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5 Physician Employment Contract Considerations

Jackson Physician Search
January 17, 2023

After a full year of searching for her first hospitalist job, Dr. M was thrilled to have an offer from a health system in a major California metro. It was everything she had hoped to find. The compensation was competitive, the culture was patient-centered, and the schedule was flexible. She had verbally accepted the offer at the end of her on-site visit, but a week later, contract in hand, her parents — and their attorney — were cautioning her not to sign it. She had reviewed the points of contention and understood the concerns. However, she also knew from her recruiter that the health system did not alter certain aspects of the physician employment contract under any circumstances. The attorney advised against signing the contract unless all the adjustments he advised were made, but she truly feels this is otherwise the job of her dreams. 

Dr. M is in an incredibly difficult situation. Her parents and attorney feel that some phrases included in the contract leave her vulnerable. However, the recruiter she’s working with has already told her that the organization has historically not been willing to change this language. Does she walk away from an otherwise perfect opportunity? 

The answer, of course, is highly personal, and Dr. M will have to make it for herself, just like any physician presented with a contract of employment. The terms acceptable to one physician may be out of the question for another, but every physician should consider the following when evaluating a physician employment contract.  

1. Do your research.

Whether you are a resident searching for your first physician job or a mid- to late-career physician looking for a new opportunity, it’s a good idea to do some research about physician contracts today.

The American Medical Association’s “Making the Rounds” podcast has a series of six episodes covering everything from letters of intent and compensation to termination clauses and liability insurance. The series features guidance from AMA Senior Attorney Wes Cleveland and touches on every aspect of the physician employment contract. A recent article summarizes the highlights.

2. Know what matters most.

Director of Recruiting Katie Moeller advises residents to get familiar with physician contracts even before they have an offer in hand.

“I tell new physicians to talk to their mentors and ask questions about how their contracts are structured,” she says. “Ask them about what aspects of their contracts have the greatest impact on how they work day-to-day, so they know what to expect and what matters most.”  

If this is not your first job search, ask yourself what, if any, part of your last contract led to dissatisfaction on the job. Talk to a recruiter about those issues, so he or she can advise on what type of employer may offer a contract that is a better fit. 

3. Understand what is in the contract. 

Once you have an offer in hand, read it! Know what your obligations are (number of hours worked, availability, call commitments, administrative duties, etc.) and what you can expect in return (base salary, bonus potential, PTO, benefits, etc.) If there are gray areas or you don’t understand some of the terms, ask your recruiter if they can help connect you with leadership at the hospital/practice for further discussion. 

4. Get input from a trusted advisor.

The contract may be fairly straightforward, but it is still a good idea to have someone you trust review it and offer feedback. This could be a mentor, a parent, a spouse, or even an attorney. Katie Moeller says it’s a good idea for candidates to seek the opinion of someone they trust; however, she encourages them to think for themselves. 

“A parent, spouse, or attorney may get hung up on something that is boilerplate/template language or is fairly standard in the industry,” Katie says. “So, I advise candidates to trust their instincts and consider the situation as a whole. If the hospital/practice you hope to sign with tells you they are unable to change certain contract language, the best first step is to ask for clarification about why that is the case — it may be for a completely understandable reason, such as being consistent with wording across all employee contracts.”

5. Discuss concerns with a recruiter.

It is not for the recruiter to advise on what a physician should or should not be comfortable with. However, a good physician recruiter can share insight on whether or not the contract is in line with industry standards. That is, in the opening story, if Dr. M’s recruiter informs her that the point of concern is going to be standard in any contract with a major health system, that’s critical information to have. If it’s not an issue that Dr. M can bend on, she may need to look at working for a smaller organization or a private practice that will be more open to making adjustments to the contract. 

Evaluating the Physician Employment Contract

Physicians are obviously in high demand, which in some ways, means they have the upper hand in contract negotiations. Certainly, things like physician compensation, recruitment bonuses, and time off are often up for negotiation; however, depending on the type, size, and resources of the organization, there is not always as much flexibility as the candidate may want.  

Do your research and know what the most important aspects of the contract are for you. Read the contract and seek advice to help you understand the implications of any area that seems unclear. Bring your concerns to the recruiter, and he or she will do everything in his or her power to bring the deal to a satisfactory close for all parties involved. 

“Any contract requires a level of trust,” Katie says. “Contract language can be intimidating, so talk to other physicians in the group to better understand how the terms play out on the job. If the physicians are happy and the situation seems favorable, you can confidently sign the contract and begin the next chapter of your career.”

Whether you are seeking your first physician job or feeling out new opportunities, a Jackson Physician Search recruiter would be happy to share some insight to help you reach your goals. Reach out today or start searching for physician jobs online now.

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