In this episode of BackTable ENT, Dr. Varun Varadarajan speaks with Michael Johnson, a business lawyer, about advice for negotiating academic and hospital employment contracts.

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SHOW NOTES

First, the doctors talk about the RVU system of compensation used by many hospitals and academic centers. They discuss what the price per RVU means and additional bonuses after the expected RVU goal is met. Michael adds that it may be beneficial to negotiate for more resources to earn more RVUs instead of negotiating more compensation, as the former strategy can lead to higher compensation. Additionally, he notes that subspecialty clinicians and surgeons have more leverage to negotiate their contracts if they are the first subspecialists in a large system. He recommends that physicians start negotiating at least a year in advance of their anticipated start date. They also discuss the compensation models based on productivity versus a flat salary.

Then, the doctors explain how to handle verbal offers from academic centers. Michael recommends talking to multiple employers at a time when starting the hiring process in order to weigh multiple options. However, he recommends physicians to be upfront about where they are interviewing with each employer. He notes that some academic institutions will send a letter of appointment, and not an employment contract, but physicians can still negotiate for firm deal breakers in the letter of appointment. He then explains different clauses in the contracts, such as restrictive covenants (non-compete and non-solicit clauses), non-disclosure agreements, and malpractice tail insurance. He advises against comparing salary offers to the MGMA compensation data, as different jobs require different obligations. Instead, he recommends making sure that the compensation matches the job obligations.

Finally, the doctors end the episode with reviewing common employer tactics, such as pressuring doctors to sign contracts quickly and only offering negotiation on the base salary and signing bonus. Michael explains that it is worthwhile to engage in higher levels of administration in the negotiation process if necessary.

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RESOURCES

Michael Johnson’s Website:

https://www.michaeljohnsonlegal.com/physician-contracts/

Michael Johnson’s Instagram:

https://www.instagram.com/physiciancontracts/

Episode 45- Private Equity: Savior or Existential Threat?

https://www.backtable.com/shows/ent/podcasts/45/private-equity-savior-or-existential-threat