Michael TorneyCFP, J.D., LL.M. 

As a physician just starting your practice or switching jobs, you have a lot of financial considerations to consider.

One of the most important to-dos is signing a contract with your employer. How the heck are you going to get through that awful language in the contract offer you’ve been given?

The contract language is important. Your physician contract will determine your responsibilities, compensation and legal protections as you advance in your new career. It’s to your benefit to negotiate the best deal possible.

Why You Should Negotiate

It might feel strange to negotiate the offer you’ve been given. After all, you don’t want to appear ungrateful, and the group can pull their offer at any time and hire someone else. But you shouldn’t let this fear hold you back. When handled respectfully, negotiation is just a normal course of business from the employer’s end. In fact, many employers expect it.

Negotiation shows that you aren’t willing to settle for less than you’re worth. It indicates that you’re taking the offer seriously, and by doing so, the employer will take you more seriously in turn.

But it’s not all about image. Asking the right questions at the right time gives you important information about your future employer and where they may be willing to bend. As financial planners, we’ve seen several physicians stuck with contracts that leave them underpaid or with subpar benefits, usually because they simply didn’t take the time to ask for industry standard benefits and compensation.

You worked hard to earn your credentials. Don’t work for less than you’re worth!

What to Negotiate:

Physicians must analyze three areas to ensure they’re getting a fair deal:

  • Benefits
  • Legal Issues
  • Compensation

You might think that compensation will be your most significant area of negotiation, but the other two areas will likely carry more weight.


  • Call: Most physicians must take call. It’s important to evaluate how often, and long, you take call. Do all the physicians take their own call? Is the group saddling the newer physicians with most of the call duty or all the weekend nights? What if someone leaves the group? ◊
  • Vacation Time: Often overlooked, adding some vacation time into a contact will go a long way to helping avoid burnout. Think of this as adding some salary through benefits. Is their offer standard?
  • Tail Insurance: “Tail coverage” on malpractice insurance is usually an endorsement on a policy that allows a physician to extend his/her coverage after the cancellation or termination of a policy. It’s important to see if you will have to purchase your own policy or if the group will add you to their policy. Also, make sure you know all expectations on termination – it can get costly. (Well over $100,000!)
  • Retirement Plans: What retirement plans are available? Does the group make matching contributions or profit sharing contributions? Will you be limited in the amount you’re allowed to contribute? Is there a deferred compensation plan? What other savings vehicles are available?
  • Disability/Life Insurance: What insurance is offered for disability and what are the terms/limitations? Does the group offer the ability to purchase term life insurance at a discount? What term life insurance is included at no cost?
  • Health Insurance: Does health insurance start Day 1, or will the physician need their own policy for a certain period of time? It’s not uncommon to see physicians carry COBRA coverage until they are eligible for the group’s plan.

Legal Issues: 

  • Termination Clauses: Each contract will have information on how termination can legally occur and for what reasons.
  • Non-Compete Language: As hospitals acquire more private practices, the language of a non-compete becomes very important. Physicians need to ensure they have reasonable options for employment if they leave their group. Non-competes are challenging and different in each state, so physicians need to know their rights—regardless of whether they’re in a small group or larger hospital system.
  • Contract Language: Is the contract composed mostly of boilerplate copy with little input from an attorney, or is it a well-drafted document tailored to the group? They may not be willing to make changes, but that doesn’t mean you shouldn’t ask questions.


  • Compensation: This must be based on the practice type, geography and market. Is this a flat salary or production-based model? How are RVU’s determined? Is the compensation fair relative to other private groups? It’s not unheard of to see physicians underpaid by 30-50% because they didn’t do their homework on what the marketplace offers for their particular specialty. When you add in other challenges (such as gender discrimination), it’s clear why it pays to have someone review your physician compensation agreement.
  • Equity: Can you buy into the practice? What about buying into the building that the group operates in? Some groups require equity, while others are not quick to grant it. There are plenty of questions to ask before you commit your career to this group, so make sure you do your due diligence. You don’t want to have to restart the whole partnership process with a new group just because you didn’t ask the right questions this time around!

Tying It All Together

Negotiating a contract is like planning for your finances: it starts with your individual goals. For example, a physician who isn’t interested in equity or unlimited earnings potential has more wiggle room to negotiate better benefits. This is why it’s important to work with a qualified negotiation company who can listen to your individual goals and evaluate/negotiate your offer based on those goals. A little time investment now can produce huge benefits in the coming years for your compensation, stress levels and overall quality of life. Our final bit of advice is to find a firm that does thousands of these – not just a few here and there.

After all, you’ve invested hundreds of thousands of dollars in yourself. Shouldn’t your contract reflect that?

© 2023 Advisory services offered by Moneta Group Investment Advisors, LLC, (“MGIA”) an investment adviser registered with the Securities and Exchange Commission (“SEC”). MGIA is a wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. All investments are subject to a risk of loss. These materials do not take into consideration your personal circumstances, financial or otherwise.