Three Keys to Physician Negotiation

One of the most important career skills in any industry is the art of negotiation. There have been many books and articles written on this topic, and it is not my intention to cover negotiation in its entirety. 

Based on my experience negotiating things from service line agreements to compensation packages, there are three aspects of physician negotiation that I’d like to cover today. These apply to physician negotiations in any setting from private practice to military medicine (or negotiating with any other professional for that matter). Use them and you too can write a best selling negotiating book and become President (the reference was too good to pass up). Ignore them, and, as our esteemed President says, you’re fired!


Want to track your money for free? I use Personal Capital. Check it out!


Good Faith

The fine folks over at Harvard Law School define good faith negotiation as “to deal honestly and fairly with one another so that each party will receive the benefits of your negotiated contract.” In short, negotiating in good faith means that both parties negotiate honestly with one another with the intention of reaching a mutually acceptable agreement.

You will find many instances of career blogs or journals suggesting that job candidates of all stripes, including physicians, should negotiate a job offer with an employer solely for the purpose of learning about the job market or using the offer as leverage in another negotiation. As the guy often sitting on the other side of the table during that negotiation, I can tell you that is bad idea. 

I’m not suggesting that you have to talk to one potential employer at a time or that you can’t use another offer you’ve received when sincerely negotiating with someone else. I can absolutely tell you, though, that it is not that difficult to spot someone who is going through the motions with no real intent of considering the position.

Not only is it flat out rude to waste everyone’s time and energy negotiating an agreement that you have no intention of considering, it is also detrimental to your professional reputation. Physicians managers absolutely talk to each other, especially in our local community. I have seen it happen where a physician has been found out trying to do this. Even if you are not found out during the negotiations, your reputation will follow you in the future.

This becomes even more true if you are negotiating with private practices about joining their group. As someone who hires for a larger organization, I may be annoyed with you but I will usually move on to the next candidate that my HR department has found for me. A private practice, however, who has spent considerable time, money, and effort recruiting you and getting you to the negotiating table, will likely be much more vindictive if you go all the way through the process to the end just to sign with the rival group in town.

Negotiation

Know What You Want

There is nothing more frustrating then trying to pick a restaurant for dinner with someone who has no clue what they want. Well, I take that back. The only thing more frustrating is someone who constantly changes their mind after supposedly making a decision.

Negotiation is no different. A good negotiation is contingent on both sides coming to the table knowing what you want. Not only does this make the process faster, but it also helps both sides get what they want out of the deal.

I’ve been a part of negotiations with physicians that have left me wondering if they had thought about what we were discussing at all before the conversation began. While negotiating with a new hire, I have had a physician literally try to figure out if they wanted to work part time or full time while negotiating salary. After providing two separate packages for part time for full time work, the physician began to negotiate each one separately, bouncing back and forth depending on which was the flavor of the minute.

Needless to say, I have no intention of negotiating two compensation packages for the price of one, and I halted the process until they could definitively tell me what they were after. I never hired that person, and have not heard from them again.

Even if I had remember them, however, it is very unlikely that they would have gotten the best deal out of me. I had already spent so much of my time and energy, that I was not inclined to haggle with them much more. There is only so much capital you have to spend in each negotiation. Know what you want and you can spend wisely to get what you want. Walk in clueless, and prepare to hear that a lot of things have suddenly become non-negotiable.



negotiation

Show Your Ethos

While my first two keys can be used by anyone when negotiating, this last one is specific to physicians and handful of other professions. As a physician myself, there is a certain ethos or characteristic spirit I expect to see in other physicians. A negotiation with a physician should be palpably different from a negotiation with a CEO, accountant or any other person.

I see physicians all the time that try to mimic some of the negotiation tactics they see other professionals use. I always tell anyone that will listen that your best tactic as a physician is to insist from the beginning that you are different from all of these other people. No one else has signed up to do the job you do. No one else will gladly be stopped in the grocery store for medical advice for free. No one else will sit at a patient’s bedside for as long as needed until they are cared for.

The way you conduct yourself at the negotiation table should reflect this inherently honorable aspect of being a physician. This should not only manifest itself in how you treat your negotiating partner, but it should also affect the subject matter that you discuss.

Everyone wants to discuss compensation when negotiating a new job, and physicians should absolutely strive to be paid what they are worth. No one expects less. The best hires I have ever made, however, never started with compensation. The best physician negotiators always started with something that displayed their ethos first.

I have seen one physician start out by negotiating how much free care he could provide if he had patients in need. He suggested a reasonable amount and then asked for a percentage of his own salary that he could throw in to help patients if needed. I hired him.

I had a physician ask if he could take a certain amount of his salary and pay it out to his staff as bonuses for excellent patient care. I hired him.

I had another physician negotiate a set amount of time where he could provide free lectures at events to benefit the local community. I hired him.

In many of those cases, these physicians asked me for more money above my initial offer. In each case, I gave it to them with minimal discussion. They were so impressive in how they conducted themselves and displayed their professional ethos that I had no doubt the extra money would be worth it to retain them. And so far, that has held true.

I’m interested to hear your stories about your negotiation experiences. What are your best negotiation tactics? What are your most awkward or strange experiences? Leave a comment below so we can talk further. Many become unnerved when the time to negotiate comes but if you keep a keep a clear head and represent what you stand for, then you will be just fine. Now, go out and get what you want!

I Love To Tell the Story

For those aspiring to be leaders in medicine or even have some influence over the operations of your clinic, you will have to know more than when to increase someone’s insulin. You will need to tell the story.

A hallmark of a good leader is the ability to express a narrative. A leader will not just tell his people what to do, he will tell them why they are doing it and the broader context behind why they are doing it. And if he’s really good, then he will do it in the context of a narrative that inspires and points to a noble mission.

Preventing the Turtle Response

This skill is especially important for a leader looking to introduce change. Physicians, in particular, can be a very tough audience to change. Given the current dynamic environment in healthcare, many physicians have taken to turtle mentalities where they retreat into their shell and resist any change that comes their way, no matter what the potential benefit to them is.

A competent physician leader will be able to coax their staff out of their shells and explain how change benefits them and the organization as a whole. Connecting change to the greater purpose and direction of the organization will give you the best chance of eliciting buy-in for the change you are trying to implement.

I have too often seen leaders elicit directives to physicians with minimal effort to tell the relevant story around why a decision was made. These “edicts” are always met with resentment, and in the absence of any narrative, physicians will fill in their own narrative that often assumes the worst intentions.


Want to track your money for free? I use Personal Capital. Check it out!


The Angry Colleague

I can recall a particular example where it was necessary to change several physicians’ clinic grids. The clinic’s wait time for new patients had grown too long, and these particular physicians had not been seeing new patients recently. The situation was especially challenging because these were senior physicians in the group that had effectively pushed the responsibility to see new patients disproportionately onto the younger physicians in the group.

I made the mistake of sending an email with my decision first and then following up in person a day later (rookie move). By the time I was face to face with them 24 hours later, they had officially declared World War III. In their mind, I had switched from their colleague to a worthless bean counter with no regard for the many years of hard work they had put in. 

As I sat down, the most senior physician opened the conversation by angrily demanding why they were seeing new patients when the younger physicians needed to fill up their panels. He then started to rapid fire questions at me. Are the younger physicians lazy? Do we need to find better junior colleagues? It was not going well.

After he finished speaking, I paused for a moment to collect my thoughts and then asked a single question of him.

“Why have you worked so hard for so many years at this clinic?”

He was taken aback at this, but after a moment he answered.

“I became a physician to help my patients and community almost thirty years ago, and I expect others here to do the same.”

“Perfect, I said. I agree. Now, how are we going to achieve our common goal of helping the patients in our community if we can’t even get them in to be seen?”

There was much conversation that followed, but ultimately, the senior colleagues agreed to the schedule change. It could not have been done by forcing it on them and walking away. Tapping into our common mission and common narrative around that mission was the only way they would agree to get on board. If you are looking to lead in any realm at your clinic or hospital, then you can’t afford to do any less.

Financial Independence Retire Never (FIRN)

I follow a lot of the FIRE (Financial Independence Retire Early) crowd both on their blogs and on social media. I find a lot of good advice there and many of the things I have read have positively shaped my personal finances today. 

For those motivated to do so, I take no issue with physicians working hard to achieve early retirement. In my view, you put up the money to pay for your schooling so it is your life to manage as you wish. If that means retiring at thirty-five and living in Tahiti, then God bless you and post pictures when you’re on the beach.

I suspect, however, that there are many folks like me that have a really hard time with the idea of working hard for some specified amount of time and then walking away forever. I’m willing to bet that many physicians, in general, share my uneasiness with this idea.

I will readily admit that I have a borderline pathological obsession with being active. I like to have my hand in several different pies at once and wasted time is truly my enemy. This even spills over into my vacation time. I will never be the guy that is able to sit on a beach for five straight days and watch the tide go in and out. Trust me, I would drive my wife crazy.

I am also blessed to say that I enjoy what I do on a daily basis, and despite the satisfaction I get when I stick that wedge within 3 feet, I would truly have less fun in my life if I just played golf every day. 

So with that in my mind, I would like to officially dub my version of financial independence as FIRN or Financial Independence Retire Never. I have no intention of accumulating wealth for the purpose of not working. I have every intention to attain financial independence to attain maximal flexibility to do the work I want to do.

FIRN

It’s really hard to find a FIRN image

The Four Principles of FIRN

Practically, many of the principles employed by the FIRE crowd are the exact same ones I employ, mostly because the basic principles of FIRE or FIRN are time honored tenets of wealth creation.  Here are my four basic principles:

Minimize expenses-I am not part of the extreme frugality crowd, but if you can do this then more power to you. The basic math dictates that the less you spend, the more you keep. This is especially important for physicians that find themselves in the upper tax brackets. Working to earn more money at a 35% federal tax rate can be downright demoralizing at times. Cutting out your $1000/month shopping budget is a tax free way to give yourself a big raise without having to pony up to Uncle Sam.

Eliminate Debt-I shouldn’t have to tell any physicians about the weight of student loan debt. Carrying six figure student loan debt definitely decreases your financial and professional flexibility and locks you in to having to pursue jobs that pay large salaries, regardless of whether you enjoy it or not. Unloading that burden can really improve your FIRN opportunities.

Use Compound Interest-There is no greater magic than watching money compound year over year. If you are earning an average physician wage, then your retirement accounts should be maxed out (401k, 403b, IRA, whatever it is). You should also take advantage of any other compound interest opportunities you may have. I will discuss more of these opportunities in future posts and link you to some great resources for getting the compound interest ball rolling.

Diversify Your Income-You might earn a fantastic wage as a physician, but your nest egg is at risk if that is your only source of income. Hospitals and physician practices are not immune to closure. You should work to diversify your income streams so that losing one will never be the end of you. Some do this by additional medical work on the side like expert witness work, chart reviews, locus work, or telemedicine. Others do things totally outside of medicine that they are passionate about. Take stock of whatever skills you have and see if you can apply them to set up an additional income stream.


Want to track your money for free? I use Personal Capital. Check it out!


The Freedom of FIRN

In my mind, a key principle of physician FIRN is that you always intend to do something, not necessarily medicine. Personally, I very well may decide to move on from clinical medicine one day. I have no idea what my professional future holds in this regard. I might even decide to cut back my work schedule one day. However, I can fairly confidently say that I will always be doing something that likely brings in a paycheck of some kind as long as I am physically and mentally able. 

What this really comes down to at the end of the day is what you enjoy. To some people, work of any kind is simply a means to an end. For others, work is part of what makes life enjoyable. It’s all about what makes you tick and what your passion is. For me, a life solely based in leisure would be unfulfilling. As my About Me page says, I am the guy that would probably train to join the Senior PGA tour if I ever devoted my life solely to my hobbies.

Ironically, I think a lot of the FIRE crowd actually falls into FIRN if we are being strict about the definition. Most of the blogs I read and people I come across are still very much working and bringing in paychecks (sometimes really big ones), even though that have “retired” from their day job. Maybe they will prove me wrong one day and totally pull the plug on working, but many of them look like they have the same itch to keep moving that I do.

FIRN Investing

The choice of FIRN vs FIRE has real implications when it comes to applying the art of compound interest. For investors of all stripes, there is often distinction made between returns that come in the form of value you receive now versus value you receive later. For real estate, this is cash flow versus appreciation. For stocks, this is dividends versus equity.

For the individual pursuing true FIRE status, investment activities would most logically be geared towards the immediate income side of the equation. The FIRN investor, on the other hand, can gear activities more towards total return. Assuming that a FIRN investor has already undergone some basic income diversification, then he can afford to engage in activities that may pay out nothing now but will be the most profitable in the long run.

A practical example would be Berkshire Hathaway stock. Berkshire Hathaway has paid out a dividend exactly one time in its entire history. This stock is much less valuable to an individual pursuing FIRE, but could be much more attractive to an individual pursuing FIRN. No dividends are no problem for the FIRN person. They can afford to play the long game and just watch the equity grow as the company’s value goes up. In reality, most physicians probably should have their money in index funds and not be buying individual stocks, but we’ll leave that for another day

At the end of the day, I’m not making value judgements about either philosophy. Everyone needs to decide what their goals are and then act accordingly. If you really do want to live life from your beach hut, then I wish no tropical storms on your paradise.

Both philosophies will eventually lead to financial independence, which is really the core goal you should be striving for. If a person that has achieved FIRE sits down to dinner with a person that has achieved FIRN, then I’m pretty sure they’ll both be happy with their lot in life and have a lot more in common than different. The FIRE person may have to wait for the FIRN person to get off work, but hey, retirement is just a big waiting game for life’s last big event anyway, right?

My Burnout Story

It’s no secret that medicine has an epidemic of burnout plaguing it. I’ve read a number of articles both in journals and blogs outlining the sometimes stunning statistics regarding physician burnout, including this article from White Coat Investor.

Today, however, it is not my intention to discuss burnout in a dry, statistical sense. Today, I want to discuss a burnout story near and dear to my heart, my own.

The Beginning

I determined that I was going to be a physician roughly around the age of four. OK, a bit of an exaggeration, but I was pretty young. I don’t remember dreaming of being anything else. After studying hard in high school and college, I entered medical school with my intellectual and professional flame burning brightly.

Four years of medical school and three years of residency later, that flame was burning a bit, shall we say, dimmer. I was tired, just like everyone else that has gone through residency. I started studying personal finance pretty intently near the end of my intern year. This had two effects on me. One, I began to get my personal financial house in order, which was helpful. Unfortunately, it also allowed my massive student loan debt to weigh on my mind 24/7.

This can be problematic for someone entering the primary care field, where my paycheck will never touch those of some of my specialty colleagues. With that set up, I then proceeded to make a very large mistake.

Forgetting the Mission

I got into medicine because I loved it, pure and simple. I loved the intellectual curiosity and the personal connection with my patients. There was no money involved. I would still be a physician even if my paycheck was much lower than it is now.

As residency ended and I searched for my first job, I promptly forgot everything that made me choose medicine. With my financial position squarely at the forefront of my mind, I signed up to work for the place where I thought I could grow my practice, and consequently my paycheck, the fastest.

In short, it was a disaster. Sure, my practice grew. I enjoyed treating my patients, and they seemed to enjoy having me as their doctor. Every day though, I would drive home and wonder what my life had become. That kid that dreamed about being a doctor and helping people had turned into a money hungry young professional who would count the number of patients on his schedule and get frustrated if it was less than twenty-five.

I forgot everything about my personal position and what my mission was in my career and life, and that is the fastest route to burnout that I know.

The Change

It didn’t take long before I hit rock bottom and informed my employer that I was done. It was one of the lowest points of my professional life. I was a young physician with large debt, no real career path, and a rapidly diminishing sense of who I was.

There are many situations where this could end much worse than it did, but with the help of friends and family, I gradually found my way. I found a new job with a healthcare system that fits my ideals. The pay was lower, but the job satisfaction was much higher.

And sure enough, you tend to do well when you work in situation where you know exactly why you show up to work every day and enjoy that purpose. Eventually, I was given an administrative role in addition to my clinical duties, and TheBossMD was born.

So please don’t take it as fluff when I say that the personal element of your position is the most important part of who you are. I know firsthand the effect that losing yourself can have on your life.

I will be speaking on the blog more about how managing your finances responsibly can be instrumental to you accomplishing your goals. Don’t worry, however, my focus will always be on how to make your finances work for you, not the other way around. Trust me, you don’t want go there.

The Three Elements of Your Position

In my day job, I field many questions regarding career management and what factors play into your individual “position” everyday when you wake up. This is a foundational principle for this blog and for physicians. Let’s define someone’s position for our purposes.

Your position is the combination of principles and circumstances you bring with you to any situation.

Your position will play a large part in shaping how you respond in certain situations, and quite frankly, how successful you will be in many of your professional endeavors.

If there is anything I can impress upon you on this blog, it is to manage your position. Many doctors not only don’t manage their position, but they don’t even know what their position is.

That is an extremely dangerous from both a career and life perspective. If other people know more about you than you do, then they can easily manipulate you. Conversely, if you don’t know the basic elements of yourself and your situation, then you cannot leverage them to steer your ship in the direction you want to go.

The Three Elements

I define three major aspects as part of your position:

  • Personal
  • Financial
  • Professional

Knowing and appropriately leveraging these three aspects will give you the best chance of success in any situation, inside or outside of the hospital.

Let’s explore the three elements further so you, not someone else, can be in charge of your position.

Personal

There is a reason that the first post I wrote on this blog was entitled “The Mission is the Answer.” The mission is always the answer, whether we are talking about an organization or a person. You have to know what it is that you do and why you do it.

Why do you get up in the morning? Why do you practice medicine? What are your fundamental life beliefs? What are your religious beliefs and how do they inform your daily life?

Your personal mission is the most important part of your overall position.

Don’t worry about anything else until you figure this out. Nothing. Do not engage in negotiations over your salary or any other aspect of your life or career until you know this answer.

In addition to your ideals, your personal circumstances are included in this category. Are you married? Have kids? What types of things do you enjoy? All of these circumstances are primary to your success and should be considered carefully. A good day at home can soften a bad day at work, but a good day at work is not going to have the same effect on a bad home situation.

Financial

Doctors are like every other person on the planet. They want to be paid.

Believe it or not, you current financial position is the largest driver of your future financial position.

Who do you think is best positioned to negotiate a better salary, a financially independent physician who could afford to never work again or a debt ridden physician who has bills due every month? I hope you can see how the financially independent physician has a much higher success rate.

Having financial flexibility will also give you the independence to pursue your personal mission and professional goals independent of financial considerations. I have met physicians that have decided to join the military, open free clinics, or cut back on their patient load because, quite simply, they can.

All of them were able to do this because their personal financial position allowed them to. If your personal position leads you to what you do each day, then your financial position enables you to enjoy maximum freedom in how you do it.

Financial Position

Professional

Finally, its time to address your professional position. While incorporating the personal and financial aspects of your position, what do you want your career to look like?

Do you want to own your own practice in your hometown? Do you want to become the world’s leading academic rheumatologist? How about working your way up the corporate ladder of a large healthcare organization or insurance company?

Once you know the general direction, then get even more specific with your professional position. Do you want to get involved in side businesses or just focus on medicine? Do you want to provide healthcare to the masses or only focus on providing elite level care to a smaller population?

Also, consider your professional circumstances. What situation are you currently in? What relevant experience do you have? As you look around and chart your course, you will be surprised how much you can use from your current situation to chart your course.

All of these paths require very different skill sets, and I would argue that it is very difficult to do all of them at once. That doesn’t mean that you can’t change course during you career. You just have to pick one direction at a time.

doctor professional

The Punchline

I apply these three elements every day both personally and as a physician manager. I can write down something for each of these elements for all the doctors I supervise. This helps tremendously for setting individual goals and allowing each team member to contribute to the best of their ability.

You should strive to not just have your manager think about these things for you, but to consider and carefully manage them yourself.

So start thinking and get moving! Your position can be leveraged by someone else for their purposes or by you for your own. The choice is yours!

The Mission is the Answer

Its not often that a single phrase can be used to answer almost any question in any scenario. Today, however, we are in luck! For my inaugural post on the blog, I am going to talk about the most important thing in any organization, the mission.

This is Not a Mission

We should start about by discussing what a mission is not. A mission is not an overly generic phrase like “to make money” or “to help patients.” Any healthcare organization is going to try to help patients and will likely try to make money in some way.

An organization’s mission also should not be to simply to do whatever another entity tells it to do. I have seen this particular mistake made in numerous hospital owned physician networks. Phrases like “we just exist to generate referrals” run rampant in these places, and these types of phrases are toxic to culture.

This is a Mission

A mission should inspire employees. It should speak to a noble cause. It should be specific enough to define structure and function while simultaneously being broad enough to encompass ideals and principles, not just rote functions like “make money” or “help people.”

In healthy organizations, the mission statement is the driving force behind every action. Anyone unfamiliar with the mission is woefully unequipped to have any meaningful conversation about the work being conducted.

Inspired by a Mission

Physicians Don’t Know the Mission

I have met many physicians who have not put in the necessary time thinking about the mission of their organization, and it reliably leads to frustration and burn out.

It is impossible to find passion or joy while working towards a mission that you don’t know about or don’t care about.

The process of acclimating to the mission should begin before a physician even interviews with a company.

You should know the mission statement before you walk into an interview, and your opening question should be for the interviewer to explain the mission statement and how it informs operations. If the interviewer cannot answer that question, then that is a serious red flag.

If you are already part of a hospital system or network, then you should be incorporating the mission into everyday decisions. Let me give you a few basic examples.

Putting the Mission to Work

The Mayo Clinic has a lengthy mission statement, but the first part reads “To inspire hope…” Do you think that an organization aiming to “inspire hope” is going to have an extensive research component to their operations? Mayo certainly appears to think so.

Let’s get even more into the weeds. The last part of Mayo’s mission statement reads “Mayo Clinic will provide an unparalleled experience as the most trusted partner for health care.” Now, I can see all of the eye rolls happening here. The customer service surveys are coming! It’s true. If you put patient experience in your mission statement, then it will probably be extensively measured and emphasized on a day to day basis.

There are ways for you, the physician, to use this mission statement when you are interacting with administrators. Perhaps you work for Mayo and they are considering opening a new urgent care down the street. You’re not excited about this because that means your patients are going to be receiving healthcare from someone else, and thus, you are losing out on potential revenue.

Doctor Thinking About Applying Mission

By knowing the mission, you can seek to have a substantive discussion with the decision makers in the process. You can make the case that your patients should be seeing you for Mayo to remain the “most trusted partner” for patients since you are already their trusted physician, not some random person in an urgent care they have never met before.

If they respond with a comment about how you don’t have enough access in your schedule and access affects trust, then point out any number of options that could open up your access. Maybe an additional medical assistant or even a scribe. Point out how these options are cheaper than an entirely new urgent care clinic and better help the organization achieve its mission.

Remember the Answer

Any physician that follows this model can actually have a seat at the table where decisions are made that affect every day clinical practice. Better yet, physicians that speak the language of the mission are viewed as people that truly “get it,” not just employees trying to protect their own interests. All of this happened because you remembered the BossMD mantra…the mission is the answer.

What do you think? Are you excited about your mission at your workplace? Do you even know what it is? Does the mission affect your every day actions? Let me know in the comments below. To hear about my mission with this blog, visit the About Me section.