Contract negotiations can be a source of stress for both new and veteran physicians. Although many physicians zero in on monetary compensation, it is not the only element to consider in optimizing the benefits of a contract. Almost all physicians are exempt employees (do not get paid overtime) who get paid a base salary. According to writer Jonathan Ford Hughes, physicians should focus on total compensation, as opposed to just monetary compensation, during contract negotiations. This means considering factors like bonuses, paid time off, or profit-sharing distributions.
Physicians should examine readily available physician salary data, like that offered in US News & World Report’s Physician Salary report, in an effort to gain a sensible perspective of what they should be earning. Many physician salary reports break down data into specifics, such as location and specialty, making it clear for physicians to determine their appropriate salary. Hughes likens this transparency of information to a game of chess, in which both parties can see the entire playing board. However, he suggests turning contract negotiations into a game of poker by playing into the realm of total compensation. In other words, when negotiating with employers, physicians should consider that employers may not be telling them how other physicians’ might have negotiated certain benefits into their contracts.
Another key factor in contract negotiations is the current state of the US workforce, which is evolving in every sector, including healthcare. Like other industries, the healthcare industry is struggling to retain workers. A New York Times article examining the effect of the pandemic on physician stress levels noted that COVID-19 exacerbated a pre-existing physician shortage, leading many wavering physicians to choose retirement. Hospitals and group practices are facing a pressing need for physicians. This need may allow for physician leverage in contract negotiations.
Negotiable factors include perks like bonuses. According to an American Medical Association report, physicians often get bonuses based on patient quantity and/or quality of patient outcomes. Hughes suggests that physicians take advantage of this information by using performance-based pay to negotiate the percentage of compensation. Another negotiable perk is paid time off. While it will not result in a greater base salary, more paid time-off means more paid non-working hours. Given incentivization to steer clear of increasing healthcare premiums by keeping employees healthy, many healthcare employers are offering gym memberships as perks. Therefore, Hughes suggests negotiating either free or discounted gym memberships into a contract as well.