Pink Panda

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Hi guys,

I understand that dermatology is a competitive specialty due to lifestyle/compensation, however I don't really understand the way dermatologists are compensated in private practice. Do dermatologists make more because they do more procedures, do insurance companies reimburse them more, or are their starting salary just higher than other specialties? What about dermatologists who only see patients and perform no procedures? Just curious and hoping you guys could provide me some insight. Thanks!
 
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The salaries you see posted now are likely remnants of the past. Just look at the data for young physician compensation (<40 years old). Mean salary for dermatologists of only $275,000. The salaries you're seeing (375-400k) are from well established well run private practices. Dermatology is changing as are many other fields and the job market and compensation of the last 20 years are not representative of what you will make when you graduate in 5-10 years.
 
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If you do private practice, do you negotiate your base salary with the group or do you just earn based on how many patients you see? How do you get initial referrals for patients? If the latter was the case, seems like an uphill battle to me, as you would have to start from scratch.
 

asmallchild

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If you do private practice, do you negotiate your base salary with the group or do you just earn based on how many patients you see? How do you get initial referrals for patients? If the latter was the case, seems like an uphill battle to me, as you would have to start from scratch.
You can do both, most new hires negotiate a base with an incentive package. Eventually, it goes to pure production which is probably the fairest way to slice the pie.

Sometimes you inherit a practice with a built in stream of patients. Sometimes you scratch your way up from the bottom: market yourself to PCPs, speak at local medical societies, do skin cancer awareness fairs, do open houses, etc. Even in derm, no one gets handed everything on a silver platter. There's a lot of work that goes into building a successful practice
 
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dermie1985

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The salaries you see posted now are likely remnants of the past. Just look at the data for young physician compensation (<40 years old). Mean salary for dermatologists of only $275,000. The salaries you're seeing (375-400k) are from well established well run private practices. Dermatology is changing as are many other fields and the job market and compensation of the last 20 years are not representative of what you will make when you graduate in 5-10 years.
- $275k is not accurate.
- I can say as a recent grad having gone through the application process and applying in a variety of settings (academic, multi specialty practice, single specialty multi physician practice), that there would be virtually no practices offering a starting salary less than 300k (and even 300k would be rare) unless the work was part-time, or it was a major academic center on the East > West Coast.
- I have data from recent derm conferences/contract lawyers and they list the median salary for a general medical dermatologist around $458,000.0 as of 2016. So it should be slightly higher now.
- I would say that most practices (outside of academic practices on the coast) are offering between $400-$450k for a 4-5 day work week +/- incentives based on production +/- signing bonus based on geography.
- You would make less in academics (I could see a $275k salary, or even less, in academics in a major East or West Coast city...I've heard as low as $180k at a few "prestigious" institutions), though academics outside the coasts usually is at least more comparable to private practice.
 

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I have data from recent derm conferences/contract lawyers and they list the median salary for a general medical dermatologist around $458,000.0 as of 2016. So it should be slightly higher now
There's no way that's accurate. It takes an extroidinary amount of work to generate revenue to a salary like that (think revenues close to $1.5-1.7M to net that). That is really hard to do.
 

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There's no way that's accurate. It takes an extroidinary amount of work to generate revenue to a salary like that (think revenues close to $1.5-1.7M to net that). That is really hard to do.
While it may not be the median, I’ve been offered $400-440k coming out of residency in a large metro.

Average collections for a general derm is $900k-1m, and many practices will offer 40-45% of collections.
 

Slack3r

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The salaries you see posted now are likely remnants of the past. Just look at the data for young physician compensation (<40 years old). Mean salary for dermatologists of only $275,000. The salaries you're seeing (375-400k) are from well established well run private practices. Dermatology is changing as are many other fields and the job market and compensation of the last 20 years are not representative of what you will make when you graduate in 5-10 years.
While I agree that medicine in general has negative salary pressure that will likely only get worse, I don’t know ANYONE who’s taken a job in derm making <$300k, and the only ones who are making <$350k are in academics.
 

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The salaries you see posted now are likely remnants of the past. Just look at the data for young physician compensation (<40 years old). Mean salary for dermatologists of only $275,000. The salaries you're seeing (375-400k) are from well established well run private practices. Dermatology is changing as are many other fields and the job market and compensation of the last 20 years are not representative of what you will make when you graduate in 5-10 years.
Look at MGMA data. AKA the most reliable source of physician compensation. It debunks everything you said here across all specialties. Median salary for derm for physicians in their first 4 years of practice is above 400k.
 
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dermie1985

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There's no way that's accurate. It takes an extroidinary amount of work to generate revenue to a salary like that (think revenues close to $1.5-1.7M to net that). That is really hard to do.
Definitely accurate. Derms have short patient visits with lots of procedures. Median collection for a general dermatologist was about $1 million in 2016. 450k salary is about 45% of net collections, which is about right.

I also personally know of general derms making 700k+, though this is admittedly in the Midwest and not on the cost.
 

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You could possibly make less than primary care doing this, and no I am not exaggerating
Define "procedure"? There are def derms who don't do excisions, etc. regularly.
However, they're still doing procedures like biopsies, cryotherapy, intralesional injections, botox, etc. You can't be a practicing dermatologist without doing those things in your everyday practice. Peds dermatologists definitely do less of it, but that's why they're also paid less.
 
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All depends how many days a week, how many procedures you do, your payer mix, and how many patients you see. Those of us who are in academics still do ok especially in areas of lesser cost of living but it requires higher volume. Bonus structure for most places isn't bad and benefits/retirement plans are nice. So the more you do the more you get back. Unfortunately I see mostly Medicaid but still do well despite being in a state that Medicaid doesn't pay well. In private practice I'd be able to choose to see a lot less if any Medicaid and collections would be higher. The potential for public service loan forgiveness makes academics even more beneficial.
 

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There's no way that's accurate. It takes an extroidinary amount of work to generate revenue to a salary like that (think revenues close to $1.5-1.7M to net that). That is really hard to do.
Yeah, this is really wrong. At least for derm in general. I don't know where you practice derm, but ~30% collections or less is not at all typical. Even for an employed doc in a bad situation. I'm sure there are a handful of people out there with deals as terrible as this, but it's not the norm.
 
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MOHS_01

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There's no way that's accurate. It takes an extroidinary amount of work to generate revenue to a salary like that (think revenues close to $1.5-1.7M to net that). That is really hard to do.
I wouldn’t offer anyone a salary of 458k, much less a new grad; that said, total comp of 458k is reasonable on 1.1-1.2m collections for General derm. Here’s the catch: new grads have no idea how much work is required for 1.2m in collections.
 
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Solodyn

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The PE groups or Platform Groups waiting to sell to PE are the ones driving this kind of salary. The warm body at satellite clinic plus leverage of PA/NP can possible drive that level of compensation. Sometime a platform group just need the warm body to corner the market, to take over retiring practice, and to create an illusion of market dominance to sell to the next PE. Let us see how long this will go on.
 
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MOHS_01

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There's no way that's accurate. It takes an extroidinary amount of work to generate revenue to a salary like that (think revenues close to $1.5-1.7M to net that). That is really hard to do.
Hey doc,

If a general dermatologist (not high injectable / filler / neurotoxin practice, general derm) was to gross 1.5-1.7m they would likely make pre-tax net >700k -- likely significantly more. Few general derms will gross that amount, though. They should be able to pre-tax net $458k on 1-1.2m in collections -- but, like I said, it's not the easiest number to hit with reimbursement these days.

That said, I still have yet the person I would offer a salary of $458k to. To quote Cersei, "You want $458k? You earn it."
 

doctalaughs

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Hey doc,

If a general dermatologist (not high injectable / filler / neurotoxin practice, general derm) was to gross 1.5-1.7m they would likely make pre-tax net >700k -- likely significantly more. Few general derms will gross that amount, though. They should be able to pre-tax net $458k on 1-1.2m in collections -- but, like I said, it's not the easiest number to hit with reimbursement these days.

That said, I still have yet the person I would offer a salary of $458k to. To quote Cersei, "You want $458k? You earn it."
This is the problem with how medicine is going in general - it’s hard to get new docs to see that joining a small independent practice is smart move.

Having been both an employee for several large systems/groups in the past as well as a partner in a small (and now largish) group I can say that it’s true - offering or promising a salary of 458k is pretty hard to justify especially for the small group.

On the other hand, large employers can often offer these salaries in exchange for less work due to a variety of factors (better contracts, market dominance, full ancillary services, self referral etc). If a practice takes off and is busy with all the ancillary revenue streams and good contracts etc then they can offer even higher than this salary; but why would they (for a new grad)?
 
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dermie1985

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This is the problem with how medicine is going in general - it’s hard to get new docs to see that joining a small independent practice is smart move.

Having been both an employee for several large systems/groups in the past as well as a partner in a small (and now largish) group I can say that it’s true - offering or promising a salary of 458k is pretty hard to justify especially for the small group.

On the other hand, large employers can often offer these salaries in exchange for less work due to a variety of factors (better contracts, market dominance, full ancillary services, self referral etc). If a practice takes off and is busy with all the ancillary revenue streams and good contracts etc then they can offer even higher than this salary; but why would they (for a new grad)?
Again, to reiterate, some insights after going through a (fairly extensive) application cycle this year as a new grad. I would say that salaries and compensation models are very specific to individual practice setting (i.e. academics, large institution, private practice) and geography (regional and urban versus rural).

- I would say that (as a new grad), most practices I've applied to in the Midwest and West Coast offered generally between 400-450k to new grads/hires.
- In the Midwest, this was generally a 4 day work week. On the West Coast, this was generally a 4.5 to 5-day work week. You could chose to take a 4-day work week on the West Coast for a reduced salary.
- The larger institutions generally used a salary-based model (i.e. academic and large multi specialty practices) so this was a long-term salary. They also had pretty sweet benefits (e.g. retirement plans with significant employer contributions, vacation, etc).
- The private practice groups usually offered a 1-2 year salary with a switch to a production-based model after this period. Some also offered a production-based model from the get go with a "safety net" guaranteed salary for the first 1-2 years.
- Many of the providers I did talk to, said it was not uncommon for your salary to decrease after 1-2 years with a switch from a salary to production-based compensation model. That is, unless you were willing to take less vacation time and/or see more patients - many chose not to for work-life balance. For some people, though, this model can lead to a higher salary if you're willing to work for it.
- Most of the private practices on the West Coast are getting sucked up into the private equity world, and I found this environment not appealing to me from a patient care perspective.
- I did apply to a few institutions in the Northeast, but didn't pursue extensively, as I found the salaries offered by larger institutions in those areas were not comparable with the salaries offered at similar-type institutions in the Midwest or West Coast. Though, it is possible this may be related to the institutions and specific city I applied to.
- Some of my friends pursued rural positions, where they'll be making between 500-600k as new grads. Not a bad option if you don't mind the location.
 
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Solodyn

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- Some of my friends pursued rural positions, where they'll be making between 500-600k as new grads. Not a bad option if you don't mind the location.
If going for rural positions, you are better off setting up your own shop.
 

dermie1985

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If going for rural positions, you are better off setting up your own shop.
That's fair.....though from the new grad perspective, that can be a daunting task until you've gotten more experience with practicing medicine outside of residency.
 

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I really don't think setting up a new practice is that hard. In a rural location, it is very hard to fail. You can actually manage through several missteps still have a sucessful practice. The challenge of "hanging up your shingle" has been exaggerated by practice management consultants and PE conglomerates.
 
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percyeye

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I really don't think setting up a new practice is that hard. In a rural location, it is very hard to fail. You can actually manage through several missteps still have a sucessful practice. The challenge of "hanging up your shingle" has been exaggerated by practice management consultants and PE conglomerates.
We had a guy open up in the rural location I'm located at. Guy is killing it right now and it is damn near impossible to get into see him because he is booked out so far. I give credit to anyone who hangs up their own shingle and works as their own boss.
 

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I worked for someone else for 3 years out of residency in the midwest and about 8 months ago opened up my own practice in the midwest. The salary numbers above are inflated for real-world take home. I saw lots of fliers promising numbers like that but that typically relies on an unrealistic volume. I have known a number of derms who thought they were getting salary numbers like that only to show up, find out they get 1 MA and have to scribe for themselves, and they can't produce the volume for such a salary. Or they show up and the volume isn't there to be had.

If you want to move to the oil patch in Midland/Odessa or Minot, ND you can probably realistically make $650-1M but everything costs more in those places and the wal-mart checkers in Midland/Odessa make like 18/hr last I heard because otherwise nobody will live in that godforsaken place.
 

estingray

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Also I would not recommend opening your own clinic right out of residency. I learned so much from the mistakes made by my employer from the first 3 years I was out it saved me years worth of headaches on my own. Plus it gave me the capital to pay off my student loans before incurring more debt.
 
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If a practice is offering you $600k it’s because you will be generating at least $1.2 million in collections. The only way that is done is through high volume of patients. There is no magic pot of money that you are paid from, it’s all generated off your back, from your hard work. Working in rural areas usually pays better because your schedule will always be overbooked. Volume is always a bigger factor than payer mix
 

Ibn Alnafis MD

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If a practice is offering you $600k it’s because you will be generating at least $1.2 million in collections. The only way that is done is through high volume of patients. There is no magic pot of money that you are paid from, it’s all generated off your back, from your hard work. Working in rural areas usually pays better because your schedule will always be overbooked. Volume is always a bigger factor than payer mix
But aren’t most dermatologists seeing 50+ pts a day? Even working 4 days a week, with such a volume, 1.2M in total collections is doable.
 
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But aren’t most dermatologists seeing 50+ pts a day? Even working 4 days a week, with such a volume, 1.2M in total collections is doable.
32 patients is probably average-ish (8am to 5pm with 1 hour lunch/charting) - 15 minutes per patient (4 per hour) if all show up
48 patients is a super busy dermatologist (8am to 5pm with 1 hour lunch/charting) - 10 minutes per patient (6 per hour) if all show up
Any higher than 50 patients per day and you are starting to enter incompetence/fraud/poor patient care zone. EDIT: or work more than 8 clinical hours per day

There are also dermatologists on the slower end who only see 2-3 per hour
 
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reno911

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32 patients is probably average-ish (8am to 5pm with 1 hour lunch/charting) - 15 minutes per patient (4 per hour) if all show up
48 patients is a super busy dermatologist (8am to 5pm with 1 hour lunch/charting) - 10 minutes per patient (6 per hour) if all show up
Any higher than 50 patients per day and you are starting to enter incompetence/fraud/poor patient care zone.

There are also dermatologists on the slower end who only see 2-3 per hour
I used to think similar to bolded, but I have softened my stance. I'm not very high volume myself, but I do know a fair number of high volume folks. Most, as you suggest, provide care that is probably not as good as what they're capable of. But every now and then I run outliars who are super high volume and extremely good. There is no magic, though. They might be a little more efficient, but for most of them the trick is to just work more hours a day and more days a week.

Of course, most everyone believes themselves to be one of these types of outliars, but they're really quite rare.
 
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Ibn Alnafis MD

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32 patients is probably average-ish (8am to 5pm with 1 hour lunch/charting) - 15 minutes per patient (4 per hour) if all show up
48 patients is a super busy dermatologist (8am to 5pm with 1 hour lunch/charting) - 10 minutes per patient (6 per hour) if all show up
Any higher than 50 patients per day and you are starting to enter incompetence/fraud/poor patient care zone. EDIT: or work more than 8 clinical hours per day

There are also dermatologists on the slower end who only see 2-3 per hour
I see. My N=1 experience with a dermpathologist who sees ~50 a day, including minor procedures, and he still manages to read his own histology. I guess he's an outlier.
 

dermie1985

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32 patients is probably average-ish (8am to 5pm with 1 hour lunch/charting) - 15 minutes per patient (4 per hour) if all show up
48 patients is a super busy dermatologist (8am to 5pm with 1 hour lunch/charting) - 10 minutes per patient (6 per hour) if all show up
Any higher than 50 patients per day and you are starting to enter incompetence/fraud/poor patient care zone. EDIT: or work more than 8 clinical hours per day

There are also dermatologists on the slower end who only see 2-3 per hour
I'd agree mostly with this. Standard is 15 minute visits in an 8 hour day (32 visits per day, 4 per hour). I think in a private practice setting, where you may not be seeing as complicated of patients, this is actually pretty chill.

More than 50 sounds hard to me - but, again, it may depend on a few factors, like level of difficulty of patient base, # of new versus follow-up patients, etc. For some patients, 10 minutes just isn't enough.

Having said that, I know personally of some providers that see between 100-110 patients per day. You need a large team of well-trained support staff to handle rooming, notes, billing, and patient counseling, but some people have found that model to work for them - see more patients, make more $$, off load basically all administrative work to non-physicians. Some patients appreciate the brevity, others do not. You end up "weeding out" the patients who don't, because they simply don't come back.
 

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How many patients you can see in Derm depends on 3 things which are all about equal factors:
1. Personal efficiency
2. Practice setup/ level of documentation and billing support
3. Willingness to provide poor care

In terms of the last one you could argue that you can still provide acceptable care by weeding out or referring any patient that takes longer than X minutes (10 minutes or on the extreme 5 minutes). In the extreme cases you are weeding out (either by poor care initially so they don’t return or by outright not accepting those patients) basically any non slam-dunk rash or rheum-Derm presentation. Also probably limiting patient to 1 or 2 minor complaints or making people with multiple skin cancers come back every at an insanely short interval. All this is possible if there is little competition in your area. Is it ethical? I’m not sure. I guess it would be similar to a mohs person saying they only do the small/chip shot cases and sending everything else to someone willing to do hard cases.
 
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For those in a private practice setting or have interviewed at PP, is it common for your direct expenses to be deducted from your collections? For example, if you're on a 45% collection based compensation plan and collect $1M that would result in $450,000. Would your true compensation be that $450,000 less the expenses allocated to you (insurance, CME, 401k matching, etc.)? Some examples above make it sound like your collection % is your gross income for the year. If that's the case, are your expenses just a part of the general overhead pool?
 

asmallchild

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For those in a private practice setting or have interviewed at PP, is it common for your direct expenses to be deducted from your collections? For example, if you're on a 45% collection based compensation plan and collect $1M that would result in $450,000. Would your true compensation be that $450,000 less the expenses allocated to you (insurance, CME, 401k matching, etc.)? Some examples above make it sound like your collection % is your gross income for the year. If that's the case, are your expenses just a part of the general overhead pool?
No, that % is typically your gross income with other benefits counting separately
 

MOHS_01

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How many patients you can see in Derm depends on 3 things which are all about equal factors:
1. Personal efficiency
2. Practice setup/ level of documentation and billing support
3. Willingness to provide poor care

In terms of the last one you could argue that you can still provide acceptable care by weeding out or referring any patient that takes longer than X minutes (10 minutes or on the extreme 5 minutes). In the extreme cases you are weeding out (either by poor care initially so they don’t return or by outright not accepting those patients) basically any non slam-dunk rash or rheum-Derm presentation. Also probably limiting patient to 1 or 2 minor complaints or making people with multiple skin cancers come back every at an insanely short interval. All this is possible if there is little competition in your area. Is it ethical? I’m not sure. I guess it would be similar to a mohs person saying they only do the small/chip shot cases and sending everything else to someone willing to do hard cases.
I know some of those people. I'm not a fan.