If you’ve only done it a handful of times—and especially if you’ve never done it all—the physician-salary negotiation process can leave you wondering if you’re getting all the compensation you deserve. That is why having the strongest physician-compensation data at your disposal is vital.
Because doctors get precious little training in the business of medicine, myths about the physician salary negotiation process abound. Foremost among them: Contract terms aren’t negotiable.
With most physicians now being employed, it is true that hospitals, health systems and other physician employers might “like to have the same contract for everyone, but we just don't see that being the reality,” said Kyle Claussen, CEO of Resolve, a contract review and negotiation firm specializing in physician employment, in a podcast. He wants every physician to understand “that you do have leverage—that you are extremely valuable. Nothing in the health system happens without physicians.”
But to achieve and maintain leverage in your physician-salary negotiation, you have to know how to work with the most comprehensive and up-to-date physician-compensation data, Claussen noted.
“You should definitely look at the surveys. You should definitely look at your peers’ information. And you should definitely have other offers if you can,” he said. “If you do all three of those things, you're going to be much more empowered, much more educated about what's fair and what's not fair.”
The AMA has teamed up with Resolve to provide custom contract review to AMA members at a discount. Resolve offers personalized legal experience to help physicians secure the best employment contract terms, no matter where they are in their careers. Ready to access your AMA-member Resolve discount? Learn more now.
Not all data is created equal
To get what you want out of your physician employment contract, you first need to understand the strengths and weaknesses of each physician-compensation dataset.
The ones used by employers, for example, are drawn from their own reported compensation numbers. They may pool data from both private practices and health systems, but Claussen advised against relying on those surveys exclusively because they're not drawn from data submitted by physicians.
“We don't think there's a right or wrong survey to use. We think you should have as much information as possible when you're negotiating,” he said.
But accessing and assimilating compensation data can be tricky, as there is a multitude of compensation surveys out there, such as those from associations and consulting firms like the American Medical Group Association (AMGA), the Medical Group Management Association (MGMA) and SullivanCotter, as well as websites such as Doximity and Medscape.
“If you use a service like Resolve’s, we're going to provide you with a lot of that access,” Claussen said. You can look to residency program directors and online forums for salary data, and you can even try to purchase the data directly, although that could run you between $5,000 and $15,000. “It's going to be much more efficient for you to utilize a consultant or an attorney that has access to that data.”
Resolve also has a proprietary dataset, rData, that provides a comprehensive, real-time view of physician employment terms across the U.S. Unlike other reports, rData has verified contracts—including salaries, signing bonuses and relocation bonuses—and reflects current trends in each specialty's job market.
If you’re seeking your first physician job postresidency, get your cheat sheet now from the AMA.
Negotiation is rooted in knowledge
Base compensation may usually be the biggest component of a compensation package, but it is vital to evaluate the entire package, Claussen said, with an eye on total potential earnings.
For example, most contracts will have a production component. This will often be tied to work relative value units (RVUs), which are measures of physician productivity. Your total RVUs are multiplied by a conversion factor to produce a compensation number.
Claussen said the biggest mistake he sees physicians make when evaluating their compensation packages is seeing a high base salary and failing to recognize that it may come with an unreasonable production threshold.
“So let's say you get an above-market offer, maybe it's a 60th or 70th percentile base offer, but the production level is set to the 90th percentile,” he said. “If it is a really busy practice, you're going to be costing yourself more by taking that high guarantee than you would have if you just set both at the 50th.”
Pay attention also to elements of the compensation package that aren’t disbursed directly to you, Claussen noted.
“Aside from just what you're being paid, tail coverage, for example, has an absolute value to it,” he said.
Tail coverage protects a physician from medical liability claims—also called medical malpractice claims—arising from incidents that occurred while a policy was active but after that policy ended.
“If they're not going to provide tail coverage when you leave, oftentimes that's valued at as much or more than a signing bonus. For some specialties, like ob-gyn, that can be a six-figure number,” he said.
Learn more with the AMA about understanding physician employment contracts.
Uneasy on your own? Lean on a lawyer
“I don't think attorneys have to be the voice of the negotiation,” said Claussen, noting that employers always prefer talking to physicians. If you're comfortable negotiating on your own, “I think it's absolutely within your power to do so, as long as you have the ammunition behind you.”
Besides obtaining all the relevant data, this also means having your fallback positions in place, which means having a plan for: If they don't give me one thing I want, I'm going to ask for something else instead.
“That being said, I often do think it is helpful to have a third party to come back to, because you never have to commit to something,” said Claussen, a lawyer himself who regularly negotiates contracts for Resolve clients. “If I'm in a negotiation, I can say, ‘Well, I need to go check with my client. I need to go check with Dr. So-and-So,’ versus if you're there on the spot, they're going to want an answer. And sometimes it's uncomfortable for physicians to sit and have those discussions.”
AMA members receive a 20% discount on all Resolve services. With Resolve, you get:
- Custom contract review for any type of employment contract.
- Access to experienced attorneys who can negotiate on your behalf.
- Real-time, comprehensive compensation data and benchmarks to help you understand your worth.
- An instant contract-review option, powered by Resolve’s attorney-trained AI model.
- Free tools such as a contract scorecard to give a quick overview of where your contract stands.
Learn more about accessing your AMA-member Resolve discount.
