Originally posted by momofthree
Neil
Ummmm...OK..well, keep on believing that. I'm here to tell you that the experience that your parents have with their particular clients is not the trend that I see with our friends and colleagues. We have a fairly large group of friends spread out across the country and I'm here to tell you that reimbursements are decreasing, malpractice insurance rates are increasing and retirement benefits are decreasing.
Not as large and not as diverse, and I'd bet a lot of money on that. Last time I checked they had clients in 29 states. That's diverse geographically. I'm not trying to turn this into a pissing contest, but I wish that you would give my view point the credibility that I feel it deserves. Last night I was thinking, I should run some averages and std-devs on the gross/net incomes of all of their clients. Maybe I'll do this later this weekend if I'm bored.
I'm certainly not argueing that reimbursements are decreasing (15%/yr), malpractice rates are skyrocketing (particularly in "bad" states like PA) and retirement is tough to do (there are no longer retirement benefits to speak of...the general rule is that you're on your own).
My husband is in a large group practice and the oldtimers are currently voting on reducing the retirement pay for the 'to be new partners' by 40%. This will affect my husband as well as all physicians hired in the last 15 years. A similar thing is playing out at a friend of our's group practice in PA. Are these anecdotal stories...yes, just as anecdotal as yours. And just as real.
Looks like the oldtimers are shafting the younger docs...surprise, surprise. Retirement benefits come as 401k contributions (where the employer can set a match ceiling much less than the statutory 11k), profit sharing, IRAs (no employer matching) and a stock option. How are they doing it at your husband's practice?
Docs get bought for cheap by large practices (or hospitals), shafted in retirement benefits, and given lower salaries than they should be just so the old dudes can get a bigger boat. It's not right, but when you have no stock you have no choice. The new partners will likely do it to the furture new partners in due time. Don't lose all faith, though, because I've seen correctly run practices that pay docs what they ought to be paid. The docs at these practices are very happy and that's better for everybody in the end. They are, however, few and far between.
This should depress everybody: Just recently I heard of an ID group that's bringing on a new doc (just outta residency) for 125k (LOL) when the two partners pull 350 a year. The senior partners will of course sell this poor soul on the idea that this is fair pay. He will, in turn, ask his peers (who are mostly getting the same level of shafting) and will take the job thinking he'll get the practice later on. Truth is, they're leasing the doc through another firm so that the two partners can put away 40k/yr in K1 profits and not pay the new doc JACK in terms of retirement. Get used to it, this is the way that everything is going to be soon...or at least that's what I hear. They're also going to lease their entire staff. The beauty of all of this is that they don't have to pay any vesting into the employee retirement funds leaving more for the partners to pull in K1 income.
When you look at the average salary values, you need to be looking at the average, not the high.
No, the average is exactly that: the average. IMO the average doctor is getting the shaft because they don't know what's up. I wouldn't want to be the average doctor in any scenario, and definately not in pay.
The average has some value (i.e. the general minimum one should be willing to work for) but the max value (provided you're correcting for geographical location) is what you should start your negotiations with. I'm trying to stress that everybody reach instead of accept.
That's great. Obviously your parents attract an affluent clientel...some people coming out of residency training have three children and nearly 200 thousand dollars in debt. The only wealthier people that I know coming out of training are single.
There are plenty of other accounting firms in the area that serve more affluent clientel. I would characterize the clientel as slightly above average, but nowhere near the elite.
Most of our clients have been with us since their days as a resident (where we did their tax returns almost for free 🙂 ) so I personally have seen all kinds of income levels and different rates of growth. I know exactly how much debt they carry...and the average is of course rising in the newer docs compared to the old ones. There are no wealthy people that have just finished residency training, just ones that are less poor.
See my post on the budget if you don't think I know how much you have to pay off in debt every month.
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Well, this is only partially true. Yes, they are subject to the same market forces, but no, it isn't affecting them quite the same way. Why? Many of them already have full bank accounts/investments/retirement AND they hire junior physicians, PA's and NPs for less money to make up for it....[/B]
What? Market forces, by their definition, affect everybody's paycheck the same. BCBS only gives 22 cents on the dollar to every physician regardless of age/seniority.
I would agree that bank accts/retirements/investments are not the same, but what people get to put into those as of today is the same regardless of years in. I see what you're saying about doctors today having less (adjusted) in their accounts 20 years from now than do 20 year old doctors. However, prudent investing can still let you retire comfortably. And if you don't think that the old farts have their accounts rattled...think again. 5 weeks ago I was talking to an old guy, head of cardiology, who had to come out of retirement because he was invested too aggressively. In fact, one could easily argue that newer docs (if they're paying attention) can cut their disadvantage over the old docs because they have some clue where NOT to put their money (and they didn't get rocked as hard by the stock market fall). Overall, though, I'm generally willing to concede that the newer docs are going to have a hard time building the same kind of cash-based assets as the older folks.
Well, I don't want to rain on your parade here...but most peds and fp's won't ever come close to earning 200k....not gonna happen. Bringing up one fp who reportedly earns 1 mill... (if he does, he's doing something illegal) is again, just an anectdotal story. One individual. I'm sure there is an fp out there who can walk on water too.
I never said that most peds/fp's would make that much. I said that SOME (please read the post carefully) could make that much (and that isn't disputable). However, 200k is a fair baseline for all specialists (again, indisputable...check the websites posted if you don't like my numbers).
I don't mind you disagreeing (infact, it makes this interesting), but please don't put text into my post that didn't exist.
And as far as the high roller FP...it's pretty lame that you would suggest something illegal. Lots of FPs do procedures that some specialists would tackle like basic gyn and even cardio stress tests. These can help. Also, that's his gross practice revenue and he does have a payroll to take care of, an office to pay for and supplies to buy. He works 16 hours M-F (morning/evening clinic). He is certainly NOT the norm (or anywhere near it), but in bringing him up I hoped to give people some hope that if they are business savvy and efficient they can do much better than the average.
Personally, as long as I can pay back my debts, take care of my kids and have a lawn to mow I don't care how much I make. If I did, I wouldn't have gone into medicine. I would prefer not to get shafted like most doctors do when it comes to pay. For me, satisfaction with my practice is the most important thing. Sometimes, I think that this could be achieved in the Army and they don't make that much at all. I would highlight one of the more tragic figures in my original post: the FP in NYC that makes 95k. That's a stavation wage for somebody with 150k in debt and trying to start a family in that city. Not everybody is doing phenomenal...and if you mine the numbers you can get a lot out of them.
In fact, the main point of all my posts has been to give people as fair a picture (from my vantage point, which I feel is pretty educated) about what kind of fiscal reality medicine entails. I don't get my numbers from talking to people, I get it from seeing W2 and 1099s every year for the past 10 years (that's when I started helping with tax returns).
It's great that you're giving a counterpoint to balance things and present the most viewpoints possible to the people reading this thread. I see so many doctors get shafted on a daily basis by the insurance companies, hospitals and other doctors that it really makes me want to arm people with the kind of info they need to be competitive in the marketplace.
Peace out, and hopefully we can keep up the discussion for everybody's benefit.
Neil
🙂
