Physician’s job hunting timeline 

Getting your job application ready 

Writing a good cover letter 

 What do physician employers want?

How to handle the telephone interview

Anatomy of a physician job interview 

In the restaurant with physician employers

Do’s and Don’ts in a doctor job interview 

Interview Dress Code for Doctors

Evaluating a physician job opportunity 

Physician Employment Benefits

Using an attorney to review your physician employment contract 

Understanding physician employment contract 

Physician Contract Negotiations 

How to negotiate physician employment contract 

Getting ready for your first physician job 

To make the point clear let me use some examples:

SCENARIO A: Imagine you are in a medical practice, practicing medicine and your yearly earning reports looks as follow.

Gross Revenue: $200,000 per year.

Overhead: $150,000 / year  [Overhead is the cost of doing business eg. expenses including rent, nurse salary, equipment and supplies cost etc.]

 In the above scenario, a physician is better off being an employee than a partner in the medical practice. Why? Because a physician employee salary is guaranteed. Even though there is $200,000 in gross revenue, the net profit is only $50,000 and would be the take home income of a medical practice partner.

Lets look at another aspect:

SCENARIO B: Few years later, your  earning reports look like this:

Gross Earnings: $500,000 / year

Overhead: $ 200,000 / year 

 As you see, the increase in gross earning does increase the overheads, but not proportionately. The increase in overheads is because of increased volume of patients resulting in increased use of supplies and increase in the number of support employees. The disproportion is because of fixed costs such as rent and malpractice insurance. But here the Net Income is $300,000 and would be the take home income for a partner in the medical practice. If, as an employee, a physician is being paid significantly less than this amount as salary, then it makes more sense for him to buy in and become a partner in the medical practice.

If the salary is only few thousand dollars less than the above amount, the only reason for becoming a partner is for job security and sense of ownership. Because, with partnership in the medical practice, also comes the never ending responsibility of managing the business aspect of it.

Before a physician even raises the issue of becoming a partner a look at the current year earnings’ and projected earnings in the next few years, is vital. Nobody wants their income to go down. Especially if you have to pay money to buy into the business. If the numbers don’t look right, it is probably better to wait an year or two before reconsidering the medical partnership.

This is the biggest problem with those jobs which offer mandatory partnership in one year. The problem is that the physician has no clue what his earning will look like at the end of the year. So for accepting a physician job with an opportunity for partnership, make sure becoming a partner is not manadatory in the contract, to continue practicing in the same medical practice. 

1) Physicians are intelligent and independent creatures. They became physicians in the first place to call the shots.

2) Physicians have high sense of self esteem and this fuels their stubbornness and inability to follow orders. They rather command than follow.

3) Over time physicians develop a relationship with their patients – a sense of owning them aka being responsible for their well being. This creates a conflict about who owns the patients – the medical practice or the physician. (My take on it? It is the patient who owns the physician or medical practice!)

4) Becoming the owner or partner appears lucrative – both financially and spiritually.

What are the ways you can own a medical practice ? There are only three:

1) Start your own medical practice

2) Buy a medical practice

3) Become a partner in already existing medical practice ( i.e. buy a share of the medical practice) 

Pros of becoming a partner in a  medical practice:

1) You do not have to start a medical practice from scratch

2) Already operating infrastructure available to you in the medical practice.

3) Business risk is shared in a medical partnership.

4) Easier to get business loans once a business is deemed established. Usually two years of operation is considered adequate by the banks.

5) More flexibility in scheduling vacations.

6) Already existing networks and word of mouth reputation established. (Hopefully good reputation!)

7) Ability to get higher reimbursement rates from the insurance companies.

You do get business related tax breaks. 

Cons of partnering with a medical practice:

1) Income levels not guaranteed. They may vary based on overhead for that year.

2) You still are not the ultimate boss you dreamt of. The most senior partner usually retains the ability to call the shots.

3) You still cannot do whatever you want. You have to go through a partner voting system.

4) Medical partnership usually retain a restrictive covenant in the contracts.

5) Getting out of partnership is akin to a messy divorce.

 

It is always a good idea to read a book on negotiations before you try to negotiate a contract. But here are few pointers to help you out:

START HIGH. Always ask for a little bit more than you actually want. Then during negotiations you can scale down you demands. But never put up ridiculous demands that may completely put off the other party.

Similarly expect your employer to start low and eventually give in to some demands.

DO NOT EXPECT TO GET EVERYTHING . In negotiations both parties have to meet somewhere in between. You win some, you lose some.

NEVER HESITATE TO ASK. You will never get what you don’t ask.

SELL YOUR SERVICES, NEVER SELL YOURSELF. Do not compromise on something which is very essential to you. If you do, you would have sown the seed of unhappiness which will only grow in time.

GIVE OPTIONS TO THE OTHER PARTY. If they are refusing a higher salary then see if you can get more vacation time, moving expenses, signing bonus etc. Many a time if the other party refuses to budge on one demand they may consider a swap.

BEWARE OF THE NEGOTIATING TACTICS OF THE EMPLOYER: If your employer is using the legitimate tactics in negotiation or unethical negotiation tactics. Unethical tactics are impoliteness, bossiness, raising tone, vague explanation, belittling, etc. A reasonable employer should not stoop so low. But if they do realize that these are the ways to stop you from putting more demands for the physician job on the table.

Most the medical residents or physicians shy away from negotiations during their physician job search and would want their lawyers to negotiate with the employer. But remember not all lawyers may negotiate for you. Most of the lawyers will review your physician employment contract and tell you about the potential pitfalls. Then it is up to you to bring it to the employer. If you want your lawyer to do the contract negotiations, make sure it is clear in the beginning before you sign an attorney client relationship.

There is a trade off as to who should negotiate the physician job contract with the employer. If it is the attorney then the process is usually slow, out of your control and can be expensive. But it is professional work, saves you from the pain of negotiating and may benefit you especially if your negotiating skills are poor. On the other hand you can decide to negotiate yourself. It also can be worth the experience as well as effective, educating and free.

HOW TO NEGOTIATE YOUR OWN CONTRACT

You can negotiate with your employer. There should be no stigma attached to it. Here is one of the ways to do it:

STEP 1. Ask the prospective employer to send you the physician job contract. Do not start negotiating until you receive the contract.

STEP 2. Review the physician employment contract at least three to four times word to word yourself. Make a list of sentences or conditions that bother you.

STEP 3. Get the physician contract reviewed by the attorney. He will give you a list of conditions which you may need to address with the employer. Also discuss the list you made in step 2 with the attorney and add relevant topics to put up for discussion.

STEP 4. Call your employer and tell him that there are some concerns regarding the contract which you would like him to address. His response to you will be “This is a standard contract for everybody.” But politely insist that you would like some changes in it and offer to email or fax him the list. The employer may want to discuss it right then and there, but if the list is too long, do let him know. It is a good idea to give them some time to think on it. The employer usually will also run it by his attorneys.

STEP 5. Neatly type up the requested changes in bullet points on a word processor. Do make reference to page number, section, sub-section and line number. Also add an excerpt of the sentence you want changed and the language of the new sentence. Make separate bullet points for asking increase in salary, vacation days, sick leave etc. Send this list to the employer.

STEP 6. Most likely you will receive a call back from the employer, who by that time would agree to some of the changes and will decline the others. Now it is your turn to think whether the declined changes are significant enough for you to refuse the offer. Tell the employer to give you a day to think and then call him back later regarding your decision.

Remember you will not get everything that you wanted. The principle of negotiation is to meet half way where both parties feel they won.

STEP 7. If you feel that there is something which definitely needs to be changed then inform the employer about the same. Be clear. Usually this is a gamble because if the employer really cannot give it up then most likely he will go for another candidate. But remember he has spent some amount of time and money trying to negotiate the contract with you. So it is not easy for him to back off too. He will try to either convince you to give it up or may try to work out an alternate solution. If nothing works then he may either give in or let you go. You can execute this step very well if you have an alternate physician job or plan in hand. In that case power balance tilts in your favor. The upper hand in a negotiation is of a person with a plan B.

STEP 8. You will receive an amended physician contract from the employer. Again carefully review the contract and make sure the agreed upon points have been added or amended in the contract. Have the amended physician job contract reviewed by your attorney again.

STEP 9. If the new contract and conditions are agreeable to you then go ahead and sign the physician contract to seal the deal.

WRONG! Negotiations are an acceptable part of corporate America. Remember you are no longer a resident who is supposed to learn and to work eighty hours on bare minimum compensation. Now you are physician businessman with a degree and training in the mighty American capitalism. By practicing medicine we do serve humanity but remember we have medical school loans to pay, a family to support, kids to send to school and plan for the retirement.

Always practice good medicine, ethical medicine and competent medicine. But practicing good medicine does not mean that you settle for a lower compensation, less vacation or lesser benefits. If you do settle for less you are serving your employer not humanity.

Remember job satisfaction comes from performing your work you like to do with utmost competence and receiving adequate compensation from the same. How would you feel if you settled for $10,000 less in salary and three weeks vacation while your physician colleague gets four weeks vacation and higher pay doing the same work?

TAKE HOME MESSAGE. Negotiations are acceptable in business including in the business of medicine. It is accepted that you will try to negotiate your physician employment contract. Nobody minds it. That is one of the reasons the initial  physician employment contract offered by private medical practices have two weeks vacation, No CME reimbursement, lesser compensation etc. This will be more explained in the principles of negotiation which will follow.

Stakes are HIGH and will increasingly be higher as you move away from your graduation date. Now the damage to your career because of a bad contract will amount to tens of thousands of dollars. And trust me, it feels like a punch in the stomach.

Should you get your physician employment contract reviewed. The answer is yes! yes and yes!  You may have found your dream physician job, but if they offer you a bad contract – do not take it. Those words on 20 pages of paper can make you life miserable. And a good physician employment contract will protect you from such misery (After all everything has a brighter side to it).

Who should you get your contract reviewed from? Find a good attorney, who deals in business and contract law. Make sure he has experience reviewing physician employment agreements. Good attorneys are expensive, but the amount at stakes is also high. Sometimes paralegals, who have experience reviewing physician employment contracts may be able to do it for a cheaper price.

Location of the attorney is also important. Always try to get the lawyer from the state where the physician job is located. Most likely, law of the state where the physician employer is located, will apply to the contract. And law varies from state to state.

Where do you find such attorneys? Websites like www.findlaw.com or www.lawyers.com are good sites to search lawyers from. Also ask for references from friends and associates. Never take the recommendation from the employer himself (There is something called ‘vested interest’). If you know of good lawyers competent in reviewing physician employment contracts in your area, let me know. We may post your reference on this website if feasible.

Remember to read the Physician Employment Contract yourself, at least three to four times before you even send it out to your attorney for review. You may not be able to understand it the first time but by the fourth reading you will definitely have some idea.

Some of the contracts are written in a simple language, but others may be more difficult than reading the unabridged Shakespeare play. In the following pages, I will list some of the things you need to watch out for in a physician employment contract. Remember, if it is not written, it is not agreed upon.

This is not a legal advice and you must consult your attorney prior to signing any contract. The post is for informational purposes only.

Here are some of the essential components of an employment contract which you may find: