Negotiation Tips to Help Every Physician Get Paid Fairly with Dr. Glenn Loomis

“You think it's all roses and sunshine, and once you get into a situation, it turns out to be a horror show.”

Dr. Glenn Loomis is a seasoned healthcare leader with decades of experience as a physician, residency director, medical group president, and health system executive. Currently a board member at KVLR Capital Partners and Chief Medical Officer at Dapper Care, he specializes in physician compensation models, practice management, and leveraging technology to improve healthcare delivery.

In this special three-part series of How I Doctor, Glenn speaks with Offcall co-founder Dr. Graham Walker about the ways physicians can maximize their earnings and start getting paid fairly. This second episode digs deeper into employment contracts.

Employment contracts are critical in defining a physician’s career path, compensation, and working conditions. However, navigating the fine print and understanding what’s negotiable can often feel overwhelming. Here are the four things every physician should know when evaluating or renegotiating a contract:

1. Contracts Are for When Things Go Wrong

“A contract is meant to be negotiated and then put in a drawer and never seen again, right? It only comes out if there's a dispute, so contracts are really only for if there's a problem at the end of things.”

Glenn emphasizes that contracts are designed to protect both parties when the relationship hits a roadblock. While salary, benefits, and call schedules are important, the less obvious clauses like termination provisions, intellectual property rights, and non-compete agreements can often hold the most significance when problems arise.

Having a healthcare attorney review the contract to identify potential “poison pills” or clauses that could pose challenges in the future are key. As Dr. Loomis points out, “At least you'll know what's in there and where the poison pills are.”

2. Understand What’s Negotiable

“If you're going to be part of a four-man group somewhere, then almost everything is negotiable. If you're joining a big for-profit group, they're going to give you the contract and say, take it or leave it."

Glenn explains that the size and structure of an employer can significantly affect the flexibility of contract negotiations. Smaller groups may allow for more customization, while larger organizations often stick to standard terms. They are often concerned about how making changes for one employee will impact the contracts of all employees.

However, Glenn says there is “opportunity to advocate for yourself in the clauses and appendices.” So if your contract states that you’ll be on call once every four weeks, but doesn’t specify what happens if you’re called in more “because of need,” it’s possible physicians could end up working more without extra pay unless that’s added to the contract.

3. Be Aware of Non-Compete Clauses

“It's totally state-dependent and it is still pretty common in many, many places. Because of the FTC ruling and then the overturn by the courts, and now it's on appeal again. So it'll probably take us two or three or four more years to know how it's really going to shake out.”

Non-compete clauses can restrict where you practice after leaving an employer. While some states, like California, ban non-competes altogether, others enforce them more rigorously. The Federal Trade Commission (FTC) is actively reviewing non-compete agreements, but for now, these clauses remain a frequent component of physician contracts.

Glenn suggests that you discuss non-compete terms openly with potential employers. Ensure you understand the scope of restrictions and consider negotiating reasonable boundaries if possible.

And remember they are not only used by large, for-profit hospital systems. Glenn says that even physician-run groups may require them “because they don't want to train somebody up and then have them go across the street and compete.” In many cases, a conversation about non-competes can lead to mutual agreements that work for both parties.

4. Don’t Overlook Renegotiation Opportunities

“My belief is that physician compensation plans are typically good for only about five or six years anyway.”

Renegotiating your contract is an opportunity to align your compensation and terms with your performance and market trends. Glenn highlights that employers are often willing to accommodate high-performing physicians to retain talent.

Therefore, it's essential to track your productivity, patient satisfaction scores, and contributions to the practice. Use these metrics to advocate for adjustments to your contract during renegotiation periods. Glenn’s experience is that “if you're one of my top performers…I'm going to probably give as much as I can to you because I want you to stay.” Employers value fairness internally and externally, so demonstrating your worth can lead to a better negotiation.

Physicians often focus on patient care but may overlook the importance of securing a fair and balanced employment contract. Understanding the nuances of contract terms and negotiating strategically can prevent future headaches and ensure a sustainable work environment.

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Transcript

Glenn Loomis:

Sometimes you think it's all roses and sunshine, and once you get into a situation, it turns out to be a horror show.

So I would recommend that you have a lawyer look at the agreement upfront and tell you what things are problematic.

Graham Walker:

Welcome to How I Doctor where we're bringing joy back to medicine. Today we're diving into part two of my conversation with Dr. Glenn Loomis where we'll tackle employment contracts. We're covering the red flags to watch out for, and sharing negotiation strategies to help you secure the best terms, even if you're planning to stay right where you are.

Glenn is a board member at KVLR Capital Partners focusing on acquisitions in the healthcare space, as well as chief medical officer of Dapper Care. A startup that combines telehealth and AI to make high-quality, affordable healthcare accessible to everybody. Welcome to the show, Dr. Glenn Loomis. Thanks for being here.

From the highest level, whether a doctor's negotiating with their current employer or they're looking at a new opportunity, do you have a list in your head of the most important items they should look out for when they're looking at a new contract or a renewal of a contract?

The Role of Contracts When Disputes Arise in Healthcare

GL:

There are a list of things that we can do and that we should be looking at in contracts. Some are very obvious, right? Things like salary, benefits, time off, hours, call arrangements, all that kind of stuff. But sometimes those are the things that are the least important when it comes to really how you're going to use a contract.

Because remember, a contract is meant to be negotiated and then put in a drawer and never seen again, right? It only comes out if there's a dispute, so contracts are really only for if there's a problem at the end of things. So in those cases, then the less obvious things are the things that come out and bite you.

They're things like term and termination provisions, like use of an arbitrator versus going to court. Intellectual property rights if you're in the type of practice where you might be inventing something. Confidentiality clauses, non-competes, attorney fees, those things.

All of those kinds of nitty-gritty, I call it the legalese, those are the things that really, ultimately matter most when you get into a dispute.

GW:

It almost seems like if you are more worried that this may not be a good fit for you, you should be even more cautious about those things.

Like if it's going to be an arbitration, what the IP situation's going to be like. Because like you said, it's when things go sour that you pull out the contract, and see what you signed and agreed to on both sides.

GL:

I would tell you though, that sometimes you think it's all roses and sunshine, and once you get into a situation, it turns out to be a horror show. So I would recommend that you have a lawyer look at the agreement upfront and tell you what things are problematic. Most contracts are pretty standard. They're pretty boilerplate and they pretty much say the same things.

But some of them have these little poison pills and good lawyers, good HR lawyers or good health attorneys know what those poison pills are. So they're going to look for them and they're going to point out to you, "Hey, this is a pretty good contract, except it's got this one clause in here that is really problematic." Now, you may or may not be able to get that honed.

We can talk about that, but at least you'll know what's in there and where the poison pills are. Or sometimes they're going to come back to you and say, "I wouldn't sign this regardless how much money they were paying me. This is a terrible contract, it's totally one-sided." That tells you something about the organization as well, right?

GW:

Yeah. I was just going to ask, say your lawyer recommends you cross out one of the terms or change it to 30 days instead of 90 days. Do you have a sense of how commonly those modifications are accepted by an employer?

Are they totally fine with it? Or is that going to, they're going to put their foot down and say, "Nope, this is the standard contract. We never change things"? Most people say everything's negotiable, but is that true with employers of doctors?

GL:

I would say that's not really true with employers of doctors. I would say that in general, if you're going to be part of a four-man group somewhere, then almost everything is negotiable. If you're joining a big for-profit ED group, they're going to give you the contract and say, "Take it or leave it."

Or if you're joining me in a 500-person medical group owned by a health system, I'm going to tell you that the boilerplate language at the front, I'm not changing anything in it. But the appendices that have things like what benefits you have and those kind, there is some wiggle room there usually, but not in the boilerplate language.

Because everybody in the whole group has that, and if I change it for one, I'm going to have everybody at my door saying, "Well, you changed it for Joe." Well, he wasn't supposed to tell anybody. Well, they always tell somebody so it gets out, and so you can't have that. So you ultimately have to hold your ground on certain things.

GW:

Yeah. So for the larger group, most of the contracts going to be pretty boilerplate. Probably not many or no changes will be accepted.

But some of the nuance maybe around the work that you and your specialty is doing that's maybe controlled locally or by the chief level, is probably up a bit more for negotiation or modification?

GL:

Exactly. If you want to say like, "Hey, I just want it stated in here that if I have to do call more than one in four, I'm going to get extra pay for that." That's a perfectly legitimate thing to ask for. Because my experience is I used to have a rule in the medical group if I have one of anything, I have to have four of them.

Because more call than one in four gets to be pretty onerous for people, and so sometimes I only had two of those, but then I'm paying those people extra because they're doing extra call. So there are things like that that you can negotiate. You have to understand that the boilerplate probably is not.

It's still good to have your lawyer look at it and point out where there are problems or where there are potential problems, so at least you know they're there. But you should be realistic about whether you're going to get any satisfaction from pointing that out to the other side.

GW:

I like that call example. You could imagine a contract might say you're on call one every four weeks or something like that. And a lawyer might point out, "Hey, it actually doesn't specify what happens if you're on call more than that."

So just having little extra what-if scenarios, I think, that's probably an area where a lawyer might be able to help advise you too, especially one that looks at physician contracts frequently.

GL:

Yeah, absolutely. Or even whether it's in the language of the contract, it allows them to say, "Well, I know it says one in four, but because of need, you have to do more than that."

And oh, by the way, we're not going to pay you extra for that. All of that comes together. Part of it might be in the boilerplate and part of it might be at the end, so you want to make sure it all is covered.

How Non-Compete Clauses Impact Physicians’ Career Choices

GW:

Yeah, that makes sense. Glenn, let's talk a little bit about non-competes. They're a constant topic of scrutiny in medicine. In some states like here in California, they're just not permitted at all.

The FTC and Commissioner Khan have been talking about them a lot, and even there's some rumors about carve-outs in healthcare unfortunately. Are you seeing that continuing to be a common issue, a common, standard clause in many contracts?

GL:

Yeah. It's still, it's totally state-dependent and it is still pretty common in many, many places. I will say that because of the FTC ruling and then the overturn by the courts, and now it's on appeal again. So it'll probably take us two or three or four more years to know how it's really going to shake out. At the moment, I think it's totally up in the air.

And I think even if you have one, your organization is probably going to be a little bit low to enforce it. Because we don't really know if later on it's going to come back and they're going to say, "Well, it wasn't enforceable, and now you owe this person a big chunk of money." It's probably one of those things that if you decide to leave somewhere, you should just sit down and talk with them and say, "Okay, let's have a talk."

I'll agree not to poach Mary Sue and all my old patients, but I'm going to set up shop across the street. And if they happen to come to me, then that's I'm not going to take the list, but if they come across, then you're not going to come after me for that. There are ways to get around these things.

Even in physician groups where we've been totally run by the physicians, they still want non-competes because they don't want to train somebody up, especially specialists. Specialists don't want to train somebody up and then have them go across the street and compete. So it's a tough conversation to have, but I think right now from a legal perspective, it's really up in the air.

GW:

It's a great point. We often think of the maybe it's the health system or the health insurer that wants to make very challenging terms in a physician contract.

But sometimes it's just another physician that wants that too.

GL:

Yeah, absolutely. If you look at big, single specialty groups, some of them have the

worst contract terms. Because again, there are certain things that give them an advantage.

Renegotiating Contracts: When and How to Advocate for Changes

GW:

Glenn, let me ask you one more contract question about renegotiation. I've been at my job for over a decade now, but when it comes to renegotiation, are you seeing physicians saying, "Hey, I've been here five or 10 years, I'd like to renegotiate my contract, or I'd like to renegotiate parts of it"?

Or are people just sticking with what they've had for a long time, and not pulling the contract out and looking at if there are ways to renegotiate parts of it?

GL:

I think people do try to do that. Again, I think you're stuck a little bit with what the group, again, with that size issue. The flip side of that though is I will say that it comes down to how valuable are you, right? Again, if I'm running a group, if you're one of my top performers, you're a top producer, you have highest quality, you have great patient satisfaction.

I'm going to probably give as much as I can to you because I want you to stay. If you're always the lowest productivity or your patients' satisfaction is the 10 percentile, I'm probably going to just say, "Sorry, Charlie," on that one. So it really does depend a little bit. I'll say though that my experience and my belief is that physician compensation plans are typically good for only about five or six years anyway.

If you look at all big groups, they go through a revamp of their physician comp about every five or six years. Because by then the docs have... Physicians are really smart people, and they're especially smart at figuring out how to get the most pay for the least amount of work as we all are. We should be, right? Yeah, right? So they're really good at that.

So by the time five or six years goes along, everybody has tweaked out their practices so much to take advantage of every little loophole, that you have to go back and say, "Okay, we're going to redo this a little bit." Yeah. So I think that this renegotiation happens on average in most organizations, every five or six or seven years anyway, without you actually having to even kick it off necessarily.

GW:

That's interesting. And then the organization is trying to essentially find a new recalibration or a new way to reset. They're probably not trying to give people a massive pay cut across the top.

But they're trying to reformulate things so that I would imagine the employer is trying to slow the rate of growth of pay in response to all the little loopholes and the changes to Medicare billing and RVUs, and everything that have changed over the past five, seven years?

GL:

All of those things, and also I think it really comes down to, I think most organizations truly, even if they don't appear to on the surface, they truly do want to try to pay people fairly, at least fairly across the group. So sometimes whatever happened within Medicare, for example.

The specialist might be getting paid way more now than primary care, and we've got to do a make-up to figure out, or we're going to lose all our primary care docs or vice versa. There's all kinds of reasons why these things get kicked off, but it usually comes down to some fairness of how things are split in the group.

GW:

Yeah. And I would imagine any good physician HR benefits person would be trying to focus on the fairness of it.

There's lots of ways you could, of course, define fairness, but trying to make things seem as equal or as fair as possible.

Otherwise, you're going to have your doctors revolt and walk, and you won't have any doctors left that'll work for you.

GL:

Yeah. In any compensation plan, you have to do two things. One, keep it internally fair between all the different parties, and two, it has to be fair in the marketplace.

If everybody in my organization is getting paid 20% less than across the street, I'm going to have nobody left. Eventually, you have to be within a range.

You can be a little less or a little more, but you can't be way out of whack. That fairness issue in both regards has to be in balance.

GW:

Yeah, it's that internal and external benchmarking piece.

GL:

Yes, absolutely.

GW:

A big thank you to Dr. Glenn Loomis for joining us for part two of this insightful three-part series. In our final episode, Glenn will dive into everything you need to know about interviewing for a new role and ensuring it's the perfect fit. You won't want to miss it. Stay tuned. If you want to learn more about the ways doctors should rethink their finances, visit Offcall.com/podcast.

Make an account on Offcall to confidentially share your details about your work, and sign up for our newsletter where you can hear more about the latest trends we're seeing in physician pay. You can find How I Doctor on Apple, Spotify, or wherever you listen to podcasts. We'll have new episodes weekly. This has been and continues to be Dr. Graham Walker. Stay well, stay inspired, and practice with purpose.