What I wish I knew in residency about being an employed physician

A growing proportion of physicians are going the employment route, but why exactly?

AMA member Alisha Reiss, MD, a general surgeon in Greenville, Ohio, chose health system employment for a variety of reasons. But not all of the pros and cons of employment were obvious to her when she was in residency training.

“In residency, you’re obligated to do the majority of your rotations at one facility, and while some programs have a few months when you get to go somewhere else, you’ll usually see only a very limited number of practice models,” Dr. Reiss said. “Plus, if you're interviewing for a job to stay on where you’re doing your residency program, you have to be careful who you ask for advice about interviewing with people in other settings. You can't ask too many questions—you have to hold your cards close to your chest.”

Alisha Reiss, MD

Dr. Reiss was able to get answers to many of her questions from colleagues in the organized medicine community—including the AMA Resident and Fellow Section—but she knows not all residents will have as many connections. 

In an interview with the AMA, she discussed what she thinks every resident should know about hospital employment. 

The biggest difference between employment and private practice is how much of the business of medicine you want to be involved in, she said. 

“I don't have to worry about many of the nuances of day-to-day business management,” Dr. Reiss said, adding that her training didn’t cover running a business. “In fact, that was more intimidating to me than doing major surgical operations.”

But this isn’t purely a benefit, she noted. 

“I don't sit in on many meetings about costs, and I don’t worry about hiring and firing staff, which is a pro and a con: If you have staff you don't love, you also don't have the ability to replace them if you’re not their direct employer,” said Dr. Reiss, who is chair-elect of the AMA Young Physicians Section Governing Council.

In addition, as an employee, you may have more limited earning potential, but you will also have more limited exposure to financial losses.

“You're going to have more of a set income. Through the COVID-19 pandemic, for example, I was probably more protected than many of my private practice colleagues,” she said.

The reason for this comes down to the business model you are working in.

“A private practice’s model of compensation is definitely different from the employed model,” Dr. Reiss said. “They get paid based on what they collect, so time management is very important to maximizing your profit. In an employed model, I get paid for working.”

Her contract is set up so that she gets a base pay and a bonus for productivity, then separate compensation for call. But some other employment contracts might provide no pay at all for call, or no bonus, or some threshold for reaching base pay. 

“When you look at employment contracts, they're as variable as anything else you can do in medicine,” she said.

“I had the impression during residency that being an employed physicians would mean having a lot of structure to your day—for example, having a report time and a dismissal time—but that's definitely not been the case for me,” she said. “I have a lot of autonomy over my schedule. Yes, your employer will often set your office hours and maybe which days you're permitted to do procedures. But I'm not committed to sitting in my office until 5 o’clock. Whenever my work is done, I can leave.”

This extra time can make a difference in avoiding burnout and achieving one’s other life goals, Dr. Reiss noted.

“In reviewing contracts, I realized I could remain involved in the AMA and other organizations in the employed setting, whereas in a private practice setting, I felt any time I took off was going to have to come out of my earnings,” she said. If she had chosen the latter, “especially when I was trying to build a family, I probably would have put a lot of my organized medicine activities on the back burner, and that just didn't feel like what I wanted to do. So employment was something that fit me and my aspirations.”

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Just as physicians aren’t trained in the business of medicine, they are untrained in reviewing employment contracts, Dr. Reiss said. So, she warned, do not try to do that on your own. Hire a lawyer who specializes in physician employment.

As far as finding one, look to word of mouth.

“I got mine by asking around. My husband was working at an orthopaedic office at the time and had some connections there. You’ll realize it’s a small world when you start asking around about this,” she said. “I went with a small firm based in my same city so I could easily go to the office to sign paperwork and that kind of thing.”

Once you get to the offer stage, it pays—literally—to be patient. 

“There's a wow factor when you first see a compensation number because you’re leaping from a resident salary to an attending salary,” Dr. Reiss said. “So even if you see a number that's not your fair-market value, you may still be in awe of that number because it's significantly different from your resident compensation.”

Don’t fall prey to this and blindly take the first offer, she warned.

“Going into it, you need to know what you're worth given your specialty, your demographic area and the practice setting. If somebody comes to you with a lowball offer, you can either respond with data or politely decline and move on if it's not something you can negotiate,” she said.

“Some employers have terms that are set in stone—they apply to everyone—and that's where I encourage residents to be creative about getting the things they want,” Dr. Reiss said. “For example, you can negotiate in a signing bonus, loan payments or moving expenses.”

Of course, this means knowing what is important to you. Dr. Reiss recommended making a list.

“If PTO or time away is critically important, you need to know the minimum you're willing to settle for and also what's your ideal. The same goes for CME: Is that something you need your employer to pay for? Can you negotiate in some of your association dues or recertification dues?”

In other words, don’t think of a single compensation number. Instead, put it together as a package.

“Too many people often get caught up strictly on that base-pay piece,” she said, adding that you should also factor in duties if you are asked to be a medical director or to supervise nonphysician providers. Even the cost of your cellphone is in play.

"The one thing that jumps to mind that I did not get negotiated into my contract—despite going through all the advice I did—was maternity leave,” said Dr. Reiss, who is the mother of two boys born after she went into practice.

“I had what I felt was great paid time off, and the call parameters felt very fair, but I didn't plan for how that would look once I took maternity leave,” she said. “Luckily, I had an employer that worked with me and didn't force me to make up call. But they could have.”

Be patient once you get a draft contract from the employer.

“I went through it with my lawyer, and we talked about what we liked and didn't like, what I wanted here and there, and then we sent them back revisions,” she said, noting that she sent the first round of revisions back herself. “Then they sent some changes back, but not all of them, and that’s when I asked my lawyer to handle the next round or two and get to something that I felt like I really wanted. So it was a two- to three-round process."

But it wasn’t an easy process to go through. Here again, Dr. Reiss found herself feeling overeager.

"As a new grad, I felt guilty—like I was asking for too much and I should just settle for whatever they offered. Fortunately, I had a strong lawyer who encouraged me to work for what I wanted,” she said. “He told me the worst they can say is no, and then we’ll come back with something, but if they say yes, then you've gotten another piece you wanted.

“If you ask for something that's really important to you and they deny it, that's probably a red flag that it's not a good fit for you and you don't need to settle for that contract,” she added. “You need to look beyond and find something that fits your goals and aspirations.”

“My last bit of advice to anyone going through this process of looking at employers, jobs, contracts is: Don't stretch the truth about an offer you’ve received,” Dr. Reiss said, noting that medicine is a small world, and many people you talk to will know someone on the other side of a negotiation.

“Somebody’s always going to be asking about you in a back-door route while you're going through this process, so don't ever lead anyone astray,” she said. “Be honest and you'll come out good on the other side.”

The AMA Physicians’ Guide to Hospital Employment Contracts (PDF), free for AMA members, provides expert guidance to physicians contemplating, entering into or working under employment contracts with hospitals or related entities.