4 Things New Physicians Should Know Before Signing Their First Healthcare Contract

Landing a new job is usually an exciting experience. For many job-seeking young physicians looking for their first salaried role, it’s a huge relief to finally land a job, receive a contract and finally start earning some money after years of work in med school and their residency/fellowship.

However, many young physicians are lost when it comes to contracts and job negotiations. Before you sign on the dotted line, take some time to carefully look everything over to make sure the role is right for you and your goals.

Here are some essential things to consider before signing a contract:

Negotiate Upfront

Once you sign a contract, it is difficult, if not impossible, to negotiate or change anything. You have little leverage to revise your employment terms once you have already joined a team. The best opportunity to request changes is before you sign. Make sure to have in-depth conversations with the recruiter or HR representative about any aspects of the job you’re unclear on, and make sure to ask all your questions during the contract review stage, not after.

Keep in mind you might not get everything you want, but this is the time to make all your requests, big or small. Don’t be afraid to advocate for yourself and for things important to you. If you don’t ask now, you may always wonder what you could have had.

Get Clear on Your Compensation Model and Numbers

Most new physicians are typically offered either a fixed salary, or a fixed salary with the potential for a bonuses and incentives, usually based around your ability to meet or exceed performance targets.. It’s important to ask questions and get a very clear understanding of bonus and incentive requirements, and how quickly you might expect to earn them. It’s quite common for new physicians to not earn bonuses the first year or two as they grapple with any learning curve.

Depending on your specialty, the practice or facility, or years of experience as a physician, you may be offered one of two types of variable, performance-based salary models: either the payment is based on how well a physician is meeting specific productivity criteria set by the organization, or it can be a pure performance- or value-based salary where you’re paid based on the RBRVS (resource-based relative value scale) where value is placed on specific procedures or the nature of patient visits, usually measured in RVUs/wRVUs.

Because performance-based compensation can be so variable and complex, it can be difficult to predict your take-home earnings. It might be worth having an accountant look over your contract and run the numbers to provide you with a pro forma, which you may want to attach to the contract itself. Getting actual numbers and having a visual aid will help you understand your compensation formula better and help aid your decision making.



Read the Benefits Carefully

Salary alone does not make a job offer a good one. And while health insurance, vision, and dental are vital to any good compensation package, as a physician there are some other critical benefits you should look for. It’s important to understand exactly what these benefits are and why they’re important.

Liability and tail insurance are necessary to practice medicine and very expensive to pay out-of-pocket for. Tail coverage protects you from malpractice lawsuits after you leave a job. Your coverage depends on how long you are at a practice and can run into the tens of thousands of dollars. Get their tail insurance policy in writing so you can be clear on the details and retain them for your records.

Some practices, especially hospitals, offer loan repayment options. This can be an extremely enticing benefit considering the average physician has between $200,000 to $250,000 to repay in medical school loans. If you’re one of those who feel like you’re drowning in debt, you may want to check to see if the practice, hospital, or other organization you are interested in offers a version of this type of benefit.

Get a Contract Lawyer

Clarity is vital when you receive a contract. What you sign could backfire on you in the years to come if you don’t fully understand what you are signing. However, that can be challenging if it is full of complex legal language. A contract lawyer who specializes in healthcare and knows your state’s laws and regulations can help you navigate the terms you don’t understand and give you the clarification you need to feel confident in the decision you make.

Look Before You Sign

Signing a contract blindly might leave you with regret in the years to come and could seriously hamper your career. Instead, ask questions, negotiate, and get clarity and professional advice before joining any new team.

If you are starting a job in medicine, bookmark the myHealthTalent blog for the latest tips and advice for your healthcare career.