Private practice compensation

[osprey099]

We just had a career workshop and some of the local oncologists in private practice in our area (northeast suburbs) told us (heme-onc fellows) that it's not uncommon for partners to make 800k and sometimes even over $1mil per year. He mentioned that MGMA data is very watered down and to not fall for hospital-based practices that try to undersell you by quoting MGMA data. Is this really how hot the market is right now for oncology??

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[Mehena]

The figure sound a stretch for the NorthEast. May be in some bum**** appalachia, alaska or some of the rectangular states.

 

[osprey099]

The figure sound a stretch for the NorthEast. May be in some bum**** appalachia, alaska or some of the rectangular states.

This is based off private practice though. He said they profit money from drug margin (revenue from chemo/cost from manufacturer) and the RVU concept does not play a role. He also mentioned they are 5 days clinic seeing 30 ish patients daily. They rub shoulders with local PCPs and EDs to gain market share of referrals and have to be available by personal cell at all times in order to field new consults and referrals.

 

[gutonc]

This is based off private practice though. He said they profit money from drug margin (revenue from chemo/cost from manufacturer) and the RVU concept does not play a role. He also mentioned they are 5 days clinic seeing 30 ish patients daily. They rub shoulders with local PCPs and EDs to gain market share of referrals and have to be available by personal cell at all times in order to field new consults and referrals.

1. That's a f***ton of work. And being a concierge oncologist sounds like pure hell. I don't doubt that people are willing to do it, but I sure as s**t wouldn't.
2. For that f***ton of work, even my academic hospital employed community-based group (which, incidentally, doesn't pay well enough according to recent applicants) would pay $1.2M a year.

 

[HemeOncHopeful19]

1. That's a f***ton of work. And being a concierge oncologist sounds like pure hell. I don't doubt that people are willing to do it, but I sure as s**t wouldn't.
2. For that f***ton of work, even my academic hospital employed community-based group (which, incidentally, doesn't pay well enough according to recent applicants) would pay $1.2M a year.

Does anyone in your group actually make a million a year, though? I would imagine if a large portion of the docs started working that hard then your hospital would suddenly want to lower the $/RVU numbers.

 

[Mehena]

I guess the crap about FMV and/or Stark law does not apply everywhere.

 

[gutonc]

Does anyone in your group actually make a million a year, though? I would imagine if a large portion of the docs started working that hard then your hospital would suddenly want to lower the $/RVU numbers.

Nope. They're too lazy. The work is there for them if they want it, but nobody's interested. TBH, neither am I. I am the most productive in my group (by ~40%) and am just about as busy as I'm interested in being.

I did actually ask "the powers that be" that question about will you actually be paying for this work (since they hadn't in the past) and was told "of course". We're only 9 months in to the new comp plan and so far they have been paying out. We'll see what happens come the next FY though. It's not as if they're being magnanimous in paying this though. With increased physician volume comes increased infusion and ancillary volume and income, and at least the data I've seen for our group, the curves are roughly parallel.

 

[bronx43]

Nope. They're too lazy. The work is there for them if they want it, but nobody's interested. TBH, neither am I. I am the most productive in my group (by ~40%) and am just about as busy as I'm interested in being.

I did actually ask "the powers that be" that question about will you actually be paying for this work (since they hadn't in the past) and was told "of course". We're only 9 months in to the new comp plan and so far they have been paying out. We'll see what happens come the next FY though. It's not as if they're being magnanimous in paying this though. With increased physician volume comes increased infusion and ancillary volume and income, and at least the data I've seen for our group, the curves are roughly parallel.

How did your employers adjust the comp plan to accommodate the new RVU rates? Just curious.

 

[HemeOncHopeful19]

I guess the crap about FMV and/or Stark law does not apply everywhere.

FMV/“Stark concerns” is a made up term used by administration to justify paying you less, whereas in private practice you just make what you collect and don’t deal with that crap.

It’s similar to how lawyers use the phrase “standard of care” to justify suing you when in reality this phrase is not mentioned anywhere in a medical textbook or guidelines.

 

[whoknows2012]

@osprey099 at one of my interviews in a suburb of NYC I was offered $425k starting for first two years, 525k for following two (accomplished by a 100k bonus) and then the option to buy in as partner which when you get out from the years paying in, the earning potential was indeed upwards of 750k. There are definitely partners in this group >5 yrs out earning 1M+

On a side note, I couldn’t be any less interested in this position, but that’s just me. I’m an academic leukemia-ologist and very happy in my current role

 

[gutonc]

How did your employers adjust the comp plan to accommodate the new RVU rates? Just curious.

Bumped up our base expectation by 10% but didn't adjust anything else. Original plan by the university was 30% but the Cancer Center leadership pushed back on that and arrived at 10%. We're coming up on the end of the FY and adjusting the base and targets again. Oddly, MGMA data (which is how we calculate our numbers) showed wRVUs dropping and median comp increasing, so we'll see how things change.

 

[HemeOncHopeful19]

Hello Osprey099. I'm a physician, and I work with physicians on these compensation topics and business models all over the country. The numbers they are quoting you are rare, though do exist. When they do exist, they sometimes involve what some consider a gray-zone of the delivery of medicine. Some physicians are comfortable with operating in this zone and others are not. There is a risk tolerance ratio that must be applied. Best wishes!

Can you elaborate more on this gray zone instead of being cryptic?

 

[gutonc]

Can you elaborate more on this gray zone instead of being cryptic?

Hi HemeOncHopeful19! Thanks for the message.

I think the most appropriate answer is each practice decides how they want to operate within the regulatory environment that is set up by their specific state statutes, federal statutes and medical boards. Various groups can have a different comfort level of operations and interpretation of the confines. For example, Stark Law (litigation on this does exist) and ancillary services need to be closely evaluated, and even attorneys can have different opinions and conflicting stances on the business arrangement. Due to variability, a grey-zone can exist in the interpretation, perspective, comfort level of operations and risk tolerance of an action based on the collective interpretation of the arraignment. Operating at the limits of an agreement may be financially advantageous, though there can be a risk tolerance association. Best Wishes!

In other words...no

 

[osprey099]

Can you elaborate more on this gray zone instead of being cryptic?

One example I can potentially think of for this "gray zone" is ordering IV iron for IDA. Private practice can negotiate the best drug margin for one of the dozen formulations of IV iron available (essentially have pharm companies compete against one-another), and order this for a lot of IDA patients by documenting they cannot tolerate oral iron due to "constipation" or something like that.

 

[bronx43]

What I think he/she means is that the interpretation of Stark Law limitations is very unclear, and I know this to be true from my encounters with different private groups. The way the group's lawyer (maybe with some nudging by the partners) interprets the law can mean huge differences in income and potential for abuse.

If a group is able to find a "legal loophole" to divert most ancillary revenue back to the ordering doc, then you can really make bank. These are the docs who will order a panel of 20 labs, an echo, MRI, and a sleep study all from one stable patient visit. Got a stable migraine that you've had for 30 years? Time for brain MRI. Oh, you drank coffee and had 30 minutes of palpitations? Let's order an echo. Instead of generating $130 from Medicare, they're generating hundreds if not thousands.

On the other hand, some more honest groups will split ancillary income evenly regardless of who orders it. This dramatically reduces the risk for abuse since most docs won't see enough of the ancillaries to go through the trouble of ordering a test, interpreting it, and taking the risk for a missed finding.

 

[Oncology08]

Private practice, close to large city, 425 k base, 5500 RVU threshold, if reached you would be eligible for bonus=profit-expenses=number (split 50:50 with the employer).
The RVU base seems high? The business model that I am familiar with is X dollar per RVU above threshold. This is different, you may get percentage from chemo, oral targeted therapy, labs etc?

Appreciate your input.

 

[HemeOncHopeful19]

Private practice, close to large city, 425 k base, 5500 RVU threshold, if reached you would be eligible for bonus=profit-expenses=number (split 50:50 with the employer).
The RVU base seems high? The business model that I am familiar with is X dollar per RVU above threshold. This is different, you may get percentage from chemo, oral targeted therapy, labs etc?

Appreciate your input.

I’m just a fellow but depending on the partnership track that could be a really good deal. I’m assuming you really mean revenue minus expenses and not profit minus expenses.

$/RVU is a system created by hospital admin to obfuscate how much money you actually earn for them. In private practice you would be getting collections/revenue minus overhead. So it sounds like this group gives you a base and if you meet an RVU threshold then you get put on their standard production system.

Definitely a fair base salary compared to lots of the private practices I have talked to in my large city.

 

[Oncology08]

I’m just a fellow but depending on the partnership track that could be a really good deal. I’m assuming you really mean revenue minus expenses and not profit minus expenses.

$/RVU is a system created by hospital admin to obfuscate how much money you actually earn for them. In private practice you would be getting collections/revenue minus overhead. So it sounds like this group gives you a base and if you meet an RVU threshold then you get put on their standard production system.

Definitely a fair base salary compared to lots of the private practices I have talked to in my large city.

Thank you for your valued input. Yes I meant revenue minus expenses. The 425k is guaranteed but the bonus will start once I reach 5500 RVU.
My current work is 4 days a week, hospital based fixed salary 400k with RVU bonus 65 dollars per RVU above 4900 RVU. It’s becoming a challenge to make the RVU as oncology Hospitalists are being employed in my current system, as you know consults in the hospitals contribute great deal to your bonus. The culture is amazing and it’s a great environment but with all the changes happening in the system we are seeing our income goes down. Hardly able to make a meaningful bonus!!!!! The employer will not raise the base and has not done so for 8 years?? That’s why I am thinking of private but so scared about the compensation formula that I have no clue how it works. Trying to get educated before I make a move

 

[gutonc]

Thank you for your valued input. Yes I meant revenue minus expenses. The 425k is guaranteed but the bonus will start once I reach 5500 RVU.
My current work is 4 days a week, hospital based fixed salary 400k with RVU bonus 65 dollars per RVU above 4900 RVU. It’s becoming a challenge to make the RVU as oncology Hospitalists are being employed in my current system, as you know consults in the hospitals contribute great deal to your bonus. The culture is amazing and it’s a great environment but with all the changes happening in the system we are seeing our income goes down. Hardly able to make a meaningful bonus!!!!! The employer will not raise the base and has not done so for 8 years?? That’s why I am thinking of private but so scared about the compensation formula that I have no clue how it works. Trying to get educated before I make a move

Just ask what the median annual gross income is for the pre-partner and partnership docs. If they're not willing to give you that information, that's a red flag. If they are, it should give you all you need to know.

 

[Oncology08]

Just ask what the median annual gross income is for the pre-partner and partnership docs. If they're not willing to give you that information, that's a red flag. If they are, it should give you all you need to know.

Thank you very much, I sure will.

I was concerned about the high RVU threshold 5500, based on my current salary of 400 k and RVU threshold of 4900, I expected that 425 k would be around 5200 not 5500, but again I was informed that the compensation here is different and that my current employer don’t give me incentives for chemo IV, targeted, labs while they will do.
I think your question will be important and will further clarify things. Thanks

 

[MD46]

You would usually get productivity from E/M visit collections in Private practice as an employee. ( if they give u mostly medicaid-anemia patients, thats gona be laughable)

Rarely they will give you RVU based productivity depending on payor mix. If they have a large chunk of medicaid or low paying insurances I dont think they will do rvus at all.

Also revenue from oral chemo, lab, rent (if they own spaces and rented them out) and infusion will only be shared starting Junior partnership usually 3-4 years and finally equal distribution once you are full partner at 6-7 years in. May also be a significant buyin at that time. If there isnt, they already have squeezed it out of you over 7 years in sweat equity.

I think PP is a dying model with things the way they are right now. Margins arent as great anymore. PP docs are not looking to make people partner and share the cake, just want work horses that are sold a partner dream that rarely comes true and make you work for that for below market value while you are still gullible.

Similar sentiments have been shared amongst many people I know and personal experience as well.

Good luck

 

[HemeOncHopeful19]

Also revenue from oral chemo, lab, rent (if they own spaces and rented them out) and infusion will only be shared starting Junior partnership usually 3-4 years and finally equal distribution once you are full partner at 6-7 years in. May also be a significant buyin at that time. If there isnt, they already have squeezed it out of you over 7 years in sweat equity.

I’ve never heard of this when I’ve interviewed but I would definitely stay away from any practice with this stuff. I’ve more commonly seen 2 year partnership track equal partnership no buy-in. Aren’t you in the NYC area? Perhaps it is more common there?

But maybe I just didn’t get that far in the process because I decided against PP for the time being due to family reasons.

I still think if private practice is doomed then we’re all doomed, no hospital system will pay fairly once we lose the option to leave and go PP

 

[Mehena]

Thank you for your valued input. Yes I meant revenue minus expenses. The 425k is guaranteed but the bonus will start once I reach 5500 RVU.
My current work is 4 days a week, hospital based fixed salary 400k with RVU bonus 65 dollars per RVU above 4900 RVU. It’s becoming a challenge to make the RVU as oncology Hospitalists are being employed in my current system, as you know consults in the hospitals contribute great deal to your bonus. The culture is amazing and it’s a great environment but with all the changes happening in the system we are seeing our income goes down. Hardly able to make a meaningful bonus!!!!! The employer will not raise the base and has not done so for 8 years?? That’s why I am thinking of private but so scared about the compensation formula that I have no clue how it works. Trying to get educated before I make a move

Are you in a very saturated market? The bolded raise some concern about supply-demand mismatch. If you're not tied to the region then I suggest perhaps looking further afield.

 

[MD46]

I’ve never heard of this when I’ve interviewed but I would definitely stay away from any practice with this stuff. I’ve more commonly seen 2 year partnership track equal partnership no buy-in. Aren’t you in the NYC area? Perhaps it is more common there?

But maybe I just didn’t get that far in the process because I decided against PP for the time being due to family reasons.

I still think if private practice is doomed then we’re all doomed, no hospital system will pay fairly once we lose the option to leave and go PP

I am in DC MD VA corridor, at least closer you are to a major city here that is the norm. If you move out 1.5-2hrs out it gets similar to what you suggested.

 

[Oncology08]

You would usually get productivity from E/M visit collections in Private practice as an employee. ( if they give u mostly medicaid-anemia patients, thats gona be laughable)

Rarely they will give you RVU based productivity depending on payor mix. If they have a large chunk of medicaid or low paying insurances I dont think they will do rvus at all.

Also revenue from oral chemo, lab, rent (if they own spaces and rented them out) and infusion will only be shared starting Junior partnership usually 3-4 years and finally equal distribution once you are full partner at 6-7 years in. May also be a significant buyin at that time. If there isnt, they already have squeezed it out of you over 7 years in sweat equity.

I think PP is a dying model with things the way they are right now. Margins arent as great anymore. PP docs are not looking to make people partner and share the cake, just want work horses that are sold a partner dream that rarely comes true and make you work for that for below market value while you are still gullible.

Similar sentiments have been shared amongst many people I know and personal experience as well.

Good luck

Thanks for the honest opinion. I really appreciated

 

[Oncology08]

Are you in a very saturated market? The bolded raise some concern about supply-demand mismatch. If you're not tied to the region then I suggest perhaps looking further afield.

That is a good point, currently I am practicing in a very competitive area, to be fair, I think my current salary is good enough giving the large hospital system in a large metropolitan area (+3 million), but again lots of changes happening such as hiring the oncology hospitalist which took a bite out of our RVUs, we do on call 3 weeks a year lol instead of monthly. Also, we are not allowed to cosign the NP notes in the clinic, the NP works as a separate entity and usually see 6-7 patients out of our schedule so that's another loss of RVU, we are left with baseline salary that has not changed in years and the employer does not seem to care because plenty of new fellows would welcome such an opportunity (open door policy, you don't like leave, you are replaceable).

The job I am looking into is 45 minutes away from the city; the area is around 100K with one practice only (with infusion center and Rad onc, and nearby 200 bed hospital).

 

[Oncology08]

Just ask what the median annual gross income is for the pre-partner and partnership docs. If they're not willing to give you that information, that's a red flag. If they are, it should give you all you need to know.

Thank you, it is a great question that I should ask

 

[Oncology08]

I am in DC MD VA corridor, at least closer you are to a major city here that is the norm. If you move out 1.5-2hrs out it gets similar to what you suggested.

You would usually get productivity from E/M visit collections in Private practice as an employee. ( if they give u mostly medicaid-anemia patients, thats gona be laughable)

Rarely they will give you RVU based productivity depending on payor mix. If they have a large chunk of medicaid or low paying insurances I dont think they will do rvus at all.

Also revenue from oral chemo, lab, rent (if they own spaces and rented them out) and infusion will only be shared starting Junior partnership usually 3-4 years and finally equal distribution once you are full partner at 6-7 years in. May also be a significant buyin at that time. If there isnt, they already have squeezed it out of you over 7 years in sweat equity.

I think PP is a dying model with things the way they are right now. Margins arent as great anymore. PP docs are not looking to make people partner and share the cake, just want work horses that are sold a partner dream that rarely comes true and make you work for that for below market value while you are still gullible.

Similar sentiments have been shared amongst many people I know and personal experience as well.

Good luck

I am following up on the type of insurance in the city: 35% employer coverage, 24% Medicaid, 13.5% Medicare, 9.5 uninsured, 3% military, rest uninsured or non group?

 

[imhopeful432]

Major metro in CA, med oncs I work with are reaching $700k-$1M in PP, very high $/RVU rate. And recruiting.