Every physician, whether seeking their first job out of residency or fellowship, or seeking a new opportunity after having been in practice, needs to negotiate the terms of their new position—either employed or as a member of a practice.
A minimum of two parties are required for a negotiation, and that means two viewpoints will be represented, and two sets of requirements need to be fulfilled.
As in-house recruitment professionals, our job is to help our physician candidates be clearly informed about the organization, opportunity and community when they interview with us, and fully understand all of the information and options being presented to them by the prospective practice/employer, who we represent.
Today we will assume that you, the candidate, have already done preliminary homework, and have selected several opportunities for site visits.
Questions to ask during a physician contract negotiation
Once serious discussion has begun regarding an opportunity and you are considering an offer, you need to make sure you understand the following for each opportunity, in order to appropriately negotiate the points that are important to you:
- What is the timeline for post-visit contact and/or an offer?
- What is covered/included in an offer?
- What are the timelines for responding with questions or acceptance?
- Once I’ve accepted the offer, what are the next steps?
- Does the organization have additional interviews to conduct?
- Have you given the organization your timeline for making a decision?
- Do you need to provide the organization with any additional information so they can make a decision?
- Do you need more information from the group in order to be able to make an informed decision?
Understanding your physician job offer
Next, understand what may be included in an offer. Depending on the type of group you are joining, an offer outlines the following:
- Compensation model and first-year salary/draw amount
- Initial contract term (One year, two years or more? Renewable, limited or self-renewing?)
- Any practice restrictions or restrictive covenants
- Work schedule
- Productivity, such as patient/procedure volumes
- Call schedule
- Administrative duties
- Teaching responsibilities
- Research responsibilities
- Professional liability (malpractice) insurance, including tail coverage
- Termination of agreement (with and without cause)
- Proprietary information
- Items unique to the organization’s culture and hierarchy
The types of agreements
- Be aware of the different types of agreements that may be extended to you. Types of agreements that you may see used for an offer include:
- Letter of intent, a preliminary offer that states the intent of the organization to employ you, and that will be later followed by a contract once all terms are confirmed between the parties.
- Contract for employment by hospital/affiliate
- Contract for employment by independent medical group
- Partnership agreement
- Independent contractor agreement
- Practice support for joining a group
- Income guarantee for independent practice
Be sure that you clearly understand the practice you are joining. Talk with your in-house recruitment professional or other contact, and revisit your understanding of the practice/employed situation so that the possibility of any misunderstanding about expectations (for work hours, office space, exam rooms, etc.) and timelines (due dates for contract return, start date, amount of time needed for state licensure, hospital or health plan privileges, etc.) is drastically reduced.
Make sure to ask questions about the contract philosophy of the organization. Is there any negotiation within the contract terms? If so, what is negotiable, and what is not?Will you receive a verbal offer, followed by a contract or letter of intent? Are you to expect everything in writing? Be sure to understand how long you have to deliberate, and/or to have the written agreement reviewed by an attorney or other trusted person, and be very clear on the due date for returning the signed document.
In this day and age of physician shortages, it is more important than ever for organizations to preserve internal equity and make sure that existing physicians within the organization do not feel that the “new kid” got a better deal. Many organizations no longer negotiate on contract terms—especially in employed situations.
Ask, too, about the negotiation sequence, and with whom you should be speaking about any concerns or changes you have.
Will you receive a verbal offer, followed by a contract or letter of intent? Are you to expect everything in writing? Be sure to understand how long you have to deliberate, and/or to have the written agreement reviewed by an attorney or other trusted person, and be very clear on the due date for returning the signed document. Many documents expire and are no longer valid if you do not return them in the specified amount of time.
Be sure you understand how you will be paid. Is there an income guarantee? Will you be on straight salary? Is there a production component? When and how do you receive paychecks, based on the agreement?
Be sure you are aware of any minimum expectations of commitment to work for the practice/organization (i.e., a two-year minimum commitment), in order to avoid having to pay back sums of money advanced on your behalf by the organization for licensure, privileging, relocation, sign-on bonuses, etc. Also, ask questions about repayment methods if something unavoidable occurs and you cannot complete the minimum timeframe.
Finally, stay in close contact with your in-house recruitment professional or other designated contact person at the organization. That is the only way to be sure that you will have a smooth experience during the offer/negotiation phase, understand “next steps” of relocation and onboarding, and following that, the ongoing relationship building that is essential to joining any practice!