Some hospitalists, emergency medicine, anesthesia, critical care, trauma ACS, many inpatient-only specialists, and other shift-based physicians in employment contracts believe they are not able to negotiate. THAT’S NOT TRUE! There are many considerations at play and fair game for negotiation, and we see many opportunities to improve these contracts even when the employer says they don’t negotiate.
At its core, physician contracts really boil down to three big questions:
- Work Obligations – What are you required to do?
- Compensation – What and how are you paid to do it?
- Exit Strategy – What are the legal and financial penalties relating to exit?
In this blog, we will discuss how to evaluate and negotiate work obligations in a shift-based context, specifically the number of hours and shifts you’ll be required to provide. Importantly, we also believe it’s vital to understand the number of hours or shifts your employer must provide to you – an important issue often left out of first-draft employment agreements. Our experience at the firm is that a common reason shift-based physicians leave their positions is a lack of clarity and changing expectations around work obligations. You deserve clarity on how your work expectations are defined so you can prepare financially!
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Shift and Hourly Work: How Is This Defined?
Here is a lightly edited sample clause from a recent hospitalist contract we worked on that highlights how vague this can be defined in a physician employment contract:
Physician agrees to provide clinical services to Employer for no less than 170 hoursper month. For all day-shift hours performed between 6 AM and 10 PM, Physician shall earn $148.00 per hour (“Day Rate”). For all night-shift hours performed between 10 PM and 6 AM, Physician shall earn $168.00 per hour (“Night Rate”). Physician shall provide clinical services at Hospital A and Hospital B (“Primary Locations”) and shall provide additional services at other locations as requested by Employer. Employer may increase or decrease shift length based on clinical volume and needs.
Let’s break down each portion of this section and discuss ways you could consider negotiating:
Minimum and Maximum Services: Two Way Street
In our example, the first sentence speaks only to your minimum monthly expectation, but it provides no minimum number of hours the employer must provide! It can be very easy to overlook this because your interview process almost certainly suggested that they have ample work and may even be understaffed. However, if that were to change or during times of the year with fewer inpatients, this contract would allow the employer to offer you fewer hours and pay you less overall. You likely want to know you’ll always receive a minimum income, so this can be very problematic. Here is a proposal that would also require the employer to offer you at least the same number of hours.
Physician agrees to provide clinical services to Employer for no less than 140 hours per month, and Employer agrees to provide Physician the opportunity to perform at least 140 hours per month. For all day-shift hours performed between 6 AM and 10 PM, Physician shall earn $148.00 per hour (“Day Rate”). For all night-shift hours performed between 10 PM and 6 AM, Physician shall earn $168.00 per hour (“Night Rate”). Physician shall provide clinical services at Hospital A and Hospital B (“Primary Locations”) and shall provide additional services at other locations as requested by Employer. Employer may increase or decrease shift length based on clinical volume and needs.
Additionally, this section is silent on what happens if they need you to work more than 140 hours in a month. If, for example, the census is super high or they experience a dip in the number of hospitalists available to provide coverage, they may want to mandate that you work as much as they need. Some employers approach this as requiring the group, as a whole, to provide whatever volume of work the employer needs, and they do not feel responsible for obtaining appropriate staffing to ensure this work falls within reasonable volume norms. Additionally, we find it rare that an employer will mandate that you cannot work more hours. If you want more work and they have more work, I’m unaware of any contract provision that would prevent two mutually agreeing parties from doing more work for more pay. Here is another addition you may want to consider to address this:
Physician agrees to provide clinical services to Employer for no less than 140 hours per month, and Employer agrees to provide Physician the opportunity to perform at least 140 hours per month. Any hours greater than 140 hours per month shall only be by mutual agreement. For all day-shift hours performed between 6 AM and 10 PM, Physician shall earn $148.00 per hour (“Day Rate”). For all night-shift hours performed between 10 PM and 6 AM, Physician shall earn $168.00 per hour (“Night Rate”). Physician shall provide clinical services at Hospital A and Hospital B (“Primary Locations”) and shall provide additional services at other locations as requested by Employer. Employer may increase or decrease shift length based on clinical volume and needs.
There are also middle-ground approaches. If the employer really needs some flexibility here, this clause could read something like this: “Employer shall have the option to require up to 160 hours per month based on practice needs, but any hours greater than 160 hours per month shall only be by mutual agreement.” You and the employer can get creative here, and this is an area where having an experienced lawyer in physician contracts on your side can be helpful.
Scheduling: Don’t Assume!
This example is also void of any discussion about when you will be required to work. You may experience important promises during the interview process, like “… this is a 7 on 7 off schedule and we don’t require anyone to do any nocturnist shifts unless they want to.” However, that is NOT in this sample contract! That might be how they currently handle things because staffing and needs are currently aligned, and they have a nocturnist on staff. But if that were to change, you would not be protected. If you wanted a 7/7 with no nights, here is how you may want to ask for it:
Physician agrees to provide clinical services to Employer for no less than 140 hours per month, and Employer agrees to provide Physician the opportunity to perform at least 140 hours per month. Any hours greater than 140 hours per month shall only be by mutual agreement. Physician shall only be required to work day-shift hours and shall follow a 7-on-7-off schedule. Any change to this schedule shall only be by mutual agreement. For all day-shift hours performed between 6 AM and 10 PM, Physician shall earn $148.00 per hour (“Day Rate”). For all night-shift hours performed between 10 PM and 6 AM, Physician shall earn $168.00 per hour (“Night Rate”). Physician shall provide clinical services at Hospital A and Hospital B (“Primary Locations”) and shall provide additional services at other locations as requested by Employer. Employer may increase or decrease shift length based on clinical volume and needs.
There are some middle-ground options. For example, I have worked into hospitalist contracts that the night shift hours shall not be greater than 10% of total hours worked. Something like the following would be protective: “Physician’s work hours shall primarily be day-shift, and night shift hours shall be no greater than 10% of Physician’s work hours in any given quarter.” A nightcap clause would be something I’d want if I were a hospitalist, as I love my beauty rest, lol.
Negotiating Hourly Rates
When negotiating compensation in physician employment agreements, we typically see requests fall into three main categories:
- The macro compensation data (we often utilize MGMA) suggests a market rate of $X, and we ask that you match that rate.
- I have another competitive offer that offers a rate of $X. We ask that your offer be modified to match that rate.
- I would like $X rate.
While #3 is the easier one to ask, it may be the least defensible in a negotiation. That’s why we find tons of value in considering macro compensation data and interviewing with multiple options.Leverage increases as you increase the information you can use in those discussions.
Quick Note: MGMA provides ample data on total compensation and total work RVU production, but does not speak to per-shift or per-hourly rates for physicians. I wish they did, but I like that OffCall is building this.
Negotiating these is not particularly complicated. In this example, it would be a simple matter of changing the rates. Additionally, consider asking for higher rates for unattractive shifts, like holiday pay or excess shift rates. Here’s what that may look like in a negotiation:
Physician agrees to provide clinical services to Employer for no less than 140 hours per month, and Employer agrees to provide Physician the opportunity to perform at least 140 hours per month. Any hours greater than 140 hours per month shall only be by mutual agreement. Physician shall only be required to work day-shift hours, and shall follow a 7-on-7-off schedule. Any change to this schedule shall only be by mutual agreement. For all day-shift hours performed between 6 AM and 10 PM, Physician shall earn $148.00 per hour (“Day Rate”). For all night-shift hours performed between 10 PM and 6 AM, Physician shall earn $168.00 per hour (“Night Rate”). For federal holidays, Physician shall earn a 25% premium rate. Physician shall provide clinical services at Hospital A and Hospital B (“Primary Locations”) and shall provide additional services at other locations as requested by Employer. Employer may increase or decrease shift length based on clinical volume and needs.
Negotiating Work Locations
Work locations are low-key one of the most commonly negotiated clauses in physician employment agreements, particularly with employers that have multiple locations and when physicians are shift-based. In the sample agreement, the employer lists two locations… but that’s essentially meaningless because they also require you to provide, “… additional services at other locations as requested by Employer.” This whole sentence could be rewritten as, “Physician shall provide clinical services wherever the Employer wants,” because it does not lock in any location. Most hospitals are part of systems that own multiple hospitals, often spread out in ways that make commutes or call problematic. Here is an example of a negotiated clause that locks in Hospital A and Hospital B.
Physician agrees to provide clinical services to Employer for no less than 140 hours per month, and Employer agrees to provide Physician the opportunity to perform at least 140 hours per month. Any hours greater than 140 hours per month shall only be by mutual agreement. Physician shall only be required to work day-shift hours, and shall follow a 7-on-7-off schedule. Any change to this schedule shall only be by mutual agreement. For all day-shift hours performed between 6 AM and 10 PM, Physician shall earn $148.00 per hour (“Day Rate”). For all night-shift hours performed between 10 PM and 6 AM, Physician shall earn $168.00 per hour (“Night Rate”). For federal holidays, Physician shall earn a 25% premium rate. Physician shall provide clinical services at Hospital A and Hospital B (“Primary Locations”), and any other work locations shall only be by mutual agreement. Employer may increase or decrease shift length based on clinical volume and needs.
Here, you could sign this contract with enforceable protection that you can only be made to work at Hospital A and Hospital B. This might also be helpful under the noncompete clause. Many noncompete clauses say that a X-mile bubble is created by every location that the physician worked for the employer during employment, and voluntarily agreeing to work at a new location could add to your noncompete! We sometimes negotiate work locations primarily because of the noncompete language.
There are also middle-ground approaches if the employer needs some flexibility. Here’s an example: “Physician shall provide at least 90% of their clinical services at Hospital A and Hospital B (“Primary Locations”), and the remaining 10% shall be at other locations as requested by Employer.” It just depends on your situation, but consider taking their interview promises about work locations and building it into the contract.
Interview Advice: I feel it’s very important for you to have ample clarity during the interview process about what you’re required to do. They are often motivated to hire you during this process, and may be more willing to open up about this. Using those interview promises as contract leverage can be a good idea.
Shift Length Guarantees
Lastly, I see some contracts that allow shift-based or hourly-based physicians to be ‘cut’ and not paid out if there is a low census. Imagine showing up for a shift and planning on 10 hours of pay, but the employer decides to cut a couple of physicians because the numbers are low. You should not be treated like servers here, and I typically recommend negotiating if that happens. Asking about this during the interview process is often helpful. Here’s an example of a negotiated clause:
Physician agrees to provide clinical services to Employer for no less than 140 hours per month, and Employer agrees to provide Physician the opportunity to perform at least 140 hours per month. Any hours greater than 140 hours per month shall only be by mutual agreement. Physician shall only be required to work day-shift hours, and shall follow a 7-on-7-off schedule. Any change to this schedule shall only be by mutual agreement. For all day-shift hours performed between 6 AM and 10 PM, Physician shall earn $148.00 per hour (“Day Rate”). For all night-shift hours performed between 10 PM and 6 AM, Physician shall earn $168.00 per hour (“Night Rate”). For federal holidays, Physician shall earn a 25% premium rate. Physician shall provide clinical services at Hospital A and Hospital B (“Primary Locations”), and any other work locations shall only be by mutual agreement. Employer shall not increase or decrease a scheduled shift length.
Work Obligation Details Matter
Big picture, I highly recommend that shift and hourly physicians pay close attention to how their work obligations are defined. Details discussed during the interview process are typically not fully incorporated into the contract, and it’s your job to identify those differences and consider negotiation. Thoughtful evaluation and negotiation will help you in one of two ways:
- If they say no to your request, you now know that you cannot rely on that interview promise when making your final decision. For example, if not being on nights is a high priority, but they say no to your days-only request, you now have clarity on what you can expect.
- If they say yes to your request, that can be exceedingly helpful in the future if they want to change their mind… and they often do. You can use your negotiated contract to push back against future changes in expectations. Employers might still want to pull some **** here, but you have much more leverage.
Don’t assume that your shift-based or hourly-based contract means you should not thoughtfully evaluate and negotiate your contract. There’s so much you can do here. We’d be happy to discuss and strategize with you.
