Tips Before Signing a Contract

It’s easy to see the appeal of Direct Primary Care as a career path, but as a newly graduating resident, it may be difficult to pass up the security of an employed position. A fixed, regular salary, no startup costs, and minimal administrative tasks may be an initial appeal. However, if you think that DPC might be an option for you down the line, there are steps you can take to make the transition smoother. Here are 5 tips to consider before signing a contract for an employed position.

Contract Basics

There are a lot of things to consider in a contract to facilitate transitioning to DPC a few years into your career. Consider the length of the contract as well as the notice you need to give to leave your employed position. Ideally, you’ll want to have flexibility to leave with 3-6 months notice. You can also consider if transitioning to part-time is an option as you begin to grow your DPC practice. That way you’ll still have some steady income while your DPC practice grows. Having these specifics in writing will give you options when the time is right.

Non-compete Clause

Non-compete clauses or restrictive covenants are one of the largest areas of contention when negotiating contracts. Employers want to protect the investment in their office by limiting your ability to practice within a certain geographic area and for a certain amount of time if you leave the organization. Notwithstanding the questionable legality of non-compete clauses, there are a few steps you can take to mitigate their impact. You can always ask to limit the scope by reducing the area and time that a non-compete would be in effect.  You can also ask your employer to exclude Direct Primary Care in writing. As DPC does not involve insurance billing, many view this model to not be a direct competitor to traditional, insurance-based practices. Finally, if some of the area around you is deemed medically underserved, you can ask that these areas be excluded as well.


Dovetailing with the non-compete clause is choosing the right location for your employed position.  More importantly, think about where you’d like to have your DPC practice and then choose your employed position accordingly. If you’re able to negotiate more friendly language in your contract, then it may not be bad to be close to where you want your DPC practice to be. It would be convenient for any patients that would want to transition and follow you to your new practice. However, if your contract negotiations are not as fruitful, you may want to consider practicing in your employed position away from where you want to open your DPC practice to avoid being within your non-compete geography.

Signing Bonus

Many employers lure new physicians with signing bonuses or loan forgiveness packages. While these can definitely help cash flow for a new resident, be careful of the terms of these offers. Many will have restrictions as to how long you’ll need to stay with the employer without penalty. There may be a graduated pay back schedule if you leave before the full vesting time. This doesn’t mean you shouldn’t take a signing bonus or loan forgiveness. Just be mindful of the terms and set some money aside if you think you may end up owing some money back.

Public Service Loan Forgiveness

Finally, many residents eye the Public Service Loan Forgiveness program as a way to reduce their student loan burden. This program requires that you work for a non-profit or governmental organization, disqualifying most DPC practices. But be careful in relying too much on this program. As we’re starting to see, the requirements to qualify for this program are stringent including having the right type of loan, making the correct payments, and making sure your employment history is certified correctly. In the past year, the majority of people who applied to benefit from this program were denied for one reason or another. If you’re thinking about DPC, there are other options for student loans including refinancing with a private lender or looking at longer repayment terms with lower monthly payments.  

All in all, starting your career with an employed position certainly has financial advantages. But there are definitely steps you can take now to make your transition to DPC easier in the future. As with all contracting and legal matters, consult a legal expert to fully discuss your situation.