Keys to Successful Contract Negotiations


First, make sure you find the right practice or position based on your personality, objectives, and family needs.  Next make sure the organization and community are good fits for you and your family.  Then you are ready to negotiate your contract and compensation, which are two of the more difficult areas to address when interviewing for a job. Both you and the employer will be willing to give and take if they are confident in a long-term arrangement.

As you schedule interviews, you can ask your in-house physician recruiter about common employment contract terms and negotiable points. Since in-house physician recruiters are employed by the hospital, clinic or practice, you can also ask how compensation is handled in the contract and within a location or area you will be working. Salaries are consistent in most hospitals, especially for new graduates. While there are areas of contracts that are not negotiable, other sections, such as signing bonuses, loan repayment and moving expenses, may be topics for discussion.

Asking the right questions about how you will be paid will help you understand more about the organization and the leaders with whom you will work. Some good questions to consider include:

  • Is the position a teaching or faculty position with a salary and incentives?
  • Is it a private practice or employed position that uses wRVUs (Work Relative Value Units) to determine compensation based on work performed and appropriate billing practices?

Most income packages offered to new physicians are determined by regional market factors and compensation surveys such as MGMA, AMGA, Sullivan Cotter, etc. Salaried positions with incentives are usually easier to understand. However, organizations may use the wRVU model that is based on work units performed rather than number of patients seen. To determine compensation and appropriate billing practices, it is important that you do your homework and understand how you are being paid. Be realistic with your expectations.

Asking about benefits offered by the employer is important. Usually employers offer health insurance, license fees, medical staff dues, and continuing medical education. In the beginning of a contract, many physicians get three to four weeks of paid vacation and specific CME time. If your compensation is based in part on productivity, you will need to understand how your income may beaffected when you take time off.

Many employers offer retirement plans. In general, hospitals and health systems offer a better range of benefits and more retirement options than private practices. Also, most employers pay for malpractice insurance. One thing to remember to ask about in the contract is if the employer pays for the malpractice “tail” coverage. This covers incidents that happen during employment but are not limited until litigated after employment ends.

Once you have finished your interviews and have a contract offer, we recommend meeting with a health care attorney to review the contract. You can talk with one of your mentors who has experience working with contracts to know the areas that may need attention, so you do not have to pay the attorney for areas of the contract are not negotiable. This will save you time and money. Remember, you should be the one discussing any contract negotiations, not the attorney.

Once you find the right opportunity, take the time to make sure you ask questions. It is your responsibility to understand the employment contract and compensation involved in the offer. Make notes on anything you need to have clarified and ask questions along the way. This approach will help with finalizing your contract and practicing in the right organization.
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