Some great responses here, and I also recently left a salaried position for a solely production-based one. For our group, that means there is no money without collections, so if I don't work, I don't generate money. The way I like to think about these things is how is the group screwing me and hiding money, because there are basically two money flows: money into the group in the form our insurance reimbursement and any hospital support, and money out of the group to the members in the form of salary, benefits, overhead, administrative positions (group, chair, etc), and whatever is left over. So, given that, how can the group hide money?
1) As others have said, they can manipulate the assignments so that you get worse insurance, lower-unit cases, and less paid-call opportunities. Some great examples above about how certain types of assignments pay worse in the form of either worse insurance or cases that are fewer units per hour, so to speak. Spines and ablations are good, hands and feet are bad.
- the way to combat this is a blended unit and equitable distribution of cases. In our case, everyone has a number every day that is assigned by algorithm that determines their pecking order. The top 4 people pick their cases. Everyone has equal access to be in the top 4. The person making daily assignments, after the top 4 pick, assigns people to rooms in descending order of likely units for a given assignment.
2) They can manipulate who gets the more lucrative paid-call assignments.
- the way to combat this is making call assignments by algorithm (Qgenda, EZCall, etc) and allowing a free, transparent market for trading, and making the calls lucrative enough that people will always pick them up if offered.
3) They can hide administrative stipends, profit-sharing, income from other ventures/venues.
- the way to combat this is frequent (monthly, quarterly)accounting statements that everyone sees so every member can see every dollar that is moved from one place to another. Maybe no one looks, but the fact that it's available makes it less likely that someone will hide something.
4) Witholding profit-sharing from non-partners. In the vast majority of groups, the only income is clinical revenue, so any overage after your salary, benefits, overhead are paid is just sitting around. Who gets that money? You? The partners? I know one group that collects +/- $55/unit, but pays a "salary" of $30/unit. The difference goes to overhead, expense reimbursement, retirement, etc. Whatever is left builds up and is eventually paid out as a bonus. It's not really a bonus, it's your money, you earned it. So you eventually get it all, just in various forms. This can be good from a tax perspective. But in other groups, the partners keep that overage and distribute it as profit-sharing. That ain't cool. You'd want to know this isn't happening in your group.
- the way to combat this is frequent (monthly, quarterly)accounting statements that everyone sees so every member can see every dollar that is moved from one place to another.
5) Some groups have multiple venues, and sometimes those venues' pay structures are different/better/worse. Do the members limit your ability to get assigned to other better venues? Do they try to more or less equalize the arrangements so that the effort😛ain:$$$ ratio is more or less the same from venue to venue? Or are some senior partners never at the mothership because they've carved out a sweetheart deal at the endo center or plastics office?
Other things to think about:
1) The not-working-not-earning thing sounds self-evident, but contrast this with a VA or academic job that accumulates sick-time. Everyone gets sick. Some people develop chronic illness. Some people break an ankle skiing. Some people get cancer. Are you going to earn enough more, compared to those more protected employed jobs, to offset the inevitable work-outages from injury and illness over the course of your career?
2) Benefits are often much more expensive in small, production-based groups. In my VA/university job, I paid $400/mo for a terrific PPO for the whole family. Same plan with my group would be $2000/mo. Disability insurance is even more important with a production-based job.
3) Working conditions can change quickly. You can gain/lose a venue. A Hospital CEO can change. Someone can leave the group. All of a sudden, you're working more (or less) than you'd like, but the cases have to get done; you're under contract. My own observation is that people gripe a lot when they're overworked, but MAN, do they gripe when they're under-worked...
4) In VA/academic jobs, you generally accumulate non-clinical responsibilities over time, which replace some of your clinical commitment. So as you age, you're maybe in the OR and on call less, and in an office/conference room more. And yet, your salary generally goes up (slowly) over time. In a production-based jobs, the only value you have to the group is the ability to bill for services, so as you age, you will be spending just as much time in an OR and on call as when you were young, assuming you want to keep making the same amount of money. Your income may or may not go up, depending on what you can negotiate with insurance companies and your venues.
Given all that, I made the move and have been very happy that I did, and I hope the same for you!
