Salaries

[reno911]

Point well taken. However, how can a practice change the net % collection on you if the contract explicitly states that this is the % you'll get if you generate x amount of money, etc?

The same way that they could pay you less per wRVU if your contract explicitly states that they will pay you $X/wRVU. As Mohs01 points out contracts are generally not in perpetuity. Most of the time they are just renewed on an annual basis.

Not to be annoying, but what other type of information would I need other than payer mix to determine whether a wRVU contract w a MSG is more favorable than a % net collections from a SSG? I have access to MGMA data for the area that I'm interested in. Thanks!

I don't think you're being annoying, and you are to be commended in that you are actually thinking about the problem in the correct way. Sadly, most residents in your position don't even get as far as you have. They just look at the guarantee and if that seems like enough they don't look into the details that closely. Most groups that you are going to negotiate with are not going to provide you with the detailed data that they possess that would allow you to make an exact comparison, so you're going too have to make a lot of estimates and assumptions, but you can probably get close. Here's some of the information you would need:

-An estimate of how much work you will actually do each day. Not just number of patients a day, but how many times will you code each cpt code on average.
-What their payer mix is (i.e., on average their payers reimburse X% of medicare)
-How successful are they at actually collecting what they bill for (this is probably the hardest to get a handle on for a variety of reasons).

Once you have this data, it's just a simple arithmetic problem. For a full-time Mohs surgeon, this is not too difficult, but for a high volume general dermatologist it will take more time. The answer will not be perfect, but it will get you close to what you need to know.

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[MOHS_01]

What about % collections 1st year out of Mohs fellowship? Single specialty med. sized practice. Slightly less than gen derm given higher overhead of most Mohs practices?

Maybe -- it is really just hard to say. I wish that I had time to provide an adequate overview but between parenting and everything else time is always in short supply these days.

I would caution everyone to take "% collections" with a grain of salt -- particularly without a sound understanding of how these numbers are achieved. Physician pay (in private practice especially) is a lot like making sausage -- the end product of a whole lot of things going into the mix. You have a relatively high component of your expenses that are only modestly variable -- space and staffing are the big two. Payroll and rent will almost always be two of your highest expenses, and while these can be variable at the margins, they are only marginally so. Medical supplies -- unless you use a lot of injectables -- will always be a relatively small absolute number. Percentages vary more according to the denominator (collections) than the numerator (absolute cost), and revenue is a function of volume, payer mix, procedure mix, and collection efficiency. A busy Mohs practice will often have a lower % overhead compared to general derm ONLY because the higher overhead associated with Mohs is more fixed in nature -- therefore the margins will improve with the greater the collections (in other words, the lower volume Mohs practice will have a high % overhead compared to one with greater volume). For example, we can look at my practice. For the first few years I was about half general derm half Mohs and my overhead ran about 50%. I would do 5 Mohs cases plus an excision or two and maybe 8-10 gen derm patients on surgery days and anywhere from 40-70+ gen derm patients ( ) on gen derm days. I worked four day weeks. This was before the loss of the multiple procedure reduction exemption for Mohs... then that hit and overhead as a % jumped. JUMPED. Sucked ass. Went to 6 Mohs a day to compensate and added every other Friday. Overhead stabilized back out around 50% -- but I was having to work more to do it. Then the insurance market really started to suck and Medicare Advantage plans started proliferating, dropping reimbursements even further. I bumped it 7 or 8 Mohs plus the excisions plus added to the gen derm volume on surgery days and kept one full gen derm day. Overhead kept going up, but the revenue outpaced it. I then dropped the gen derm day and went straight surgery days.... and to my surprise, revenue actually dropped! That was three years ago and there has been a steady erosion on the payments side despite a steady increase on the billing side. Welcome to life in the time of JackAssCare...

 

[reno911]

A total pay package of 40% of collections is not unreasonable; collecting 1m in year one may be a little more ambitious. Collections are harder to realize than you might imagine... and you'll be working with an 11 month calendar.

40% is approaching the lower end of what I would consider reasonable. It's not unfair, but it's not like you're getting some sort of amazing deal.

I'd say that getting 1 million in collections your first year out may be difficult. But once you're established, if you're a full-time dermatologist seeing a reasonable volume of patients, getting 1 million/year in collections should not be difficult at all in many parts of the country.

 

[MOHS_01]

40% is at the lower end of what I would consider reasonable. It's not unfair, but it's not like you're getting some sort of amazing deal.

I'd say that getting 1 million in collections your first year out may be difficult. But once you're established, if you're a full-time dermatologist seeing a reasonable volume of patients, getting 1 million/year in collections should not be difficult at all in many parts of the country.

I'd say that 35-45% has become pretty standard with some getting better and others getting worse... with 40% first year being the most common number tossed around. Some areas cap out at that... and, again, that all depends on what the practice mix is. If you are doing any injectables / cosmetics, that 40% becomes more attractive. If you are doing most E&M... well, nothing can really make that attractive.

Anyone with MGMA access? Maybe they can shed some light on the percentile breakdown of dermatologist revenue...

 

[asmallchild]

I'd say that 35-45% has become pretty standard with some getting better and others getting worse... with 40% first year being the most common number tossed around. Some areas cap out at that... and, again, that all depends on what the practice mix is. If you are doing any injectables / cosmetics, that 40% becomes more attractive. If you are doing most E&M... well, nothing can really make that attractive.

Anyone with MGMA access? Maybe they can shed some light on the percentile breakdown of dermatologist revenue...

I've seen quite a few contracts where cosmetics revenue clocks in at a different percentage. I've seen numbers from 15-30% depending on how much cosmetics the office does and what kind of deal they can get on their products (ironic I've always thought: the less cosmetics a practice does, the higher the price they typically pay for product, which results in a lower percentage for the new hire and thus, incentive for the new hire to build a cosmetics heavy practice)

 

[MOHS_01]

I've seen quite a few contracts where cosmetics revenue clocks in at a different percentage. I've seen numbers from 15-30% depending on how much cosmetics the office does and what kind of deal they can get on their products (ironic I've always thought: the less cosmetics a practice does, the higher the price they typically pay for product, which results in a lower percentage for the new hire and thus, incentive for the new hire to build a cosmetics heavy practice)

Truthfully, it should always be separated out -- I've seen more than one practice split up because it was not.

 

[sawtella]

I'd say that 35-45% has become pretty standard with some getting better and others getting worse... with 40% first year being the most common number tossed around. Some areas cap out at that... and, again, that all depends on what the practice mix is. If you are doing any injectables / cosmetics, that 40% becomes more attractive. If you are doing most E&M... well, nothing can really make that attractive.

Anyone with MGMA access? Maybe they can shed some light on the percentile breakdown of dermatologist revenue...

Pacific northwest:

For ESTABLISHED physicians,
Collections: median $837,187, 25th percentile at $763,310 and 75th percentile $1,078,376
Compensation: mean $462, 585; median $450,756; 25th% @ $337,001, 75th % at $566, 609 and 90th % at $693, 616
Comp: collection ratio: 0.469 median
wRVU production: median 7016, 25th% percentile 5173, 7th% percentile at 8,737

 

[reno911]

I'd say that 35-45% has become pretty standard with some getting better and others getting worse... with 40% first year being the most common number tossed around. Some areas cap out at that... and, again, that all depends on what the practice mix is. If you are doing any injectables / cosmetics, that 40% becomes more attractive. If you are doing most E&M... well, nothing can really make that attractive.

Anyone with MGMA access? Maybe they can shed some light on the percentile breakdown of dermatologist revenue...

I probably should have been clearer. I think 40% is on the low end for a long-term situation for an established, full-time dermatologist. For someone who is just starting out, then 40% is fine. If it never gets any better than that, i'd say it's a bad deal (not horrible, just suboptimal), and you'd probably be better off just going solo. If someone is going to cap you out at 35% long term, there would have to be something really exceptional about the opportunity for me to even consider it.

 

[MOHS_01]

Pacific northwest:

For ESTABLISHED physicians,
Collections: median $837,187, 25th percentile at $763,310 and 75th percentile $1,078,376
Compensation: mean $462, 585; median $450,756; 25th% @ $337,001, 75th % at $566, 609 and 90th % at $693, 616
Comp: collection ratio: 0.469 median
wRVU production: median 7016, 25th% percentile 5173, 7th% percentile at 8,737

Thanks. I had the sneaking suspicion that 80k/month in revenue for a dermatologist would place them soundly above median....

I probably should have been clearer. I think 40% is on the low end for a long-term situation for an established, full-time dermatologist. For someone who is just starting out, then 40% is fine. If it never gets any better than that, i'd say it's a bad deal (not horrible, just suboptimal), and you'd probably be better off just going solo. If someone is going to cap you out at 35% long term, there would have to be something really exceptional about the opportunity for me to even consider it.

Yeah, me too -- but it really just depends on how the numbers are broken down with regards to amount and mix of cosmetics, patch, ancillaries, etc. If you are going to be living strictly off of insurance reimbursement at that amount I'd be checking my emails for job offers... but if you have a high cosmetic / ancillary practice, 35% of a really big number may be better for you than 50% of a purely clinical general position.

 

[reno911]

If you are going to be living strictly off of insurance reimbursement at that amount I'd be checking my emails for job offers... but if you have a high cosmetic / ancillary practice, 35% of a really big number may be better for you than 50% of a purely clinical general position.

Yeah, I think that would fall into what I'd call an exceptional case. Generally groups that are recruiting for derms are trying to find new recruits to do the general medical derm so that they can do more of the high value stuff.

 

[sawtella]

Is it customary for practices to allow your % net collections to increase after a certain amount of time? One of my contract offers is based on a tiered structure, with 40% up to 800k, 45% up to 1.5mil, then 50% after 1.5 mil. I know there's no way I'll ever get close to 1.5 mil doing general derm. The practice does have a separate aesthetics suite but it seems that most of it is done by the midlevels and the MDs are not that interested in doing it. However, they are offering 60% of gross collections of fillers/injectables after cost.

 

[reno911]

Is it customary for practices to allow your % net collections to increase after a certain amount of time? One of my contract offers is based on a tiered structure, with 40% up to 800k, 45% up to 1.5mil, then 50% after 1.5 mil. I know there's no way I'll ever get close to 1.5 mil doing general derm. The practice does have a separate aesthetics suite but it seems that most of it is done by the midlevels and the MDs are not that interested in doing it. However, they are offering 60% of gross collections of fillers/injectables after cost.

I wouldn't say that the tiered structure is customary, but it ought to be for the reasons that Mohs01 has pointed out earlier (i.e., once your fixed costs are covered, then each additional patient you see is more profitable than the last). So, something like what you've outlined makes sense (although I might quibble with the precise cutoffs -- I'd have to put some thought into them).

As far as allowing your percentage of collections to increase with time. There are a variety of ways this can be experienced. A very common way is that they start you off at something like 40%, but you're on some sort of partnership track and once you become partner, you will keep all collections less actual overhead (which normally comes out to more than 40%).

Another way is with the tiered structure that you describe. If the tiers are set up differently, you can easily imagine a young dermatologist just starting out not really seeing a high volume and being stuck on the lower tiers (and hence lower percentages), but once his or her practice builds and the volumes go up and the higher tiers of compensation are realized, which means the average percentage of all collections received has gotten better with time.

The scheme for cosmetic compensation you've described is also not uncommon. If they are going to subtract out the cost of the material before calculating the percentage, the the percentage that you get paid should be greater than what you get for general derm primarily because there is much less collections risk and hassle in a well-run cosmetic practice.

 

[MOHS_01]

Is it customary for practices to allow your % net collections to increase after a certain amount of time? One of my contract offers is based on a tiered structure, with 40% up to 800k, 45% up to 1.5mil, then 50% after 1.5 mil. I know there's no way I'll ever get close to 1.5 mil doing general derm. The practice does have a separate aesthetics suite but it seems that most of it is done by the midlevels and the MDs are not that interested in doing it. However, they are offering 60% of gross collections of fillers/injectables after cost.

That's precisely how I would structure a new derm's comp formula -- be it wRVU based or collections based -- for that is how practice finance most often works (although the exact tiering would require a little more pencil and paper math to determine). That is how the high performing practices that I have spoken with prefer to structure their associate comp formula; interestingly enough, the lack of interest and desire to perform cosmetics is another thing that I have observed in virtually every high volume / high comp practices.

When it comes down to it, you are going to practice in a certain fashion and that fashion will dictate your hourly burn rate. The difference between your revenue generation and your burn rate sets the realistic cap for your compensation... so low revenue density activities are the first to be cut if given the choice... and should not be offered once the reasonably expected revenue drops below that required for your burn rate.

 

[sawtella]

[QUOTE="interestingly enough, the lack of interest and desire to perform cosmetics is another thing that I have observed in virtually every high volume / high comp practices.
[/QUOTE]

Thanks for the replies reno911 and MOHS_01. Why do you think this is? If you're banging out excisions and destructions instead of doing cosmetics, do you think just straight med derm can be as profitable as doing injectables but without the hassle of dealing with high maintenance patients?

 

[asmallchild]

Thanks for the replies reno911 and MOHS_01. Why do you think this is? If you're banging out excisions and destructions instead of doing cosmetics, do you think just straight med derm can be as profitable as doing injectables but without the hassle of dealing with high maintenance patients?

It depends on your negotiated rates for gen derm and your negotiated % for cosmetics but yes, many do find it's easier to just crank out the volume in gen derm rather than deal with cosmetics patients

I've moved away from a major metropolitan area and the cosmetics patients are significantly more easy going. But at my last gig, they would fight you tooth and nail for everything. Can I get a lower price? Can I get a free touch up? I'm not happy can I get a free redo?

Depending on your location, you may have other offices or even specialties under cutting you on price thereby further sapping profitability from your cosmetics schedule

 

[MOHS_01]

You'd have to pay me 5k an hour to listen to not-exactly-attractive people trying in vain to be slightly less unattractive.... so maybe I'm not the best to ask.

 

[MOHS_01]

To answer your question, though - currently, at least, the most profitable thing per hour this side of path is small destructions and biopsies and like. The guys who do the best are those who everyone hates - they do the easy path, the easy Mohs, and lump and bump derm. If they really are gaming the system, they throw some patch in there for good measure. Ha.

 

[Slack3r]

Is there a field that has more to lose than derm when/if we transition away from fee-for-service? I'm not convinced there is.

 

[MOHS_01]

Is there a field that has more to lose than derm when/if we transition away from fee-for-service? I'm not convinced there is.

Not that I can imagine... the house hates us... and the house makes the rules.

 

[reno911]

interestingly enough, the lack of interest and desire to perform cosmetics is another thing that I have observed in virtually every high volume / high comp practices.

Thanks for the replies reno911 and MOHS_01. Why do you think this is? If you're banging out excisions and destructions instead of doing cosmetics, do you think just straight med derm can be as profitable as doing injectables but without the hassle of dealing with high maintenance patients?

My experience has been different on this issue. In my group the highest compensated general derm docs do the most cosmetics (botox, fillers, and lasers). They also do the most general derm. However, they all want to do even more cosmetics.

 

[Medicine123abc]

I'm only a resident so the nuances of CPT codes, RVU committees, billing and insurance companies do escape me.

But, I believe in dermatology's resilience based on simple economics.

Wait times - essentially, there are few specialties where wait times are so long (outside of maybe psychiatry). Even in Boston with the highest per-capita of dermatologists, the wait times are the highest. This suggests to me an underlying unmet demand.

I'll use GI as an example. Everyone above the age of 50 should have an interaction with a GI physician if only for a colonoscopy. It's very easy to argue (albeit minimal clinical evidence) that everyone deserves one skin check even without specific risk factors. More dermatologists can easily induce more demand for their services. The demand is infinite - radiation oncologists can't say that. Non-invasive cosmetic procedures continue to be in demand and grow far in excess compared to spending in other segments of the economy.

The reality is that the compensation for Dermatology (even if it goes down 30%) is still pretty attractive in the context of all of medicine. 4 days a week. No call. Low liability. In general, more appreciative patients. Sign me up. Beats the hell out of family practice everyday of the week.

In the context of my radiology/pathology/anesthesiology colleagues, the future looks pretty damn bright to me. If all of medicine is a sinking ship, Dermatology is a submarine.

 

[calvnandhobbs68]

Definitely a thing. I no longer have that rule, but I did for three years when I was trying to establish a surgical practice; now everyone requires a referral and everyone knows to direct those elsewhere. In my mind it is no different than the pulmonologist who decides to limit his/her practice and not follow pulmonary hypertension patients.... or, in my case, the cardiologist who decides that he is not going to manage diabetes.

Uh...no. A dermatologist who refuses to see rashes is not the same thing as a cardiologist who doesn't manage diabetes. Maybe the same thing as the pulm example but a better example would probably be a general orthopedist who refuses to see knee complaints or a FM doc who refuses to see patients with diabetes. It borders on ridiculous. Trying to mostly see non-rash problems? Sure. Refusing to see rashes? Come on now...

I can kind of get it if you're someone starting to start up a surgical practice who wants to free up his schedule for surgical patients (which you wouldn't be able to do if your schedule was filled with rash patients all the time).

 

[MOHS_01]

Definitely a thing. I no longer have that rule, but I did for three years when I was trying to establish a surgical practice; now everyone requires a referral and everyone knows to direct those elsewhere. In my mind it is no different than the pulmonologist who decides to limit his/her practice and not follow pulmonary hypertension patients.... or, in my case, the cardiologist who decides that he is not going to manage diabetes.

Uh...no. A dermatologist who refuses to see rashes is not the same thing as a cardiologist who doesn't manage diabetes. Maybe the same thing as the pulm example but a better example would probably be a general orthopedist who refuses to see knee complaints or a FM doc who refuses to see patients with diabetes. It borders on ridiculous. Trying to mostly see non-rash problems? Sure. Refusing to see rashes? Come on now...

I can kind of get it if you're someone starting to start up a surgical practice who wants to free up his schedule for surgical patients (which you wouldn't be able to do if your schedule was filled with rash patients all the time).

Ummmm.... I apologize if my screen name [s=]confused you[/s] is confusing. Perhaps you forget that the cardiologist completed (and is likely boarded in) internal medicine prior to the cards fellowship. Other than that...

 

[calvnandhobbs68]

Ummmm.... I apologize if my screen name confused you is confusing. Perhaps you forget that the cardiologist completed (and is likely boarded in) internal medicine prior to the cards fellowship. Other than that...

No I didn't necessarily mean you specifically however I believe the earlier posts referred to general dermatologists who just decided they weren't going to see rashes anymore because biopsies and excursions are more profitable.

And yeah it is my opinion that anyone who isn't seeing major problems within their specialty primarily because it's more profitable to see other stuff is just money grubbing. Just like it can be your opinion that that's cool.

 

[Lawgiver]

Interesting. I never have tried 50-60 (I feel drained at end of day seeing 40). The other thing that would always get me is the occasional patient that is a major talker, needy with a long list of (sometimes written) complaints. There are always 1-2 in your daily schedule. If I'm seeing 30-35 I feel like I can slow down a little, talk with them for 15 minutes and they leave pretty happy. If you are seeing 50 and have 6-7 minutes this strategy doesn't work so it seems you'd always have a couple angry patients a day.

If you have a good method of dealing with this efficiently I'd love to hear it.

lol wow. another post im adding to my how to be an awesome doctor list!

 

[deleted647155]

bump. this conversation is really interesting.
are dermatologists happy these days?

 

[Dermione Granger]

http://www.medscape.com/features/slideshow/lifestyle/2016/dermatology#page=1

We are pretty happy compared to our peers.

I am still pretty happy. I am hearing more stories about burnouts from others about increasing admin tasks and decreasing compensation though. This is however across all the fields in medicine.

 

[DermDudeMD]

http://www.medscape.com/features/slideshow/lifestyle/2016/dermatology#page=1

We are pretty happy compared to our peers.

I am still pretty happy. I am hearing more stories about burnouts from others about increasing admin tasks and decreasing compensation though. This is however across all the fields in medicine.

Can someone in practice please comment on how the ACA has lead to such a significant impact on burnout? If you can, please be as detailed as possible so someone who does not know the ins and outs of private practice can understand. Thank you.

 

[deltamed]

Can someone in practice please comment on how the ACA has lead to such a significant impact on burnout? If you can, please be as detailed as possible so someone who does not know the ins and outs of private practice can understand. Thank you.

One thing I've noticed is an uptick in unhappy complaining patients due to high deductible plans so common with obamacare. Unhappy patients leads to doctor burnout. Sure, you have insurance but you didnt realize that a single skin biopsy will generate a $200 bill. Need an excision? You'll be getting a $750 dollar bill because your crappy plan only covers stuff after you've hit $6000 dollars.

These plans always existed but many have been pushed from fully covered to these high deductible plans by the ACA. And they are paying more in premiums than before. And guess where their money is going.... Want to wager how much a biopsy costs the millions of people who now have new medicaid coverage?

At it's core, the ACA is actually just a money redistributionist scheme.