First year in private practice, and this is my bonus + base...

Discussion in 'Podiatric Residents & Physicians' started by jdm95ls2000, Jun 4, 2018.

  1. jdm95ls2000

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    I have been in a medium size podiatry practice (~6 dpms) with surgery center for almost one year now. I signed a contract for 100k base, 22.5% bonus after 275k in collections (not including DME). I was fairly slow in clinic my first 6 months of joining the group, but have been moderately busy these past 5 months. I also struggled getting on many insurance plans, and I'm still not on a few which has affected my surgical case load. My collections for this fiscal year is 319k (including DME). My bonus check for this year was ~$3,700. I signed a 1 year contract, so I will be renegotiating my contract next week.

    My 1st year contract also included CME money $300, 10 vacation days, health insurance, malpractice, board fees, hospital fees, uniforms,etc. If I collect over 100k at our surgery center, by bonus increases from 22.5% to 27.5%.

    My new contract that I will be renegotiating will be for 2 years. I really enjoy the group that I am with, they treat me well and they have made the transition from residency to private practice very easy. We take call every 6 weeks for a week straight, and it's very easy, rarely ever have to go in to the hospital. I start at 8:30am and I'm out the door everyday at 4:30 or 5pm latest. On my busy clinic days, I also have a personal scribe. They are also very transparent with my numbers throughout the year. Overall, I have very minimal stress, if it all, at work. When they hired me, I told them I wanted to make ~170k by year 2 and they said that is a reasonable goal. What is a good base salary and bonus structure for my upcoming 2-year contract?

    I was going to ask for base of $125k, 30% bonus after 275,000 (not including DME), and 10% of surgery center collections, CME money to 2k.

    2 of the docs in my group collect 750k, 1 collects 650k, 1 collects 550k, 1 is part-time and collected $400k.
    I am anticipating in collecting 475k in year 2 with rate of my current collections per week the past few months.
     
    #1 jdm95ls2000, Jun 4, 2018
    Last edited: Jun 4, 2018
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  3. hypermobility

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    If you are busy in clinic, I would go with a lower base, with lower threshold to get to bonus, and higher percentage once bonus is realized.
     
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  4. dtrack22

    Podiatrist

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    First thing is, while I'm glad you like the group/position/location/etc. this is a good example of a group that wasn't ready to hire and you're the one that took the hit. A part time doc collected more money than you did. You made PA/NP money, the owners made money off of you, and they got to take less call. They won.

    So you collected ~$291,500 for your services and $27500 in DME. I would be asking for a cut of the DME. If you brought in $50k in DME, when you take out costs of supplies (our lowest markup is around 300%, a boot might be a 600-700% markup), you should be easily putting $30-40k in the partners pockets. Of course, I'm sure they're using DME as part of the value for partnership (assuming it's offered). A lot of practices won't give you that as an associate for that reason, though many will tell you that legally they can't which isn't true. It's an easy way to justify charging more for the buy-in, a buy-in that is usually much higher than it should be. If you're in a group that has a single owner and everyone remains an associate forever, I'd still be asking for a cut of my DME, because they will be taking a % of your collections in perpetuity (which is fine if you never have any marketing/managerial expectations, you're paying for them to do that).

    CME would be a must too. $300 doesn't even pay for the registration fee for the necessary CME credits to keep your license. You are an employee. The employer needs to be paying for your license and the things that are required for you to keep it.

    If you collect $475k...

    -your current contract would get you $145k which would be 30% of collections
    -your proposed contract would get you $185k or 39% of collections.
    -a straight % of collections would have to be higher than 30% to be better than your current deal, assuming just under $500k in collections. And anything less than a straight 39% of collections (I would be shocked if they agreed to that, because they are still podiatrists) would be worse than your proposal for the next contract.
    -that last point is really all you need to know to figure out whether you are getting a better deal in your next contract than your first.

    I wouldn't base any of my personal projections on surgery center income as that (to me) is much less predictable than clinic projections. At least given what you posted.

    Your current base salary is actually good given the collection bonus threshold. Your base with $265k in collections would mean you're effectively getting 36% of collections before bonusing. The more money you bring in under your current contract actually lowers the % of collections you are getting, since your bonus is much lower than your base in % terms.

    All of that being said. If you have faith in your ability to sustain growth, I would be comfortable moving towards a straght % of collections that is at least 36% of my collections. Remember bonusing at $275k with a $100k salary is an effective rate of 36% collections, so they must be comfortable enough with their overhead to pay you that amount. That or they were really confident they'd make it up on the back end where they were only giving you 22.5% of what you brought in. I would only lower my base if the bonus threshold lowered too.

    I still think they weren't ready to hire. Your schedule should be full around 18 months from starting. There is no reason a 2nd year associate shouldn't be collecting closer to $600k. I mean I'm only a month or so in to a new job and see around 15 patients a day. I have 9 new patients on my schedule today and I haven't taken any call at this point. My net revenue was only around $26k my first month, but that's $312k for a year without any growth. Good luck to you on your negotiations.
     
    #3 dtrack22, Jun 5, 2018
    Last edited: Jun 5, 2018
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  5. jdm95ls2000

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    Thank you for taking the time to run my numbers. My practice let go of the previous associate who was with the company for 3 or 4 years, and thus, we lost a good number of that associate’s patients. I was hired to replace this associate. Everyone in the group share equal amount of call, I do not take more call because I’m the new associate, thank goodness! As a brand new associate fresh out of residency not on any insurance plans, it took a full 5 months before my schedule became full. There were patients to be seen, I just wasn’t on the insurance plans to see them legally or book cases.
     
  6. dtrack22

    Podiatrist

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    It may or may not have been illegal. It is dependent on the group's contract with the commercial carrier. Medicare really shouldn't have ever been an issue since those claims could have been held until you were credentialed and Medicare would back date your credentials to your start date with the group. Not to mention Medicare is typically the first to go through.
     
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  7. Dochopeful13

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    Is it always this hard at first to start seeing patients and getting on insurance plans??
     
  8. PashaOdesit

    PashaOdesit Nobel Prize Recipient
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    My MD friend, started working around October 2016 in large healthcare network clinic. For the first year he averaged 3-5 patients per day. Some days he only had 1 or 2 patients. Even now, he sees no more than 6-8 patients on average. He told me that he still goes around the metro sometimes to meet other docs and introduce himself so they know about him.
     
  9. dtrack22

    Podiatrist

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    It's not hard, it just takes time. I was on every commercial plan within 2-3 months of starting my first job, and I didn't start the application process until 2 weeks before I started working. As a graduating resident you often can't start much sooner than that anyways. BCBS took the longest and it was closer to 3 months. We were part of an IPA which may or may not have sped up the process. There were a couple of work comp plans that took 4-5 months, but Medicare and major commercial plans weren't bad. I've heard of BCBS taking 5-6 months for some of my colleagues so maybe my situation was the exception to the rule.

    And none of this matters if your commercial contracts allow non-credentialed providers to bill out under the group tax ID with a supervising physicians NPI in clinic. In that case you can see patients in clinic from day one as long as there is a credentialed doc in the office that day. However, some commercial contracts specifically do not allow this...though you hear about plenty of offices in every specialty billing this way after hiring new associates. So either a lot of people are committing fraud or risking audits, or most contracts allow this practice with new hires.
     
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  10. hematosis

    hematosis Slappin Da Bass

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    This is a terrible offer. I don't know how you people do it but i couldn't even make my payments with that type of salary. You should make well over 200k as a second year.
     
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  11. ExperiencedDPM

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    Are you really surprised? The APMA states the average podiatrist makes $124,000. I don’t remember if it was the mean or the median, but you get my point.
     
  12. hypermobility

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    I sense sarcasm, otherwise you need a financial reboot, STAT!
     
  13. hematosis

    hematosis Slappin Da Bass

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    I don't really pay attention to what the apma says. Thats probably 124k net and not gross?
    For me its simple:
    Private practice after 1-2 years : 150k-200k (base+bonus)
    Hospital after 1-2 years: 220-265k.

    Thats was my mentality when job hunting. I wasn't about to be bent over and screwed.
     
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  14. ExperiencedDPM

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    You missed my point. I’m not talking about you. I’m talking reality. And the reality is that the APMA numbers are what most shmos are making.
     
  15. hematosis

    hematosis Slappin Da Bass

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    The average salary in podiatry does not hold the same weight as...say the average salary for family physician. There is just too many variables and too many shmos in this profession. I knew this even when I was in Podiatry school. Sometimes we would have a bimodal grade distributions and there were just really dumb people and smart people mixed in the class. Its not like that for MD's and even DO's since they have a better screening process. this grade variability and distribution doesn't just stop at Podiatry school but it extends into our careers. (Yes I am making a general assumption that good grades get good residencies and good jobs). Anyway, that's why i never compared myself to the average. Its just my 2 cents. Don't kill me.
     
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  17. SnozzBerry

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    You still missed the point and just reiterated your own. We are happy you are doing above average, but most people are not above average.
     
  18. dtrack22

    Podiatrist

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    What I find fascinating is how much this "problem" is podiatry specific. There is no other medical specialty where new grads are paid so much less than a MGMA type survey median salary. If a dermatology group brings on a new dermatologist they do not pay him or her some base salary that is bottom 10%-ile. Orthopedic groups do not do this. Vascular groups do not do this. And before someone says, "well of course they can pay a new dermatologist or Orthopedic surgeon more, he/she collects more money," realize that Pediatricians and Family Practice docs who on average make less money than podiatrists, are paid significantly more in their first year out of residency.

    Our hospital has the largest FM residency program in the country. They laughed at the idea of being hired (even by a private/group practice) for the same amount of money as a clinic would pay an NP. They may never make much more than $200-250k per year, but none of our FM residents were offered a salary of $100k or lower.

    Median podiatry salary in the 2017 MGMA survey is $270k FWIW
     
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  19. dtrack22

    Podiatrist

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    And why are we throwing out some mean/median from APMA or PMnews or whatever? Every single person in this forum that has been in practice knows how easy it would be to make $130k or whatever those publications are saying is average. An "average" podiatry practice that sees even 50% palliative care and is open 4-5 days per week will be able to pay the owner of the practice or the owner and the associates significantly more than $130k.

    I could literally go to nursing homes 4-5 days a week doing almost nothing but clipping nails and make around $120k. Heck, I could work 3 days a week with my current patient load and current "typical podiatry contract" and still make $130k. I get that's what the surveys says. But its wrong.

    Low-ball salary survey results work out great for current private practices and podiatry groups though, don't they? Wonder who's answering these surveys?
     
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  20. ExperiencedDPM

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    I’ve been doing this a long time and I believe it’s safe to say that I’ve reviewed more contracts than most on this site. I have a very clear understanding of reality and I can tell you that the MGMA number of $270,000 +/- is not the norm. I’ve bought and sold practices and consult with young docs, middle age docs and older docs and I SEE the real numbers. North, South, East and West and everywhere in between.

    I can tell you as a matter of fact, the average is much closer to $125,000 than $270,000.

    For every chest thumping doc on this site who says it’s easy to make money and you shouldn’t work for less than X amount or that he/she is killing it........ I can give a list of those who are struggling.

    Sometimes it’s grades. Sometimes it’s skill or lack of skill. Sometimes it’s the residency. And sometimes it’s just luck. I’ve trained many residents over the years at a very strong program that only accepts top students. Some who I considered mediocre compared to their peers, ended up with positions starting at almost 300,000. And I’ve trained residents who excelled and stood out above their peers who got very mediocre offers.

    This can be debated forever. I’m telling you my observations over many years and training many residents and looking at the real numbers of hundreds of practices. Palliative old fart practices and high tech surgical practices.

    Believe whatever you want, but there is a reason podiatrists have one of the highest rates of defaulting on loans.
     
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  21. coolguy53

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    Hey Experienced DPM what would you say is an ideal contract for a dpm fresh out of residency in the north, south, east, west? Also what would be some negotiating points within the contract? I think it would be helpful and serve as a template for others on this forum.
     
  22. ksp2276

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    Yeah but have you SEEN the average "mustache pod" that is out there. Most of them deserve way less than 124k. its really the new batch and young well trained guys who will bring the salary demands and value of the profession up.
     
  23. UIO1098

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    "Fair" would be the MGMA average in a hospital, ortho, or MSG setting. In a pod private practice, if they can't afford to give you a BASE salary >100k, they are not ready to hire.
     
  24. Dr. Steve Hale

    Dr. Steve Hale Fuller House, CA

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    Is there data for this statement? If so, could you please link/cite it?
     
  25. msion

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    Official School Cohort Default Rate Search

    The government has data on federal loans for FY 2012-2014. It appears that NYCPM is the only stand-alone podiatric college in the nation, as the other colleges are all affiliated or under bigger institutions (Midwestern U, Western U, Barry, Kent State, Samuel Merritt, Temple, DMU, RFU). So their data is all mixed with other MD/DO/PA/RN students at those institutions. The default rate for these institutions are all well under 1%, except for schools with a more comprehensive program including undergraduate and graduate degrees (Kent State and Barry).

    If we just look at NYCPM and thinks it can represent podiatry, then yes the default rate is a little higher, but also note the few people it takes to bump that rate. A drop of default rate from 2012 to 2014 only takes 2 people.

    The US national average is at 11.5% now for all schools combined in FY2014. A lot of these are from private, for-profit tech schools.

    Screen Shot 2018-06-14 at 8.50.58 PM.png

    There was an education loan called Health Education Assistance Loan back in the days. That's the federal "doctors' loan" we all heard about. The government published a document in 1998 listing all the individuals defaulted on this loan. These include all MD/DO/DPM/DC/OD/PharmD/Public Health. Podiatry is definitely not the specialty with the most amount of people defaulting on this loan. Just take a look. Chiropractors seem to be #1 on there. In general I think we are on-par with other specialities considering the number of schools/graduates. We may even be a little lower than dentistry.

    Federal Register :: Health Education Assistance Loan (HEAL) Program: List of Defaulted Borrowers
     
    #23 msion, Jun 14, 2018 at 9:21 PM
    Last edited: Jun 14, 2018 at 9:29 PM

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