Physician Signing Bonuses Are Climbing

Cortney Ikpe

Signing bonuses are a lucrative tool for employers looking to attract physicians. Considering that physicians who recently completed training are staring down an average of $183,000 in medical school debt, a sizeable signing bonus can be hard to pass up.

Signing bonus offers are increasing too:

  • According to a recent study by The Medicus Firm, average physician signing bonuses have reached all-time levels, sitting in the $30,000 range. 
  • Just seven years ago, the average signing bonus was barely above $21,000.
  • The largest signing bonus in 2017 was $200,000 but did not surpass the record of $250,000 set in 2015.

According to the report, 88 percent of all physicians were placed in employed positions rather than opting for private practice or self-employment. The trend towards employment along with the appeal of being able to pay off a large chunk of student loans quickly could help explain larger signing bonus amounts.

Note: While the average amount of individual signing bonuses has been climbing, previous Medicus Firm reports have suggested that the amount of total signing bonuses offered has actually shrunk. They attribute this to increased hiring of mid-level providers to try to fill gaps in care.

What’s the catch?

Many physicians probably see a signing bonus as high as $200,000 and think that there must be some underlying objectionable terms and conditions.  In actuality, signing bonuses are relatively straight forward when considering other compensation methods and contract terms, such as quality-based incentives and non-compete clauses.

Signing bonuses can be viewed as a loan that you receive in exchange for a promise to continue working for an organization for a set period of time, typically two or three years. If you leave before the agreed upon amount of time, you could be forced to pay back a portion or all of the bonus. Unless you are not willing to stay at practice for that long, there are not many detriments to accepting a signing bonus. 

How are they determined?

The size of the signing bonus is typically inversely proportional to the size of the practice and region. For example, a prestigious healthcare organization in a popular metro area may be flooded with applications from job-seeking physicians. In this case, supply outweighs demand, and the employer may not need to out-bid other organizations with better incentives to attract candidates. The reverse applies to small, rural practices.

Starting early

Some organizations have created unique stipend programs to attract residents and fellows.  They will offer the option of receiving a monthly stipend anywhere from a few hundred dollars to a couple thousand dollars while still in training.  This allows the resident or fellow some extra financial breathing room while guaranteeing the organization has a new physician to bring on board.

If you are interested in a program like this, they typically start offering stipends a full year before a resident or fellow completes training.

Big picture thinking

If you are a job seeking physician, realize that different bonus structures  can be better or worse for you depending on your goals. Some practices may not offer a signing bonus, but do offer production bonus incentives, such as wRVU-based models.

In the long run, production-based incentives can sometimes eclipse what your signing bonus might have been. These types of bonuses are backloaded, as opposed to the frontloaded signing bonus. In the best-case scenario, you would have both bonus options available, but be sure to consider these other bonus structures before you dismiss any jobs without signing bonuses.

Get in on the trend

While market factors heavily influence the size of an offered signing bonus, there is typically room to negotiate, just like with your overall compensation. The ceiling for physician compensation is typically very high and settling on the first compensation offer can cost you thousands of dollars.

Resolve contracts with the number one rated physician contract attorney team in the nation to get physicians the compensation they deserve, including signing bonuses. Check out our contract packages to find which one meets your needs and get in touch with us today.