WHEN YOU’RE CONSIDERING A PHYSICIAN job and start to evaluate the physician contract, you may find yourself remembering why you picked medical school over law school. The legal jargon can read like another language, making it hard to identify what’s meant, what’s missing and what you may want to negotiate. 

But the contract review and negotiation process is a crucial crossroads. You can skip negotiations and accept your contract as-is, or you can advocate for yourself and, in doing so, likely set up your career for greater success. 

Here you’ll learn the why, the what and the how of negotiations, ensuring your compensation is fair, your work is clear and your contract is solid overall. Follow these tips and you’ll be able to negotiate and sign with confidence. 

Why negotiation matters 

If you’re finishing residency and ready to start your attending career, it may be tempting to accept the first contract you’re offered. After all, you may not realize how much leverage you hold. Or, perhaps the potential employer is actively discouraging you from negotiating. 

“I actually didn’t negotiate anything,” says Pamela Mehta, M.D., an orthopedic surgeon based in San Jose, California, of her first contract. “I was told that my contract was standard and all the physicians in the system sign this standard contract.” 

But by opting out of negotiations, you’re typically leaving time, money and personal agency on the table. 

“I later found out that this wasn’t true at all,” says Mehta, now co-founder and COOof Pinnacle, an organization that teaches skills like negotiation, leadership and business management to women in medicine. “People do negotiate more vacation, more maternity leave and more educational stipend.” 

According to Miguel Villagra Diaz, M.D., a Reno, Nevada-based hospital and telemedicine physician, time and money may not even be the biggest potential losses. Failing to negotiate also raises the already-high risk of burnout. 

“Of course you want the best for you and your family and your professional growth. That’s a given when you are negotiating a contract,” says Villagra Diaz, a certified physician life coach. “But considering the pandemic of burnout, it’s so crucial now more than ever that physicians look into all the specifics of any contract position they’re trying to pursue.” 

What a contract includes 

Understanding every part of a contract—and identifying what is negotiable—is an essential step in preparing for negotiations. Although you’ll want a contract lawyer to comb through every word, you still need to have your own understanding of the document. 

Contract components can be loosely categorized into work expectations, compensation and legal terms. 

Work expectations. Your contract should clearly spell out what you’re doing as well as when, where and with whom. This should include details about how many hours you’re working (and which ones), how scheduling works (including call), additional provider and staff support, supervisory responsibilities, volume expectations, duties and scope of practice, PTO, parental leave, administrative time and CME allowances. 

Compensation. Your contract should also cover what you’ll be paid and how, including base compensation, incentives and bonuses. It should spell out whether your job is salaried, hourly or productivity-based as well as how you may be compensated for extra work. It should also include any signing bonuses, stipends, moving allowances and benefits such as insurance and 401(k). 

Legal terms. Your contract should also include additional legal terms such as duration of the contract, termination clauses, disciplinary actions, restrictive covenants and malpractice coverage. 

Types of contracts 

Depending on the type of job you’re considering, your contract may look slightly different. If you’re joining a private practice, your contract may spell out profit-sharing details, partnership track information and how to buy in or out of the group. If you’re taking on locum tenens work, your contract may include more related to schedule and travel arrangements and may require more details about malpractice coverage. And if you’re working in telemedicine, you may need additional information about payment structure, guarantees and types of supervisory responsibilities. 

How to gear up for successful negotiations 

In addition to knowing the general components of a contract, it helps to know the best practices of negotiation prep. These include bringing on expert legal guidance, conducting compensation research, asking the right questions (from the get-go) and brushing up on basic negotiation terms and strategies. 

Hire an attorney or contract expert 

“My biggest concern [in reviewing my first contract] was that I didn’t have any experience in legal jargon. I didn’t know who to trust to ask to review my contract,” says Jennifer Bacani McKenney, M.D., a family medicine physician who practices in her hometown of Fredonia, Kansas. 

Thankfully, what you lack in legal knowledge can be made up by an experienced attorney or physician contract review company. McKenney found her attorney through her residency program. Colleagues and former residents typically also make excellent referrals. Be sure to seek out those with specific expertise in health care contracts. This is likely not a job for your family lawyer. 

“[Attorneys] can point out the inconsistencies and missing things, as well as advocate for clauses I may not have considered,” says Mehta. “It’s also nice to have an attorney as a buffer so that it doesn’t get awkward when asking for additional things. I can say ‘My attorney advised’ rather than ‘I want.’” 

“You need somebody to look at your contracts, period,” says Villagra Diaz. “…They give you feedback on the nuances and red flags of the contract.” 

Learn about compensation ranges 

Another crucial part of negotiation prep is familiarizing yourself with compensation data. After all, you won’t be able to advocate for a fair salary—or recognize an unfair one—without knowing what other providers are being paid. 

While practicing in Arkansas earlier in his career, Villagra Diaz realized he wanted to move to the Charlotte area of North Carolina. “Part of my research was to look at resources to tell me…the [standard] salary for the position that I was applying for,” he says. “Knowing that ahead of time gave me more power to understand how much leverage I have, how much room for negotiation I have even before I sit down at the table.” 

There are many tools available to help you glean salary data, including Medical Group Management Association’s annual Provider Compensation Data as well as data provided by Medscape and specialty organizations. Resolve’s free physician compensation tool can also be found on PracticeLink.com. 

Perhaps most importantly, knowing about average compensation can help you negotiate based on cold, hard data rather than wishful thinking. When you request a certain figure, you’ll know it’s based on the actual salaries of other providers. 

Ask the right questions 

To negotiate well, you must also ask the right questions of the employer, your attorney and other providers in a group. This ensures you understand what you’re potentially signing. Of course, whereas hiring an attorney and researching compensation data are steps you can check off, asking questions is more of an ongoing exercise throughout the job search, interview and negotiation process. 

As a rule of thumb, ask about anything you don’t understand—especially anything that’s unclear in the contract itself. 

“Ensure clauses like patient volume expectations, RVU or productivity targets, call schedules and administrative time give you something specific rather than vague wording like ‘reasonable’ or ‘as needed,’” says Mehta. 

Indeed, payment structure, scheduling and support are particular areas of importance when you’re seeking clarity in your contract. “People need to ask if their salaries are flat rates or production-based,” says McKenney. “What can increase or decrease your pay either voluntarily or involuntarily?” 

Misunderstanding guarantees is one of the most common ways to land yourself in a financially untenable situation. Villagra Diaz recently worked with a coaching client in this scenario. “They have… this base salary [and] guaranteed income, but it was just for a year. … After that it was half of it, and they need to compensate with RVUs,” says Villagra Diaz. “…He found himself with a 50% decrease on his income, and he was not able to compensate that gap by generating RVUs because it was not the nature of the job that he was performing.” 

You can avoid such a conundrum by working with your attorney to ensure you understand your compensation structure—and negotiating it if it’s undesirable. Don’t get so hung up on finances that you neglect other areas, however. As you consider questions to ask, think not only what’s important right now but also what may be important in the future, such as parental leave. 

“As a woman especially, the years you finish your training and begin an attending job align with the time you may want to start a family, so it’s important to safeguard maternity leave and call schedules in the contract,” says Mehta. 

To make sure you’re getting the whole story, ask questions not only of the employer but also of other providers within the group. By speaking to providers, you can learn not just how something is handled on paper but how it’s handled in reality, and you may learn more areas that you need to solidify in your contract. 

“I would ask about other women in the group. … What happened with her call schedule and patient load during pregnancy and leave?” says Mehta. “Ask for the last time a physician was made partner, and see if there is a pattern of how often this happens and to how many physicians.” 

Both McKenney and Mehta emphasize the importance of thoroughly questioning how patient load is split up—now and in the future. 

“I would ask about how patients are divided amongst all the providers, how overhead is split and how callschedules are managed,” says Mehta. 

“Ask [how] a contract might end or change if something happens like a leadership change with the clinic or hospital,” says McKenney. “If other physicians leave, will you have to be on call more or have to see more patients? …Is there a guarantee of the number of support staff that you’ll always have?” 

If you struggle with being assertive with your questions, remind yourself that these are reasonable questions with huge implications for your life. 

Negotiate like a pro 

An important part of mastering negotiations is prepping like a pro. That means knowing your own value, brushing up on basic negotiation tactics and practicing the conversation until you feel comfortable walking into the real thing. 

Villagra Diaz recommends familiarizing yourself with basic negotiation concepts, specifically your BATNA and your ZOPA. 

The Best Alternative To A Negotiated Agreement (BATNA) is basically your backup plan if negotiations don’t go your way— typically another job offer. “If you already have this position, this other offering, that has a better salary, better compensation and so on and so forth, it can give you a little bit of more leverage when you are in negotiation,” says Villagra Diaz. 

The Zone Of Possible Agreement (ZOPA) is the range between your bottom line and that of the employer, Villagra Diaz explains. If the employer’s bottom line (their max salary) is $240,000, and your bottom line (your minimum salary) is $220,000, then you’re likely able to come to an agreeable number in this range while also snagging some of your additional priorities. However, if their bottom line is $210,000, you may need to default to your BATNA because you’re unlikely to find a mutually agreeable number. 

Though financial figures make for clear demonstrations of the negotiating terms, it’s important not to focus so much on the numbers that you neglect other factors. 

“I focus first on how much I can negotiate on my salary, then I pivot,” says Villagra Diaz. He suggests negotiating time off, RVUs (if applicable), benefits or even the possibility for future negotiations. By ensuring these non-numerical terms are agreeable, you’re likely improving your life in other ways. 

“At the end of the day, you might say, OK, I might be willing to take this [bottom line] 220k because I’m getting more time off. Either I can use it for my family, protect my well-being or even to work somewhere else if you don’t have anything that is stopping you from doing it,” he says. 

Because these negotiation terms and tactics are likely to seem unfamiliar, it’s helpful to role play negotiations with a friend, colleague or even an AI tool before undertaking the real thing. 

“If you just use ChatGPT, you can [tell it], ‘You’re a specialized contract negotiator.’ …You can just do the role playing as [you would] with a different person,” says Villagra Diaz. 

Negotiating for everyone who comes after you 

If you need any added motivation to pursue your negotiations with vigor, it may help to remind yourself not of your own value but of your colleagues’. After all, a favorable contract for you helps raise the standard for your fellow physicians. 

“Often as physicians, our mindset is just to do the right thing and help people. But remember that we are negotiating not just for that job but for the work, time and money we put into getting to this point in our lives,” says McKenney. “We’re also negotiating for all the people that come after us, so they have a good starting point.” 

Additionally, you should remind yourself that negotiating doesn’t have to be combative. In the end, successful negotiations entail both you and the employer respecting each other’s value, and that mutual respect is a strong foundation for a happy practice. •