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Supplement Article

Finding Your Ideal Job and Negotiating Your Contract

Where to Get the Information and Numbers You Need to Know

Henley, M. Bradford MD, MBA

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Journal of Orthopaedic Trauma: September 2012 - Volume 26 - Issue - p S9-S13
doi: 10.1097/BOT.0b013e318264218d
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Despite years of postdoctoral training, graduating residents and fellows often find themselves ill prepared for the process of interviewing for jobs and for evaluating and negotiating an employment contract. Without adequate preparation, an understanding of business/medical practice management and contract law, the process can be both daunting and overwhelming.

The process of finding, evaluating job opportunities, teaching the skills required for practice evaluation, and contract negotiations is beyond the scope of this article. Instead, my goal is to provide you with the resources, tools, and references (eg, web sites), which will allow you to negotiate a successful path through this process. The business of medicine is ultradynamic given the recent changes in the health care marketplace. The best “Numbers” available today will likely be inaccurate tomorrow. Thus, my goal is to provide you with the best sources for these “Numbers” so that you may have access to the most up-to-date information when you need it. Much of this information is available for free on the web. However, some of the most coveted “Numbers” can only the purchased. Despite this restriction, many practice executives, hospital administrators, and residency and fellowship program directors may have access to purchased data, and they are usually willing to share with you. Asking colleagues to share information with you is usually successful, even if it is purchased or “proprietary.”

The American Medical Association (, the Medical Group Management Association (, your state medical society, and the American Academy of Orthopaedic Surgeons (AAOS; have many reference materials that will assist you in your search and deliberations.


In the practice management and the resident sections of the AAOS web site, I recommend that you look at the following articles (web pages) to help you prepare for orthopaedic practice.

You should become familiar with the different types of orthopaedic practices that are available (multispecialty group practice, single specialty group practice, solo or shared practice, academic practice, hospital-based practice, HMOs, locum tenens, military medicine, administrative medicine, etc). Each of these practice models and their governance structures have specific benefits and liabilities, and some practice settings and structures serve orthopaedic trauma surgeons better than others.

Solo practice is a good option for trauma surgeons; however, it presents some unique operational challenges. The AAOS has an overview and a checklist if you are interested in this option.

There has been a recent trend toward hospital affiliation and hospital employment, especially for orthopaedic trauma surgeons. The AAOS has 2 recently published monographs pertaining to hospital employment and hospital alignment:


After you have decided on the geographic location, the type(s) of practice(s) you are most interested in and arranged for interviews, the next step is to narrow down your choice to 1 or 2 entities. After an initial interview, if you and the practice(s) are both interested in each other and in pursuing an employment agreement, the first step is usually signing a letter of intent. This is a nonbinding missive to which each party affixes their signature and symbolizes their intentions to pursue a binding legal contract. The AAOS provides an overview on the process of negotiating physician employment contracts and the common elements of these contracts.

Dr. Ryan M. Dopirak has written an outstanding article “Evaluating Orthopaedic Practice Opportunities.” It contains many things you should consider when evaluating a practice. He has written it in a Q&A format, and many of the questions he poses are ones that you might ask in your interviews and deliberations. The article can be found in several differing formats:

After 1 or 2 interviews, I believe that the first real step in evaluating a practice is to listen to your intuition, your gut feelings, and the feelings of your spouse or partner. Every practice has a personality. Some are intensely competitive, and “eat what you kill” capitalistic with little revenue and expense sharing. Others are geared more toward socialism or even communism where everything, including expenses and revenues, is shared equally. There is not one size that fits all, and it is best to match the practice's personality to that of your own.


There are 3 simple rules in negotiating employment agreements.

  • Rule #1—If it is not in writing do not count on it.
  • Rule #2—A written contract is essential.
  • Rule #3—Do not forget rules #1 and #2.

The corollaries to these rules are as follows:

  • Do not be satisfied with oral agreements and handshake.
  • If you want something, put it in the contract.
  • If you do not ask for it you will not get it.

As courses in negotiations, contract law, and business principles are rarely taught in medical schools, residency, or fellowship, consider consulting a health care attorney if you are uncomfortable with the process. Another option is to use an intermediary, advisor or negotiator if you feel that the process of negotiation may foster ill will or if reviewing, understanding, and revising contracts yourself is confusing or causes you anxiety.

The hiring process is one of the few times you have real power and leverage. This is something rarely appreciated by job seekers. Once hired, an employee loses a lot of clout. Even though employers are usually the ones writing employment agreements, one of the principles of contracting is reciprocity. Any contract should provide both parties (the employer and the employee) with equal or at least equitable protection. Reciprocity also means that if you give up something of value, you should get something of value in return; thus, if asked to sign a contract with a protective covenant, the employer should offer you something in return.

Contract Elements

The common elements of an employment contract include the description of the job and its purpose. For trauma surgeons, it is important to clarify specific responsibilities such as the frequency you will be on call (weekdays, weekends, and holidays) and how cases will be triaged to you and from others when you are and are not on call. You might also want to stipulate access to any specific or specialized operating room practice equipment that you deem necessary to meet the obligations of your job and specialty. The document should state specifically whether you are being hired as an employee, an independent contractor, or in another capacity. The term of the contract refers to beginning and ending dates of employment, and the potential of contract renewal and its terms. It is important to understand the criteria for renewal, partnership, and termination. In most orthopaedic practices, partnership is usually offered after 1–2 years of successful employment during which time the new recruit and practice prove their value to each other. In regard to termination clauses, contracts generally have 2 types: “termination for cause” and “termination without cause.” Specific reasons will be given for “termination for cause” [such as nonadherence to the standards of professionalism, loss of hospital privileges, loss of insurance participation (eg, Medicare), loss of malpractice insurance coverage, or loss of medical licensure] whereas “without cause” is when either party may initiate termination of the relationship by providing 30 or 60 days advanced written notice.


Of great interest to physicians, especially those with looming student loan repayments is the compensation package. The components of a compensation package often include a salary, a bonus and/or a productivity incentive, and a benefits package. Some practice groups, especially those that are more capitalistic, allow the new employee to draw a salary of the new hire's choosing, which is a loan to be repaid from future revenues after expenses have been deducted. For trauma surgeons, it is important to understand how you will be compensated for uninsured and underinsured patients requiring trauma and fracture care while you are on call, and how indigent patients will be managed when one of your partners is on call and assigns them to you for care (Box 1).

Recruiting Incentives for New Hires Cited Here

According to Merritt Hawkins, in 2010/2011, the “low, average, and high” incomes offered to recruited orthopaedic surgeons were $300,000; $521,000; and $700,000, respectively. Note that these figures are for “base salary or income guarantee only and do not include production bonus or benefits.” Merritt Hawkins also collects data on signing bonuses, relocation, and CME allowances in physician recruitment incentive packages, though these are not reported by specialty. In 2010/2011, 76% of physician searches offered a signing bonus and the “low, average, high” amounts were $5000; $23,790; and $200,000, respectively. In my experience, orthopaedic signing bonuses vary from $10,000 to approximately $75,000 and correlate inversely with the attractiveness of a practice and its location. CME/CME pay is offered by 96% of recruiting organizations with “low, average, high” values of $500; $3194; $10,000, respectively. Merritt Hawkins notes that a relocation allowance was offered by 92% of recruiting organizations ($1000—low; $10,454—average; $85,000—high), and 1–3 years of educational loan forgiveness was offered by many also. In 2011, more than half of Merritt Hawkins information came from hospital-based search assignments. Hospital systems are generally able to offer new recruits higher starting salaries than private practice groups because they are able to share revenue from the profits they realize from their other services (eg, laboratory, imaging). In contrast, physicians in private practice may be able to supplement their clinical practice compensation packages with passive income derived from investments in ancillary services (eg, ASCs, advanced imaging centers, PT/OT, DME distribution). These separate income streams are generally excluded in most compensation surveys, though your ability to participate in these opportunities once you transition to partnership should not be overlooked when evaluating a job.

New employees typically are offered a recruitment package that is more robust than that offered to an employee at the time of contract renewal. Perquisites offered as part of recruitment include a signing bonus, moving expenses, marketing expenses, start-up office expenses (such as desk, chairs, filing cabinets, computer hardware and software, business cards, stationary, announcement cards). There are several organizations that provide benchmark information on recruiting packages, compensation, and productivity data for physicians by specialty and sometimes subspecialty (eg, orthopaedic trauma).

Organizations Benchmarking Faculty Practice Plans and Academic Compensation

When comparing compensation numbers for established orthopaedic surgeons, it is important to read the survey instrument to understand what compensation components are included or excluded in the reported figures. Generally, compensation data refer to the total value of the compensation package including the costs of benefits provided by the employer. Below are a short list of the current “Numbers.”

No title available.

The AAOS conducts a census of its members approximately every 2 years. This document has a plethora of information and includes data pertaining to demographics and geographic density of orthopaedic surgeons, work hours, productivity, and compensation. The most recent survey was in 2010 and was published in June of 2011. “Orthopaedic Practice in the U.S. 2010,” is available in the “members-only” section and may be accessed at


The most common perquisites offered as part of an employment agreement include paid vacation, licensure examination fees, board certification/recertification fees, professional liability (malpractice) insurance, life insurance, health insurance, disability insurance, retirement plan contributions, Continuing Medical Education (CME), and dues and subscriptions. Some contracts offer reimbursement of appropriate entertainment expenses, automobile expenses, cell phone/PDA expenses. I suggest that you ask for source documents for policies such as health insurance, life insurance, disability insurance, and the retirement plan so as to better understand the benefits you may receive.

Specific Clauses

Although a thorough discussion of specific aspects of standard contracts is beyond the scope of this article, I will address several of them briefly.

Access to the OR and Assistants

Although not always stipulated in a contract, you should understand how access to block OR time is assigned and the availability of daytime trauma rooms. Will you be assisted by a physician's assistant, nurse, or no one for emergency trauma cases while on call and patients needing surgical care the next day.

“Tail” Coverage

Regarding liability insurance, in your initial contract it is best to work out an exit strategy as to who will be paying for “tail” coverage should you ever terminate your affiliation with the hiring entity. If such coverage is not specified as a benefit, I would recommend that the premium be shared equally if your termination occurs before partnership (in private practice) or is mutually agreeable to both parties.

Restrictive Covenants

These are becoming more common, especially in desirable or competitive markets. Restrictive covenants will limit the scope of your practice to a specific type of medicine or orthopaedic subspecialty; it will restrict you from establishing a practice to a defined (and reasonable) geographic distance from your organization's current site(s) of practice; it will be enforceable for a finite amount of time (usually 1–2 years). Most noncompete clauses will also specify damages or restitution you will need to pay the organization should you choose to violate this clause though many contracts may also stipulate that other remedies (eg, litigation) could be pursued too. If you sign a contract with a restrictive covenant, get something of value in return as you are giving up your right to practice your trade for a period of time.

Dispute Resolution

Understand the differences and consequences between litigation, mediation, and binding and nonbinding arbitration. If you agree to a mediator or an arbitrator, note how they are chosen and be certain that the process is impartial.

Intellectual Property

If you are entrepreneurial, a consultant, a speaker for medical education or an inventor, you should be sure that you protect your intellectual property. Contracts usually exclude honoraria, royalties, and other reimbursements if for services provided outside the premises of your employment, and if they are beyond the scope of the “usual” clinical, marketing, and outreach services performed for the benefit of your employer.

Boilerplate Legal Provisions

These include hold-harmless clauses, provisions for bankruptcy, death of a member, contractual amendments, assignability, severability, indemnification, and governing law. It may be helpful to have your contract reviewed by an attorney licensed in the state of your employer. For example, restrictive covenants are not valid and enforceable in all states (eg, Colorado and Delaware), and state and local laws may affect other clauses.

Final Considerations

In Table 1, I have appended a list of benefits you might consider in reviewing a contract. Not all of these will be included. Also, it is important to reiterate that if you want something you must put it in the contract. Even though contracts often stipulate performance parameters required of both parties, there is still a chance for default by one or the other. My recommendation would be to add “teeth” to any of your “must-have” requests by using performance clauses. Consider assigning a due date to items of importance and stipulate a reasonable penalty for missed deadlines or non-performance. This is very helpful if you expect to get what you ask for in a reasonable amount of time from some employers who may not take their commitments seriously. And finally, good luck.


employment contracts; compensation; salary; practice management; benefits; recruitment incentives

© 2012 Lippincott Williams & Wilkins, Inc.