would be reasonable to request a title of Associate Professor.

#3 Each Level of Faculty Has a Range of Salaries

Frequently a physician is told that the compensation offered is “fixed” for that rank. This is rarely true. Most institutions have a range of salary for each level of faculty. The first offer is likely to be at the bottom of that range, and there usually is flexibility in increasing the salary.

An MGMA compensation analysis (included in the Physician Prosperity Program) will reveal if the offer meets benchmarks. MGMA (unlike most other benchmark providers) has a separate database for academic providers and can segregate by level of faculty, so you have comfort knowing that the benchmark is truly reflective of the market.

#4 There Usually is Flexibility in the Signing Bonus

Physicians considering an academic position are frequently told that this is a standard pay package. Although that statement is accurate to the extent that there are fixed pay ranges for each level of faculty, most departments have money in the budget that can be used to increase the offered physician sign-on bonus.

In addition, many institutions have the flexibility to pay a signing bonus shortly after execution of the agreement. Most academic institutions prefer to avoid paying a signing bonus upon execution of the agreement, because doing so frequently requires another document. That document, a promissory note, is typically only three pages or so. A promissory note is a very standard document that their legal department can generate with very little effort if asked to do so.

#5 An academic physician employment agreement generally provides significant administrative time

Although I have seen academic physician employment agreements with as little as four hours per week reserved for research, teaching, and administrative duties, most provide at least eight hours per week for these duties. Frequently the amount of time the physician is given for research and administrative duties can be negotiated.

Academic physicians typically earn significantly less than their brethren in private practice or those employed by non-academic hospitals, so the amount of time away from patients is an important benefit that should be aggressively negotiated. This is one of the major benefits of academic medicine, so the physician should maximize this “free” time.

#6 Not every agreement with an academic institution is an academic physician employment agreement

As noted above, academic physicians typically earn significantly less than physicians in other clinical settings. Unfortunately, I have seen physician employment agreements with academic institutions that are clearly a strictly clinical position. The physician had no academic title, few administrative hours, and an academic pay scale.

I view a contract such as this as taking advantage of the name of the institution to unfairly penalize the physician. As noted above, the trade-off for lower compensation in an academic physician employment agreement is generally the additional time given for research, teaching, and administrative duties. If you are expected to grind out 36 (or more) patient contact hours in a week, then let’s not pretend that you have an academic position.

You should be paid commensurate with what other physicians in your position are earning – not what a physician with less clinical responsibilities is willing to accept in return for the ability to spend time teaching and performing research.

Academic appointments can provide decent benefits and the opportunity to conduct innovative research in your field. If teaching and research are important to you, an academic position might be rewarding. When looking at moving to academia, however, physicians should protect themselves and make sure they are treated fairly.

We have extensive experience in reviewing and negotiating academic physician employment agreements, and have written a book on physician employment agreements.

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

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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.