Physician Contracts: Negotiate and Sign With Confidence

Take Advantage of Your Bargaining Power

As a practicing physician, you’re well on your way to establishing yourself in your field of expertise. Whether your contract is up for renewal or you’re considering a new position, you have more bargaining power than when you were fresh out of residency.

As you plan your next career move, being up-to-date on the physician employment contract process will ensure that you can negotiate and sign with confidence.

Dennis Westlind, managing partner with Portland-based Bullard Law, spent seven years as senior labor and employment counsel for Providence. He offers physician contract negotiation tips and shares what pitfalls to avoid.

Physician Contract Negotiation Tips

“Being in a position to negotiate is a good thing,” Westlind says. “You might now have an expertise that’s a hot commodity. But, commensurate with that, employers may expect a different level of performance.”

Whereas earlier in your career, you could negotiate things like start dates, vacation time, moving expenses and sign-on bonuses, you may now be in the position to ask for more in terms of salary and support.

Remember the Following when Heading to the Negotiation Table:

Do Your Homework

For example, if you hope to bargain based on productivity or patient satisfaction scores, bring your records.

“Don’t show up with a negotiation position you can’t back up with proof,” Westlind says.

Get All Promises in Writing

If you are taking a job based on a promise made by an employer, make sure you get that promise in writing and that it’s clear and enforceable.

“Employers often make promises about referral patterns or pipelines, and physicians may use these promises to estimate their potential earnings,” Westlind says. “When these promises don’t materialize, that’s when we see disputes and litigation.”

Consult an Attorney

The stakes get higher as you climb the career ladder. This is especially true for physicians in clinical faculty positions, which can include multiple contracts. An attorney can offer advice and give you peace of mind.

Four Common Contract Pitfalls and Surprises

Whether you are considering a career change or wish to leverage your experience to negotiate with your current employer, you’ll want to avoid some common pitfalls or contract surprises.

1. Not Knowing Where You Stand.

It’s important that you review your current contract to make sure you’ve met expected requirements. You’ll also want to understand what a career change could mean for current contract terms. Ask yourself:

• Were there milestones you had to meet? Did you meet them? What are the penalties or ramifications if you did not?
• Would a job change impact any incentives tied to your service?
• Does your current contract have a non-compete, and how does that impact your career considerations?

2. Skipping Over the Fine Print.

You’ve been through the contracting process before, so you are familiar with the physician contract basics. But that doesn’t mean you can sign without reading.

Physicians need to look carefully at each contract to see how it’s structured. For example, if your experience dictates that your compensation is now performance-based, you’ll want to be sure you understand the employer’s expectations and the performance metric they are using. If you don’t meet this expectation, you could be compensated less.

3. Not Setting Clear Limits and Expectations.

Employers tend to move more senior physicians toward administrative and leadership roles within a medical group. Westlind says to remember these positions are totally negotiable.

“I’ve seen situations where a physician agrees to spend 70% of their time in the clinic and 30% as an administrator,” Westlind says. “Arrangements like this can go south if there’s any misunderstanding on the part of the physician or their employer.

“Administrative duties aren’t typically compensated as well as clinical duties, so it’s important to set clear expectations from the start. And if you don’t want to do administrative work, don’t agree to it.”

4. Expecting a Non-compete to be a Non-Issue.

Physician employers will try to protect themselves by including non-compete clauses in their employment contracts. These clauses — called restrictive covenants — should not be ignored.

You’ll want to know everything about your contract’s non-compete clause, including its geographic scope, the length of time it will be enforced and any other specific restrictions included in the language.

“Don’t make the mistake of assuming this part of your contract won’t ever apply to you,” Westlind says. “Understand it completely so you can make the best and most informed decision about your employment offer.”

How PS&D Can Help

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