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Negotiating physician contracts

 

Recruiter Site Posted by Chris Hinz
Recruiter Site

Have you ever met a physician who wants to negotiate a different deal than what your organization is offering? He or she has a list of demands that would reshape your agreement significantly. If so, you’ll likely appreciate a recent PracticeLink Magazine article that provides a look at the process, with a critical heads-up as to what can be negotiated versus what must be left on the table.

Organizational differences

An organization’s size and structure really do matter in terms of what can or can’t be negotiated. As the article notes, the larger, more complicated the health care system, the heavier the lift to change provisions than the lift for a smaller entity.

Indeed, whether it’s a small independent rural practice, a community hospital or an academic medical center group, there are progressive challenges tied to size and structure for physicians to achieve what they want. Then, what are the major negotiable areas? As readers learn, compensation tops the likely list.

Compensation top negotiable point

No matter where physicians land, they probably can finesse a salary number that fits their goals and research. But as the article emphasizes, they must be mindful of several factors: First, what are the constraints - from fair market value and internal equity to anti-referral and anti-kickback statutes - that will shape an offer?

Second, how is the potential package structured, particularly if it phases from a guaranteed salary into a productivity or other model?

And third, besides the base, what other items - from CME stipends to bonuses for administrative, leadership or other tasks - can be modified or even added?

In fact, physicians should concentrate on what Ethan A. Nkana, JD, principal of Rocky Mountain Physician Agency, calls the "wrap-around value" of the entire contract. That is, they need to pay attention to every item that might maximize what they’ll earn or even give them a negotiating opportunity. These "bennies," he says, are key because they "add a tremendous amount of value, although the value generally can’t be deposited into a bank account."

Beyond compensation, the article focuses on two other areas that may be grist for negotiation. For starters, noncompetes. Although physicians likely won’t be able to eliminate the clause, it’s fair game to challenge and mitigate geographic and time restrictions, especially if they appear overreaching.

Granted, not every organization will entertain changes. But physicians should fully understand how a non-compete works and, more importantly, where the radius originates for their place and position. Will they be prohibited from performing their specialty within "X" miles of the organization’s furthest clinic or just from where they hold office hours most days of the week?

Work/life balance

Whatever the case with a particular non-compete, job candidates have another major area - work/life balance - that might yield negotiating options. With more employers recognizing that more physicians want scheduling flexibility and other work options, physician candidates shouldn’t be shy about pursuing their options.

Organizations may tread lightly, given that customizing schedules can affect the dynamic of a place. Still, if administrators are accommodating, they may be open to someone designing their practice commitment in any number of ways: working fewer, but longer, days; reducing direct patient care to less than the traditional 40-plus hours a week; or by enabling more personal or administrative time off.

In rounding out their advice, experts offer quick takes on a variety of additional items that may or may not come into play, such as evergreen clauses, malpractice tail terms and even non-compete buyouts. But they also give advice on two areas critical to bringing the most favorable contract home: How to be a successful negotiator on their own and how to use an attorney to address the legal clauses and language.

As Nkana notes about the work-life and lifestyle factors that come into play: "My job is to help identify what matters most to a physician, and then help codify that into a contract."

 

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