Physician Employment Contracts: Important Considerations

Whether a young physician finishing up residency or an experienced surgeon, negotiating and signing an employment contract can be overwhelming.  Physician employment contracts are especially unique, and it is this contract that will ultimately determine your relationship with the hospital or group with whom you chose to join.

When looking at these contracts, it is important to have a complete understanding of the terms of the contract.  Below are just a few of the contract clauses to which you should be paying close attention:

The Term

The contract should specify a start and end date.  Some contracts are only written for a year while others are automatically renewable.  It is important to consider the term and how the renewal process works.

Compensation Formula

The starting salary is just one number among many which will ultimately determine how you are compensated.  Many groups provide a base salary but will ultimately compensate based upon performance.  Understanding the compensation formula is of utmost importance in deciding whether the contract meets your expectations.

Non-Compete Clauses/Restrictive Covenants

Most physician employment contracts will have a non-compete clause that prohibits the physician from practicing medicine for a specified period of time in a specific geographical area.  Restrictive covenants may also limit the physician’s ability to keep certain patients.  Knowing the restrictions that will be placed on you should you chose to leave the group may play a major role in knowing whether this arrangement is right for you.


Image Credit: Roman Motizov/

Written by Mary Runkle Smith