The following post is part of a series on physician contracts
Non-competes are restrictive clauses that are found within many physician contracts. Unfortunately, they can drastically impact where a doctor is able to work and how they practice medicine. Before you sign any contract, look to see if it contains a non-compete clause and make sure you understand all the nuances around it.
What are non-compete clauses? Non competes are stipulations in contracts that prevent you from “competing” with your current employer by working for one of their competitors if you were to leave your job. They prevent you from working for a competing organization or health system within a certain radius for a particular time frame to prevent you from taking away any business form your current employer. For example, if you are a psychiatrist who decides to work for a large health system, the non-compete clause in your contract may state that if you leave your current job then you cannot practice psychiatry within a 20-mile radius of that employer for the first 2 years after you leave.
Why do they exist? Non-competes exist because employers have discovered that many patients like their doctors. In fact, patients tend to be more attached to their doctor than to the health center or clinic that they go to. Because of this, if patients find out that their doctor is leaving the current practice or hospital to work at another location nearby, the patient may follow the doctor to his or her new location. Health centers and hospitals don’t want to lose patients, so many of them put terms in place, like a non-compete clause, to prevent doctors from leaving the practice, taking patients with them, and becoming their direct competitors.
Why don’t doctors like them? It is rare for a doctor to work at one place for the entirety of their career. They may want to switch jobs for an increase in pay, more work/life balance, a change in family priorities, a job promotion, etc. Non-compete clauses restrict this. If a physician is already settled in a city that they love, non-competes clauses may require them to move to an entirely different location in order to continue to practice their specialty. If a non-compete states they can’t work within a certain radius for a certain length of a time, then a physician may not be able to take a better job in the same city and may be forced to move away or have a long work commute in order to avoid being sued for violating this clause. Many doctors feel as though non-compete clauses keep them stuck in jobs they may not like, getting paid less than they are worth.
What can doctors do to change it? Many doctors have encouraged others to refuse to sign contracts that contain non-compete clauses. They argue that no other profession tends to have this sort of restrictive language in its contracts and believe if physicians collectively refused to sign contracts with these clauses then the clauses would be removed entirely. Other doctors disagree. They feel as though trying to eliminate noncompete clauses altogether is a lost cause and instead encourage doctors to negotiate better terms. They suggest shortening the length of time in the non-competes, lessening the radius, or having the clause eliminated altogether for doctors who have not yet built up their patient practice or who have worked for their employer for a certain length of time.
My point? Be aware that non-competes clauses exist and try to eliminate them out of your future contract. If you cannot remove the non-compete clause, then be sure to negotiate more favorable terms.
8 Things to Negotiate Besides Salary
The following article is focuses mainly on physician contract negotiation
Whether we are considering a new job or up for review at our current place of employment, there are several things we should negotiate. Many of us focus solely on salary, but there are other things we should be sure to negotiate as well:
1. Benefits and Insurance: One of the first things to consider besides salary is benefits. For physicians and other young professionals with college degrees, student loan forgiveness may be one of the top things to look at. Some jobs offer direct loan forgiveness. Other jobs qualify for federal loan forgiveness through the public service loan forgiveness program. Be sure to see if either is offered at your job. Along with loan forgiveness, also look at retirement matching. Retirement matching is when your employer gives you extra “free” money to invest in your work retirement accounts. They may “match” the amount of money you invest up to a certain amount, which can add up to tens of thousands of dollars per year. I’ve seen some jobs in which the salary was $10-$15K less than another place but the retirement matching was so good that it more than made up for it. Another benefit to look at is malpractice insurance. Ensure that your job covers you if a patient or client tries to sue and that the insurance in place will cover you for claims made while you work for the organization AND even after you leave.
2. Sign-on bonus: One of the initial bonuses doctors get when they sign their first attending physician contract is a sign-on bonus. There are many nuances involved with a sign on bonus that doctors should be aware of but in general, a sign-on bonus is a 4 to 6 figure amount of money that many businesses provide to newly hired doctors. It can be given in one lump sum or in smaller installments. It is usually structured as a loan that gets “forgiven” after you work at the company for a certain period of time. This free money can be great, but the first amount they mention is unlikely to be their best offer. Ask for more.
3. Productivity Increases: Along with a sign-on bonus, it is also important to inquire about productivity bonuses. Most places want you to be as efficient as possible since increased efficiency leads to increased profits. If you’re actively increasing the business’s revenue because of your efficiency, then you should get a share of the profits. Be sure to negotiate this ahead of time and be aware that the amount they offer may differ for people in certain specialties. Some places will pay you a flat salary until you hit a certain work productivity threshold. Other places will pay you based on productivity from the onset. There are even businesses that offer a set monthly pay but provide annual or semiannual bonuses to employees based on the total company revenue. The exact structure of the productivity bonus can differ. Make sure you understand what other folks in your profession are getting so you can ensure you are being compensated adequately for the efficiency you provide.
4. Vacation and Personal Leave: Whether you love your job or not, everyone needs periodic breaks to step away and recharge. Do not forget to negotiate paid vacation time. While 3 weeks may be standard at most places, who says you have to settle for average? Why not ask for more? Aim for 4 weeks or negotiate additional vacation time after you have been with the organization for a certain length of time. Many jobs like to lump vacation time and sick time together as “personal time off” but try to keep this separate if you can. If you or a loved one gets sick or diagnosed with an illness, you shouldn’t have to use all of your vacation time dealing with medical issues. See if you can get at least 5 days of sick time in addition to your vacation time. If you’re a parent or plan to be, be sure to ask about parental leave for the birth or adoption of a child. Although FMLA holds your job while you are out, you may not get paid during that time. Negotiating paid family leave is vital.
5. Work Schedule Flexibility and Expectations: Along with personal time off, it’s also important that you negotiate a healthy work schedule that allows you to be productive without causing you to burn out. Perhaps you decrease the frequency you are on call? Maybe you negotiate a 4-day work week. Or perhaps you consider starting and/or ending work a little earlier or later some days to accommodate your family needs. You have the power to create the work schedule you desire. Figure out what type of work schedule you want and negotiate for it. If you can articulate how you will maintain productivity with your desired schedule, employers will be more likely to consider your requests.
6. Automatic increases: I am amazed by the number of physicians and other young professionals who don’t get automatic raises each year at their job. Because of inflation, things get more expensive each year. If you don’t get a cost-of-living adjustment to account for inflation, then you may actually be losing money year after year. Cost-of-living adjustments may not be standard at many places, so be sure to negotiate that in the contract if you don’t see it. It may also be wise to negotiate general productivity targets or a longevity increase. The goal is to get an automatic increase in pay after working for the organization for a certain length of time, like 3 years, as well as an automatic increase for bringing in “X” amount of revenue for the company. These types of automatic increases help you continue to be paid your worth over time and ensure that people hired after you don’t start off making more than you.
7. Licensing and Continual Education: As physicians, this is an important expense to inquire about. State medical licenses (to practice medicine), DEA licenses (to prescribe medicine), and board certifications (to maintain your medical credentials) can cost thousands of dollars in fees. It’s standard that the business pays for these expenses so if you don’t see it in the contract, ask for it to be added. Along with getting these fees covered, most medical societies require you to stay up to date on new medical treatments by doing a certain amount of continual medical education (CME) each year. Ensure that your job provides you with an adequate amount of CME funds to attend conferences and programming that provide these CME credits.
8. Autonomy (Intellectual property and non-compete clause): A surprising number of physicians do not have autonomy over their work. Don’t let that be you. Ensure that your intellectual property (ideas, products, or services that you create) are yours and not the job you work for. Be sure that you have the freedom to do other projects and work at other places outside of your job should you choose to do so. Lastly, watch out for non-compete clauses. These phrases in contracts prevent you from doing similar work at a nearby organization if you were to leave your current job. As you can imagine, they can cause a huge problem because they may require you to uproot your entire family or drastically increase your work commute if you were to quit your job since these non-compete clauses prevent you from getting another job at a different location in the same city. Try to avoid non-competes if you can.
Was this helpful? Do you plan to negotiate these things in your physician contract? Are there other things you plan to add?