Medicolegal Issues

The Art of Negotiation


Got a job offer? Congratulations! The hard part of finding your first job after residency is complete. This also is a time to sit down and think about what’s important to you, as you want the details of your job to be stated in a contract. Here are some tips about contract negotiation.

Get It in Writing

Just as in practice, where we are always told, “it didn’t happen if it’s not documented in the chart,” the same holds true for your workplace contract. This is the time to prioritize what elements are important to you in order to have a satisfying and rewarding career, both professionally and financially. If a particular aspect of your employment agreement is important to you, be it salary, schedule, or malpractice insurance coverage, be sure its stated in writing in your contract. Verbal statements from your employer, such as “we’ll discuss this after you start your job,” should raise a red flag.

Know What Is Negotiable

Some residents are relieved just to secure their first job offer and they immediately accept the initial offer as-is, without attempting to negotiate. Although it’s probably unreasonable to negotiate everything, after you read the initial contract, if anything important is not to your satisfaction, it is practical to have a discussion with your employer. Employers expect this of their hires and, if done politely and professionally, this is a time to build bridges with your future supervisor. Moreover, they begin to better understand your needs and you theirs.

You may find it helpful to talk to associates in the group about what parts of their contracts were negotiable. For example, particularly in academic settings, you may find salary and benefits are not negotiable; however, other benefits, such as office space or protected research time, may be negotiable. Basically, the best time to negotiate is the “honeymoon” period, right after a job offer has been made, as the employer will be doing its best to entice a prospective employee.

Consider a Legal Opinion

In general, the more complex your contract, the more important it will be to solicit the help of an attorney experienced in healthcare. Even if your contract is very simple, contains a standardized salary and benefit structure, has no restrictive covenants, and partnership is not an issue, it may be helpful to have your contract reviewed by an attorney. Understand what is written in your contract and, if there is any doubt, hire a lawyer.

Ultimately, you will be signing the contract, not your lawyer, so be sure you understand what is in it and don’t get mired in “legalese.” Some firms offer third-party contract negotiation; they will assign an attorney to step in as an intermediary. Then again, most experts recommend against hiring a third-party negotiator, as this may increase the distance between you and your employer at a time probably best spent getting to know each other.

Maintain a Keen Eye

Specifics to look for in your new contract:

Work requirements. The employment agreement should visibly define your job responsibilities. Things to look for in your contract include the obligations of the physician, number of shifts or hours or weeks per year you are expected to work, call responsibilities, a census cap (if applicable), allotted vacation time, and continuing medical education time.

Compensation. The contract clearly should delineate how you will be paid. Some hospitalists are compensated solely via a salary; others are paid based on billing/productivity, while the majority are paid based on a combination of these methods (a base salary plus incentives). Be sure you understand the incentive and/or bonus structure of your salary. Practices basing incentives on physician productivity will incorporate your own billing practices and often is measured in relative value units (RVUs). In some settings, group incentives are based on quality targets set by the administration, such as the Joint Commission on the Accreditation of Healthcare Organi-­zations (JCAHO) core measure compliance, dictation timeliness, or patient/primary care physician satisfaction.

Benefits. In addition to your salary, you should see that your benefits are spelled out. The obvious benefits include medical, dental, and vision insurance, as well as a retirement savings plan. As discussed in the July 2008 issue of The Hospitalist, as demand for hospitalists continues to exceed supply, look for signing bonuses, coverage of relocation expenses, and the possibility of student loan payoff. Other important benefits include coverage of professional dues, CME allocation, and licensing and board examination fees.

Malpractice Insurance. This can be a complicated topic. In general, there are two major classes of malpractice insurance: an occurrence policy and a claims-made policy. In respect to an occurrence policy, any malpractice incident arising while the coverage was in place, regardless of when the claim was filed, will be covered even after you have stopped practicing under that policy. A claims-made policy, on the other hand, protects physicians for any covered claim, if they are insured when the claim is made. It does not cover malpractice claims filed after the physician cancels the malpractice policy, even if the claim is about an event that occurred while the physician was insured.

If you are offered a claims-made policy, require your employer to add tail coverage, which covers you after leaving the practice for any events occurred during employment. If you are unclear about any part of the group’s malpractice coverage, consider seeking legal advice.

Restrictive covenants. These are non-compete clauses often setting geographic and time restrictions of where and when a physician can practice in the event they leave the group. Though you never know what the future holds, this becomes relevant if you were to change jobs and work at an adjacent local facility or one in a nearby county. In general, hospitalists rarely carry a panel of patients, so an employer probably should not be concerned about hospitalists taking patients with them if/when they leave the practice. Be cautious of restrictive covenants found in your contract.

Ownership/Partnership. In some private groups, partnership will be offered after a preliminary employment period, usually one to two years. Look for your contract to state when and how partnership might be offered, and what the criteria to join are. This also is the time to ask others in the group to get a sense of how many associates are offered partnership and when this might happen.

Allowable Activities. Look for any restrictions regarding your activities outside normal clinical duties, such as teaching, research, or consulting for other firms. If such restrictions are in your contract, there may be specifications about whether income from such activities is yours or whether it is shared with the rest of the practice. TH

Bryan Huang, MD, assistant clinical professor, division of hospital medicine, University of California-San Diego Department of Medicine, Bhavin Patel, MD, hospitalist at Regions Hospital, HealthPartners Medical Group, St. Paul, Minn., Bijo Chacko, MD, hospitalist program medical director, Preferred Health Partners, New York City, and chair of SHM’s Young Physician Committee.

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