As residents, we enjoy a rather sheltered life. We work hard, read digest and debate cutting edge medical research and studies, and try to do a darn good job taking care of patients. The one thing we don’t do? Learn the business of medicine. While some residents will go on to continue in academia, the majority will emerge to engage in one or the other form of private practice. All these endeavors involve a crucial legal document – the contract, made between the employer and the prospective employee i.e. You! The employer can be a hospital, a private group or even a solo practitioner trying to hire a partner. In this post, we share our thoughts about negotiating your first physician contract.
While this post will ramble on, perhaps in multiple parts, there are two extremely important observations that need to be put out right now to emphasize their importance:
- If you agree on anything specific, put it in writing in the contract itself. For example, you are signing up to work at clinic in town A but the practice has clinic in town B as well. The employer says “oh yeah, we have plenty of people there, we won’t be sending you there at all”. Get that in writing, in the contract. Situations change, administrations change. In such circumstances, the contract is what protects you.
- Get an attorney’s advice. There are attorneys who specialize in contracts, including physician contracts. Of course, getting such advice costs money, expect to pay about $500 – $1000 for a rather uncomplicated contract. That is money well spent in this context.
Now, on to the rambling…
A contract is basically a truckload of legal mumbo-jumbo that emerges as a result of your negotiations with the potential employer. That is important – the negotiation itself. Very few terms are set in stone, even if they say this is “standard”. Whoever is in a weaker position, typically will have to concede more (part of the reason you should start your job hunt early). Even if you are a strong position (i.e. very sought after), things will be a lot smoother and you will find people more malleable if you are courteous and professional.
In the negotiations, it is a good idea to clarify all the things that matter to you. This may be the salary, vacations, CME allowance, sick days, work expectations, 401K plans, even cell phone bill which some hospitals will pay if used for work. Once things are agreed upon, get it in the contract. There is absolutely no reason for one party to agree verbally to something and not agree to put that down in writing. You would not want to be stuck with a verbal assurance from someone who a) is not there any more, or worse b) is dishonest enough to now totally deny making that assurance to suit the current situation.
To start with, you should know your “market value”. That may sound crude to some, but we would ask you to wake up and smell the coffee. Whether you’re continuing in academia or going into private practice, the fact is, a physician is a highly trained professional and highly trained professionals command a “market value”. As young doctors, we have all sorts of ideals and ideas of being noble. Get over your delusions of being noble in this particular scenario of contract negotiations. There is nothing stopping you from being a great doctor. Your patients will not care if you’re paid a gazillion bucks or nothing. All they care about (and need) is a good doctor. So, you can be a well paid, great doctor or a poorly paid, great doctor (if you’re a well paid, pathetic doctor, please get help). You will realize however, that in many instances, you are just an employee to the employer albeit a “special” one. When you sit down to negotiate the terms of contract, you should be an excellent (and courteous) negotiator, forget about everything else. For this, you absolutely need to know your market value.
So, how to go about finding out what you are worth in terms of starting salary?
There is an organization called MGMA which releases periodic survey data including physician compensations. However, this data is usually expensive to obtain and available usually to management or billing/coding staff of a hospital or practice. Moreover, you are interested in a single number – the median salary in your specialty – while this data contains a whole lot of other information that you do not need (at this time). You could try asking some physicians especially your colleagues who have recently graduated from residency programs.
It is important to know this number for another reason that you may not realize at the time. During residency, we are paid peanuts. After spending 3 years (or more) barely above the poverty line, the number quote in the starting salary may seem mouthwatering and you may say “yes YES YES” in less than a heartbeat only to realize later on that you screwed up. Knowing the average salary in your specialty gives you a perspective.
You should also negotiate on other things like CME allowance, number of vacation days etc unless these terms are already good. Usually, its a good idea to pick your battles.
A line frequently used by the employer is that they’ll give you X number of days of vacation and it is “standard”. Many times, it is not, sometimes it is. In any event, you can try to negotiate if the number of days is too less. If the number of days cannot be increased under any circumstance, you could ask for your salary to be increased proportionately. For example, you are offered $ Y as salary, and X number of days of vacation. You want 5 more days. You could calculate your salary per day, multiply it by 5 (the number of days more you wanted) and ask to be paid $ Y + this amount. Again, negotiate.
Another line frequently used by employers is “this is a generic / standard contract”. That is fine, but you should still insist on adding the terms that you both have agreed on. Remember, a contract most likely be used in case of dispute. Two parties involved in a dispute are not necessarily on the most cordial terms. Get things in writing!
Contracts would also typically refer to other documents, for example the benefits handbook. You should ask to be sent a copy of these documents along with the preliminary contract. If the document referred to has any impact on your income (a compensation formula, for example), insist on seeing this document and also send it to your attorney.
** to be continued **
