Physician Employment Contract Negotiations Tips and Tactics: How to Get the Most Optimal Offer
Physician Employment Contract Negotiations Tips and Tactics: How to Get the Most Optimal Offer
One of the most recurring issues that we have come across working with physicians in all different fields of practice is both the importance and the complexity of contract negotiation. Whether you are a new physician joining your first practice straight out of residency, or an experienced physician looking to renegotiate an existing contract or relocate to a new practice, skillful negotiation is of the utmost importance and will help determine your future. Being able to negotiate to maximize the dollar value of your worth, as well as increase your intangible benefits within the practice is key.
The following is a brief overview of the most relevant issues that we’ve seen come into play again and again with physician contracts and a few simple yet effective strategies vital to keep in mind when negotiating:
The most important thing to remember is that all contracts are negotiable. Whether it is a new contract or the renegotiation of an existing one, do not be afraid to ask for what you want and to maximize the value that you bring to the table. Contract terms are rarely set in stone, and while not all employers will be willing to negotiate on all terms, you will never be penalized for asking. The most common areas for contract revision are physician compensation, incentives, or revision of key contract terms. Even if something is standard, it is generally also open for negotiation!
Furthermore, keep in mind that negotiation is a process. Prioritize what your most important asks are, and focus on those first. You may not be able to get them to agree to everything that you want, therefore focusing on what is personally the most important to you will help ensure that is the priority in your negotiation talks.
Know your worth and don’t be afraid to clearly and effectively communicate your expectations. Whether you are weighing multiple offers or re-negotiating an existing contract, being aware of fair market value and compensation statistics for your region are key to understanding the relative value of your contract. This is where having statistical MGMA data (something that we provide) is key.
Don’t make the mistake of focusing solely on compensation. While this may seem initially the most important term of any contract, in the long run it may be of less importance to you than some of the other contract terms. Include productivity bonus structure, call schedule, time off plans, and wRVU breakdowns in this assessment as well. Do not be afraid to ask for an increased wRVU to be in line with market averages for both your region and speciality. This again is where having access to MGMA data is extremely important as it gives you a concrete authority to use in your value assessment.
Be aware of key contract provisions that may affect you even after your contract ends. The two main issues to focus on here are restrictive covenants (noncompete clauses) and malpractice insurance. While non-compete clauses are illegal in many states including CA, non-solicitation clauses relating both to patients and other employees are generally enforceable. Whether you are offered either occurrence or claims-made coverage may affect your potential liability after the end of your contract. Be aware of this and always try to negotiate for tail-coverage if under a claims-made policy.
Finally, if re-negotiating an existing contract, keep in mind what has/hasn’t worked for you in the prior one. The main point most physicians focus on in renegotiation is where they feel they have been undervalued in the past. If you didn’t make a strong push initially, or get sufficient legal advice regarding the contract terms, this is when to rectify that. Here, your existing relationships matter. It is always going to be easier and less expensive for a medical group or hospital to keep an existing physician within the practice that to incur the recruitment costs/time associated with searching for a new physician. Take advantage of this and don’t hesitate to emphasize all of your strengths!