Essential negotiation tips every physician should know [PODCAST]

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We dive into the essential skills every physician needs to master in contract negotiation. Internal medicine physician Miguel Villagra offers practical advice on navigating the complex clauses and legal language, sharing key strategies for securing a fair, comprehensive agreement that supports career growth and personal well-being. From understanding contract types to leveraging market data and avoiding common pitfalls, Miguel’s insights empower physicians to negotiate with confidence and clarity.

Miguel Villagra is a hospitalist.

He discusses the KevinMD article, “10 essential tips for doctors: Mastering contract negotiations.”

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today we welcome back Miguel Villagra. He’s a hospitalist. Today’s KevinMD article is “10 essential tips for doctors: Mastering contract negotiations.” Miguel, welcome back to the show.

Miguel Villagra: Thank you, Kevin. I’m glad to be back on your show.

Kevin Pho: So tell us about what led you to write this particular article in the first place.

Miguel Villagra: Absolutely. So through my career, I have gone through different pivoting moments, and I have gone from being a full-time employee, to being in a partnership agreement, to doing independent contracted work. Now I even do business-to-business work with my company, with telemedicine as well. And one of the things that I realized is that we physicians go through changes through our career, and that has been well documented, and oftentimes we ignore the importance of being ready.

There is a lot of backup research and science behind contract negotiation, and this is not something we’re trained for. Therefore, that led me to write the article, to do a combination of my experience when I sit down at the table negotiating a contract, but also some of the evidence-based research on the topic.

Kevin Pho: All right. So when you say that physicians need to prepare themselves and be ready before they enter a contract negotiation, what are some ways they can do that? What kind of research do they need to do?

Miguel Villagra: Right. Well, first, I’m going to share a few stats for your audience to understand how important this is. Back in April of this year, Doximity did a compensation survey, and they ran this survey through a thousand physicians. I would say that nearly 40 percent of them were dissatisfied, very dissatisfied, with their current contract and salary and compensation. And the other side of the coin, in the same report, nearly 62 percent of those physicians feel like they were not compensated according to the level of work they’re performing or their area of expertise. In other words, they were not practicing at their full license, right, at what they’re capable of doing.

And that is something that someone might want to reflect upon, because you might change jobs because you just want a better work-life balance, or you are moving to a different state. But oftentimes you need to realize that the stats about physicians in the United States indicate that most likely you are going to be facing this at some point or other, and that’s crucial to understand.

I think that the first thing when we get into the topic of contract negotiation is: Can I do good due diligence about what my true worth or my value is? And you can do good research. There are surveys that you can access, some of which are free, some of which might be paid. But in general, it’s about having a grasp of what type of contract you’re going to be presented with, but more important, what is the value, you know, of the task that you will perform. That is going to be very, very important. Of course, there are geographic differences, depending on the position you’re doing, whether this is a locum tenens agreement, independent contractor, full-time employee, or even a partnership. All of this has to be thought out, right?

And even before that, I would say that it’s important for folks to at least ask themselves what they truly want, before you even sit down at the table. Because, interestingly enough, when I meet with physicians or I coach physicians, oftentimes they don’t even know what they want, and it’s hard to get what you don’t even know.

Kevin Pho: So when they try to find out what they want, tell us the type of questions they should be asking themselves to really clarify that.

Miguel Villagra: Absolutely. The first is going to be to understand, well, first and foremost, what is your mission, right? So what exactly are you most passionate about, or what do you want to consider doing, what are you going to be doing most of the time, right? So now you need to align that with your career portfolio, and that’s crucial, right? Because you need to understand what is the skill set you have and you bring to the table.

Now, surprisingly, that question of what you truly want might be quite complicated for some people. I have the privilege of sometimes helping other physicians going through career transitions, either as their mentor or their coach. And believe it or not, I was recently chatting with a particular practitioner who had been doing this particular field for a few years, and she just realized she didn’t even like what she was doing. She was just going with the flow. She was just exposed to this specific track, and she felt that it was so easy to just go in the wagon and see if that was what she wanted to do. But after a few years, she realized that she actually didn’t want to do it.

So sometimes those hard questions require time and reflection: what you want, what you truly want, what you’re passionate about, what you are capable of doing. Those are very important questions for folks to ask before you even get to the due diligence of researching how much you can get paid for it, etc.

Kevin Pho: And when it comes to research, you mentioned surveys. Do physicians have ready access to these surveys, like MGMA and other types of compensation surveys?

Miguel Villagra: Yeah. Well, MGMA is mostly paid, even though there might be some information that you can get in general. I also recommend the Doximity compensation map. They have a very nice map that is free to use, and you can go even by ZIP code for the place that you want to move to, and also the specialty that you have, and it will give you an average of what the compensation package is.

And I want to make another point about that due diligence and research, and I’m going to show you the impact of knowing how to negotiate a contract. There is good research that if you look at the average salary of physicians from the top 10 to the top 90, and the median average salary, there is a huge gap between the bottom and the top of almost 150K a year. So that’s what you might be leaving on the table just by not doing all this due diligence ahead of time: what you want to do, who you want to work with, how much you are worth.

Oftentimes what I see is that we put a value that is too low at the starting point of the negotiation. So it’s good to be realistic, of course, about how much you’re going to be asking for, but also, to some degree, to feel like you can definitely negotiate and start a little bit higher than what you want.

Kevin Pho: And have you heard of case studies or stories where an employer budged from that initial offer and a physician was successfully able to negotiate up that salary?

Miguel Villagra: Well, I will say that in my own experience, I have been able to be very strategic and tactical about negotiating even my own contracts, and I can cite very different examples of ways where physicians have been able to improve their compensation in the sense of salary. But not only that, because this goes beyond salary, and that’s one of the mistakes that we oftentimes make, you know. We only focus on how much money we’re making, and we don’t realize what other benefits we might be leaving on the table.

Sometimes there are physicians who are just looking for life-work balance, and maybe what they are seeking is more flexibility in their schedule, either the number of hours working through the day or the number of days that they’re going to be working through the month. And the second thing is that the benefits, of course, are important, and the way you’re going to be paid, the productivity model versus a base salary. So all those nuances are important to analyze in anything that you’ve been offered ahead of time. But I can tell you that you definitely can have a successful negotiation if you know your value ahead of time, again.

Now, I’m going to say that physicians need to understand that they need to start with an anchor, you know: “This is what I’m pursuing.” And you’re trying to get to what is called the ZOPA, the zone of potential agreement, right? And in between, you have your BATNA, which is your best alternative to negotiation agreement. What that is, is your exit. And I always say to any physician going to negotiate their contract: Always have a backup plan, right? That’s going to be something that gives you the leverage of feeling that you have a cushion of comfort if something happens and you don’t get what you’re pursuing, or you’re getting something, but it’s not quite what you need or what you want. And you can just walk away and say, “Thank you for this.” But sometimes there is also power in saying no.

Kevin Pho: Tell us what other tips you wrote in the article that physicians should know when they’re negotiating contracts.

Miguel Villagra: Yeah. I will start by saying that these are the most common mistakes, and I have done them myself. The first is going to be to accept the first offer without negotiating. That is one I see a lot, particularly in early-career physicians, and this is very, very important to understand: You might be leaving not only benefits but even money or salary on the table. And considering that you might end up working for this employer for many, many years ahead of you, you can compound the amount of money you might be losing.

The second thing, and we briefly touched on it earlier, is going to be to just focus on salary. And that is important because, when I say anchor, you’re going to be anchoring, definitely, on how much you want to be paid. That is absolutely right. And oftentimes, as I said, you start too low, and that’s what I like to do: the due diligence and research, to see how much you can be paid. That way you can start with a number that is definitely reasonable and realistic. But also, is this a position that offers you the possibility of growth, right, beyond the salary? Is this a position where you might want to take over a leadership role? Or sometimes it’s your geography, right? So you’re just looking at that specific location and understanding the trade-off, right, of that particular location. Because, as we know, the larger the city, the more competition there might be, and therefore you have less leverage.

Now, I need to say that sometimes all this is crucial, because you might feel that you don’t have any leverage at all, and maybe you don’t know the circumstances of the place where you’re applying for the position. And oftentimes they might be going through a specific challenge, and you might have more leverage than you know.

And that leads to the other tip, and that is not only to talk to the recruiter or the leadership at that particular position. Try to reach out to people who are just part of the team, and try to grasp if there is anything that you, I always, you know, when I’m moving to a different place, I try to reach out to get the phone number or email, or whatever the case might be, of people who are part of the team, not necessarily in a leadership position. And you can talk to them and see, you know, “I’ve been told this is what it is,” or “What is the culture of this place?” The more you know about this place, the more you can even visualize how you’re going to fit within that culture.

Kevin Pho: So I’ve talked about contract negotiations several times on the podcast. We’ve had attorneys come on. We’ve had companies come on saying that they can do these for physicians. So what do you recommend? Do you recommend outsourcing a lot of these negotiations to an attorney or a contract company? Should a physician do the negotiation themselves, perhaps in conjunction with legal help? What approach do you typically coach?

Miguel Villagra: Yeah, so I have a few thoughts on that, and I have used people, at least, who can review my contract and get red flags, you know, on it, and things like that. In general, I will suggest a few things, even if you’re going to outsource, and I’m going to give you my advice as far as that goes. Even if ultimately you’re going to outsource some part of the negotiation process, you still need to do it yourself, because the only way to know that somebody’s advocating for what you want and need is for you to know ahead of time what you want and need. So that’s the first thing that I will say: Even if you’re going to entertain getting a lawyer or anything, you still should be able to know all these skills and try to apply them ahead of time, and do all this due diligence and research.

Having said that, I would say that it depends on what is on the table, right? So it’s not the same if you are just entertaining a gig where you’re just going to do some consulting work, minimal. You already have your job; you’re not looking at changing it. That might not be worth even considering getting a lawyer or anyone to review the contract. But it depends on what is on the plate, how much help you will need. In other words, if this is going to be your main gig, your main job, you’re making a massive change to a new employer you don’t know, and you want to go into the details of any red flags in the contract, I would definitely suggest getting legal help. It could be a lawyer. There are some firms that offer low-cost review of contracts or compensation packages, and that can also be a good resource to use.

Kevin Pho: So tell us a case study or a story where a physician successfully negotiated a contract that was markedly better than what was first offered. Tell me a success story from your coaching.

Miguel Villagra: Yeah, so I can tell you I have a particular physician on the East Coast who was trying to go from academia to private practice. And I can go over the details about why, because I have seen a lot of physicians in that kind of case, you know. They’ve been in academia for some time, and they’re trying to get better life-work balance and compensation, and that’s what they have designed to do.

Now, the first question, and struggle, for this particular physician was that she was in a high-cost area, a larger city. And the first thing I said is, “Are you willing to move?” Right? “Are you willing to move?” And thankfully, she was actually willing to move to a not-that-crowded area, and that on its own caused a difference of nearly 50K in her compensation, just on that, without even the contract, without anything, just by the fact that she was going. And I’m not talking about cost of living; I’m talking about the compensation package, because she had an offer that was way better than what she was given in the place where she was living, right? Oftentimes you might not have that option, though, right?

So the second thing: This particular physician, besides the salary, was looking for a little bit more life-work balance. In other words, instead of working five days a week, she wanted to work only four. And that’s another area where she didn’t have that option where she was before, and she was able to negotiate to actually go to three and a half days, meaning Monday, Tuesday, Wednesday, and half of Thursday. So at least those two things, for this particular physician, were enough, you know. And she’s very happy with the position she was able to pursue.

Now I’m going to give you another example, though. I recently came across this physician, and I’m going to give you the other side of the coin, right? This physician is a gastroenterologist who wanted to move to a larger city, and he did everything that I just told you. He went over all the research, and the median salary in that particular area for a gastroenterologist, for the position he was pursuing, was 450K, right? So he went to the negotiation, and he only got offered 380. He only negotiated 380. Of course, again, larger city, less leverage, right? So it’s leave it or take it, if it’s important for you to move. But he was able to negotiate some other flexibilities among the weekends that he was supposed to be on call.

So there’s always a way, you know. The point I’m making here is that there’s always a way. If you truly want to be there, you can. Why don’t you try to think in terms of what are the things you can get from this negotiation? You want to maybe not work on specific weekends or holidays and things like that, and you might have that type of leverage. Sometimes it’s about thinking out of the box when you are negotiating a contract.

Kevin Pho: We’re talking to Miguel Villagra. He’s a hospitalist. Today’s KevinMD article is “10 essential tips for doctors: Mastering contract negotiations.” Miguel, we’ll end with some of your take-home messages that you want to leave with the KevinMD audience.

Miguel Villagra: Yeah, absolutely. I would say: Always think in terms that, even if you don’t know about something, like how to negotiate a contract, you can learn, and there are resources. There is a lot of science behind it. So I would say that folks who are interested in knowing more about this can read the article. They can also reach out to me by email, and I’ll be happy to help in any way.

The second thing is that even if you feel you don’t need this now, you might need it eventually, because it’s been well documented that a lot of physicians are looking for a change in the future. I was reading a survey that was done last year, and it is interesting, because 75 percent of physicians were staying in their particular position through 2025. But when they asked them if they were going to be in this position through 2026, the percentage went down from 75 percent to just 40 percent. So what I’m saying is 20, 25, 30 percent were looking for a change eventually. So that’s something to keep in mind. And absolutely happy to be here on your podcast and to help folks in any way possible.

Kevin Pho: Miguel, thank you so much for sharing your perspective and insight. Thanks for coming back on the show.

Miguel Villagra: Thank you for having me.

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