Can anyone shed light on realistic compensation (also private practice questions)

[Anakinmemer]

I am a medical student interested in ophthalmology and I am trying to learn about the things they don't teach you in medical school aka what life is actually like as an ophthalmologist. In my reading I have noticed the dichotomy of compensation figures quoted is more extreme than any other field. What I mean by that is certain threads on sdn and reddit have people saying ophthalmologists can make 7 figures, and others showing academic and private starting salaries below 200k which seems egregiously low compared to other specialties. I have a few questions about this:

1. I know personal salaries are private so I'm not asking anyone to share, but based on your knowledge of the job market what are realistic ranges one can expect in private practice vs academic, starting career vs established doctor.

2. If the range between private practice and academic is as big as people say, why? I know academic takes a cut in every field, but why would ophthalmologists be hit the hardest? For 4 years of training including surgical training a sub 200k salary with little room for growth seems awful and I don't understand why ophthalmologists would even take those positions when academic centers pay other 4 year trained physicians much more (anesthesia).

3. From what I understand, in private practice you start as an associate with a similar salary to academic, however, you can be eligible to buy into the practice after a few years which is how you would make a high income in this field. My question is how hard is it to become a partner in today's world? Is that something few associates achieve, meaning most ophthalmologists are poorly paid but the average is brought up by the few older practice owners making high six figures to seven figures? It just doesn't really make sense to me why partners would let someone else buy in when they can churn through associates who make them more profit year after year, without the negative of sharing equity with them.

4. How realistic/difficult is it to start your own practice so you don't have to pray you're offered a partnership position after investing time in someone's else practice? One thing that draws me to ophtho is the vertical integration of business into the field which seems to be dying in many other fields of medicine, does it face the same fate for me who won't be starting to practice for another 8 years?

My overarching question would be, is being a partner in a practice (either by building my own or working hard to earn it in another practice) and achieving a high compensation a realistic goal for me or are those positions only held by older docs who are going to sell to PE when they retire, meaning my options will be PE or academic.

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[mjohnsonets]

There's a lot to unpack in your post so I'll answer the numbered ones for a comprehensive ophthalmologist in private practice. There is a lot of nuance that will be missed in this post:

1.) Starting base $175,000-$250,000, experienced base (DOE) $250,000-300,000, maybe more depending on where you are. If you put too much emphasis on this number you will miss out on some great opportunities. There are production bonuses to be earned on top of these that can potentially double your income before becoming a partner.

2.) I have little experience recruiting for academic centers and would defer this question to those with better knowledge than I have.

3.) Partnership opportunities exist but are becoming less numerous due to private equity buying practices. Some owners do churn associates but it more typical of highly desirable areas to live. If an owner does this too much, they will eventually develop a reputation for it and it will make recruitment much harder. Plus it's just not a cool thing to do in general. You can be more profitable long term by growing your business not trying to squeeze money out of new docs. It is penny wise, pound foolish you might say.

4.) I don't know the challenges of starting your own practice but I definitely don't believe that solo practice is dead. I did at one point and one doc, in particular, pointed me in the opposite direction. It's very doable but it takes a different mindset and understanding of delayed gratification to get it done well. Market saturation and overhead costs are also the other key. This may sound obvious but important enough to mention, generally being good a good entrepreneur which you won't learn in any of your formal training.

Overall, in 8 years your options will be private practice, PE private practice, hospital, and academic. Between now and your time hospitals and PE private practices will gain market share by taking it from private practices. Partnership may be less likely but still available and you can start your own practice if you really get frustrated.

 

[Anakinmemer]

There's a lot to unpack in your post so I'll answer the numbered ones for a comprehensive ophthalmologist in private practice. There is a lot of nuance that will be missed in this post:

1.) Starting base $175,000-$250,000, experienced base (DOE) $250,000-300,000, maybe more depending on where you are. If you put too much emphasis on this number you will miss out on some great opportunities. There are production bonuses to be earned on top of these that can potentially double your income before becoming a partner.

2.) I have little experience recruiting for academic centers and would defer this question to those with better knowledge than I have.

3.) Partnership opportunities exist but are becoming less numerous due to private equity buying practices. Some owners do churn associates but it more typical of highly desirable areas to live. If an owner does this too much, they will eventually develop a reputation for it and it will make recruitment much harder. Plus it's just not a cool thing to do in general. You can be more profitable long term by growing your business not trying to squeeze money out of new docs. It is penny wise, pound foolish you might say.

4.) I don't know the challenges of starting your own practice but I definitely don't believe that solo practice is dead. I did at one point and one doc, in particular, pointed me in the opposite direction. It's very doable but it takes a different mindset and understanding of delayed gratification to get it done well. Market saturation and overhead costs are also the other key. This may sound obvious but important enough to mention, generally being good a good entrepreneur which you won't learn in any of your formal training.

Overall, in 8 years your options will be private practice, PE private practice, hospital, and academic. Between now and your time hospitals and PE private practices will gain market share by taking it from private practices. Partnership may be less likely but still available and you can start your own practice if you really get frustrated.

Thank you so much for your reply it helped a lot. A few follow up questions if you don't mind. What is the growth pathway like at PE private practice? Is there much room for vertical growth in compensation or would they just start you higher than true private practice but never offer an opportunity to buy in as a partner?

And second, is the PE and hospital takeover affecting other traditionally private practice fields similarly (for example derm, rads, anesthesia)?

Edit: Upon reviewing some data from MGMA, I see that ophthalmologists have the lowest compensation to work RVU's ratio of any specialty, what exactly does this mean? Are ophtho docs doing the most work for the least amount of pay?

 

[mjohnsonets]

Thank you so much for your reply it helped a lot. A few follow up questions if you don't mind. What is the growth pathway like at PE private practice? Is there much room for vertical growth in compensation or would they just start you higher than true private practice but never offer an opportunity to buy in as a partner?

And second, is the PE and hospital takeover affecting other traditionally private practice fields similarly (for example derm, rads, anesthesia)?

Edit: Upon reviewing some data from MGMA, I see that ophthalmologists have the lowest compensation to work RVU's ratio of any specialty, what exactly does this mean? Are ophtho docs doing the most work for the least amount of pay?

It depends on the model, the bonus opportunity for PE backed practices generally isn't as high. Some allow buy ins to the PE group, some allow buy ins to specific surgery centers but this is rarer. These are potential ways to grow your income but on the buy-in side, you really only get a payout if there is a sale. While I can't say exactly where PE groups are headed in 8 years, by then we may have one who is directly publically traded or more that are owned by publically traded PE groups - this is more likely. Then you are more likely able to buy stock at discounted rates as a benefit but this is just a guess honestly.

I only recruit Ophthalmology so no idea on other specialties, although I would imagine if they:
a) work in surgery centers
b) have fee for service patients or add ons frequently

then they are being pursued by private equity. I also wouldn't say hospitals are going to takeover, I just think they will increase their market share relative to private practice.

MGMA data is not a good reference for ophtho since there are so little responses from ophthalmologists for that data. I would tell you that it really depends on your hospital.

 

[RetinaDude]

Yeah, I never respond to “salary surveys”. I don’t want any non-medical people knowing how much we really make

 

[Anakinmemer]

Yeah, I never respond to “salary surveys”. I don’t want any non-medical people knowing how much we really make

Even as a medical student I definitely agree with this sentiment, all it does is place a big target on your back because the public thinks doctors salaries are what causes expensive health care (obviously not the case as they only make up 8% of US healthcare spending, but no one takes the time to research this).

What I will ask is this: If I were able to get into retina, do you think It will continue to be a profitable field with regards to the rest of medicine in the future? I know medical reimbursements are dropping across the board, but is there any imminent threat that would make you say "stay away" like the current EM docs are telling medical students about their field?

 

[LightBox]

Dude, not to jade you too much. But if you really want to make money, then own/run some businesses. You won't waste your 20s buried in books and doing guaics and your potential is limitless. I make a good living as an eye surgeon. But I "earn while I sleep" with the multiple businesses I own/run (and outside of real estate). With a scalable business, your ceiling is endless.

 

[Anakinmemer]

Dude, not to jade you too much. But if you really want to make money, then own/run some businesses. You won't waste your 20s buried in books and doing guaics and your potential is limitless. I make a good living as an eye surgeon. But I "earn while I sleep" with the multiple businesses I own/run (and outside of real estate). With a scalable business, your ceiling is endless.

That's true but I do like medicine and want to practice as a physician. However, I also want a wage I deem is fair for the amount of training and value provided to society by physicians. For example, I don't have any strong urge to make 7 figures or I wouldn't have gone into medicine in the first place like you said, but I would be unhappy making 200k as a mid career ophthalmologist considering that is what CRNA's make (and I think optometrists).

I assume you started earning as a physician and then used that money to get into other businesses (maybe I'm wrong). If I were to drop out of medical school I wouldn't have any money to do the same (and I wouldn't get to practice medicine which I want to do). Starting businesses from nothing would be near impossible.

I would be extremely interested in learning about how you incorporated your medical practice with other businesses and income sources, so if you want to PM me or message on here to explain a bit more I would really appreciate it. I understand if it is information you don't want to share though.

 

[mjohnsonets]

That's true but I do like medicine and want to practice as a physician. However, I also want a wage I deem is fair for the amount of training and value provided to society by physicians. For example, I don't have any strong urge to make 7 figures or I wouldn't have gone into medicine in the first place like you said, but I would be unhappy making 200k as a mid career ophthalmologist considering that is what CRNA's make (and I think optometrists).

I assume you started earning as a physician and then used that money to get into other businesses (maybe I'm wrong). If I were to drop out of medical school I wouldn't have any money to do the same (and I wouldn't get to practice medicine which I want to do). Starting businesses from nothing would be near impossible.

I would be extremely interested in learning about how you incorporated your medical practice with other businesses and income sources, so if you want to PM me or message on here to explain a bit more I would really appreciate it. I understand if it is information you don't want to share though.

There are 0 mid-career(generally considered 5+ years experience) ophthalmologists in the entire US earning $200K/year unless they have chosen to.

 

[RetinaDude]

That's true but I do like medicine and want to practice as a physician. However, I also want a wage I deem is fair for the amount of training and value provided to society by physicians. For example, I don't have any strong urge to make 7 figures or I wouldn't have gone into medicine in the first place like you said, but I would be unhappy making 200k as a mid career ophthalmologist considering that is what CRNA's make (and I think optometrists).

I assume you started earning as a physician and then used that money to get into other businesses (maybe I'm wrong). If I were to drop out of medical school I wouldn't have any money to do the same (and I wouldn't get to practice medicine which I want to do). Starting businesses from nothing would be near impossible.

I would be extremely interested in learning about how you incorporated your medical practice with other businesses and income sources, so if you want to PM me or message on here to explain a bit more I would really appreciate it. I understand if it is information you don't want to share though.

Retina, and ophthalmology in general, are going to continue to do very well. There are tons of procedures, and people value their vision A LOT. Plus, the number of ophthalmologist graduating each year is not keeping up with the number of opht retiring, so the shortage will only get worse.

As far as how much money you’ll make, who knows. I had the same fears as I was going thru training…..”I bet all this money will dry up by the time I get going”. You know what, it hasn’t. As a matter of fact, I’ve made more money in the past ten years than I did the first ten years, and I don’t really work that hard.

 

[ball123]

I understand the fear of committing to one of the most competitive specialities in medicine, if you are not going to have relatively decent compensation (and take out a lot of loans). I think it's quackery when we tell medical students to do what they love. I, for instance, really enjoyed a lot of different specialties! I loved medical school.

Anyway, I think the main message is that there is a good amount of money in comprehensive ophthalmology. The downside is that the first 1-3 years may not be as well compensated as other well-paid fields. However, the ceiling is great. At least that is my understanding. I am still a resident.

 

[Trefoil]

Generally speaking optometrists and CRNA’s don’t make $200,000. There are exceptions of course. People here will tell you not to focus on the dollars, and then other people here will tell you that those people are foolish. My advice is work to live don’t live to work. I am only focused on the amount of money I need to have more leisure time. If you make $500,000 and spend $500,000 dollars a year, you will come out poor. If you make $250,000 and save $100,000, you will have over a million in 10 years considering interest on your investments. Passive income is far more powerful. In the US, we focus too much on how much we can work and how much money we can make, but in the end, you can’t take it with you.

I think another aspect of this conversation that has been ignored is that employed opportunities have a higher starting salary, but a lower ceiling. I’ve heard of multiple ophthalmologists having salaries in the $350,000-$420,000 range starting as employees at the VA or Kaiser or other hospital systems. While that is not the highest salary, we also have relatively good hours and get to do surgery. Furthermore, our patients are generally very happy, which makes a big difference in your day to day.

 

[LightBox]

Generally speaking optometrists and CRNA’s don’t make $200,000. There are exceptions of course. People here will tell you not to focus on the dollars, and then other people here will tell you that those people are foolish. My advice is work to live don’t live to work. I am only focused on the amount of money I need to have more leisure time. If you make $500,000 and spend $500,000 dollars a year, you will come out poor. If you make $250,000 and save $100,000, you will have over a million in 10 years considering interest on your investments. Passive income is far more powerful. In the US, we focus too much on how much we can work and how much money we can make, but in the end, you can’t take it with you.

I think another aspect of this conversation that has been ignored is that employed opportunities have a higher starting salary, but a lower ceiling. I’ve heard of multiple ophthalmologists having salaries in the $350,000-$420,000 range starting as employees at the VA or Kaiser or other hospital systems. While that is not the highest salary, we also have relatively good hours and get to do surgery. Furthermore, our patients are generally very happy, which makes a big difference in your day to day.

I think compensation in any field can be boiled down to 4 basic factors: (1) income; (2) autonomy; (3) minimizing hours worked; and (4) financial exposure/liability. I think many jobs can have 3 of these factors, but not all 4. So one has to reflect over his or her own value system and determine which factors are the most important to him or her personally. There is no one "right" answer for every person. It is more of "which type of career suits you best?"

For example,

* Private practice has: (1) best lifetime income potential; (2) best autonomy; (3) *not* minimal hours worked; and (4) higher financial exposure/liability. So this route would not be good for someone who wants security at the onset; does not want to take risk; or wants to have a 9-to-5 and then leave work at the office type of mindset.

* Kaiser has: (1) moderate lifetime income potential; (2) not good autonomy; (3) good hours worked; and (4) no financial exposure liability. So this route would not be good for the entrepreneurial type of person or someone who values flexibility.

So decide on what factors are most important to you. It is very difficult to obtain all 4... unless of course you inherit your practice from a benevolent family member.