4 keys for a physician’s first employment contract

Brendan Murphy , Senior News Writer

You aced medical school. You have survived residency and perhaps fellowship. Next comes another difficult test: deciphering your first physician employment contract.

This professional benchmark is a young physician’s first opportunity to shape several aspects of the career path ahead, including compensation, work hours and benefits. 

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The AMA provides many resources to help physicians understand employment contracts.

The first season of “AMA Making the Rounds”  focuses on the complexities doctors confront while negotiating their first physician employment contract. Throughout the six-part series, Wes Cleveland, a senior attorney for the AMA, offers a road map for successful contract negotiations. Here are some of the key considerations he highlights.

It is becoming less common for physicians to enter into an employment agreement in which the compensation is articulated as a strict salary number. Instead, employment agreements frequently include a productivity element. Understanding how those productivity parameters and how they translate to dollars is key.

“It’s perfectly normal to have a productivity component in your compensation,” Cleveland said. But what physicians should be asking their potential employers and colleagues about is “the extent to which the productivity expectations are such that you can meet those expectations, realistically.”

“This will feed back into issues about what other administrative duties you might have with respect to your employment,” Cleveland said. “If we're basing your compensation in part on your productivity, that means that your compensation is going to be a function of how much clinical care you will be providing. Anything that takes away from that is going to have some impact on your overall compensation—how you're going to be evaluated by the organization.”

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The extent to which a particular employer is willing to negotiate can vary widely. A large health system may be less inclined to negotiate vis-à-vis an independent physician practice. A lot may depend on how much your specialty is in demand. But regardless of the employer, it never hurts to ask. Cleveland recommends an a broad initial request when it comes to negotiations.

“Once you enter into negotiations, you're going to be required to give something up,” he said. “That's part of the negotiation process, so it makes sense to prioritize what you may want.”

“When you enter into the negotiation process with a potential employer, you can give those other things away in good faith as part of the negotiation process, and then perhaps be able to settle on maybe the two or three things that are really important to you,” he said.

Spelling out your call responsibilities and work hours in your employment contract will give you a better chance to maintain work-life balance and a clearer understanding of what your institution expects of you. 

It’s easy enough for muddiness to creep into the definitions over physician’s contractual work obligations, he said.

“For example, you may be obligated to work full-time, but what does that mean? Does full-time mean an 8-to-5, 9-to-5, or does it also include 8-to-5 and working evenings or working weekends? In this respect, the definitions regarding your duties are very important.”

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If your job responsibilities take you away from direct patient care, particularly where your compensation includes a productivity component, it’s important to understand if, and how, those other duties are accounted for in your overall compensation package. It’s also helpful to have a handle on how the workload will look on the day to day.  

“Obviously, you are going to be paid for your clinical time,” Cleveland said. “However, you may have other expectations on you that may not be clinically related but that may take time and be duties that you will need to satisfy on top of providing direct patient care or clinical care. For example, will there be any expectations for you to engage in business development after hours? Do you need to be present at meetings in a hospital, at the group or at other locations? How much of your day will it typically take to complete electronic health records?”

Listen to “AMA Making the Rounds” podcasts on Apple Podcasts or Spotify, or wherever you listen to podcasts.