Our office regularly provides counsel to physicians seeking employment opportunities with hospitals and medical groups.  This includes the negotiation of physician employment agreements.

Your prospective employer will typically provide you with an employment agreement to review.  Understandably, this employment agreement skews towards the needs and interests of the hospital or medical group.  It’s not unusual for the proposed employment agreement to include blanket restrictions on a physician’s outside professional activities or permitted ownership interests.  For the employee physician, this is problematic because you may have investments in healthcare related entities; earn outside income as an expert witness or through speaking arrangements; and/or maintain other non-patient care consulting roles.  The good news is that these contracts are negotiable.

During contract negotiation, particular emphasis should be placed on your operative experience and successful surgical outcomes.  This gives the physician leverage in negotiations; not just as a potential revenue generator for the medical group, but also as a mentor and leader.  However, there is always an integration clause in these employment agreements, which means that if it’s not in the contract, it doesn’t exist.  As such, do not rely on any oral assurances made by senior hospital representatives – make sure it’s all in writing.

With respect to compensation, my recommendation for physicians is to always opt for a higher base salary.  This avoids any later ambiguity regarding the calculation of “productivity” or determining whether you met certain targets i.e. timeliness audits, patient satisfaction scores etc.  Bonuses and targets can be defined in the contract, but they are useless if you don’t know how cases are assigned or if there isn’t a transparent and equitable process of case assignments between physicians.

The contract should also delineate your opportunity for career growth and leadership.  If you envision this opportunity to be a long-term relationship, my advice is to incorporate career growth opportunities into the contract.  For example, specify the criteria you need to meet for leadership positions within the department e.g. Chair, Medical Director etc., and put it into the contract so both parties are clear on growth opportunities.

Finally, do you have any specific requirements of your prospective employer?  Now is the time to ask, and add them to your contract.  How will they promote you as part of their group?  Are there any particular staffing needs or equipment requirements that you’ll require to perform your work?  Has the medical group clearly delineated its work performance guidelines?  Will you have to repay a signing bonus if you leave prior to the contract term? If necessary, who pays for tail insurance?

While not exhaustive, this article is intended to highlight important considerations when negotiating potential employment offers from hospitals or medical groups. For further assistance, contact Manbir S. Chowdhary, Esq. at 949.910.6810.