WASHINGTON, D.C.–Whether seeking to apply one’s medical training and expertise as a physician to private practice, academia, or industry, rheumatologists need to be aware of the fine art of negotiating contracts when seeking employment. Critical to effective negotiation is knowing what you want, focusing on building and maintaining relationships, and getting any verbal agreement down in writing. These were among a number of negotiating tips offered by a panel of experts during a session titled, “Contract Negotiations for Physicians,” at the recent 2012 ACR/ARHP Annual Meeting, held here November 9–14. [This session was recorded and is available via ACR SessionSelect.]
Negotiating a Career in Private Practice
Physicians interested in a career in private practice have a number of options to choose from, including a partner in private practice, a solo practice, a member and/or partner in a single-specialty group practice, or a member and/or partner in a multispecialty group practice. According to Herbert S.B. Baraf, MD, clinical professor of medicine at George Washington University School of Medicine in Washington, D.C., the best earning potential for rheumatologists is in a single-specialty practice, as demonstrated by data that show physicians in single-specialty settings receiving the highest compensation compared to their peers in other private practice settings, such as solo practice or multispecialty practice, or hospital or academic settings.
When considering a position in private practice, Dr. Baraf emphasized the critical importance of knowing the type of position desired and the need to be honest with oneself in determining it. Key questions to consider are whether one wants a full-time or part-time position and whether the choice of career is consistent with the life plans of one’s spouse, as well. Along with compensation, other important issues to consider are whether you like the people and the facility of the specialty group that you are considering joining.
“These questions become increasingly important as you move toward partnership, because this is a marriage,” he said.
Dr. Baraf emphasized that there are two stages to contractual relationships when negotiating a position in a private practice group. The first contract will be an employee agreement that is for a limited period of time, about one to two years, and can be considered an “engagement” period with the specialty group. What you really want, he said, is to move on to the second agreement that “marries” you to the group as a shareholder. Partnership, he emphasized, is the prize.
Because partnership is for the long term, he emphasized viewing the interview as a two-way process. Just as the potential employer is evaluating you, you also should be evaluating the interviewer and asking yourself questions such as:
- How well am I being treated?
- How do people in this group treat each other and the staff?
- What is the retention rate?
Once you know you want a position with a specific group and are offered a contract, Dr. Baraf emphasized the need to select an attorney to work with who will be accessible and who can review and explain the contract as well as act as mediator between you and the specialty group.
Negotiating a Career in Academia
Fundamental to negotiating a career in academia is knowing what you want in terms of research space and monies as well as time devoted to clinical, teaching, and service duties, said Marc C. Hochberg, MD, MPH, professor of medicine and epidemiology and public health at the University of Maryland School of Medicine in Baltimore.
As research is typically what drives physicians to seek an academic appointment, he emphasized the need for negotiating upfront sufficient protected time during the first two to three years of getting the appointment to get research underway before assuming significant clinical, teaching, and service duties. He emphasized that typical start-up packages offered to cover research space, laboratory equipment and staff, and salary usually last three years and are not long enough to determine success in academia. He therefore urged negotiating longer sustenance packages (and urged using the term “sustenance package”) that will provide sufficient funding for up to ten years.
Although compensation is generally lower in academia than in private practice or industry and is determined by set ranges within specific institutions, he emphasized the importance of addressing specific questions that may affect salary such as:
- What part of the salary is paid for by grants?
- Is the salary guaranteed indefinitely or for a finite period of time?
- What fringe benefits are provided, such as health insurance and tuition remission?
- What is the retirement system?
Overall, Dr. Hochberg emphasized that negotiating for a faculty position is a business deal that needs to be handled as such. To this end, he urged physicians to practice interviewing prior to the actual negotiation, to dress appropriately for the interview, and to get any offer down in writing.
Negotiating a Career in Industry
Although careers in industry once were the road less traveled for many physicians, they are increasingly being chosen as alternative careers, said Gregory Dennis, MD, head of immunology, US Medical Affairs at UCB, Inc., in Smyrna, Ga.
Physicians who choose to go into industry can pursue different career paths that offer specific positions and compensation packages. A general research track includes positions in laboratory investigation (i.e., drug discovery, preclinical trials), a clinical research track includes positions necessary to conduct clinical trials (i.e., medical directors, monitors, safety assessment), and a medical affairs track includes positions necessary to pursue U.S. Food and Drug Administration review and large-scale manufacturing (i.e., late-phase research that is field based, medical information, outcomes research, and pharmacovigilance).
Dr. Dennis focused his talk on negotiating the compensation package once an offer is made. After ensuring that the offer is in writing, he emphasized the need to carefully review the package offered to identify any areas for improvement. Among the negotiable items, he said, are base salary, sign-on bonus, initial stock option or restricted stock award, start date, transition period, car rental, and moving expenses. He emphasized that the most important piece of the offer to make a well-informed decision is an understanding of the salary particulars. He highlighted key components of salaries that can be negotiated including the type of salary (i.e., stated annually, monthly, or both), frequency of receiving a paycheck, the timing of the salary review, and different types of bonuses, including a signing bonus and performance bonus. He recommended at least asking for a sign-on bonus and said that this could be quite substantial, depending on how much the company wants a particular person.
When negotiating these items, he suggested first investigating the compensation elements for persons in similar positions and emphasized the need to refrain from making strong demands. “A little bit of diplomacy goes a long way,” he said.
Items in the contract that are less negotiable or not open to negotiation include the annual bonus target, annual stock option/restricted stock award, annual long-term incentive cash award, and vacation period.
Although one may choose one track initially, Dr. Dennis emphasized that transitioning between career paths is possible. Overall, he emphasized that compensation in industry is commensurate with one’s skill set and is competitive with other endeavors requiring similar levels of expertise.
Mary Beth Nierengarten is a freelance medical journalist based in St. Paul, Minn.
