Pediatrician salaries...help me understand something

[lulu3]

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I've read that pediatricians in private practice can make around roughly 160-175k after a few years experience. I realize this number can fluctuate depending on locations and other factors. This is just an example.

But what if you own your own practice and you hire other pediatricians? Doesn't that significantly raise how much your business makes? So if you start a practice and later on bring 2 other pediatricians, are you as the business owner not making some amount of money from the other 2 other pediatricians?

Or is it that all the money brought in by the other 2 goes to their salaries? If this is the case, then why even hire others, why not just stay solo if their presence isn't adding a penny extra to your practice? (i'm assuming though that this is not the case but just throwing it out there).

 

[DoctwoB]

I've read that pediatricians in private practice can make around roughly 160-175k after a few years experience. I realize this number can fluctuate depending on locations and other factors. This is just an example.

But what if you own your own practice and you hire other pediatricians? Doesn't that significantly raise how much your business makes? So if you start a practice and later on bring 2 other pediatricians, are you as the business owner not making some amount of money from the other 2 other pediatricians?

Or is it that all the money brought in by the other 2 goes to their salaries? If this is the case, then why even hire others, why not just stay solo if their presence isn't adding a penny extra to your practice? (i'm assuming though that this is not the case but just throwing it out there).

You can certainly try to own a practice and hire other pediatricians, but its likely not that simple. Very roughly speaking, how much a private doc makes is Collections - Overhead. For pediatricians, that is usually around 150k (very, very rough numbers). Now you could try to hire another pediatrician for your practice at 120k and pocket the difference, but why would that pediatrician take that job when he could make more on his own or at another practice? Basically if you're hiring a doctor at less then they could have made on their own, you're paying below market value and people have no incentive to take that job. If anything, what happens is that hospitals hire pediatricians at above how much revenue they generate, because then that pediatrician will keep referrals for specialty services, labs, and imaging within that hospital which allows the hospital to make more money in the long run.

In reality for small private practices, it usually works that you'd hire a pediatrician who would work for 120k (below market value) for a few years (during which you make money off him/her), and that doc becomes a partner in the practice after a few years. After that, you no longer make money off him/her but get other benefits like shared overhead and a better call schedule. The new doctor gets the downside of earning less money initially but the upside of joining an established group with an established patient population and referral pattern.

 

[lulu3]

Yes, but there are many pediatricians that don't want the headache, the overhead, the advertising, the billing and accounting and will work for less and some don't even want to work full time. isn't that true? for example, many female pediatricians would love to work part time...

 

[DoctwoB]

Yes, but there are many pediatricians that don't want the headache, the overhead, the advertising, the billing and accounting and will work for less and some don't even want to work full time. isn't that true? for example, many female pediatricians would love to work part time...

Of course many pediatricians like the aspect of being employed, not a business owner. But like I said, hospitals will hire pediatricians (in an employed relationship) at more then the net revenue brought in by the pediatrician in order to keep all referrals and labs/imaging in house. As an only pediatrician practice, you wouldn't benefit from these referrals/labs, and so would have to hire a pediatrician at a lower salary then a hospital could offer and no-one would take the job or offer a higher salary and not make any money off of them.

And yes, you could theoretically hire part time staff at lower salary. Of course their billings will be lower, while their overhead won't change that significantly, and you get all sorts of time constraints and headaches.

Thats not to say its impossible to own/run a large group where you could hire pediatricians at market value, but that would require business acumen that reduces overhead or increases billing to above normal levels.

 

[Pandas are love]

Yes, Pediatricians can own a practice, and hire other pediatricians. My dad is a pediatrician and he opened up his own practice around 6 years ago. At first it's a huge time committment, but he made ALOT more than working full time for another pediatrician + at the hospital. 2 years ago he hired another male pediatrician, who views the same amount of patients. And a couple months ago, he hired a female pediatrician.

My parents have been very very successful with the clinic. I wouldn't say pediatricians make the least money, because my parents have friends that work in higher specialties and don't make anything nearly around what my parents make. We're not filthy rich, but my parents did afford to pay 2 ivy league educations with no problem...

Good luck! And if it is what you really want to do, be prepared to work hard, and don't let anyone discourage you.

Me on the other hand..pre-dental 🙂

EDIT: Oh and my dad's not anywhere near 50 yet, so don't worry about age if that's a factor for you.