Right now is an incredible time of the year for many residents and fellows. They are being wined and dined, and presented with impressive-looking contracts. Read this before you sign.
This article was co-written with Dennis Hursh.
Right now is an incredible time of the year for many residents and fellows. Many of you are being wined and dined, as you consider inking the contract in front of you.
Remember, you are a free agent. This is your time. You are Marshawn Lynch in the NFL. Go Beastmode, grab that ball from Russell Wilson, and squeeze every last concession you reasonably can while running across the end zone!
As you are looking at a contract, maybe you are wondering…
Is this the best I can get?
Am I leaving money on the table?
What are the pitfalls that other physicians have fallen into?
Who can I have review my contract? What can they do for me to get me the best possible deal?
It’s clear that many physicians don’t seem to know how valuable they are. Consider that, unlike virtually any other job, there aren’t usually 50 physicians vying for your spot.
If an employer has culled through the résumés, done some interviews and made you an offer, they're very interested in having you there. They've invested a lot of physicians’ time and probably a lot of money.
What we’ve found about working with docs in the financial planning and contract review worlds is that early in their career they tend to be trusting—perhaps too much so.
There’s no doubt that they are bright, they are super busy, and they just don’t have the time to address these kinds of concerns.
Most residents and fellows get stuck like a deer peering into the headlights. They're entering this last year of training and they say, "I'm going to be able to finally make some money and pay off some debt!"
They're overwhelmed with responsibilities and are used to being low person on the totem pole. What almost inevitably happens is that they just sign on the dotted line because they're so excited about the new job, the big raise, and the new opportunities.
After all, who can blame them? They’ve been making subsistence wages and suddenly they are signing a contract with 5, 6, or even 7 times what they are making now.
It sounds great. You can hear residents thinking, “What's not to like about it? What do I have to read? What did you say that salary was? Okay, where do I sign???”
Slow down for a moment and take time to understand each and every aspect of the contract. Make sure to be aware of what is there and what is not.
Here are 3 main areas that get neglected in most physician contracts:
1) Reviewing Malpractice Insurance. Does it cover you before AND after your employment? If not, what are your options?
2) Understanding Bonuses and Productivity. What model is being used? How are you splitting time between administrative duties and treating patients? How is the bonus earned?
3) Getting money for moving expenses or just for signing on. Is it upfront or is it reimbursement? Would they be willing to change it?
We will explore each of these 3 areas and pitfalls in our next article. Make sure to keep an eye out for that in the next 2 weeks.
The good news is that most provisions of that contract CAN be negotiated! Remember they wouldn’t have given that contract to you if they didn’t want you.
You are a free agent. Enjoy the process!
Allow yourself the time to savor each and every moment of the meal presented in front of you. Sip on that hardy red or sweet white wine, enjoy the world-class steakhouse, but don’t sign the contract until you’ve taken some time to negotiate.
Go Beastmode and run that bruising final yard to score the touchdown!
He is also the author of 5 Steps to Get out of Debt for Physicians, The Insurance Guide for Doctors, The Tax Reduction Prescription, and his new book, The Freedom Formula for Physicians. You can contact him at (800) 548-1820, at firstname.lastname@example.org, or visit his website at www.DavidDenniston.com/Physicians to get 3 free articles on financial issues specific to physicians.
Dennis Hursh is a physicians’ lawyer focusing on physician employment agreements. He literally wrote the book on this topic - The Final Hurdle — A Physician’s Guide to Negotiating a Fair Employment Agreement. You can contact him at (866) DOC-LAW1, at Dennis@PaHealthLaw.com, or visit his website at www.PaHealthLaw.com.
Dave Denniston, Chartered Financial Analyst (CFA), is an author and authority for physicians providing a voice and an advocate for all of the financial issues that doctors deal with.