This is the stuff I love to look at, so let's take a gander and do some math.
I interviewed with a group of 3, expanding into a large 13000 sq. ft. space with all ancillary services minus allergy and possibly also a surgicenter to be built attached to this building.
This may sound over-the-top, but WTF? 13,000 sq ft for a group of 4? I have 9,500 sq ft with 7 large exam rooms, a surgical procedure room, an audio suite, a billing office, a large nurse's station, a front office/reception area that can seat 6 comfortably, a waiting room that can hold 45 people including a children's play area, and an allergy suite with its own private waiting room, mixing room, and injection room. I can run 3 docs in full clinic at the same time without any problem and 4 if we had to although that gets crowded. What the heck are you going to do with that much space? If they have a paper chart practice, that may explain 500 more sq ft. The first thing I'd worry about is dead space. Any space that's not generating revenue (exam room, allergy room, audio booth) is space that's losing money. Having a nice gigantic doctor office with a huge desk, credenza, 4 chair meeting table and bookshelves may look awesome, but there's a remarkable cost for that luxury.
.1. Compensation of $150k for the first year, with a $20k sign on bonus
2. $190k for the second year
This 100% depends on where you are. I'm in Texas too. DFW area. MGMA says that the avg ENT compensation for a first year in N Texas is $250k and change. So maybe you're being low-balled if you're in an area of high need where compensation is usually great, but if you live in a highly desirable area with lots of competition, that may actually be a really good salary.
.3. Option to buy in the 3rd year at the price of $250k.
Whoa. I agree with the above. You better be getting some partnership in real estate for that buy in and you better see the appraisals indicating that it's worth that much. NEVER do a good will buy-in. That's for suckers these days. ESPECIALLY if they've ever discussed selling the practice to a hospital in any near future. You'll buy in and get nothing for it.
.4. Plus a bonus of 20% of my net profit (collected revenue minus ¼ general overhead minus my employee specific expenses). Eligible for this bonus after the first 6 months of employment. The initial bonus would be calculated based upon the first 6 months of data.
Hmmm. Depends on how busy you are. I'll do the math below with the associated question there.
.7. On call every other week until partnership. No ER call.
That sucks. Totally unreasonable in my region. You're getting raped on that one in my opinion.
Seems like a real low-ball offer.
Maybe, but probably not once you do the math. See below.
No mention of non-compete.
Awesome. Their oversight, not yours. Don't say a word.
The buy in thing sucks. Is that still done? Do I need to know the exact overhead in order to calculate my ability to make a bonus here? Is there a way to calculate how many patients I would need to see a day in order to get above said expenses so that I could estimate what this bonus would be like?
Yes, the buy in thing is still done. It needs to be for hard assets with immediate real net worth, not good faith. Good faith is for suckers as I said above.
Ok the math. Since you're considering TX, I'll share my ballpark. If you take every encounter I had last year and divide that into my total collections, I made about $128 per encounter. That includes OR, ER (insured or not), inpt consults, pro bono for referring physicians/employees/family/friends/neighbors/etc, outpt clinic whether office new pt/est pt/post-op in global/allergy/audiology, and anything else conceivable. So how does that translate to the $150k?
Assume you made $128/encounter too on avg. You'd have to have 1172 encounters to make $150k. Is that a lot of patients? Not really. It's only 22 patient encounters in a week. You're multiples less than the average ENT at that point. Assuming no overhead, you could have 6 encounters a day for a year and make more than $150k. Remember, encounters means anything from highly lucrative sinus surgery cases to nothing for a post op thyroid.
So, then, it obviously boils down to overhead. Let's assume the avg private ENT 4 person single specialty practice is 50% for the sake of math (it's usually closer to 53%). Well, then just double your encounters to 12 a day and you bring in over $300k. $150k of that is gone to cover your guarantee. Of the remaining $150k, you get a 20% bonus or $30k. Let's say you're full steam, double the number of encounters again to 24/day. Now you're bringing in over $600k minus $150k to cover guarantee and then 20% of the remaining $450k as a bonus and you get $90k.
Therefore, if you are seeing an avg pt volume by your second year getting the avg collection/encounter that I get, you'll make $190k in guarantee plus $90k bonus. That's pretty good for most ENT's in their second year.
I'm going to guess that their overhead is not close to 50% if they have a 13,000 sq ft office, but who knows, maybe they have a savvy real estate agent.
Should I be asking for any other specific info?
You can never ask too many questions.
Can you buy into the surgicenter?
Do you get a cut of hearing aid sales?
Do you get a cut of allergy revenue?
Who does your credentialing?
Who does your insurance contracts?
Who pays for your malpractice?
Who pays for your marketing?
Who pays for your CME?
Do you get paid vacation? How much?
Who pays for your health insurance?
Is there any stipulation on partnership for passing the boards?
Will the hospital pay for ER call if you want to take it?
Hope that helps some. It's later than freak and I've been up since 4AM for a anticoagulated nose bleeder that keeps rebleeding around his pack. I'm going to bed. Feel free to check my math, it may be off with me this tired. . .
