Dr Rebecca T, a Cleveland-based perinatologist, had always been interested in high-risk pregnancies. During her ob/gyn residency, she decided to specialize in perinatology and began looking at potential employment early in her fellowship. But the other fellows discouraged her.
“They told me that the opportunities in subspecialties were very limited and I should take the first offer I received,” said Dr T.
When she received an offer from a large regional health system, she was ready to jump at it. “But then one of my attendings suggested that I have my contract reviewed by a lawyer or legal expert.”
Dr T turned to Justin Nabity, CFP, CLU, ChFC, founder and CEO of Physicians Thrive, an advisory group based in Omaha, Nebraska, that helps physicians manage and protect their money.
“Justin encouraged me to go for what I wanted without fear that the offer would slip through my fingers,” Dr T said. “The recruiter made an offer, Justin told me I should counter with a higher amount, and that’s what they ended up giving me. If not for that input, I would have settled for the original offer.”
Dr T’s initial reflex is common, as reflected in a recent survey of physicians conducted by Medscape. Respondents were asked whether they had accepted a salary offer for a desired job without asking for a higher amount. Less than half (42%) said they had accepted the amount offered without further negotiation.
Don’t Be Afraid to Negotiate
Nabity said that in his experience, physicians are “often timid and shy and don’t want to rock the boat and risk losing the contract or come across as greedy, pushy, or high maintenance. This is why they accept whatever is offered — especially in the first contract, which is where most of the problems start.”
Coaching and legal advice can help change that mindset and provide the tools to begin the negotiation process.
Attorney Dennis Hursh of Physicians Agreement Health Law, a firm based in Pennsylvania, agreed that a common concern is that negotiating will backfire and the offer will be withdrawn. “In all of my years of experience, I’ve never seen negotiation backfire or heard an HR [human resources] person ask, ‘How dare you challenge our offer?’ and then retract it,” he said. Hursh is also the author of The Final Hurdle: A Physician’s Guide to Negotiating a Fair Employment Agreement (Advantage Media Group, 2012).
Tracy Clarke, chief human resources officer, Kitsap Mental Health Services, a large nonprofit organization in Bremerton, Washington, has been in healthcare for almost 20 years and has previously worked in a physician-owned multispecialty clinic. According to Clarke, physicians are negotiating more than they used to, and she has come to expect it from them.
“I want to reassure candidates that it doesn’t put me off if they come with counteroffers or requests. I don’t see them as ‘demanding,’ and I won’t withdraw an offer just because the physician wants to negotiate for a higher salary or other types of compensation,” she said.
“What turns me off isn’t when physicians negotiate but rather when they haven’t done their homework and don’t provide specific data to support their position and request,” Clarke said. “It’s really hard to negotiate with someone who is arbitrarily picking a number and has nothing to back it up. Pay structure and practices of the academic and nonprofit sectors are typically very different from those of health systems and physician-owned practices.
“The bottom line is, do your homework and be prepared to have a well-educated discussion around compensation,” she said. Having good data is a “good negotiation tool both for new graduates and for someone who is well established.”
Do Your Homework and Come Prepared
A cornerstone of good clinical practice is that any treatment approach must be backed by solid, reliable evidence. Negotiation is no different.
Clarke said that when considering a physician’s compensation, she “leans heavily on the data. Is the physician’s request at or above median level? How aggressive is the physician in his or her role? How many patients is he or she seeing, compared to others in the specialty?”
As a starting point in obtaining solid data, there are many sources of salary and compensation data. Among them are Medscape’s Salary Explorer tool and Medscape’s Physician Compensation Report 2020. Hursh also recommends that physicians turn to the Medical Group Management Association.
Hursh suggests “coming to the table with figures about the median salary and productivity bonuses of a physician in your region of the country, who’s in your specialty, who has approximately the number of years of experience you’ve had, and who’s employed in the particular type of setting you’re being hired for, such as a large health system or a small group practice.”
He warned that it’s not always possible to get “very granular” with the available data. For example, instead of looking at compensation of physicians in Pennsylvania, you might have to look at the “North Atlantic region,” which would include New Jersey and Delaware. If you are in a subspecialty, there might not be sufficient regional data, so you might have to look at nationwide figures.
According to Nabity, there are pros and cons, strengths and weaknesses to each physician compensation survey. His company reviewed many top physician compensation reports.
Learning How to Track Yourself
Clarke said that she looks at the productivity of the position when considering physician compensation. “For example, neurology and primary care levels will be very different, so what in general is our benchmark of productivity? What are we shooting for? How quickly can the person we want to hire recoup those dollars and get to the point were they are paying for themselves?”
To that end, figures regarding other physicians in your specialty, region, and practice setting are important, but it’s equally important to know your own individual worth, according to Nabity.
“Pay should be based on revenue collection and quality of care,” he said. “So what physicians need to do from the very first day they start their job is to track their metrics, including how many patients they have seen and how many procedures they have done, their work RVUs [relative value units], and how those compare to their peers. That way, on the anniversary of the contract, they will know if there is room to negotiate or expect an increase in their compensation.”
This information can be obtained by asking the person who hired you or their supervisor, he noted. If that does not get you far enough, you can reach out to the practice manager or the person responsible for managing the books and records, such as the accountant or tax preparer. Information should be provided to you on a monthly basis.
He urged physicians not to be “dissuaded from pursuing this, even if you might be the first physician to request it. That way, you’re not showing up blind to the negotiation, with the employer in complete control of all the facts, data, and information.”
Are Some Specialists in a Better Bargaining Position?
Historically, specialists were in a stronger position to negotiate, compared to primary care physicians, because there was “a greater shortage of specialists such as pulmonologists, neurologists, gastroenterologists, emergency medicine physicians, and surgeons,” said Clarke.
However, that’s starting to change, she said. “Since primary care providers are now in short supply as well, they have more negotiating power than they used to have.”
She noted that when physicians seek work in “less popular and attractive areas, such as very rural communities that have more difficulty recruiting physicians, then physicians of all specialties are in a greater position of power, and employers are more willing to dig deeper into their pockets to attract people, which could mean larger signing bonuses, loan forgiveness, or a higher base compensation.”
Over a third of Medscape respondents (38%) reported being either “apprehensive” or “very apprehensive” about negotiating their compensation. Many Medscape respondents reported being “neither confident nor apprehensive” about it.
If you’re well prepared, however, your apprehension will abate.
“When you go into your negotiation meeting with hard data, your attitude can be, ‘If you don’t think I’m a median-quality physician who is worth a median compensation, why are you hiring me?’ Of course, I’m not suggesting that you say that aloud to the recruiter, but it can boost your inner confidence in negotiating for that salary,” Hursh said.
Nabity recommends developing a relationship with individuals in the HR department as well as with the practice manager, the accounting department, and the supervising physician, if relevant. “It’s about relationships — basic human interaction, respect, kindness, courtesy, and knowing when to back off.”
Cultivating and honing these relationships can help physicians understand more about the people with whom they will be negotiating — a process Nabity describes as “developing emotional intelligence.” He likened this “emotional quotient (EQ)” to an “intelligence quotient (IQ),” noting that just as physicians develop an intuitive sense of how to develop a bedside manner and navigate patient interactions and communications, they also need to fine tune the ability to navigate negotiation.
To that end, Nabity advises face-to-face meetings — preferably in person or via video, if necessary, due to the pandemic — rather than negotiating over the phone. “Then you can read each other’s body language. Is the person you’re negotiating with getting annoyed, so you’re getting a signal to back off? Or do they seem to be on board?”
Strength in Numbers
Dr Martha P, a primary care physician based in Washington State, has practiced in the same group since she completed her residency. “But the practice went through a lot of changes, from initially being a small private group practice to being bought by a larger organization, which then was acquired by another large organization,” she said. This necessitated multiple rounds of negotiation each time the practice changed hands, as well as on an ongoing basis since then.
Dr P reports that she and her 29 co-practitioners “did everything as a group,” so she never had to negotiate on her own. Within the larger practice, there were five other family practice physicians who asked one particular physician to serve as their spokesman in the negotiation process.
“We all trusted him [the spokesman], and, in turn, he checked in with us. He is very good at negotiating with higher-ups, and although we haven’t gotten everything we wanted, he has helped us get some concessions.”
Nabity calls this approach “strength in numbers,” which can be particularly helpful for physicians who lack confidence in their negotiation skills.
This approach can be valuable for other reasons as well. “If a group of physicians band together to negotiate, it strengthens their request, and they can emphasize the importance that their request will have to the overall benefit of the organization,” he said.
“You can say, ‘As physicians on staff, we want to make sure the organization is healthy, and we feel that our request not only benefits us but also the organization as a whole.’ Framing it as what’s in the best interest of the organization makes it a win-win situation, not only for you as an individual physician but also for your practice and the organization as a whole.”
What If You Don’t Get What You Ask For?
What if the organization is unyielding and does not grant your request for a higher salary?
Clarke encourages physicians to look at the total compensation package, not only the salary. “As a human resources officer, I know that there is sometimes no ‘wiggle room’ in the base compensation, and I can’t budge from the number I offered.
“So when that happens, I look at what else I can do to accommodate the physician. For example, can I increase the sign-on bonus, offer more in relocation, or even loan forgiveness options? Can I increase or offer other benefits or other perks? For younger physicians, I’ve noticed that they particularly appreciate flexible schedules or the opportunity to work part time to allow for more family time.”
Respondents to the Medscape survey reported asking for several concessions if their request for a higher salary was turned down. Of those who requested other concessions, 10% asked for extra vacation time, 9% asked for more flexible hours, and 12% asked for a signing bonus.
Other concessions reported by respondents were requesting higher sign-on bonuses, and a few requested a higher company match for 401(k) savings.
Hursh said that asking for a higher 401(k) company match is unlikely to work because it is a tax-qualified plan and all employees are treated the same. However, he encouraged physicians to explore other options. For example, you can request an increase in the signing bonus or try to extend the guaranteed salary period, even on a reduced basis (eg, 80% of the first-year salary), so that your compensation the second year you’re in practice no longer depends exclusively on productivity.
If you are in a private group practice, Hursh recommended including potential partnership, which is a “huge consideration,” in the discussion. “But approach it delicately,” he cautioned. “You may want to simply ask under what circumstances partnership will be considered, how they consider the volume price, and how they calculate the buy-in price.”
He noted that, in his experience, smaller private practices tend to be more flexible with concessions and partnership possibilities.
Additional “bargaining chips” Hursh recommends include the following:
Increased relocation allowance (or added to signing bonus)
Retention bonus at the end of every year
Increased CME allowance ― agree to add board certification/recertification fees separate from CME
Increased time off
Reduced amortization time of bonus forgiveness
Provision of a cell phone and usage plan
Paying dues for AMA/AOA and state and local medical society
Paying dues for a specialty society
Implementation or enrichment of a productivity bonus
Compensation for midlevel supervision (or request midlevel support)
Provision of mileage allowance for trips between offices and hospital
Assistance with medical school debt
A monthly stipend while in training (if relevant)
Reduction in region of noncompete
Compensation for excessive call
A higher portion of tail coverage premium paid when the physician leaves the institution or practice
If in private practice, faster consideration of partnership
Less on-call time (or higher recompense for calls)
Flexibility of schedule or part-time work
Consult a Lawyer or Coach
“Physicians leave medical school with detailed information about diseases, diagnoses, and treatments, but they don’t receive legal training or learn how to evaluate a contract,” Nabity said. “A contract is a legal document, and the best person to review it is a lawyer.”
For example, “We recommend that physicians try to get several offers and do multiple interviews, which they can then use as leverage in their negotiations. ‘I’d rather work with your organization, but your offer doesn’t match what I have been offered by another opportunity. Would you be willing to come up on your offer?’ It can be nerve-wracking to ask this question, but we help our clients develop the confidence and skills to do so.” Nabity estimates that a majority of physicians are more effective in negotiation after learning skills.
How Well Do Women Negotiate?
Some research suggests that women are less likely than men to initiate or engage in negotiation and that this reluctance can impede their professional advancement and have adverse financial consequences.
These discrepancies can be mitigated when women have greater experience in negotiation and more information to bring to the table.
Clarke said that, in her experience, “male providers tend to be more likely to come to the table willing to negotiate, even if they don’t know the business side very well.” But that has changed recently, and she is seeing more women ready to step into the negotiation process.
Beyond gender per se, personality may play a role in the discrepancy between men’s and women’s negotiation styles, according to Nabity.
Dr T agreed. “In general, I’ve observed that women tend to have a harder time negotiating, compared to men. But in my case, it’s also my personality and my need to please people that get in the way.”
Taking Care of Yourself
All the experts agree that physicians shouldn’t be afraid to be assertive in negotiations and that they should remember that they are worth whatever they’re asking for — and much more.
Of course, “worth” can’t be measured in RVUs or dollars and cents. The “worth” of a physician is priceless. “Medicine attracts amazing people, and the types of values, priorities, and passions that physicians have lead them to keep giving and giving to their patients, often to a fault, and not looking out for themselves enough,” Nabity said.