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Discussion in 'Otolaryngology' started by 1217MD, 11.07.11.

  1. 1217MD

    1217MD

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    SDN Members don't see this ad. (About Ads)
    just wanted to get the opinions of the attendings here.

    What are some important questions to ask when interviewing for a private practice job? I have asked many of the generic questions, just wondering if there are some important ones I have left out.

    What is a good way to determine how busy a group is without asking about their income? should you ever ask to see the groups financial info? How can you determine if a group wants to hire you because they are busy or if it is to decrease their overhead? or does that even happen?


    thanks for the help
  2. resxn

    resxn

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    I'll answer that within the others below.

    How far out are you booked?
    How many patients does the average doc in your practice see in a day?
    How much time do you typically book new patients for? Established patients?
    How much marketing do you do?
    Is this market competitive? e.g. Is there more than 1 ENT per 30,000 population?
    How many patients do you need to see in a day to break even at the salary at which you're starting me? In other words, they should know the avg reimbursement they get per patient (that can be further broken down into the type of visit: est, new, consult, inpt consult, pre-op, etc) and should know how many you need to see to cover the cost of hiring you. If they don't, that's a warning sign that they're not in their books enough.

    Sure. Most won't give it. I won't. I'll show them our overhead percentage (53%) of which I'm very proud. I won't show them gross collections, net revenue, or anything else. You can generally tell by the growth of the practice, the quality of equipment (particularly computers, phones, waiting room furniture, scopes--distal chip, etc), and how much they market or don't market.

    Well, usually it's both. I started private practice 4 years ago and now have 4 docs in my practice. One is a partner, 2 are on that tract. I hire for one reason, I'm trying to grow the practice and generate more revenue. I do that by generating more income per FTE employee and per sq ft of office space (the two biggest overhead expenses). If I'm too busy, patients will go elsewhere and I lose business even if I have the best reputation.

    If I am not busy enough, I'm not going to hire a new physician and have them take some of my lucrative new patients away in order to build their practice. That's giving them money and taking it out of my pocket. It doesn't make sense for a practice to hire a new physician if they're not ready and actually needy.

    Historically, the lowest overhead offices were the ones that had 3-4 docs. That's changing rapidly this day in age. Now the lowest overhead usually goes to the group with the largest number of docs and the most extensive use of non-physician income earners--audiologists, allergy nurses, aestheticians, etc. EHR's have changed the game--you can add docs without needing as many FTE's as with paper charts.

    Look at it this way. Any square foot of space for which you're paying that isn't generating income, is losing it. Any employee that doesn't bill and generate money, is taking it away from you.

    Use those 2 rules and you'll quickly figure out how to minimize your overhead.
  3. 1217MD

    1217MD

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    As usual, very helpful info.

    Two other questions. What should a private practice ENT expect to bill after 5 years of practice? Not interested in collections, etc. Just curious about what you should expect to bill grossly once your practice is in full swing.

    Also, is overhead ,when mentioned as a percentage, an actual percent of your net collections? or your gross billings?
  4. Fah-Q

    Fah-Q Senior Member

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    I'm not sure why you want to know gross billing. That is a useless number. It can be anything you want it to be. I'll give you mine...I billed 9 gazillion dollars last year. If you are a contracted provider with third-party payors then what you bill has zero relationship to what you are paid. You should ask about collections because that number is the only one that matters.

    Overhead is usually expressed as a percentage of collections. It is a number that can be deceptive as revenue can vary significantly from one month to the next but expenses are much more fixed for a medical practice.
  5. resxn

    resxn

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    Agree with Fah-Q. As far as collections goes after 5 years, there's no way to answer that. I guarantee you if you're the busiest thyroid surgeon doing 10 thyroids a week and a handful of other stuff here and there, you'll be collecting a fraction of the rhinologist who's doing 10 FESS's in a week. Entirely depends on the cases you do, how hard you work, and your payer mix.

    I try not to see more than 28 pt's in a day. I make a great living doing that and if I see more (there are some in this area that will see 40), I could make a large chunk more money but I don't think I'd enjoy my life as much, I don't think patients would like me as much, and I certainly don't think I could teach my patients the way I think they should be taught.

    Overhead is basically your expenses over your gross collections (not billings) minus your salary (but not minus a corporate distribution). In other words the gross collections is what is left after you pay your salary which is usually a small percentage of what you take in a corporate distribution. Therefore, when I say my overhead is 53% you can think that I grossed about $110, paid myself a salary of $10, then took $53 to pay my office expenses and then gave myself $47 in a corporate distribution (or maybe $45 to leave a cushion in the coffers).

    Clear as mud?
  6. 1217MD

    1217MD

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    The reason I asked about gross billings is, I have heard people say that they collect x% of what they bill. So, it was my impression that if a guy bills 1 mil, collects 50% of that, and then has 50% overhead- he made 250K. Correct? or way off??

    I realize that there is a lot of variability in collections because of a multitude of reasons. But on average, what then would you expect to collect after 5 years of practice. If this is too general of a question feel free not to answer, I am simply trying to get an idea of what to look for when I talk to practices next year and they are showing me their finance info. I am using this as a relative gauge (amongst other things) as to how busy the practice is, and how successful they are.
  7. Fah-Q

    Fah-Q Senior Member

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    You can bill whatever you want. Insurance does not pay a certain percentage of the bill. They pay what are called "allowables". An allowable is a contracted rate for a certain CPT. If the allowable for a tonsillectomy is $350 in your contract with Cigna then that is what you will be paid....hopefully...in 2-3 months. You can bill $1000 or $10,000. It doesn't matter because you are only going to be paid $350. Everyone bills differently for the same procedure but everyone is basically paid the same allowable in a given region for a given procedure. You can start to see why gross billings and percentage of billings are worthless.

    Ask how much overhead each partner pays. Actual dollar number, not a percentage of anything. If you want to know how busy they are then ask how many patients they see per day and how long new patients have to wait before being seen.

    How much after 5 years? Very difficult question that depends on a ton of factors. I know guys that make $250K and I know others in the same area that make >$1M. It all comes down to how busy you are and what you are busy with. Busy with ear tubes will put you on the lower end of the spectrum. Busy with sinus cases will put you at the higher end.
    Last edited: 11.18.11
  8. 1217MD

    1217MD

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    thanks for the info. I appreciate it
  9. 1217MD

    1217MD

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    When comparing practices that have ancillary services (i.e allergy, audiology), what should I look for?

    What does a typical ENT practice involved in these areas make from these services- (or what is another way I can determine if they are running successful ancillary services?

    Thank you
  10. resxn

    resxn

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    I would consider asking the following questions:
    1 - Are allergy and audiology distinct separate businesses from the medical practice? Who runs the books for each? Same accountant, or different ones? How is overhead covered for each ancillary service?
    2 - What are the policies for the allergy business for pt care? Is there a doc in clinic full time while shots are administered? How long are patients required to wait after shots? How many people are allowed to mix? Do you offer SLIT? Who does the billing?
    3 - Who holds the dispensing license for the audiology practice? What are the profit sharing plans between audiologists and physicians? If you didn't sell a single hearing aid all year, would audiology be profitable?
    4 - What percent of partner physician income is secondary to ancillary services income?
    5 - Do you allow patients on beta-blockers to have immunotherapy in your allergy clinic?
    6 - Do you treat poorly controlled asthmatics in your allergy clinic?
    7 - May I see what your hearing aid contract looks like?
    8 - What kind of finance options do you offer for your HA's?
    9 - What HA companies do you work with?

    You want the ancillary services to support themselves. As to how much you can expect to make from each, it varies so widely it's hard to say. I'm not sure if there are good benchmark numbers on that. The AOA has a decent amount of data on most ENT practices. You could start there. I doubt MGMA drills that far into ENT. I know a practice in the Midwest with 19 ENT's who have a monopoly on hearing aid sales in their large town. They have a $5.5M/yr HA business. Yeah, that number is correct. More than 30% of the physician income is from HA sales alone. My HA sales provide about 10% of my income for a group of 4.
  11. earboy

    earboy pluggin away

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    While we are talking jobs, I am in need of advice from the attendings. I'm a chief at a well-known midwest program, going on to do a peds fellowship next year, looking to join a private practice group in a big town in TX doing general/peds. I interviewed with a group of 3, expanding into a large 13000 sq. ft. space with all ancillary services minus allergy and possibly also a surgicenter to be built attached to this building. They seem busy and do alot of sinus, plastics, general. With the space, they are ready to hire one more doc.

    So, I got my offer via email and am sort of bummed. I'll be the first to admit I don't have much business sense. Never needed it until now. Here's the entire offer. No clauses or anything. What do you guys think?

    1. Compensation of $150k for the first year, with a $20k sign on bonus
    2. $190k for the second year
    3. Option to buy in the 3rd year at the price of $250k.
    4. Plus a bonus of of 20% of my net profit (collected revenue minus ¼ general overhead minus my employee specific expenses). Eligible for this bonus after the first 6 months of employment. The initial bonus would be calculated based upon the first 6 months of data.
    7. On call every other week until partnership. No ER call.

    Seems like a real low-ball offer. No mention of non-compete. The buy in thing sucks. Is that still done? Do I need to know the exact overhead in order to calculate my ability to make a bonus here? Is there a way to calculate how many patients I would need to see a day in order to get above said expenses so that I could estimate what this bonus would be like? Should I be asking for any other specific info?

    Any advice would be sincerely appreciated.....
  12. Fah-Q

    Fah-Q Senior Member

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    Where to begin.

    First, don't take a salary. Just ask them to let you take home a certain percentage of your collections (this should be equal to the partners' overhead percentage). This will give you incentive to get out and attract more referrals and grow the practice rather than just taking patients from the partners. If you let them pay you a salary then they will likely lose a lot of money for the first year or maybe longer and they will always look at you with that "you owe me" kind of look. Don't fall into that trap. I know that you feel well trained and super important and that you deserve a big salary (trust me, we all felt that way too). The truth is that you are not very special and as an employee you will be very expensive. Eat what you kill. It is the most fair to everyone.

    The buy-in should be for real assets only. If they want $250K from you then they think their practice has $1M real assets right now. Possible but hard to believe. I suspect the buy-in includes ownership of the building. That's really the only way anyone could justify a buy-in of $250K. Don't pay them a cent for "goodwill." If you can't put your hands on it and sell it for cash tomorrow then it is not worth buying into.

    Call should be equally shared but you probably won't get very far with that idea. No ER call is sweet.
  13. OtoHNS

    OtoHNS ENT Attending

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    $150K is not so bad for a desirable location and a good practice. In my research, I found that 150-200K for the first year is pretty standard for quality practices. The high $$$ guarantees are going to be for places that you most likely will not want to live ("ENT needed in scenic rural Idaho!" etc). Academics you'll make more starting out but probably less in 5 years than PP.

    It depends on your own situation, but I would think very carefully before proposing what Fah-Q advocates. It takes time to build up your practice, and you are very likely not going to be seeing that many patients for the first few months. My guess is that you would almost certainly make substantially less than $150K your first year and probably more than $190K your 2nd year if you didn't take a salary. The first few months would be especially lean. Would depend on the percentage of your collections that your partners skimmed off the top too.

    In the end, you may come out on top, but IMO the piece of mind that comes with a guaranteed salary check outweighs any potential "you owe me" mentality down the road. I'm in my first year in a practice on salary right now and I'm certainly not slacking on marketing myself/meeting referring docs/drumming up business.

    I agree also that you need to find out more details on the $250K buy-in per Fah-Q's advice above.

    The new guy's always gonna take more call, at least you won't be in the ER apparently.
  14. neutropeniaboy

    neutropeniaboy Blasted ENT Attending

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    Good discussion, guys.

    Always an interesting thing to learn more about what you don't have to worry about in academics. Based on this thread, I have concluded that our overhead is 99%.
  15. resxn

    resxn

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    This is the stuff I love to look at, so let's take a gander and do some math.

    This may sound over-the-top, but WTF? 13,000 sq ft for a group of 4? I have 9,500 sq ft with 7 large exam rooms, a surgical procedure room, an audio suite, a billing office, a large nurse's station, a front office/reception area that can seat 6 comfortably, a waiting room that can hold 45 people including a children's play area, and an allergy suite with its own private waiting room, mixing room, and injection room. I can run 3 docs in full clinic at the same time without any problem and 4 if we had to although that gets crowded. What the heck are you going to do with that much space? If they have a paper chart practice, that may explain 500 more sq ft. The first thing I'd worry about is dead space. Any space that's not generating revenue (exam room, allergy room, audio booth) is space that's losing money. Having a nice gigantic doctor office with a huge desk, credenza, 4 chair meeting table and bookshelves may look awesome, but there's a remarkable cost for that luxury.

    This 100% depends on where you are. I'm in Texas too. DFW area. MGMA says that the avg ENT compensation for a first year in N Texas is $250k and change. So maybe you're being low-balled if you're in an area of high need where compensation is usually great, but if you live in a highly desirable area with lots of competition, that may actually be a really good salary.

    Whoa. I agree with the above. You better be getting some partnership in real estate for that buy in and you better see the appraisals indicating that it's worth that much. NEVER do a good will buy-in. That's for suckers these days. ESPECIALLY if they've ever discussed selling the practice to a hospital in any near future. You'll buy in and get nothing for it.

    Hmmm. Depends on how busy you are. I'll do the math below with the associated question there.

    That sucks. Totally unreasonable in my region. You're getting raped on that one in my opinion.

    Maybe, but probably not once you do the math. See below.

    Awesome. Their oversight, not yours. Don't say a word.

    Yes, the buy in thing is still done. It needs to be for hard assets with immediate real net worth, not good faith. Good faith is for suckers as I said above.

    Ok the math. Since you're considering TX, I'll share my ballpark. If you take every encounter I had last year and divide that into my total collections, I made about $128 per encounter. That includes OR, ER (insured or not), inpt consults, pro bono for referring physicians/employees/family/friends/neighbors/etc, outpt clinic whether office new pt/est pt/post-op in global/allergy/audiology, and anything else conceivable. So how does that translate to the $150k?

    Assume you made $128/encounter too on avg. You'd have to have 1172 encounters to make $150k. Is that a lot of patients? Not really. It's only 22 patient encounters in a week. You're multiples less than the average ENT at that point. Assuming no overhead, you could have 6 encounters a day for a year and make more than $150k. Remember, encounters means anything from highly lucrative sinus surgery cases to nothing for a post op thyroid.

    So, then, it obviously boils down to overhead. Let's assume the avg private ENT 4 person single specialty practice is 50% for the sake of math (it's usually closer to 53%). Well, then just double your encounters to 12 a day and you bring in over $300k. $150k of that is gone to cover your guarantee. Of the remaining $150k, you get a 20% bonus or $30k. Let's say you're full steam, double the number of encounters again to 24/day. Now you're bringing in over $600k minus $150k to cover guarantee and then 20% of the remaining $450k as a bonus and you get $90k.

    Therefore, if you are seeing an avg pt volume by your second year getting the avg collection/encounter that I get, you'll make $190k in guarantee plus $90k bonus. That's pretty good for most ENT's in their second year.

    I'm going to guess that their overhead is not close to 50% if they have a 13,000 sq ft office, but who knows, maybe they have a savvy real estate agent.

    You can never ask too many questions.
    Can you buy into the surgicenter?
    Do you get a cut of hearing aid sales?
    Do you get a cut of allergy revenue?
    Who does your credentialing?
    Who does your insurance contracts?
    Who pays for your malpractice?
    Who pays for your marketing?
    Who pays for your CME?
    Do you get paid vacation? How much?
    Who pays for your health insurance?
    Is there any stipulation on partnership for passing the boards?
    Will the hospital pay for ER call if you want to take it?

    Hope that helps some. It's later than freak and I've been up since 4AM for a anticoagulated nose bleeder that keeps rebleeding around his pack. I'm going to bed. Feel free to check my math, it may be off with me this tired. . .
    Last edited: 02.17.12
  16. Butler

    Butler

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    As per usual resxn is clutch. Thanks for that break down. Nice for a student to get a feel for how to look at contracts and what questions to ask in the future when it will be vital.
  17. neutropeniaboy

    neutropeniaboy Blasted ENT Attending

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    I'm really ENTrigued by all this. (Was that lame?)
    Honestly, I think I'm going to bank this thread somewhere for future consideration if I ever leave academics.

    It's interesting to note some of the factors do cross over to academics, but it really does look like there is a plethora of business decision making going on here. And that further highlights why doctors can no longer survive if they run their practices under the auspices of delivering health care without ensuring fiscal responsibility.
  18. Fah-Q

    Fah-Q Senior Member

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    Very thorough analysis by Dr. Resxn as usual. Here are some further things to consider.

    Resxn has a mature practice and seems to do very well. Earboy's new practice will look very different in the first 2 years and possibly longer. Let's say you decide to become an employee and take a salary. Where will your patients come from? At first they will come from your employers (the partners). So, not only are you taking patients from them but they are going to pay you to take money out of their pocket. Sound fair? What patients do you think they will give you? Big sinus cases and thyroids with Aetna? No, you will get Medicare reflux, earwax and dizziness. Good luck reaching that bonus. The other issue is your chosen subspecialty. Peds requires one thing....volume. The cases do not pay well and so you have to see a ton of kids to line up a decent OR day. You just won't have the volume in your early years to generate enough revenue to reach your bonus. Your share of the overhead will be 25%....25% of what? Their overhead is probably $100-120K per month. Who determines what employee specific expenses are attributed to you? Also, you won't have much in the way of collections for the first few months because you will not be on any insurance plans.

    The bonus is a mirage. A fool's errand. The goalposts will be moved. Don't fall for it.

    I know it sounds crazy, but the best long-term position to be in is to start under the thumb of nobody. Your friends will be taking jobs in academics or with multi-specialty groups with >$250K starting salary. You feel like you are from a good program and fellowship trained and should be getting more. Well, you will when you earn it. Try to lose the entitled mentality. I certainly had it when I started and most everyone I know had it too. It is one of those things you wish you could go back in time and punch yourself for thinking, trust me.

    I would tell them that you would like to share space, employees, call, etc. but don't accept a salary. Just pay them a percentage of collections and build your practice from the ground up.
  19. pvdoc

    pvdoc New Member

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  20. resxn

    resxn

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    Fah-Q makes some valid arguments, but not all practices are necessarily like that.

    I've been in practice for 4.5 years--I was in the USAF prior to that, having graduated from residency in 2004. So while I'd like to think I have a mature practice, I'm still a relative newbie. I started solo and now have a practice of 4 physicians with 2 other practices in the early stages of talking merger with us. 2 physicians are employees, I have one full partner. Our newest physician joined us this summer out of residency on guarantee.

    Let me tell you my philosophy regarding him so that you know that not all practices are like Fah-Q's experience. I brought on a new doc because I was too busy. I was losing patients to other practices because I was too far booked out (in my very competitive market that's about 10 days). I brought him in because I needed him. So I'm not really losing patients to him. He comes in on a guarantee so I don't feel forced to feed him 20+ patients/day from day 1. In fact, he started with 4-6 and I asked him to go out and meet our referring docs, docs that we were trying to win over, hang out in the ER, give talks to community groups, etc. Doing this allowed him to build a community relationship beyond just a new name on our website. His practice continues to build and he's not full steam yet seeing 15 patients/day on avg. He got a guarantee of $250k. In January, traditionally a slow month, he met his guarantee for that month in his collections. He's started Aug 1, but really spent his first month prepping for boards and meeting people. So now he's 1/2 way through the year and already meeting his guarantee.

    I allow him to see any patients he wants. I don't limit sinus cases to me although they're my favorite. I only allow 1 medicare patient per 1/2 clinic (2 max per day) for me because we have a really strong payer mix. However, he sees more than that because he's building a practice much like I did when I started as a solo guy. The reason I don't limit what he can see to dizzies, Medicares, and wax impactions is because I want him to be happy. A happy, productive physician I've invested in will build my business, get better community influence, and scare away other docs thinking about moving into my area. An unhappy Medicare wax doc is going to want to bolt when they get out from their guarantee contract. What good does that do me in the long run?

    Additionally, it will do him and our group no good to keep him from sinus cases, thyroids, necks, and middle ear stuff and other cases where his skills will wilt. I can be with him on cases like that now when he still appreciates it and I can teach him skills that he didn't learn in residency simply because I was trained in a different program with attendingw who had different techniques. I get the side benefit of learning from him too. If he doesn't do a lot of good cases for 2 years and then is turned loose as a partner on any hard case he wants, how efficient is he going to be on a tough frontal recess, revision parotid, or stapes?

    So I would hope that 4th year and 5th year residents or fellows have started looking for practices at an early enough stage that they don't settle for a practice that uses them as a pack mule worthy of nothing more than they were used as an intern. Look for a practice that wants you to build, doesn't limit your case variation, sees you as an asset and not as a liability, needs you because they're busy not because they want less call.

    At any given time, there are between 2500-3500 positions in the US available for ENT's. It's a buyer's market. You're the buyer. You're no longer competing against 600 people for 250 positions. It's the other way around. We should be selling ourselves to you to get the best of you out there.
  21. otomatcher

    otomatcher

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    Learned a lot from this discussion. I am a 4th year medical student putting together my match list for this year's match (due this week!). How much does the program you train at affect your private practice job prospects? Is the national reputation of the hospital overall as important as the reputation of the program within the ENT community? If I have to preference one of two programs that I perceive to have equivalent surgical training. One has a better national name the other has happier people. Especially if I'm thinking of looking for jobs in a different part of the country, should I go with the bigger name? Thanks in advance.
  22. Fah-Q

    Fah-Q Senior Member

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    Just to clarify, I was not describing my personal experience. I started off solo. I was only offering an alternative to the current trend of everyone coming out of training and becoming employed.
  23. OtoHNS

    OtoHNS ENT Attending

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    Awesome info in this thread. Earboy, you need to figure out what's most important to you and focus on that. Being salaried initially has worked out well for me as I said above. Can't really add much more to the excellent insights from Resxn and Fah Q.

    Academic reputation is irrelevant once you get into the private practice world. Pretty much all programs will give you excellent training, and the few with issues will be obviously apparent. Hiring decisions are going to be based on personality fit more than anything else. And as Resxn already stated above, you will be in huge demand coming out of residency. Getting a job is not a problem, and if all else fails you can open your own practice.
  24. resxn

    resxn

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    I figured that was the case and it was my bad wording that made it look like it was your experience--I thought you were providing just another perspective.

    I do support residents avoiding employment, but I think of employment as under a hospital, multispecialty group (e.g. Kaiser), or other type of corporate structure. Whereas, I think when a person comes in on a guarantee salary, that's different and more of a stepping stone because it has a clear end date. I would advise coming in on a salary guarantee because at some predefined point, you need to be allowed to be in an eat what your kill model or offered partnership. I would be wary of any resident who simply wants a straight salary from a group and I would be wary of any group that is only willing to offer that with no predefined end point to consider other reimbursement options.

    You could probably calculate at what point the risk of being in an eat what you kill model is better than the protection of the guarantee. Here's a good rule of thumb for general ENT. If your overhead is 50%: 20 clinic pts/day (taking 1/2 day off a week) of which 20% generate OR cases, you should make over $200k/yr.
    Last edited: 02.20.12
  25. Fah-Q

    Fah-Q Senior Member

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    I don't think opening your own practice should be seen as a last resort. In fact, I think all physicians should first considering opening their own practice. I realize it is not for everyone. It just seems like very few physicians even consider this option anymore.

    I know it seems daunting and intimidating to start a practice from scratch but don't forget who you are. You got into med school. You matched into otolaryngology. You completed a long and difficult training program. You will take on the challenge of opening a practice and succeed just like you have your entire life. The next time you are at the local frozen yogurt place or dry cleaners, ask yourself what ability the owner of that establishment has that you do not have. They probably knew next to nothing when they started their business too. Don't sell yourself short.
  26. OtoHNS

    OtoHNS ENT Attending

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    Haha, actually I couldn't agree more with Fah-Q here. Damn internet twisting my words...

    What I was trying to say before is that the option of opening your own practice is always there, so if you are coming out of an ENT residency, employment is really not an issue. There is always going to be demand for your skills. You may need to learn how to be a savvy businessperson to succeed in a saturated market, but it can be done. Most doctors are still lousy businesspeople. Business requires a lot of grunt work at times, but if you can spend 9+ years in med school and residency, you definitely have the work ethic and can certainly learn how to run an effective business.

    Coming out of ENT residency is different than every other transition in your adult life. College, med school, and residency are all competitive application processes where lots of people get rejected. Finally, the tables turn after residency: YOU are the one who gets to be the selector.

    My personal philosophy is that I wanted to end up in the long run in an "eat what you kill" money situation and be my own boss without any strings attached from a hospital or health system. I interviewed with several practices and found one that was a good personal and professional fit. I was strongly considering opening my own shop if I had not found the right fit.
  27. ORLHNS41

    ORLHNS41

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    This is a great post... can we sticky this?? I'd definitely like to be able to refer back to it in a year when I am getting ready to apply for jobs.
  28. resxn

    resxn

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    Since The Throat stopped coming by, I don't think there's been a moderator in this forum forever.
  29. Fah-Q

    Fah-Q Senior Member

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    Consider yourself nominated.
  30. earboy

    earboy pluggin away

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    Thanks guys very much! Your advice is priceless. I read a book on contractual pitfalls and it doesn't touch the quality of advice you've given in this thread.

    I did a bit more asking and got some more answers. Their average overhead is ~160K/month. Pretty high. That means I'd have cover 40K/month.

    There is a very reasonable non compete clause of 5 or 10 miles depending on if I leave voluntarily or if I am let go.

    The buy in is for real assets -25% of assets including the building, equipment, etc. Only caveat is that the surgicenter is a different entity as is the sleep and imaging. I would be able to get partnership in those as well but for some kind of $$$$.

    Health insurance is only for me and not my family which stinks.

    $2500/yr for CME.

    3 vacation weeks per year while an employee.

    Overall, given the location, its not a bad deal. I have an offer to stay as faculty for a whole lot more bonus with a significantly higher salary. Only downside for me is location.

    What can I ask for at this point? What is reasonable? Can I ask for a higher base salary or to make sure my family could get health insurance? Can I tell them I've got a higher offer so that they may increase theirs?

    I think it's time to get a lawyer!
  31. Fah-Q

    Fah-Q Senior Member

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    Their overhead is stupid high. Just stupid. In Texas??? Is their office in a luxury box in Cowboys Stadium???

    There is nothing reasonable about non-competes. They restrict your ability to earn a living and provide for your family. Do not sign one. Ever.

    Ah ha. That's why their overhead is crazy high. They are printing money with a ancillary services. They don't care if they make any money practicing medicine. Oh, you say you want a piece of the printing machine. Well, that will cost you even more. You are being hired to split the overhead by 4 instead of 3. Just so you know.

    You can get a family high deductible policy for $300-400 per month. No big deal.

    Money is probably the worst reason to stay in academics. Open your own practice in the exact location you want and you will be making more than your chairman within 3 years.

    I've made my opinion of what you should do quite clear. Start your own practice and share space, call, etc. See how it goes and then buy-in to their honey pot later if you want. Live with them before you marry them.[/QUOTE]

    Only if you want to drop several thousand dollars and increase the complexity of the situation by a factor of 3.
  32. resxn

    resxn

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    I have a little bit different spin than Fah-Q, but we agree on most.

    Whoa. Warning sign. However, knowing that amount is not helpful. $160k/mo seems like a ton to me for a 4 person practice, mine's less than 1/2 that, but what matters is the overhead %. If they take in $1M/mo, that's obviously nothing then.

    Goal of overhead for a 3-4 ENT private single specialty practice should be 51% or less. In other words, their monthly collections then need to be $320k+. That's pretty high too for a 3-4 person practice. Also, what are they counting as their overhead. Since you're being hired as an employee of the practice, not of the sleep lab, imaging, or the surgicenter (which requires extra to be a part of), you should not be told the total overhead for all of that. Only for the practice itself (building mortgage, payroll, equipment leases, lines of credit, utilities, malpractice, CME, etc etc). If they haven't divided those parts of the practice into separate business entities, well then that's a warning sign because in Texas, it would be stupid not to for reasons your accountant and atty can get into.

    If they're willing to give you those numbers, they should be willing to give you the overhead percent. Heck, they may give you gross receipts for 2011. If they do that divide it by 12 and then by put that in the denominator under 160 and you'll get the month avg overhead. If it's over 60%, they do not have an efficient business model. Karen Zupko would be all over that. They may argue it's justified saying that they have the premiere practice, busiest clinics, blah blah blah. They can still do that with a good business model. Not saying this a deal breaker, just saying you need to know what you're taking on. The world's most expensive cruise ship still looks good during the early stages of sinking.

    One place I disagree with Fah-Q. In Texas, non-competes are pretty standard. If you're suburban, then these are reasonable numbers. The other thing about Texas, is that they are very difficult to enforce and nearly impossible to enforce if your contract is terminated by them for whatever reason.

    Pretty typical and fair if you get an independent appraisal. I agree with Fah-Q about them using you to cut overhead. I'm betting the percentage is quite high.

    Definitely a point to negotiate, but Fah-Q is right about getting a plan for the rest of your family at a reasonable rate.

    Not bad. Covers home study course and will get you a trip to the Academy probably.

    Typical

    Relocation expenses or sign-on bonus may be worth asking about. Base salary is always negotiable, but the bonus is probably locked. Family health insurance is also negotiable, but you're bumping your package up by $5k/yr or so with it--not much. You can tell them you have a higher offer, but that will do nothing if they don't need you. If they're desperate, it may help to make it seem that you are a hot commodity. However, ENT is a small world, so don't say that offer is anywhere near you--chances are they know that person. Also, there's a good chance one of them knows someone almost everywhere. Lies are easy to catch.

    Another point with which I diverge with Fah-Q. An atty is sooooooooo useful here. You can pay one about $400 to review your contract and make suggestions. You never have to let the practice know you've retained one. I can guarantee their lawyer wrote the contract they're giving you. If they didn't, the practice is really retarded. A $400 investment is a tremendously lucrative one if he gets you even $2500 more in that contract. Think of it that way.
  33. Fah-Q

    Fah-Q Senior Member

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    Word. Non-competes are really a personal decision. They restrict your ability to practice medicine and it is a deal breaker for me but not everyone feels strongly about them. I would strongly urge you to not sign one if you have the idea that you can just get out of it when the time comes. Yes, you can get out of it but it will cost you plenty of time (years in litigation), money ($50-100K would be a conservative estimate), and heartache. Moving away 10 miles might cost you even more as some of your established patients might decide you are just too far away for them and you lose some of your hard earned business. You have to consider the worst-case scenario and if it is unacceptable to you then don't sign the restrictive covenant.

    The bigger question is why do they want to you to sign a non-compete? Here's the deal: they know you would be much better off in the long run starting your own practice. They know you will eventually figure that out. When you do figure it out they don't want you to be able to pack up and move across the street and compete with them. They insert the non-compete because they want it to be prohibitively expensive for you to make the decision in 2 years that you should have made today. They figure that you are going to move into the area anyways and they would rather have you as an employee to help them with their ridiculously high overhead and to take most of the call than as a competitor (general ENT's hate to compete against peds fellowship trained ENT's).
  34. smq123

    smq123 John Singer Sargent Administrator SDN Senior Moderator SDN Advisor

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    Agreed...there's a lot that for physicians (even non-ENTs) to learn from this thread.

    If a lot of you in this thread think it should be stickied, say so - I will be happy to oblige.
  35. neutropeniaboy

    neutropeniaboy Blasted ENT Attending

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    Do so; it's exceptionally good material.
  36. OtoHNS

    OtoHNS ENT Attending

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    I'll second that.
  37. resxn

    resxn

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    yes, sticky
  38. smq123

    smq123 John Singer Sargent Administrator SDN Senior Moderator SDN Advisor

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