As Mario Espindola, M.D., neared the end of his residency in the University of California, San Francisco Fresno Family and Community Medicine program this spring, he began looking for his first practice opportunity. He knew where he and his wife wanted to live and that he preferred a federally qualified health center.
Espindola found just that at Hillside Health Center in Ukiah, California, but his work wasn’t over after he landed the job. He still had to negotiate his offer.
Negotiating the offer
Kelly Kesey, the recruiter and training coordinator for Mendocino Community Health Clinic, Mendocino Coast Clinics and Long Valley Health Center in northern California, recruits health providers and executives for Hillside Health Center and a number of other locations. She says Espindola handled his negotiations exceptionally well.
“He knew that the practice wanted someone who was bilingual,” says Kesey. “So when it came to negotiations, he said, ‘I’m wondering if the agency strongly values that I’m bilingual and if that has a place in these negotiations.’” Espindola wasn’t pushy, but he paid attention and balanced his interests with the needs of the employer.
Espindola’s example shows physician contract negotiations don’t have to be a battle. Both he and Hillside Health Center ended up with happy outcomes. And that’s what negotiation is all about: making sure everyone comes out ahead.
Don’t fear physician contract negotiation
Amber Brake, chief executive officer of Physicians’ Negotiators LLC, says new physicians need to know how to negotiate. She believes the first contract builds a foundation for a physician’s career and that it’s important to begin on good terms. “About 60 percent take terms that are unfavorable,” says Brake. “And about 50 percent of physicians change jobs in the first two years.”
Some physicians hesitate to negotiate because they don’t want to come across as difficult, according to Ryan D. Mire, M.D., FACP, who practices at Heritage Medical Associates and serves as associate chief of medicine at Saint Thomas West Hospital in Nashville.
“There is a natural intimidation factor that exists with an early career physician who feels like they need the job and doesn’t want to get into a contentious relationship or conflict from the beginning of the relationship with the practice,” he explains. But Mire and other seasoned physicians know that negotiating terms is just part of the process.
Physician recruiters know this, too. As the regional director of physician recruiting for LifePoint Hospitals in Colorado, Utah and Nevada, Bruce M. Guyant, DASPR, has seen good and bad examples of negotiations in his 18 years of recruiting. He says that although some negotiations have wrinkles, LifePoint Health always wants physicians to feel good about the outcomes.
“I speak not only for myself, but all of my esteemed colleagues in the industry, when I say that I truly want a physician to be happy, contented and comfortable with the agreement that they sign with us,” says Guyant.
Another reason new physicians don’t negotiate is that their first salaries seem large compared to what they made as residents. Espindola, who served as chief resident at UCSF Fresno before joining Hillside Health Center, points out that new physicians are often making more money than they’ve ever made before. He says that when they talk to practices, they think: “‘I’m going to be working five days a week and getting paid two to three times more than in residency, and I’m getting great benefits. Why would I negotiate more?’”
But physicians who don’t negotiate may later find out they could have been earning more. Although most employment agreements must keep physicians within a set range, there can be wiggle room. Additionally, compensation varies from region to region and even practice to practice, says Espindola. He emphasizes that physicians have to find out what’s out there. The only way to negotiate is to know your own worth and the going rates.
Prepare for negotiation success
The easiest way to find out your worth is by thorough preparation. “It’s important for a physician to know what his or her fair market value is,” says Rebecca Blythe, DASPR, MBA, physician recruiting specialist for St. Vincent’s Health System in Birmingham, Alabama.
She says a tool such as the Medical Group Management Association’s regional salary guide is a good resource. “A physician can also talk to other physicians in their specialty and to new hires,” Blythe adds. Consultants such as Brake can also help.
Brake says, “We come in, take all of the different salary surveys and distill them down to what’s applicable and say, ‘Here’s what we think you’re worth.’”
In addition, it’s important for physicians to understand how a potential employer or practice determines compensation. Some base pay on productivity, while others use experience or specific skills to determine salary.
Knowing what matters most to an employer helps physicians gather the right data to estimate a fair starting point. “People respond to objective data,” says Brake. In fact, if another party doesn’t respect the data you present, it could be a red flag about future dealings.
Asking questions also eases you into the salary discussion. Rebecca W. Miller, M.D., who specializes in internal medicine and pediatrics for St. Vincent’s Family Care in Hoover, Alabama, says she was not comfortable negotiating her physician contract.
“When you come to negotiations as a resident physician, you may not feel empowered,” she explains. Miller says questions help you start the conversation, establish a relationship and gather information. “I would recommend to ask a lot of questions and consider what you will want out of life not just one year, but many years into the future,” says Miller.
Know what you want to negotiate
Salary is not the only item on the table. A financial package might include a sign-on or retention bonus, moving expenses and other perks. Physicians may be able to negotiate these amounts or adjust their payment schedule. For example, Espindola worked with the group to negotiate slight changes in his signing and retention bonuses.
Lifestyle factors are also important to many physicians today, says Miller. Schedules and vacation time might be negotiable depending on the practice. “This was not the case when I entered the workforce,” she says. Physicians who want additional family time should find out whether those terms are even on the table before negotiations go too far. And if an employer is willing to budge on lifestyle factors, a candidate might need to be more flexible about other terms.
Before negotiating, physicians should determine their priorities. Guyant recommends ranking contract terms from most to least important. “Successfully negotiating requires some preparation ahead of time,” says Guyant. “If you go into discussions and shoot from the hip, so to speak, then you will likely not have a favorable outcome.”
Guyant adds that physicians should try to understand an employer’s perspective. When a practice denies a request, it may be less about winning the negotiation and more about ensuring the practice’s viability. To stay in business, practices have to maintain a certain budget while providing a high level of care.
Fully understand your contract
Mire hired an attorney to help with contract interpretation. He advises new physicians to do the same, but to negotiate without an intermediary. “I would hire an employment agreement attorney for the legal understanding of the contract, but handle negotiations on your own,” he says. He believes this is more personal and less adversarial.
Blythe agrees. “A physician is his or her best representative,” she says. Attorneys help by reviewing contracts and making recommendations, but candidates shouldn’t assume their attorneys have the final word. Blythe has seen candidates propose long lists of contract changes from their attorneys even when “there may be just a few things that are negotiable.” Many established practices have standard phrasing and clauses that aren’t up for debate.
Similarly, Guyant cautions, “You are not obligated to make legal counsel’s gripe yours.” He says he’s found that “minor parts can become huge sticking points, and all of a sudden, you have a deal-breaker because the physician feels that there is a big issue, when it really is not big to them.”
It’s important to understand a contract and ask questions, not just nitpick about potentially unfair terms. Often, recruiters and mentors can help explain contract terms so candidates can make their own decisions. As Guyant says, “The contract is for you, and you must be happy with it.”
Once you’ve agreed on terms, nail down the details in your written contract. Play nice
After research comes negotiation. The same rules of professional courtesy apply here as with all other communication. Honesty and openness are important. And although candidates and employers should consider offers carefully, it doesn’t help either party to play waiting games. “Hillside Health Center took the time to review every counteroffer that I presented to them and get back to me in a timely manner,” Espindola says. “Kelly and Dr. (Thomas) Bertolli were very good about communicating,” he adds. Other practices made him wait longer and did not communicate as well.
Poor communication during a negotiation can be a warning sign. As Kesey points out, practices should want providers to feel valued and vice versa. An open, friendly negotiation process creates “an established relationship of trust and of hearing each other, like how to say ‘no.’” This sets the stage for open discussions in the future.
Blythe echoes this sentiment. “Be honest and aboveboard with everyone, and try to make it a win-win for all involved. Being comfortable with your relationship with your new employer is as important as anything you will negotiate in a contract,” she says.
Choose your battles
Negotiation always involves compromise, and sometimes a practice can’t meet a physician’s request. For example, some physicians try to negotiate paid time off with Mendocino Community Health Clinic, but Kesey says, “That’s just not negotiable with our agency.” However, she’s willing to work with candidates. She explains the practice’s policies to them, saying, “Here’s what we can and can’t negotiate. How can we make this work for you?”
According to Mire, some physicians are under the false impression that candidates can’t negotiate. “While there are times that there is a standard contract for a group, there is always a possibility that you negotiate some aspect of a contract, especially if the group has a high interest in you as a potential candidate,” Mire says.
“I advise all physicians to ask for what they want. …But understand that it’s a negotiation. Pick your battles for those aspects that are most important to you, and realize that you have to compromise on some aspects.”
Each party should show respect for the other and be willing to address issues. “It’s important to approach it from a respectful point of view,” says Brake. “So neither party is negotiating from a zero-sum game. They aren’t trying to negotiate everything to their advantage and have the other party walk away with nothing.”
According to Guyant, conceding a little leaves both parties feeling good after the physician signs. “Often, to get a few things that you need or want from your practice arrangement, you need to be willing to give some concessions to the hospital or clinic for whom you are going to work,” he explains. Mire agrees. “I advise all physicians to ask for what they want but understand that it’s a negotiation and they may not get everything they ask for,” he says.
Espindola certainly didn’t get everything he asked for from Hillside Health Center, but he was welcomed and respected. Now he knows that it never hurts to ask. He says, “You want to make sure that you’re being adequately compensated and left with no doubt that you didn’t explore all your options.”
10 tips to keep negotiations positive
Worried about how you’ll come across if you negotiate your contract? Follow these tips from physicians, recruiters and consultants to make sure your negotiations go smoothly.
- Timing is everything. Asking about compensation too soon can be a big turnoff to employers, so get to know a practice and its physicians before talking dollars and cents. That said, don’t drag out talks. If the hiring process is advancing without a salary discussion, ask your first or most trusted contact when and how to ask about money.
- It’s a myth that everything is negotiable, but don’t assume the opposite. Recognize that some terms are flexible, and others aren’t. If a practice won’t or can’t budge on an issue that matters to you, you’ll have to make a tough choice between walking away or compromising.
- Ask questions not only to gather data but also to build relationships. Show interest in the practice, the area and future colleagues. By demonstrating excitement, you’ll show you care about more than your own interests.
- Explain that you want to find the opportunity with the best long-term fit for you and your family. By showing the practice you want to put down roots, you can demonstrate commitment and explain why the contract terms matter to you.
- If you receive an offer from one employer while negotiating with another, it’s OK to let the second employer know about the first. Emphasize that you’re still excited about their opportunity and give them your decision timeline. If that employer can accommodate your timeline, it will. Sometimes, a practice simply can’t meet another deadline because it’s still interviewing prospective candidates.
- Demonstrate your value. Use objective data to show the employer what benefits you offer. For example, bringing you on board might help the practice offer a new revenue-generating service or expand its patient base.
- Be persistent but reasonable. You don’t want to fold immediately, but you must be willing to compromise.
- Get help if you’re uncertain how to negotiate or gather salary data. Attorneys and consultants can review contracts and arm you with information. And experienced colleagues make great mentors because they know how the conversation looks from both sides of the table.
- Be open about your hopes and desires. Paint a picture of the future you want in medicine. This is much better than taking a guarded, adversarial approach to negotiating, and it will help the other party feel like you’re on the same side.
- Practice openness, honesty and trust to keep negotiations positive whether or not you accept the job offer. If you do walk away, both parties will understand why, and if you sign the contract, you’ll start off on the right foot.
September 1, 2012
Bruce D. Armon
