You’ve found a position, impressed all the right people during your interviews, and now you’ve got a job offer in hand. But how do you know the difference between a competitive offer and one that’s not so great? And even more importantly—how do you use that knowledge to negotiate a better contract for yourself?
Physician contracts are lengthy and complex, and the agreement you sign can affect everything from your finances and your workload to your future employment prospects. Learning how to negotiate your offer—and what’s negotiable in the first place—puts you in a better position to secure the contract you deserve.
Decoding your physician contract
Your contract spells out the expectations and obligations for both you and your employer. Since this is a legally binding document, it’s critical to understand every term and condition.
Many new physicians have signed contracts they didn’t fully grasp, only to discover later that they’re not earning as much as they expected, or they’re bound by restrictive clauses that limit their future choices.
Let’s review the key components you can expect to encounter in an employment contract, and some important considerations when reviewing the terms of each.
Salary and compensation
Naturally, one of the first things you’ll want to know when reviewing any job offer is how much you’ll get paid. Location, experience, and demand for your specialty will all factor into the salary range for any position.
Salary is one of the most frequently negotiated terms in any physician contract. To negotiate effectively, you need to understand the details of your compensation package. Physicians’ compensation can be structured in several different ways, but is frequently a mix of a base salary and productivity-based bonuses.
When reviewing the total compensation package, make sure you understand your minimum salary, how any performance bonuses are structured, and ask for specific examples if anything seems unclear. Employers will often focus on the best-case earning scenario during contract negotiations, but it’s also wise to run the numbers for what you’d bring home in a below-average year.
Benefits package
Aside from your compensation package, the other benefits outlined by your contract are worth careful consideration. Over time, factors like fully paid health insurance, a generous profit-sharing plan, or plentiful PTO may outweigh a slightly higher salary number.
Health coverage
Many employers offer a few standard plan options to choose from. Copays, premiums, and deductibles can vary widely (and significantly affect your healthcare costs) so look closely into what’s covered and what’s coming out of your pocket.
Vacation and leave time
Time off is crucial for avoiding burnout, and it’s one of the most negotiated terms (aside from compensation). Make sure you understand how PTO is accrued, what happens to unused time, and the policies on sick leave or parental leave.
Retirement savings
Tax-advantaged retirement savings accounts like 401(K) plans are commonly included in full-time contracts. Things like employer-matched contributions, pensions, or profit sharing can seriously sweeten an employment contract.
Malpractice Insurance
Most employers provide malpractice coverage for full-time physicians, but be sure to understand the details. Depending on what’s included, some physicians may choose to supplement employer-provided coverage with their own policy.
Work schedule and hours
Scheduling is another one of the most commonly negotiated terms in many physician contracts. Your agreed-upon schedule, hours, and call responsibilities can drastically affect your work/life balance and overall job satisfaction.
Ask for specifics on how frequently you’ll be on-call, the number of patient hours expected, and how you’ll be assigned patients. Fuzzy language here can lead to schedules and workloads that are more demanding than expected, so clear up anything that’s nebulous or confusing.
Job responsibilities and expectations
Beyond your hours, be sure you understand your obligations regarding administrative duties, outpatient care, or other responsibilities. A contract promising 40 hours of patient time per week could actually require longer hours when other duties are factored in.
If part of your compensation is tied to productivity metrics, those should be clearly outlined somewhere in the contract. And if there’s talk of partnership potential, get those terms in writing too. Be wary of vague promises that hinge on “meeting expectations” without clear definitions.
Termination and renewal clauses
Termination and renewal clauses are often organization-wide policy, so there may not be as much room for negotiation here. However, keep in mind the length of the contract itself is usually negotiable.
While both physicians and facilities hope new hires will be a long-term fit, it’s common for many physicians to change employers multiple times throughout their careers. Be sure you understand the conditions for terminating the contract from either side, and any restrictions or obligations after the contract ends.
Watch for provisions that allow an employer to accelerate termination dates, or that require a lengthy, awkward transition period after giving notice. Be especially clear on how any non-compete clauses or non-disclosure agreements could affect your future opportunities. Note that non-compete clauses were recently banned by the FTC for workers at for-profit businesses, though legal proceedings on the ruling are still ongoing.
Preparing to negotiate your contract
Research salaries for your specialty
To ensure your offer is competitive, stay informed about market rates for your specialty. Professional organizations and industry sources like MGMA can be highly valuable in helping you compare your offer with regional and national averages for similar positions.
Staffing agencies, firms, or attorneys who specialize in reviewing physician contracts can also share insights into how your compensation and benefits stack up. And of course, there’s no replacement for firsthand reports from your classmates, mentors, or colleagues—especially those who are in the recent job market. Open communication empowers physicians to ask for what they’re worth when negotiating with employers.
Define your goals and priorities
Some physicians want to maximize their income or retirement-savings rate, while others place greater value on schedule flexibility, work/life balance, growth opportunities, or one-on-one time spent with patients.
Consider how an employment offer and overall workplace culture aligns with your goals and life circumstances. From there, you can evaluate how well an offer matches your priorities, and identify any specific areas you may want to negotiate.
Know your deal breakers—and where you’re willing to compromise
Contract negotiations are a give-and-take process, and you may not get everything you’re asking for. Before you negotiate, know the minimum you’re willing to accept for key terms like salary, scheduling, vacation time, or any other areas that are most important to you.
Establishing clear criteria allows for objective decision-making, increasing your confidence during negotiations and helping you steer clear of contracts that could lead to buyer’s remorse later on.
7 tips for a successful contract negotiation
Negotiating might feel awkward at first, but it gets easier with practice. Most employers expect some level of negotiation, so keep these tips in mind to get a deal that aligns with your priorities.
1. Be confident and clear about your expectations.
Ask for what you want clearly and concisely. It’s always wise to have a justification for your requests, but be straightforward and avoid long-winded explanations.
2. Understand your negotiating position.
If your specialty is in high demand or you have offers from multiple facilities, you’ll have more leverage to negotiate a favorable deal. In competitive job markets, you may have less room to ask for more.
3. Do your best to minimize back-and-forth.
Submitting any requests or clarifying questions at once streamlines the negotiation process, and makes you look confident and organized. While it’s always OK to ask questions, adding too many additional requests down the line can be off-putting to employers.
4. Consider non-monetary benefits.
If a facility has limited wiggle room on salary, they may be more flexible on other aspects of the contract like vacation time, call hours, or reimbursements for continuing education.
5. Be willing to compromise when necessary.
There’s a fine line between knowing your worth and coming across as greedy or inflexible. Remember the ultimate goal is to find an agreement that works for both parties.
6. Communicate promptly and professionally.
It’s normal to take some time to review an offer, though try not to let the process drag out. Always be positive and respectful when communicating with a potential employer, even if you don’t see eye-to-eye on certain terms of a contract.
7. Don’t sign anything until you’re ready to commit.
Even if it’s just a letter of intent and not a formal contract, avoid signing anything until negotiations are complete and you’re satisfied with an offer.
Reviewing and finalizing your contract
Handling counteroffers
If you’ve requested changes to an employment contract, you may receive a counter-offer. Take a close look at the updates and how they compare to your requests. Is the employer making a good-faith attempt to meet you halfway—or showing warning signs of future stinginess? You can always request additional changes, but keep in mind an employer may already be making their best offer.
Seeking legal advice
When reviewing employment offers, many physicians consult with an attorney who specializes in healthcare employment contracts. An experienced healthcare attorney can make sure your negotiated terms are included in the contract, point out any potential pitfalls or abnormalities, and ensure you fully understand the implications of what you’re signing.
Signing the contract
Remember that an employment contract is a legally binding document, regardless of how well you understand everything it contains. After signing, always keep a copy of your contract for your own records. While doing your due diligence during the negotiation and review phases goes a long way in avoiding potential disputes, it never hurts to have an easily accessible copy you can reference or share with an attorney.
Explore more resources for your medical career
Beyond Residency offers useful resources to help you launch your career, and to understand your options in an evolving healthcare landscape. From blogs and downloads to webinars and in-person events, we’re here to help you make the transition smoothly and successfully.
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