For many younger physicians coming out of residency or fellowship, negotiating an employment contract with you may be their first time taking that employment step - often without any instruction or guidance regarding how to approach such a process. So, in addition to coming to an agreement on employment terms, you may need to also inform and educate your latest hire along the way regarding the negotiating process itself.
Kenny Deari, who does physician and health care talent acquisition at Ironside Human Resources in Dallas, has found that more experienced physicians often begin the contract negotiation process having a decent sense of the negotiable elements. Even so, a fair number start the process with expectations that may be unrealistic, or at least ill-informed. Keep that in mind as you work to negotiate an employment contract that best meets everyone’s needs.
Start with a letter of intent
Although what is generally negotiated is referred to as the employment "contract," Logan Ebbets, MS, CPRP, principal recruiter for clinical talent acquisition-Northeast for Optum, explains that many organizations start first with a verbal discussion about the job opening. That’s followed by a written letter of intent, "which is essentially an expression of terms, which basically lays out start date, compensation, benefits, clinical hours, schedule, and all that jazz," she says. "It is recommended that you negotiate off of that [the letter of intent], to really hash out all the terms prior to getting to the contract piece."
Once the terms outlined on the letter of intent are negotiated, she explains, the contract itself is then typed up and presented for signature as a mere formality. "The contract is generally a very long document. And it is less efficient when providers have questions about pieces in the contract; that holds things up," Ebbets explains, pointing out that it’s best to iron out the details before the actual contract.
The contract terms that generally receive the greatest number of questions and discussions from candidates are:
Compensation. Although many physicians already have a number in mind as far as their desired salary goes, Ebbets finds that "physicians are uncomfortable advocating for the compensation they’re seeking." Bringing the topic up early on helps ensure both parties are aligned.
Sign-on bonus. Steven Jacobs, MA, CPRP, enterprise director of physician and provider recruitment at Jefferson Health, says that "sign-on bonuses are bizarre," and can vary by close to $100,000, depending on the facility.
Relocation. Jacobs says relocation allowances are frequently negotiated and range from $5,000 to $20,000 or $25,000, with some restrictions.
Paid time off. Vacation time may also have some flexibility, depending on the other elements being negotiated.
Student loan repayment. Given that as many as 89 percent of physicians have student loan debt, with an average $241,600 owed, requesting assistance with repayment has become standard. Deari explains that only hospitals accredited through federal programs can be reimbursed for such repayment assistance, which ranges between $2,000 to $4,000 per month. And while private practices can’t be reimbursed for such repayment help, partners can certainly decide to provide it as part of the compensation package if they so choose.
Non-compete terms. While physicians typically want a non-compete radius that is small and a term length that is short, facilities generally have standard terminology.
Moonlighting. Many facilities try to discourage moonlighting, to avoid any conflicts of interest, while physicians may want the opportunity to earn extra cash during their free time.
Support. Many facilities are vague in delineating the type and quantity of administrative and provider support to be made available, and physicians are generally concerned with ensuring the support offered will be able to help them earn any rvu bonuses.
Malpractice insurance. Many facilities provide either claims made or occurrence malpractice insurance, which physicians should be clear about.
Although many facilities can’t negotiate every contract term, finding a way to provide the compensation and benefits sufficient to allow a newly hired physician to focus on their job and not outside stressors, like student loans or housing, for example, is one way to increase the odds of a long-term employee.
Marcia Layton Turner
