The Money Meets Medicine Podcast

Navigating and Negotiating Physician Contracts

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We all remember what it was like the first time we saw our first physician contract. If you have ever left a medical practice, you likely remember the lessons you learned from it. Let’s say that you’re on the brink of signing your first big contract. The salary looks great, but there’s so much more lurking in the fine print that could shape your career and financial future. While it is important to understand your compensation, it is equally important to consider all of the non-compensation aspects of your physician contract.

In this piece, we’ll dive deep into what often gets overlooked – non-salary terms like malpractice policies, severance conditions, and variable compensation structures. By the end, you’ll know how to navigate negotiations for better autonomy and flexibility and understand the financial nuances that can make or break your success.

We’ve also got real-life examples from those who’ve walked this path before. So buckle up; let’s take a ride through the world of physician contracts.

Beyond the Basics: The Importance of Non-Salary Terms in Physician Contracts

It is important to understand the basic compensation provided by your employment agreement or contract. You may use databases to find this information – like MGMA data – or you may use the help of a financial advisor or contract review attorney. Regardless, compensation is the most obvious feature of an employment agreement, and one that I’ve rarely seen a physician fail to consider.

However, the compensation outlined in your physician contract is not the only thing to consider.  Here are a few items that are also worth considering:

1) Medical Malpractice Policies: Occurrence vs. Claims Made

Diving into medical malpractice policies often mentioned in physician contracts, you will find two main types: occurrence and claims-made. The former covers you for any incident that occurs during the policy period, no matter when you file a claim. On the flip side, claims-made policies only protect you if both the incident and claim happen while your coverage is active.

Said differently, an occurrence policy is a claims-made policy + tail insurance.  A claims-made policy does not include tail insurance.

Disability Insurance for Physicians


This distinction matters big time because switching jobs or retiring could leave gaps in your protection unless you get tail coverage—which can be pricey (for example, see below from North Carolina). Understanding these nuances is crucial not just for peace of mind but also to avoid unexpected expenses down the road.

North Carolina Tail Insurance


 2) Severance Terms and Termination Circumstances

Let’s talk severance terms next. They’re like a financial safety net if things go south with your job—layoffs, downsizing, or other termination scenarios not related to misconduct on your part. These clauses dictate what compensation (if any) you’ll receive upon leaving.

Negotiating favorable severance terms ensures that even if employment ends unexpectedly, there’s less strain on your finances as you transition to new opportunities.

3) Variable Compensation Structures

Last up are variable compensation structures tied to collections or Relative Value Units (RVUs) alluded to previously. Here’s where it gets interesting; this pay model directly links income potential to productivity rather than just showing up for work.

Unlike an employee, who is paid based on performing the work required during their shift, a physician paid based on RVU collections or productivity works in an “eat what you kill” model. This means compensation is variable, and likely takes time to hit your bank account as mentioned above.

Sure, it means more skin in the game but navigating this terrain carefully can potentially lead to significantly higher earnings compared with flat salaries alone. During your contract negotiations, you may consider asking about any RVU/production compensation that may come with or without a monthly salary.

Either way, understanding exactly how you will be paid – and not just what the anticipated amount will be – is key to understanding your physician contract.

Dive into the nitty-gritty of physician contracts. From malpractice policy types to severance terms and pay models, know what impacts your wallet and peace of mind. #HealthcareJobs #PhysicianContracts

The Role of Autonomy in Negotiating Physician Contracts

When you’re knee-deep in contract negotiations, remember this: Your future happiness might hinge more on your work conditions than the size of your paycheck. Sure, money talks but autonomy sings. 

Money Meets Medicine, Jimmy Turner, Justin Harvey


Having control over your schedule can mean the difference between feeling like a cog in the wheel or a number on a balance sheet… and feeling like the captain of your personal and professional ship.

Flexibility in choosing which procedures you perform or having a say in patient load not only affects day-to-day satisfaction but also guards against burnout. 

For example, let’s talk about personal autonomy. Specifically, the ability to pursue side projects.  Is this allowed where you work? What if it is related to your medical degree? You may not have an interest in making income outside of medicine, but you never know when you will become like ~40% of doctors who pursue a physician side gig.

To ensure these aren’t mere afterthoughts during negotiations, make them front and center from the get-go. Remember, negotiating isn’t just about asserting what you want; it’s also about listening and finding common ground where both parties feel valued and understood. Learn how others have navigated these waters successfully.

Docs, remember: A fulfilling career hinges on work conditions, not just the paycheck. Autonomy and flexibility beat burnout. Make them key in your contract talks. #PhysicianLife #ContractNegotiations

Intellectual Property and Restrictive Covenants

Another important aspect of negotiating a physician contract is to make sure your rights are protected, especially when it comes to your ideas and future job opportunities. This is where understanding intellectual property ownership and restrictive covenants becomes crucial.

Some contracts might have clauses that put a leash on your ability to chase after other business ventures or claim ownership over your own innovations outside of work hours. Think of these as the non-compete agreements for intellectual property – they can seriously limit what you can do even after leaving an employer.

To navigate these waters safely, it’s essential to get familiar with what exactly these terms mean for you. Research suggests that understanding contractual nuances, such as non-compete clauses or intellectual property rights, can significantly impact professional freedom and future job opportunities,

Remember: While your employer may own the work you provide while under their employment, they should not own you. Said differently, they may own your medical practice and the revenue it generates, but they should not own your ideas, concepts, or any outside endeavor that generates income. That is yours.  Make sure your contract reflects that.

Diving into a physician contract? Watch out for clauses that limit your future moves and claim innovations or intellectual property. #medtwitter #PhysicianContracts

Navigating Contract Negotiations for Physicians

Disability Insurance for Physicians


Bargaining time? Remember this: everything’s on the table—including stuff like compensation and schedule flexibility which might just sweeten the deal enough to outweigh other shortcomings.

This is even true when you are told “This is a boiler plate contract. No one ever changes anything.” I’ve seen terms changed. Even in that situation.

If negotiating feels like trying to perform surgery on yourself without anesthesia, remember professional help from a lawyer familiar with medical contracts can make all the difference between a good deal and a great one.

Negotiation isn’t just about asking for more money—it’s advocating for conditions that align with your long-term goals. The key here is to simply point out the obstacles or hurdles you have prior to feeling comfortable signing the contract.  When you do this, you help the “other side” become a problem solver who is working on the same problem as you. You now have a common goal, and will begin to feel like you are on the same team.

The key lies in preparation: arm yourself with knowledge about standard practices in physician contracts so when it comes time to discuss terms, you’re ready to negotiate. And stand your ground. Keep pointing out the hurdles you have until they are addressed. You will be surprised how often you have the leverage in a negotiaton, even when it may not feel like it.

Diving into your first physician contract? It’s more than just the salary. Get savvy about malpractice policies and severance terms to secure your future. #PhysicianContracts #CareerGrowth


So, we’ve journeyed through the complex world of physician contracts. From malpractice policies to severance terms and beyond, it’s clear there’s a lot to consider.

Navigating these agreements isn’t just about salary. It’s about securing your future, both professionally and financially.

Remember: Knowledge is power. Understanding every clause can turn a good deal into a great one.

Talk things out. Negotiate for what matters most to you – be it flexibility, autonomy, or financial security. You worked to get to where you are, and you deserve to live a personal and professional life you love. Don’t settle for less.

Physician Disability Insurance

Are you ready to live a life you love?