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Reasons for Physician Contract Renegotiation

One of the best things about being in practice is seeing those direct deposit paychecks every two weeks. Before long though, like any other professional, physicians begin to wonder if they chose the right career, or if they are in the best situation.

Between taxes, school loan payments, mortgages or rent, brutal inflation, and every burgeoning level of expectations after sacrificing for so many years, physicians think about how they could do better. There is a natural tendency to adjust to whatever income they have, but then they begin pining for more.

As physicians become more familiar with their situation, they begin to look over their shoulders. They talk to colleagues at meeting locally and nationally. The comparisons may not be fair, but they can go both ways. You may think you are in a great spot or you may consider what the alternatives might look like.

There are some common reasons which may lead you to venture out to see what can be done to improve your current compensation package. Your overriding theme should be to pick some skirmishes but avoid war.

The best negotiation happens before you sign your contract initially. But circumstances are fluid. There may be flaws in the contract you want fixed. You may be saddled with a bad schedule or have to waste time traveling between offices to fill in because another provider left or is on leave.

The best strategy is to build a solid relationship with your employer, but at the same time be firm. It is essential to use honey, not vinegar as the cliche goes. You must be careful with your tone and attitude in your negotiations.

At the same, it raises the proverbial question: Should you let someone more adept at negotiations do the dirty work? And, that does not mean successful negotiations should be done by only physician contract lawyers. There are other tools available including firms that work exclusively for you as contract negotiators like Contract Diagnostics.

Your Compensation Isn’t Sufficient

Be careful in assessing your compensation as compared to others and to yourself in prior circumstances. The keys to the best compensation is not to focus on any singular strength or leadership quality.

The most important traits as a physician are to gain trust and respect while working your butt off. The best physicians admit that they don’t know everything. They have curiosity, courage, and an elusive quality known as grit.

Finally, physicians are judges if they really care. That means they care for their patients, staff, management, and themselves.

Your compensation is not just a cookie-cutter stamp on all physicians in your specialty in a particular location. It has a lot to do with your doing the right thing on a daily basis, caring about what happened yesterday, and building a solid foundation for the future.

Your goals in achieving the highest pay and benefits depend on you and your perceived value as much as what the market will bear. Not only do you have to understand what you already have, but so does your employer, and what the alternatives are.

Remember just like in any business, it takes time and money to hire new physicians and for you to establish a new practice somewhere else. The vital word in the phrase “sufficient compensation” is sufficient. What is sufficient?

Your Schedule Is Uncomfortable For You

Physicians learn quickly that their schedules can make or break them. Nothing can be more stressful when starting to see patients in a new setting than not having enough patients on the schedule. You wonder if there is something you can do.
Visiting other doctor’s offices to introduce yourself seems foreign when you first begin, but with time you will learn that collegiality can be one of your best practice builders. A weak schedule can mean not only less productive but weaken your stance in the medical community.

On the other hand, as you surmised from the word “uncomfortable” in the title, an overly swamped schedule can be awful too. Being so busy that you can’t breathe happens all too often.

The reflex response physicians have is like most professionals, I need to get paid more. This may be true, but there are other considerations too.

In part of your contract negotiations, you may want to ask for help in lieu of higher pay. Having physician assistants or nurse practitioners may lessen the load and make you and your family happier.

The trick is to find the balance. Your schedule is ultimately yours. Only you can determine what your comfort level is in how busy or slow you are. At the same time, it is important to be paid appropriately for what you do and have the support you need.

You Have Started a New Business

Most physicians begin looking around for ancillary projects and ways to make more money as they continue the daily grind. Seeing patients is taxing. Many want to be able to supplement their paycheck and not work as hard.

The intricacies of a new business require dedication and careful planning. You will need to have expert opinions on what you are doing outside of your daily practice to make sure your additional efforts turn out to be your employers after all. You definitely want to separate a new business venture from your job.

A new business may include consulting, a medical startup for an invention, or another type of service. Your employer will find out about what you are doing so it is best to be upfront as soon as possible. Negotiations should begin ideally before you do outside work or accept any pay or equity.

Tips For Renegotiating Contracts

Aim for success. If you are happy with your circumstances, take a positive attitude. Always think about what could make you and your medical facility succeed. Use a professional, grateful tone with your employer to make sure you are establishing the best relationship possible.

Gauge your value. Be realistic. How valuable are you to the practice or hospital? Do you have specialized training? What do you add to the environment? Do patients and staff love you? How much would you be missed if you were not there?

Create a realistic negotiation framework. Don’t expect more when there is no reason to expect more. If the rules of negotiation are fair on both sides, you will be able to sleep at night knowing you are being taken care of reasonably. If your employer feels the tables are turned too much in your favor, no matter how excellent a physician you are, you will likely be replaced at some point anyway. You don’t want surprises.

Involve all parties. Always involve everyone who is important in the negotiation process. Being left out creates animosity. In your spirit of cooperation, always be open to contract mediators, if necessary.

Factors That Can Affect the Renegotiation Process

Try to understand both sides. One of the most significant factors affecting the negotiation process can be lack of or poor communication. Both sides need to have a clear understanding of what the expectations are and how to move forward.

Be honest. Hiding information or feeling about a situation can breed animosity. This is true for both sides. No one wants a bait and switch. If the hospital or medical practice is being sold, you want to know ahead of time and get your fair share. On the other hand, if you are hiding the fact you are participating in clinical research or an owner of a medical start-up, then negotiations can never work.

Things to Consider

Happiness = Success divided by Expectations

Success can be defined in many ways, but many physicians and professionals look at success in their Adjusted Gross Income (AGI) as they should. Of course, there are many other factors at play in a physician’s work life.

The key to physician contract negotiations is the expectations in the denominator of the equation. If your expectations are always exceeding the numerator, you will never find happiness.

Physician contract negotiations should take the original agreement, evaluate the contracting process, and tamper expectations with realism. After all, your goal is to be paid for what you do fairly and find happiness.

About the Author

Dr. Drew Sutton, MD, has walked the long road of a successful medical career, amassing invaluable insights and expertise. With a wealth of knowledge derived from his time in the trenches, he understands the myriad challenges and opportunities that come with physician contracts and compensation. Dr. Sutton is not just sharing theoretical knowledge; he imparts lessons learned from his own hands-on experience in the medical profession. Dr. Sutton has been where you are, and he’s navigated the path to where you want to be.

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