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Physician Contracts: Always Negotiate These Six Parts

Jackson Physician Search
March 10, 2021

In the first installment of our three-part series on physician contracts, we outlined six of the components that make up an employment agreement. For this article, we will highlight things that are negotiable and share tips for doing it successfully. The final installment will shed light on common mistakes to avoid.

If you are a new physician, the most important thing you should know about your physician contract is that it is negotiable. Even if it is your very first contract, you should not accept it “as is” without asking clarifying questions or improving it to better suit your needs.

What Parts of a Physician Contract are Negotiable?

Let’s begin by outlining which aspects of a physician contract are typically negotiable. Caveat: Due to specific rules and policies, some healthcare organizations are unable to negotiate certain clauses within your agreement.

1. Bonuses

One thing that surprises most young physicians is the variety of bonuses that can be included in the employment agreement. And the good news is that most of them are negotiable. If you are going to be moving across the state or even across the country for this new job, it is logical to seek some form of relocation bonus. Another popular bonus that may or may not be included is a signing bonus. In a competitive market, you may be offered a bonus just for signing on the dotted line.

Pro tip: There is usually fine print attached to bonuses. Identify and understand any clauses that require you to pay back monies if you leave within a specific time frame.

2. On-call Hours

New physicians are pre-conditioned to expect that they will be saddled with the least desirable schedule, and terms that require you to work weekends and holidays. On-call terms can quickly become the difference between loving your job and hating it if there is no equity in how the most junior physicians are scheduled. While it is normal to expect weekend and holiday hours, there is no reason for you to be the only one working them. Call schedules are typically negotiable so only agree to something that seems fair and shares the burden.

Pro tip: Make sure the on-call schedule is clearly defined. Never agree to nebulous clauses that state “hours specified by employer” or you may find yourself working every weekend and holiday for the duration of your contract.

3. Benefits

If this is your first-ever contract, standard benefits may not be as important to you as they will be after having a few years under your belt. But they should be. Consider that things such as health insurance, vacation time, professional development time, termination clauses, and a host of other benefits are important at all stages of your career. These “so-called” standard benefits are typically all negotiable, so if anything is missing or lacking, you know who is to blame.

Pro tip: Figure out which benefits are the most important to you prior to entering any contract negotiations. If you have an idea of what you are looking for, you can be prepared to ask for it.

4. Path to Advance

Career advancement clauses can vary depending on the practice setting, but it is something even new physicians should consider. If you are joining a practice, it would be helpful to understand how they view your path to partnership. While they may be hesitant to spell it out for a new physician, at a minimum, you should clearly understand what is required to earn partnership status and how to get there.

Pro tip: This is one of the more tricky aspects of contract negotiations. Your employer may be hesitant to provide concrete language. Still, you should never agree to open-ended language that does not contain some aspect of enforceable, achievable direction.

5. Non-compete Clauses

When you first join an organization, the last thing you are thinking about is what happens when you leave. Depending on the state, contracts can contain a clause that prohibits you from practicing for a competitor within a certain distance and timeframe. Typical non-compete clauses are two years and a distance of 20 miles.

Pro tip: In large metros, a twenty-mile non-compete radius may result in a 90-minute commute to and from the office every day. Consider negotiating a shorter distance by adding a year to the term.

6. Tail Insurance

Another aspect of a contract that new physicians overlook because it deals with leaving a practice, is malpractice tail insurance. This type of malpractice insurance covers you against any claim that arises after you have left a position.

Pro tip: Tail insurance is easy to overlook on your first contract, don’t. Tail insurance can be very expensive if you try and purchase it on your own and may end up causing you to stay in a place where you are unhappy.

If you are a physician who is starting out or ready for a new opportunity, Jackson Physician Search has an experienced team of recruitment professionals who can help you find the practice setting that is right for you. Contact us today and learn about the difference we can make in your job search.


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