Negotiating Your Second Contract: Know Your Worth

By V. Seenu Reddy, MD, MBA

December 14, 2018

Cardiothoracic surgeons change jobs for a variety of reasons, including economic factors, family needs, and practice opportunities. When embarking on your second job, it is critically important to “know your worth” and negotiate an appropriate contract.

Many first contracts have very little room for negotiation, as the physician does not yet have a proven track record in practice on which to base productivity or quality. In addition, starting salaries at many academic institutions have set ranges based on specialty and faculty rank or year of service. In private practice, initial contracts often are based on a combination of salary support and a ramp-up period needed to establish one’s practice. These caveats may not apply in the same manner for a second contract.

Assess Your Strengths

The first thing you should do is make a list of what you bring to the negotiating table. For example, if you specialize in minimally invasive surgery, robotic procedures, aortic surgery, or ventricular assist devices/transplants, then these skills must be highlighted. Clinical programs built around these skillsets can create large, recurring, and likely growing revenue streams for a hospital or health system. This means that your salary can be based on your integral value to that program.
    
These programs also require the direct input and oversight of a physician with the associated skillset, providing the opportunity for you to monetize this leadership with directorship pay or program development and oversight compensation separate from clinical productivity.

Bring Specific Details

You also must know your current level of productivity and quality. You cannot enter into a negotiation without having information on your case mix, case volume, and clinical outcomes. Important, but not critical, is to have numbers such as work Relative Value Units (RVUs), total collections, or gross billings. These numbers give the new entity that you are joining a benchmark against which to compare when calculating salary ranges.

You cannot enter into a negotiation without having information on your case mix, case volume, and clinical outcomes.

Manage Your Expectations

Many surgeons do not realize that the era of astronomical salaries for our specialty are long gone and mostly cannot be recaptured. Salary will vary by the type of contract you’re considering (guarantees versus productivity-based), the additional services you can provide (service line oversight, program development), and the quality outcomes you can create (incentives). Understanding the widely available salary ranges for your region of the country and practice type will help inform your negotiation starting point. 

Ask for Additional Support

The other important things to evaluate and negotiate in the second contract are termination clauses (for and without cause), contingencies for material changes in the practice not related to you (e.g., loss of fellow physician, loss of major referral sources due to shift in health systems), and pay for call. It also is important to include support for continuing medical education (CME) activities, dues, and subscriptions, as these items can quickly add up to thousands of dollars.

Time off is often stipulated and will need to be balanced with expectations of bonuses and payments for work above a set level (RVU-based, program growth-based, or volume-based targets). If quality is to be measured and will impact compensation, then your contract should be very clear on what those metrics and targets are and how your pay will vary based on the results.

Contract negotiations are just that—negotiations. The second time around often puts you in a stronger negotiating position than the first.

Contract negotiations are just that—negotiations. The second time around often puts you in a stronger negotiating position than the first. You likely have more or better skills, you no doubt are more experienced than coming out of training, and you have a better idea of your “worth.” 

The key is to keep in mind both an ideal contract and one with areas in which you can compromise. Remember to make the other party extend the first offer, and know that some aspects have more room for negotiation (call pay, directorships, CME support) than others (guaranteed salary amount, RVU rates). Finally, reach out to your colleagues, peers, and those a few years ahead of you to ask questions, compare notes, and get ideas.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of The Society of Thoracic Surgeons.


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