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Discussion in 'Anesthesiology' started by bic_atlantis, Aug 27, 2017.
Thank you for your posts. You're an intelligent individual.
From these posts, it seems like the best financial outcome is 1099 employment unless the W2 employment has some great benefits?
You can roll a cash balance plan without having to leave your job? Or are you quitting and then getting rehired?
You have to evaluate the whole package including the pay, benefits, etc. W-2 in a non income tax State combined with a good salary and MAXED out 401K would certainly be a job worth considering for the long term.
Too many new graduates don't look at the whole picture but instead focus on that W-2 wage offered by the AMC. For many new graduates that is not in their best interest over the long run.
The job market in this field is SATURATED with Anesthesiologists looking for good jobs. This means that many jobs posted are from management companies or hospitals looking for cheap labor. Even the locums companies will charge a small fortune per hour for your services while paying you maybe 2/3 of what they collect from the group/hospital.
Uhhh no. Just do the simple math. Calculate how much tax savings you'd have with the retirement account of the 1099 job compared with what the W2 job would give. Then consider how much the malpractice insurance, health insurance, etc... are worth with the W2 job. While you are able to make some business deductions being 1099, you're also responsible for the employer portion of SS and Medicare taxes and these can be significant. If you read WCI, he has stated that generally speaking, a 1099 job has to pay about 30k more than the W2 job to be considered equivalent. Also, remember that as a W2 you can still save in a very tax efficient manner in a taxable account, which has no annual limits. Obviously not as good as a tax deferred account but it's not a bad option at all. Investing in real estate is also an option many W2 people use very successfully.
1. There's no reason you can't have both a 401k and a cash balance plan in a W2 job. My practice offers both.
2. If anesthesiologists are trying to figure out ways to save over $100k/year pretax then it's probably still a pretty good job.
I think the point they're making is that there isn't an AMC that offers a pretax plan that allows contributions of 55k and above . There are many PP groups where you are W2 and still able to have that setup
Best is to be a partner in a PP group. We pay ourselves w-2. We can max 401k + cash balance plan + can expense nearly everything through the practice pre-tax you could do as a 1099 but this way your personal return stays very clean and simple.
Any suggestions for resources that go in detail about this? Is the book White Coat Investor a good place to start? Any others?
Let's talk a bit about the chances for that. I would say it's under 20% for the generation going into anesthesiology today.
That is depressing. Blah
I never said most likely - I said best . So glad I don't live in your corner of the country.
But I can tell u working with a Sheridan/amsurg/envision (whatever they call themselves). I've seen their w2 "benefits"
Health insurance for families is subpar compared to more generous other w2. Retirement match is a paltry $5000
So Sheridan w2 blows. If u ask me I rather have 350k w2 Sheridan or 350k 1099. I take 1099 cause their benefits suck.
Now if u ask me if I rather take my old state employed w2 @300k with great benefits vs 350k 1099. I'd take the state w2 job.
So going down the list
W2 benefits are Best with
1.state academic jobs
2. Private academic job
3. Hospital non profit w2 employed
4. AMCs (their benefits will vary, i would team health benefits above Sheridan since I have seen both).
Anyone know what typical benefits are for mednax? On that note, which amc has best benefits in your opinion?
I couldn't agree more. I don't think a cash balance plan is a magic trick to get you instantly wealthy.
I am familiar with only one and that's the one my practice uses. Baked in fees that are impossible to determine, vesting period, penalties for leaving early, commissions to be paid, other expenses, low rate of return, etc.
It is a great way to tax-defer income though.
I am just not convinced that you come out ahead in the long run.
Does anybody really contribute this much though?
I would imagine the only scenario would be an older anesthesiologist joining a practice late in life that needs to catch up quickly. I don't think that happens often though. I would imagine older anesthesiologists would be very hesitant to take a private practice job with a partnership track.
A million dollars per anesthesiologist means you either have a crushing workload, very good payer mix, very good contracts etc.
What type of cash balance plan lets you roll it out every 5 years?
i'll quit. i'll just take what i have a move to the sticks
that's not a problem in SoCal but it actually depends on what your definition of "doable" is. can you rent and commute to work? yeah no problem. can you buy a nice home? yeah, probably, but you'll be saving for a big down payment and also competing with very wealthy people not in medicine. if you're talking more suburbs (like very suburbs) you're probably good. just remember, Cali has some highest home prices and also the highest taxes. But for all we pay out here we get plenty of sunshine.
im victim of this myself (especially me) and i considered getting a white coat. but then i got self-conscious. i felt people would think, "who does this guy think he is in his white coat all of a sudden". there are plenty of surgeons who don't rock a white coat and a still addressed "respectfully" by both staff and patients. i think at that point it has nothing to do with the white coat and more to do with an established culture.
One of our old timers actually maxes his out. Workaholic dude pushing 70 that up until this year was working 1.25 FTE's. Worked through the glory days of the 80's and bought his home way before real estate prices went bananas. Doesn't need the income so he's just socking it away.
That dude needs to get a life.
Haha. Ya. I agree. To his credit though he did spend 700k of his own money building an elementary school in his hometown back in India.
Sounds like a decent life. Whatever floats your boat.
700k for a school in India? He could have bought a reasonable sized town for that amount.
All depends if you are willing to move.
Well from what I hear AMC have very good contracts and payor mix. So if they have you supervising 1:4 and give you 4-6 weeks of vacation I don't see how the anesthesiologist isn't worth at least a million....what would you estimate based on what you know
My estimate would be $800K on the low end to $1.2 million on the high end for 4:1 coverage. The AMCs have great contracts with insurance companies.
I hear you overall, but I can tell you that in some areas of the country, all you need to be wiling is to go slightly off the beaten path from the major metropolitan centers. Not a lot, because that can put you in BFE which has problems of it's own, but just a bit out of the metro areas. Maybe 1.25-2+ hours away, into smaller or better, medium sized cities. I know of plenty of practices doing very well, with a good practice environment, reasonable partner track terms, and overall good gigs.
The problem is that many docs feel compelled to live in the large city centers (If this is for family then so be it), and miss these opportunities, and indeed don't even know about many of them.
So, if "being near the opera" is important to you, you are doing yourself a major disservice, because you can just make a little field trip to those cities while enjoying a great career OUT of them.
Actually, what's most important to me is practicing quality medicine. I find that many community hospitals (and their associated groups) lack that. There is both lack of resources and too much corner-cutting. I didn't go into medicine to sell out my soul and spine for thirty pieces of silver.
People don't realize the realities of a service specialty: in most places, you have to keep the overlords happy, at all costs, or you lose the contract. That means not practicing medicine by the book and playing Russian roulette. I have postponed many more cases in academia than in private practice because, in the latter setting, all everybody cares about is not to upset the apple cart. That explains why people are attracted to academia or the VA, even with less money and sicker patients.
This has not been my experience. I know this is a very real possibility, however. But, I don't hear this complaint from such places. Indeed, the team work between surgeons, anesthesia, and administration seems to be more civil than anything I've experienced in training as a med student or resident.
It's true, resources are limited. We have put in for 2 new US machines, and have been waiting a long time now. But, it has not compromised patient safety.
This happens when the Anesthesia department says "yes" to everything the administration and the Surgeons ask for. It doesn't have to be that way, and it isn't, in many community settings. The Anesthesia group can be united and powerful in a community setting. I agree that the trend is not in the right direction though.
Sure they can. Still have to work to keep that contract though.
You mean a PP group in an AMC area, who's afraid they could lose the contract? Yeah, sure.
I don't argue that, given the ~5 years I spent moonlighting at a rural community hospital in central California. They accepted a lot as "normal" that just wouldn't fly elsewhere.
Here's the problem with that line of thought, though. Most of the issues I observed there were a direct consequence of their difficulty in recruiting and retaining good doctors. Good doctors who go to those places aren't selling out, they're raising the standard of care. At least while their shift is underway.
So critical. My personal belief is that groups need to be extremely integrated and never really let their guard down. Now, if only some of my partners would understand this we'd be great.......
Agree. That's why AMC's are such a sham.
How does that set with the other partners?
Not sure what you're getting at here. If he wants to work his balls off until we have to pry the laryngoscope from his cold dead hands, that's his perogative. Why should the rest of us care. Furthermore, what he chooses to do with the money he has earned is also his perogative, and his alone. How is it any different from the hungry new grad working his balls off to repay his loans??
Potential tax liability depending on how your group is structured.
Ok, you're gonna have to educate me then. How is there a potential tax liability if he is contributing to the 401k and DBP in accordance with their respective limits and guidelines?
Is like to think our accountants would have said something if there was an issue.
How can a doc increase their chances of falling into this lucky 20%?
Research private groups in your desired area. Groups that have been private for a long time. Groups that are moderately sized (10-30 docs)
Ask how the partnership works, is it equal financially, are there equal voting rights, equal call/vacation schedule, are there super partners, what is the typical partner salary, what is the buyout, is there a buy in - the usuals
If you find a group with true equality of all of the above, don't be afraid to work hard and take a chance on that group if you trust and like the people.
No partnership, even in the fairest group, is a cake walk. Your going to work hard, your going to be treated like the junior doc, the contract will often be on the lower end of what your expecting for salary/benefits/retirement.
No one is going to give you partnership. Dont be afraid to take a leap of faith and earn it. I have personally witnessed many docs young and old walk away from an offer for silly reasons; way overcautious. If you dont like the health insurance, for example, cant it be overlooked by the fact that your partner salary is >500k? weigh that against the other job for 350k , more work, but "great benefits"
Partner track is temporary. It might be more attainable than you realize. If you find a fair and equal group, dont be so caught up in the details of the contract. Just get on board and do what it takes.. after a few years you have a better job than pretty much everyone else.
A better paid job. I am not so sure about better in general (unless one gets 12 weeks of vacation/year).
Also, I am not so sure there are many fair and equal groups remaining. Fair is a very relative term when most places (e.g. AMCs) are infested by sharks.
Maybe not. But there are still a few.
I took a huge leap of faith and it worked out. Of course, I'm always concerned about hanging onto our gig. I think we can and will do what is necessary to keep renewing contracts.
One confounder is a general feeling of skepticism which is influenced by not only real world changes in terms of less favorable employment prospects, SDN Anesthesia (50%), and anecdotes of people getting screwed over. So, when new grads deal with a PP group discussing partnership track and the partners give less than 100% transparency (as is usually the case when it comes to partners telling you what they make and what, specifically, their retirement benefits are), it can reinforce the distrust the candidate may already be predisposed to per above reasons.......
That being said, someone gets the job, so it's true that sometimes you need to take a risk and use your own intuition and any other source of reliable information to help you decide.
The "good gigs" are still out there but they become fewer and fewer each year as more sell out to management companies. It's fine to take a leap of faith when you are young and fresh out of residency. My warning to those looking for jobs is the following: the larger the hospital stipend the more at risk the contract. No hospital stipend or a tiny one would be the best type of situations for a partnership track these days.
Agree. You also must consider the reason that there may be a stipend - who employs the nurses?
I very much respect your opinions on most matters Blade. But, I'm not sure I see the trend of groups continuing to sell out at the rates we've seen in the past 10 years or so. I think a lot of groups come to regret it, and word travels fast. This influences the decisions of other groups considering such deals. What is a threat are the predatory AMC's, but they have their drawbacks as well from administrations point of view.
It's not like the administrators don't talk among themselves. How many have been burned by big promises and ultimate under delivery by the predatory AMC's? How many AMC's struggle to fill their ranks with locums docs and go back a year or two later looking for the stipend that they waived to get the contract in the first place. My sense is that hospital administrators are getting keen towards the antics of the predators, meanwhile PP docs are becoming aware that remaining independent isn't such a bad idea, even in the face of short term gains to be had.
I agree with GA8314 if you go further out from a city (not BFE) you should have decent chance of finding good private groups. That doesn't mean you need to go 2-3 hrs away from city. I won't disclose where I am at in the NE but there are AMC's aplenty. My group has remained private since day 1. We are also an hr from major city :0 Do i wish I was little closer to the major met area sure.... but I have a good job and minimal commute. The problem is many new grads just want to get a paycheck/uninformed/don't care about AMC jobs. It is sad but true.