No matter where you are in your career, negotiating your employment contract is key to maximizing your earnings and opportunities.
It is important to consider the employment offer and prospective health care employer in totality, weighing both the positives and the negatives. Remember that a positive or negative answer to any single question may not, by itself, make or break the deal. Keep these three tips in mind.
Do not be timid
Physicians just coming out of residency sometimes feel self-conscious or timid about raising issues or trying to negotiate, such as for a relocation bonus. Do not let this stop you. Potential health care employers will expect you to ask questions, and doing so will demonstrate that you have done your homework. This will impress the practice or health care organization and speak well of you professionally.
In addition, issues with the language in your contract will almost certainly arise, and you have to be prepared to work through them.
Consider, for example, the assignment clause. Many employment contracts have a clause that says the hospital can assign the contract to a different entity. This is problematic because most physicians do not suspect that they could be traded like professional athletes after they worked so hard to find the right employer.
“It means all your due diligence is out the window,” said Elizabeth A. Snelson, president of Legal Counsel for the Medical Staff PLLC, which specializes in working with medical staffs, medical societies and medical staff professionals.
Snelson is the author of the AMA Physicians’ Guide to Hospital Employment Contracts (PDF), which provides expert guidance to physicians contemplating, entering into or working under employment contracts with hospitals or related entities. The guide is free to AMA members.
“You could end up an employee of an entity that you wouldn't be caught dead working for,” she said.
Negotiation is expected
A prospective physician employer will not retract an offer if you try to negotiate. If the prospective employer has gone through the trouble to make you an offer, the employer values you and wants to see you come aboard. And, if an offer is rescinded because you raised some questions about the employment agreement, ask yourself: Would you want to work for that organization anyway?
One way in which you may be tested is on the topic of professional judgment. With the recent trend toward hospital employment, physicians have sometimes been put in uncomfortable positions as advocates for their patients.
“In most states an employee owes a legal duty of loyalty to their employer. When the employee is a physician, however, the duty to patients is paramount,” the AMA Physicians’ Guide to Hospital Employment Contracts notes. “That may seem self-evident, but nonetheless, the employment agreement should protect the physician’s ethical duty to their patients and right to advocate on their behalf.”
The guide includes a sample provision for the physician’s unfettered right to exercise personal and professional judgment:
The employee shall retain the unfettered right to advocate for patients and to exercise their personal and professional judgment in providing treatment and health care services to patients in their care.
“The silent part is that you, the physician, have the authority to do what's best for the patient, even if that's not what's best for the hospital,” Snelson said. “Getting it into the contract shouldn't be controversial. If the hospital says, ‘We're not putting that in the contract,’ that's a red flag. Think twice—think eight times—before signing it.”
Willingness to negotiate will vary
While employers expect potential physician hires to negotiate, be aware that some employers will be more flexible than others on what they will negotiate. Large entities may sometimes be less flexible than small independent group practices, but even if your prospective employer is not willing to negotiate, there are a few things to note.
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First, do not take it personally, or think that you are being stonewalled, or that the prospective employer is playing games with you. A large entity may have to administer hundreds, even thousands, of physician employment agreements. To make contract administration manageable, the employer may use standard physician employment agreements from which, as a matter of institutional policy, it does not often significantly deviate.
Still, although the prospective employer may not budge on major institutional issues, such as a noncompete clause, the employer might be willing to concede on issues that it considers minor but that might be important to you, such as research projects.
Second, even if you do not get what you want initially, ask for an arrangement whereby you and the employer revisit specific issues after you have been working for a specified time—say, three months. After you demonstrate that you are going to be one of its best physician hires, the employer may be open to revisiting some issues because it ultimately sees your value and wants to keep you as a physician employee.
More expert guidance
Check out Season 1 of the “AMA Making the Rounds” podcast featuring AMA Senior Attorney Wes Cleveland, for tips on what to consider before you begin the contracting process and these related episodes.
“Letters of Intent.”
- What are letters of intent? And when should you retain an attorney during the contracting process?
“Compensation.”
- It’s all about money. Or is it? Here is what to look for in compensation and benefit packages.
“Restrictive Covenants and Termination Clauses.”
- Do you know how restrictive covenants can affect your new job? Your employer does.
“Duties and Liability Insurance.”
- You may not know it, but you can negotiate your duties as part of your employment contract. And don’t forget to think about liability insurance! Get the details.
“Interviews and Negotiations: What to Do (and Avoid).”
- It’s not about wearing red vs. wearing blue: interviewing and negotiating your first contract involves a lot of steps.
Consult this handy checklist for evaluating prospective employers (PDF).
The AMA has assembled a variety of resources to help physicians flourish in the employment setting. That includes developing the Annotated Model Physician-Group Practice Employment Agreement (PDF) and featuring experts’ perspective on collective bargaining for physicians.
Learn more about understanding employment contracts.
This article was written in collaboration with AMA Senior Attorney Wes Cleveland.
