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Everything You Ever Wanted to Know About Physician Contract Negotiation

This post is a Q&A style discussion about physician contract negotiation between me and Jon Appino from Contract Diagnostics. Contract Diagnostics is the only firm in the country with a 100% focus on assisting physicians in the understanding and negotiating of their employment agreements and compensation structures. They are a sponsor of the blog, but I do NOT receive any referral fees. This post is purely for your (and my) education!

Contract negotiation as a physician is such an important aspect of your financial well-being

Your contract will set the parameters of your work as well as how much you will or can make. In case you weren’t aware (kidding…), your income plays a big role in your personal finances…whether we like it that way or not.

I’ve already shared my experience negotiating my first contract as well as the 9 steps that I think are most important in securing the best physician contract for you. It’s a big part of why I love my job so much.

However, I wanted to pull in an expert to share some more insight into the all-too-important topic. This is especially timely since, at the time of this writing, we are getting into contract negotiation season for graduating residents and fellows. But, whether you are early-, mid-, or late-career, there will be super helpful information here!

Physician Contract Negotiation Q&A with Jon Appino from Contract Diagnostics

Can you tell me a little bit about your background?

Long story short!  

I started my first company at 17 years old (car stereos) and another at 20 (nutritional supplements in college). After choosing a corporate career over medicine (I have undergraduate degrees in Pre-professional Biology and Chemistry with minors in Psychology and Economics), I went to work for a few large and small pharmaceutical and biotech companies in various roles across the country.  I earned my MBA while in corporate roles.

After a decade working for these companies, Contract Diagnostics was created. It was born out of focus groups of physicians and MD/DO friends of mine.  We had them set the company up based on what they wanted (payments over time, morning, weekend and evening hours, and a simple online system).  I’ve been focusing all efforts since – almost a decade in!

Tell us more about the birth of Contract Diagnostics.

As I said above, it was out of need.  

I have a friend that is an oncologist. After having his contract reviewed by a local attorney, he was offered a redline version and told that the contract was ‘pretty good’.  

They had a a 12 minute conversation. That’s it. My friend didn’t understand what it said, just that is was ‘pretty good’ and the attorney had no comments on how the pay was, if the wRVU rate was competitive or not, and didn’t coach my friend in anyway on how to have the discussion with the employer.  

We have fixed all this with our unique system.  Our focus is on the education of our physician clients. We guide them based on industry standards, compensation trends, and their individual story.

Why should a trainee signing a new contract or an attending physician renewing their contract have it reviewed first?

There are countless reasons.  

I just have too many horror stories for those that didn’t understand their agreement or obligations during or after the employment.  

Physicians are not trained in this process and due diligence is vital.  Also, you want to make sure you are compensated fairly for the significant efforts that you have put in to get to your first attending position.  

We just spent 52 minutes yesterday with someone that had a 4 page agreement that he thought looked good. He almost didn’t have it reviewed.  There are so much these contracts say and often, so much they do not say.

How do you advise clients regarding compensation models (RVU, profit/loss, straight salary)? Do you think one is generally better or does it depend?

Its all dependent on their story.  

Many smaller practices are predominately collections/profitability based as are some common specialties (Plastics, DERM, ORTHO, OPTH).  Others are most common wRVU based such as hospital employees.  Yet other physicians are salaries or paid by the shift/hour.  

It’s so variable and each situation is unique.  

That is why we spend most of our time discussing compensation.  Not only what it says, but how they could discuss it with the employer.  It’s not always a ‘negotiation’ per se, asking for changes, but just an overall understand and setting expectations.   

What are some things that a physician joining a private practice needs to worry about with their contract? For example, things that may not be as relevant for someone joining an academic/employed position.

Depending on specialty private equity buy-outs are very important to understand.  Physicians joining private practices need to understand the salary and expenses and what the expectations are of them during their first few years ramping up. They need to understand what monthly reports look like (hopefully they get them!). Also, how they are paid on termination for post-termination collections (this is a fair thing to ask).  

Many private practices also have more risk than a hospital-based position (tail insurance, lower salary, more call, etc) so they need to understand all the risk involved in taking this type of position.   

Of course, it’s all different per specialty and region. It also varies based on the physician’s story with why they are interested in the position.  The group’s size and why they are hiring are all important variables.

What is the #1 mistake that you see physicians make in their contract negotiations?


Not understanding what is important or not asking the right questions.  Too many physicians are told ‘this is our standard agreement we are not making changes.’ This may be true.  It does not mean the physician doesn’t need to understand it and ask good questions about the agreement and/or job.  A redline version turned into the employer from an attorney is not the best way to go by far.

How can physicians get the best sense of what their peers are making?

Good data and good questions.  

Public data is often wrong and many surveys are a year behind (we have 2020 dataset now in January of 2021, which is based on 2019 data, pre-covid).  Our internal data is real time from those we have worked with.  Unfactored and unbiased. 

(Here is my guide to the 4 methods of defining your value as a physician.)

physician contract
Find a full comprehensive program detailing contract negotiation and so much more in my course, Graduating to Success!

Have you been able to successfully negotiate out non-compete clauses in certain contracts?


Of course all contracts and opportunities are unique.  It’s unfortunate but non-competes are a function of being a physician in most states.  When a physician is negotiating these they need to have the right questions – not ‘will you take out Section 10, the non-compete?’  

There are many ways the noncompete could stay in the agreement but be less risky to the physician depending on many factors (time employed, how the agreement ends, carve outs, etc).

What is one thing that you would improve about the physician contract negotiation process?

I would just say that physicians have a process, that they have a strategy.

I would say they need to have the agreement reviewed and then understand it. Not accept being told ‘it’s fine’ or ‘here is a redline version submit this to the employer’ from an attorney. I would tell them they need to know which questions to ask who at what time.   

I don’t know what percent have their agreements reviewed. Honestly, I feel that it’s around 40%.  If a physician uses a lawyer or a firm like Contract Diagnostics, I just hope they understand them and do the proper due diligence on an important decision like this.  

Even if is ‘standard’ or ‘non-negotiable.’

Tell us a little bit about the process of contract review once someone contracts your service.

Anyone can find information on our website.  They can call us anytime, submit an inquiry for information, or set up a 15 minute free call.  

If someone wishes to book a review they can do so on our website from any phone or work computer. It takes about a minute.  

We have made it so simple for anyone to contact us or work with us.  We understand how busy physician lives can be! 

All our packages are flat priced and some packages (the popular ones) allow residents/fellows to pay over time interest free. 

If you have questions about your contract or are interested in learning more about Contract Diagnostics, learn more on our Recommended page!

Also, if you are approaching job season or contract negotiation and are concerned about possible physician hiring freezes, here is a guide for you!

What do you think? Did you have your contract reviewed before signing? If you did, was it worth it? How can physicians work to optimize the contract negotiation process? Let us know in the comments below!

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    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected].

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