- Joined
- Nov 27, 2002
- Messages
- 7,890
- Reaction score
- 752
I have noticed that some of the topics we think have been thoroughly covered are actually pretty hard to find when searching. We frequently tell new users to search their questions first. I think we should try to address some of these topics in an informative manner. I will then link to these threads in the FAQ and hopefully we will have created a useful resource.
EM Pay and Compensation
For the purposes of this post I am using pay to mean how much income you can expect to make and compensation to describe the various ways Emergency Physicians (EPs) are paid based on hours worked, patients seen, work done and the infinite combinations of those elements. Compensation will also include a discussion of benefits although that subject really crosses both concepts.
EM Pay
EM pay is usually in the top half of the pay for physicians across the spectrum of specialties. The pay you can expect as an EP will depend on the type of practice you join such as academic vs. non-academic or corporate vs. independent. It also varies pretty dramatically by region and by urban vs. rural in some regions.
Simply put and in the current job market an EP can expect to make somewhere between $200,000 and $300,000 per year. The big urban areas such as LA, NY and SF tend to pay less because there are lots of docs who want to work there. That same supply > demand situation also reduces pay in some attractive areas like Hawaii, San Diego, Denver and other places with beaches or mountains. Areas that pay more to attract EPs have been places like west Texas and Oklahoma. Not all rural places can support premium EP pay to attract docs because of their payer mixes.
Important definition: Payer Mix = the ratio of insured patients to uninsured patients in a given area. If you work in an area with a poor payer mix you cant get paid a lot because there is no money coming in to pay you. Take this one to heart. It will affect you as an EP for the rest of your career unless significant political changes occur.
So the point is that some rural areas are too poor and have such bad payer mixes that they cant support the premium EP pay necessary to attract doctors. These are the kind of places that usually wind up staffing their EDs with non-boarded docs such as Family Medicine doctors.
For reference here are some sites that list EP pay (if any of these links are broken please let me know, thanks):
Salarywizard
AAEM
Alliedphysicians
I encourage others to add links to useful sites but please only post quality sites. Many of the headhunter sites that pop up first on a search are unreliable because theyre trying to sell you something and to that end they tend to be a bit over optimistic.
EM Compensation and Billing
There are many methods by which EP pay is determined. To start to understand these different models though it is important to shed some of the popular misconceptions about how doctors are paid that are held by most medical students. Most medical students think that doctors are employed by and paid by hospitals. This is NOT THE CASE. Most doctors are paid by their patients. We treat our patients, bill our patients and are paid by our patients or their insurers. This is true of every specialty. There are some doctors who have other arrangements but these are exceptions to the rule.
Given that most doctors make a living by billing their patients how does that work? Doctors bill for work done. If a patient is seen in an office they get a bill for the visit. If they are seen in a hospital they get a bill for that consult. If they needed a procedure or a surgery they get a bill for that.
In Emergency Medicine we bill both for the visit to the ED and for any procedures we do for the patient. The amount of the visit bill is based on complexity. This is where you encounter the Level 1 through 5 and Critical Care billing codes. Billing is in itself a horrendously complex undertaking. To bill effectively as an EP you have to have some training in it which is noticeably lacking in most residency programs. Most EPs flounder with it until their have time to take a course after residency.
A central element of EM billing is the RVU which stands for Relative Value Unit. The RVU is the amount of work done for various procedures and complexities of patients as determined by CMS. CMS is the Center for Medicare and Medicaid Services. The idea is that you shouldnt pay doctors based on the number of patients seen. That would be simple but it would punish doctors who see complicated patients and reward doctors who see simple patients. To equalize this anything you do for a patient will be assigned an RVU and you will be paid accordingly.
Heres a pretty good description of RVUs provided by SDN user Dakota:
Texmed on RVUs
Which is from this discussion of RVUs:
SDN RVU thread
Here are some past discussions on EM billing:
SDN billing discussion
SDN billing discussion
SDN billing discussion
Feel free to add more discussion of billing as well as old threads that are useful.
Now on to compensation.
Salary
The simplest model for compensating EPs is a salary. Under this system you are paid $X per month or year. Nothing else matters in such a system. This type of system is pretty rare and is usually limited to academic groups or groups in publicly owned hospitals. The good thing about this system is that you always know what you will make in a given month. The downsides of this system are many. There is no way to pay you for doing extra work like staying late to take care of a particularly complicated patient, coming in early because the doc before you is overwhelmed or covering for a sick colleague. Most of the time these groups evolve a barter system to account for this. For example if you call out sick you may owe the covering doc two shifts. Some groups set up a bonus system for the extras although that isnt a strict salary system and other groups actually pay each other out of pocket for such coverage. Another disadvantage of the salary system is that there is no disincentive to let patients to be seen pile up or to sign out too many patients at the end of the shift.
Hourly
Many groups pay based on a straight hourly rate. You work an hour; you get paid the rate for an hour. This system is almost as simple as the salary and it does suffer from some of the same disadvantages. There is no incentive to see patients. There is no disincentive to sign out lots of patients. The hourly system does accommodate staying late, coming in early and covering shifts for colleagues. If you work more hours you get paid more.
Fee For Service
Fee for service is the system where EPs are paid based on the work they do. This type of system is frequently referred to as the eat what you kill system which if regrettably termed for a medical entity is a roughly accurate description of the model. This system relies on the RVUs we talked about before. The more RVUs you generate the more you get paid. This system has the advantages of providing incentives and rewards for working harder and seeing more patients. There is a disincentive to leave patients waiting to be seen or signing them out to other doctors. This system has the benefit of making a particularly busy shift less irritating for the doc because they know they will be paid accordingly. One disadvantage of this system is that income is not consistent month to month because it depends on acuity and volume. Another pitfall is that there are incentives to do more than is indicated for a patient or even to up code because either of those things will result in an increase in pay for the doc. Doing too much is bad medicine and up coding is illegal.
Up coding = fraudulently documenting things that didnt happen or that happened but werent indicated to increase a patients bill. This is illegal.
There is another VERY IMPORTANT distinction when looking at fee for service compensation schemes. Within a fee for service model doctors can be paid based on the work done or the money collected.
This is complicated but crucially important. First you have to understand that when you bill as an EP the patient is sent a bill that is connected to your CMS ID number. For the curious its your CMS UPIN (Unique Personal Identification Number). So it is easy to track how much money is collected under your number. Groups that use the collections model take the money collected by a given EP, deduct the overhead expenses (administrative costs, malpractice, etc.) and give the rest to the doctor. The advantage of this is that it is the most direct way to pay an EP based on the work that they do. It shields them from subsidizing other EPs in their group who might be weaker. It does have some very important disadvantages though. Under this system if you see a patient who doesnt pay their bill you eat that cost by yourself. For example if you have to spend a lot of time working on a critically ill homeless guy you get nothing at all for your efforts. In fact you will have lost money because you spent all that time and didnt see any paying patients. This fact can lead to cherry picking of charts. That means that doctors may start to fight over who gets to see the insured little old lady with chest pain and who is forced to deal with the homeless dug addict with an abscess.
The other way to do fee for service is to take all of the money collected by the group. Put it in a pot and then divide up the pot by the RVUs generated by the EPs. Using this system there you will get paid for seeing that homeless guy although the group as a whole takes a hit. This system spreads the cost of treating the uninsured across the group so that no one takes as big a loss. This mitigates the risk of having a shift where you see a disproportionate number of uninsured patients or working a shift in a hospital with a poorer payer mix.
Compensation and Benefits
Let me throw in a word about compensation and benefits with respect to EM. Remember that compensation includes everything tangible you get from your job. Money is only a part of it. Medical, vision, dental, disability, malpractice insurances, tail insurance (which covers your malpractice once you leave a job), education and licensure expenses, professional association dues (e.g. ACEP, AAEM, AMA, etc.) parking, meals while on duty, scrubs, required immunizations and testing (e.g. TB tests) and various other things are sometimes provided, and sometimes not. All of that stuff is negotiable when looking at a job or signing a new contract.
Most new residency grads are too fixated on income as the main form of compensation. Most underestimate the value of things like health and disability insurance when it comes to choosing between job offers. Buying insurance and other benefits on the open market is expensive. Health insurance, even for a young healthy family, will run hundreds of dollars a month and can easily be tens of thousands a year. A good benefits package will equal between $15k and $50k of cash income, especially if you have some health issues. Remember this when looking at job offers. The best thing to do is to use the internet to get quotes in the market youre looking at (i.e. the city you would be in) to see what it would cost to buy the things that a particular job offer lacks so you can compare apples to apples.
EM Pay and Compensation
For the purposes of this post I am using pay to mean how much income you can expect to make and compensation to describe the various ways Emergency Physicians (EPs) are paid based on hours worked, patients seen, work done and the infinite combinations of those elements. Compensation will also include a discussion of benefits although that subject really crosses both concepts.
EM Pay
EM pay is usually in the top half of the pay for physicians across the spectrum of specialties. The pay you can expect as an EP will depend on the type of practice you join such as academic vs. non-academic or corporate vs. independent. It also varies pretty dramatically by region and by urban vs. rural in some regions.
Simply put and in the current job market an EP can expect to make somewhere between $200,000 and $300,000 per year. The big urban areas such as LA, NY and SF tend to pay less because there are lots of docs who want to work there. That same supply > demand situation also reduces pay in some attractive areas like Hawaii, San Diego, Denver and other places with beaches or mountains. Areas that pay more to attract EPs have been places like west Texas and Oklahoma. Not all rural places can support premium EP pay to attract docs because of their payer mixes.
Important definition: Payer Mix = the ratio of insured patients to uninsured patients in a given area. If you work in an area with a poor payer mix you cant get paid a lot because there is no money coming in to pay you. Take this one to heart. It will affect you as an EP for the rest of your career unless significant political changes occur.
So the point is that some rural areas are too poor and have such bad payer mixes that they cant support the premium EP pay necessary to attract doctors. These are the kind of places that usually wind up staffing their EDs with non-boarded docs such as Family Medicine doctors.
For reference here are some sites that list EP pay (if any of these links are broken please let me know, thanks):
Salarywizard
AAEM
Alliedphysicians
I encourage others to add links to useful sites but please only post quality sites. Many of the headhunter sites that pop up first on a search are unreliable because theyre trying to sell you something and to that end they tend to be a bit over optimistic.
EM Compensation and Billing
There are many methods by which EP pay is determined. To start to understand these different models though it is important to shed some of the popular misconceptions about how doctors are paid that are held by most medical students. Most medical students think that doctors are employed by and paid by hospitals. This is NOT THE CASE. Most doctors are paid by their patients. We treat our patients, bill our patients and are paid by our patients or their insurers. This is true of every specialty. There are some doctors who have other arrangements but these are exceptions to the rule.
Given that most doctors make a living by billing their patients how does that work? Doctors bill for work done. If a patient is seen in an office they get a bill for the visit. If they are seen in a hospital they get a bill for that consult. If they needed a procedure or a surgery they get a bill for that.
In Emergency Medicine we bill both for the visit to the ED and for any procedures we do for the patient. The amount of the visit bill is based on complexity. This is where you encounter the Level 1 through 5 and Critical Care billing codes. Billing is in itself a horrendously complex undertaking. To bill effectively as an EP you have to have some training in it which is noticeably lacking in most residency programs. Most EPs flounder with it until their have time to take a course after residency.
A central element of EM billing is the RVU which stands for Relative Value Unit. The RVU is the amount of work done for various procedures and complexities of patients as determined by CMS. CMS is the Center for Medicare and Medicaid Services. The idea is that you shouldnt pay doctors based on the number of patients seen. That would be simple but it would punish doctors who see complicated patients and reward doctors who see simple patients. To equalize this anything you do for a patient will be assigned an RVU and you will be paid accordingly.
Heres a pretty good description of RVUs provided by SDN user Dakota:
Texmed on RVUs
Which is from this discussion of RVUs:
SDN RVU thread
Here are some past discussions on EM billing:
SDN billing discussion
SDN billing discussion
SDN billing discussion
Feel free to add more discussion of billing as well as old threads that are useful.
Now on to compensation.
Salary
The simplest model for compensating EPs is a salary. Under this system you are paid $X per month or year. Nothing else matters in such a system. This type of system is pretty rare and is usually limited to academic groups or groups in publicly owned hospitals. The good thing about this system is that you always know what you will make in a given month. The downsides of this system are many. There is no way to pay you for doing extra work like staying late to take care of a particularly complicated patient, coming in early because the doc before you is overwhelmed or covering for a sick colleague. Most of the time these groups evolve a barter system to account for this. For example if you call out sick you may owe the covering doc two shifts. Some groups set up a bonus system for the extras although that isnt a strict salary system and other groups actually pay each other out of pocket for such coverage. Another disadvantage of the salary system is that there is no disincentive to let patients to be seen pile up or to sign out too many patients at the end of the shift.
Hourly
Many groups pay based on a straight hourly rate. You work an hour; you get paid the rate for an hour. This system is almost as simple as the salary and it does suffer from some of the same disadvantages. There is no incentive to see patients. There is no disincentive to sign out lots of patients. The hourly system does accommodate staying late, coming in early and covering shifts for colleagues. If you work more hours you get paid more.
Fee For Service
Fee for service is the system where EPs are paid based on the work they do. This type of system is frequently referred to as the eat what you kill system which if regrettably termed for a medical entity is a roughly accurate description of the model. This system relies on the RVUs we talked about before. The more RVUs you generate the more you get paid. This system has the advantages of providing incentives and rewards for working harder and seeing more patients. There is a disincentive to leave patients waiting to be seen or signing them out to other doctors. This system has the benefit of making a particularly busy shift less irritating for the doc because they know they will be paid accordingly. One disadvantage of this system is that income is not consistent month to month because it depends on acuity and volume. Another pitfall is that there are incentives to do more than is indicated for a patient or even to up code because either of those things will result in an increase in pay for the doc. Doing too much is bad medicine and up coding is illegal.
Up coding = fraudulently documenting things that didnt happen or that happened but werent indicated to increase a patients bill. This is illegal.
There is another VERY IMPORTANT distinction when looking at fee for service compensation schemes. Within a fee for service model doctors can be paid based on the work done or the money collected.
This is complicated but crucially important. First you have to understand that when you bill as an EP the patient is sent a bill that is connected to your CMS ID number. For the curious its your CMS UPIN (Unique Personal Identification Number). So it is easy to track how much money is collected under your number. Groups that use the collections model take the money collected by a given EP, deduct the overhead expenses (administrative costs, malpractice, etc.) and give the rest to the doctor. The advantage of this is that it is the most direct way to pay an EP based on the work that they do. It shields them from subsidizing other EPs in their group who might be weaker. It does have some very important disadvantages though. Under this system if you see a patient who doesnt pay their bill you eat that cost by yourself. For example if you have to spend a lot of time working on a critically ill homeless guy you get nothing at all for your efforts. In fact you will have lost money because you spent all that time and didnt see any paying patients. This fact can lead to cherry picking of charts. That means that doctors may start to fight over who gets to see the insured little old lady with chest pain and who is forced to deal with the homeless dug addict with an abscess.
The other way to do fee for service is to take all of the money collected by the group. Put it in a pot and then divide up the pot by the RVUs generated by the EPs. Using this system there you will get paid for seeing that homeless guy although the group as a whole takes a hit. This system spreads the cost of treating the uninsured across the group so that no one takes as big a loss. This mitigates the risk of having a shift where you see a disproportionate number of uninsured patients or working a shift in a hospital with a poorer payer mix.
Compensation and Benefits
Let me throw in a word about compensation and benefits with respect to EM. Remember that compensation includes everything tangible you get from your job. Money is only a part of it. Medical, vision, dental, disability, malpractice insurances, tail insurance (which covers your malpractice once you leave a job), education and licensure expenses, professional association dues (e.g. ACEP, AAEM, AMA, etc.) parking, meals while on duty, scrubs, required immunizations and testing (e.g. TB tests) and various other things are sometimes provided, and sometimes not. All of that stuff is negotiable when looking at a job or signing a new contract.
Most new residency grads are too fixated on income as the main form of compensation. Most underestimate the value of things like health and disability insurance when it comes to choosing between job offers. Buying insurance and other benefits on the open market is expensive. Health insurance, even for a young healthy family, will run hundreds of dollars a month and can easily be tens of thousands a year. A good benefits package will equal between $15k and $50k of cash income, especially if you have some health issues. Remember this when looking at job offers. The best thing to do is to use the internet to get quotes in the market youre looking at (i.e. the city you would be in) to see what it would cost to buy the things that a particular job offer lacks so you can compare apples to apples.
