I know this internist who's a family friend. He owns his practice in the south and works around 40-50 hours a week. I have been weighing my options regarding loan forgiveness programs, and since they require you to do primary care, I decided to talk to him for economic outlook and whatnot. I was shocked when he told me he makes around $500,000 a year. I thought average salaries of internists was around $160,000 or so. He also has a lab attached to his practice so that might net him more money. But still $500,000? My question is, is it even possible to make that kind of money as a primary care physician or is this guy messing with me?
It is absolutely impossible to NET $500,000/yr doing primary care alone if you are billing correctly. I am an Internist and I grossed $518,000 last year.Typical overhead for a primary care doctor these days is about 70% so you can figure a net income of about $155,000 with a gross in that range. There are only a few ways a primary care doctor can net $500K that I can think of if you don't include investments.
1.Ancillary services: a physician can boost his income by doing additional testing in the office such as stress tests, echocardiograms, and bone density tests, but to net the kind of money you're talking about you would need to order lots and lots of these tests on people who really don't need them.
2.Offering cosmetic procedures: Some physicians are now offering things like laser hair removal and botox injections in their office. If you do this a lot you can make quite a bit of money, but if you practice in a metropolitan area where there are lots of plastic surgeons and dermatologists, you may have a hard time attracting enough patients to make this line of work significantly profitable. You also have to remember that it takes a very different demeanor to provide these types of services than it does to provide primary care and you may not feel comfortable or qualified to do both.
3.Build a large practice with lots of doctors working for you as salaried employees with no partnership tract offered to them: You would probably need a minimum of 10-20 ( but more like 40-50)employee physicians working for you to accomplish this and you would have to be extremely adept at negotiating lower than average salaries to keep overhead low.
4. Run a "Boutique Practice": Boutique medicine means accepting no insurance and providing a "premium" level of access and care for a limited number of patients. There have been PCP's who have come close to making $500K with this kind of practice but you could easily count them on two hands. This type of practice is viable in a very limited number of communities where people are wealthy enough to afford the $1500/yr membership fee. It also requires a very different type of temperament to cater to a segment of the population which can be very demanding at times.
5. Owning other medical facilities: Some physicians own clinical labs, physical therapy centers or radiology facilities, but this is becoming more difficult. There are government laws ( The Stark Laws) that prevent physicians from referring patients to these facilities if they have an ownership stake in them. These restrictions can cut down on the profitability of owning such facilities.
6. Insurance Fraud: This is by far the most unethical and the riskiest way to boost income but despite that some physicians use this technique to increase income. Insurance companies will clearly argue this point, but the line between fraud and legitimate billing practices is a very fuzzy one. For example, there are legitimate arguments between physicians and insurance companies about what level a given office visit should be billed at. A physician who consistently bills a given type of visit at a level three while the insurance company thinks it only merits a level two could be accused of commiting insurance fraud. Also a doctor is usually not allowed to bill for an office visit when a patient comes in just for a vaccination. Unfortunately the insurance companies only pay the doctor for the cost of the vaccine with no margin for profit. As a result most doctors look for any excuse to bill for an office visit. If the patient mentions he had a cough 2 weeks ago the doctor will then put down cough as the diagnosis and bill for an office visit. Insurance companies will call this fraud. Physicians will call this fighting back.
My point is that most physicians bend the rules a bit in order to survive and level the playing field that has been unfairly setup to favor the insurance companies, but some physicians have gone way over the line and will falsify records to justify a level 5 visit when only a level 1 is justified. Others bill for tests that were never done and then bring patients into the conspiracy by offering to write off the deductible or copay if they go along with this. There are lots of sleazy ways to commit insurance fraud if a physician wants to sell his soul to the devil.
Bottom line: It is impossible for a primary care doctor to legitimately make $500K/yr doing primary care. If you have the opportunity and temperament to branch out into other services it might be possible to supplement your income and make much more, but if a PCP says he makes that kind of money just doing primary care, he's not telling you the whole story.
