"Productivity bonuses" details?

[smr]

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Does anyone have experience with the subject of productivity bonuses or in general the subject of extra potential income on top of the base salary offered by employers?

I am sure there is a lot of variation, but I am just interested in knowing what this really means and what is the potential difference in income. Is it generally a marginal increase i.e. 5% or more significant?

 

[DarkHorizon]

Does anyone have experience with the subject of productivity bonuses or in general the subject of extra potential income on top of the base salary offered by employers?

I am sure there is a lot of variation, but I am just interested in knowing what this really means and what is the potential difference in income. Is it generally a marginal increase i.e. 5% or more significant?

Look up the concept of wRVUs and conversion factor. Run a google search, you’ll have your answer.

 

[militaryPHYS]

Look up the concept of wRVUs and conversion factor. Run a google search, you’ll have your answer.

I bet @DarkHorizon is a stickler on morning rounds...

Sorry I can't help you...I have a few more years before I get to think about productivity bonuses, conversion factors, etc.

 

[VincentAdultman]

I bet @DarkHorizon is a stickler on morning rounds...

Sorry I can't help you...I have a few more years before I get to think about productivity bonuses, conversion factors, etc.

Everything you do at work is worth some number of wRVU. A new patient visit, follow up, an injection, a TKA, etc. Your employer budgets you a certain number of wRVUs that you should be hitting in a year. The number of wRVUs that you go over that budgeted number, multiplied by a conversion factor is your bonus.

 

[smr]

Everything you do at work is worth some number of wRVU. A new patient visit, follow up, an injection, a TKA, etc. Your employer budgets you a certain number of wRVUs that you should be hitting in a year. The number of wRVUs that you go over that budgeted number, multiplied by a conversion factor is your bonus.

Interesting, thanks for the details. I am slightly familiar with wRVUs but wasn't sure how they factored into bonuses. Do you have any idea about what a typical bonus is for an orthopedic surgeon? Is it 10% of base salary etc.? I imagine it ranges a lot, but just interested in knowing what is typical or possible.


Thanks!

 

[VincentAdultman]

Interesting, thanks for the details. I am slightly familiar with wRVUs but wasn't sure how they factored into bonuses. Do you have any idea about what a typical bonus is for an orthopedic surgeon? Is it 10% of base salary etc.? I imagine it ranges a lot, but just interested in knowing what is typical or possible.


Thanks!

I don’t know what’s “typical” that was just my experience when I was hospital employed.

 

[ChiDO]

The bonus is usually a percentage of collections over your target. In my private practice interviews it was anywhere between 30-90%. So in the PP world, once you hit overhead + salary, then you can start collecting bonuses.

Usually hard to bonus your first year since your first month or two have little to no collections, so you end up with a 6-7 figure in the red to start with.

 

[DarkHorizon]

Interesting, thanks for the details. I am slightly familiar with wRVUs but wasn't sure how they factored into bonuses. Do you have any idea about what a typical bonus is for an orthopedic surgeon? Is it 10% of base salary etc.? I imagine it ranges a lot, but just interested in knowing what is typical or possible.


Thanks!

Bonus is not really bonus, it’s actually money that you earned. They call it productivity bonus. Essentially it’s the number of wRVUs that you generate over the salary you’re being paid. So basically, eat what you kill. There’s no free lunch.

 

[smr]

Bonus is not really bonus, it’s actually money that you earned. They call it productivity bonus. Essentially it’s the number of wRVUs that you generate over the salary you’re being paid. So basically, eat what you kill. There’s no free lunch.

Yes I understand. I was more interested in knowing what is possible (above the base salaries being offered) if you are willing to put in the work.

 

[DarkHorizon]

Yes I understand. I was more interested in knowing what is possible (above the base salaries being offered) if you are willing to put in the work.

Average Ortho generates roughly 8000 wRVUs a year. Once you get into 11-12k, you get above 90th percentile. Depending on what conversion factor you get paid. You can theoretically make up to 50 percent over the baseline, which is usually set at 8000 give or take.

I know someone personally who generates around 15k wRVUs and gets paid around 70/wRVU. You can do the math.

 

[smr]

Average Ortho generates roughly 8000 wRVUs a year. Once you get into 11-12k, you get above 90th percentile. Depending on what conversion factor you get paid. You can theoretically make up to 50 percent over the baseline, which is usually set at 8000 give or take.

I know someone personally who generates around 15k wRVUs and gets paid around 70/wRVU. You can do the math.

Ah I see, not as complicated as I assumed. How are spine docs making 2-3M a year a few years after practice? It's just higher wRVUs? Is someone arbitrarily paid less just because they recently joined a practice? Does "buying in" mean you pay this up front?

Also, do you know generally what sets aside the applicants who get median MGMA salary versus those that get 90th percentile? Is that data just including bonuses or are their significantly higher paying jobs? I know certain regions pay less/more, but is that the major determinant?

 

[DarkHorizon]

Ah I see, not as complicated as I assumed. How are spine docs making 2-3M a year a few years after practice? It's just higher wRVUs? Is someone arbitrarily paid less just because they recently joined a practice? Does "buying in" mean you pay this up front?

Also, do you know generally what sets aside the applicants who get median MGMA salary versus those that get 90th percentile? Is that data just including bonuses or are their significantly higher paying jobs? I know certain regions pay less/more, but is that the major determinant?

I personally don’t know any spine guys making 2-3 mil, I do know quite a few making close or just around 7 figures. Those numbers are highly exaggerated. Average spine guy make high six figures.

Everyone gets paid about median, even in markets with high demand. Even the least competitive markets will start you around 60th percentile, which would be around 650k-700k. Guys that are making 90th plus percentile are just busy cranking out the RVUs.

What this generally means that your employer will guarantee a certain salary, say 500k for example. They’ll also put a clause about wRVUs, and how much each wRVU is worth in terms of money, this is your conversion factor. So say for example your base salary is 500k and your conversion factor is $50. This means that you are guaranteed a salary of 500k, which means In order to generate 500k, you’ll have to crank out 10k wRVUs. If you generate less than that, you still take home 500k, that’s your base. But say you generate 12k wRVUs, you’ll get another 100k in bonus.

However, if you consistently underperform and don’t generate what they are paying you, they will cut your base salary to what you generate over the average of your last few years. As I said, there are no free lunches.

 

[smr]

I personally don’t know any spine guys making 2-3 mil, I do know quite a few making close or just around 7 figures. Those numbers are highly exaggerated. Average spine guy make high six figures.

Everyone gets paid about median, even in markets with high demand. Even the least competitive markets will start you around 60th percentile, which would be around 650k-700k. Guys that are making 90th plus percentile are just busy cranking out the RVUs.

What this generally means that your employer will guarantee a certain salary, say 500k for example. They’ll also put a clause about wRVUs, and how much each wRVU is worth in terms of money, this is your conversion factor. So say for example your base salary is 500k and your conversion factor is $50. This means that you are guaranteed a salary of 500k, which means In order to generate 500k, you’ll have to crank out 10k wRVUs. If you generate less than that, you still take home 500k, that’s your base. But say you generate 12k wRVUs, you’ll get another 100k in bonus.

However, if you consistently underperform and don’t generate what they are paying you, they will cut your base salary to what you generate over the average of your last few years. As I said, there are no free lunches.

Thanks for the information! I don't personally know any either, but 90th percentile on the 2015 MGMA data sheet is 1.9M so it seems reasonable.

I wish it would be possible to know if graduates of higher regarded programs (residency/fellowship) were offered higher base salaries than those that trained at lesser known places. I would assume the best job offers would go to these individuals but I haven't really been hearing much about it.

Do you start getting job offers during residency or is it mostly a connection thing?

 

[DarkHorizon]

Thanks for the information! I don't personally know any either, but 90th percentile on the 2015 MGMA data sheet is 1.9M so it seems reasonable.

I wish it would be possible to know if graduates of higher regarded programs (residency/fellowship) were offered higher base salaries than those that trained at lesser known places. I would assume the best job offers would go to these individuals but I haven't really been hearing much about it.

Do you start getting job offers during residency or is it mostly a connection thing?

Lol no. No one cares where you trained. You asked this question in a previous thread and I answered it. You get paid by Medicare fee schedules and insurance negotiated contracts. The only way to get paid more is to either be highly efficient and crank out more cases , or work in an area where reimbursement is higher. No one cares where you did your training as long as you are board eligible/certified, as far as how much you get paid.

A top residency/fellowship might make you a bit more competitive for certain job market/groups, but that doesn’t mean you’re going to get higher offers. In fact you’d likely make less because most of these jobs are in very competitive markets and tend to pay low.

 

[smr]

Lol no. No one cares where you trained. You asked this question in a previous thread and I answered it. You get paid by Medicare fee schedules and insurance negotiated contracts. The only way to get paid more is to either be highly efficient and crank out more cases , or work in an area where reimbursement is higher. No one cares where you did your training as long as you are board eligible/certified, as far as how much you get paid.

A top residency/fellowship might make you a bit more competitive for certain job market/groups, but that doesn’t mean you’re going to get higher offers. In fact you’d likely make less because most of these jobs are in very competitive markets and tend to pay low.

This is very strange to me because there is definitely a sense that people are really trying to match into specific top programs, even taking an extra research year after med school just to be especially competitive for these programs. If there is zero incentive to do this why are people doing it? Just feels good to match at a top ranked program or what?

I actually hope it is accurate because I would prefer to stay at a place near my home city to train if at all possible.

 

[ChiDO]

This is very strange to me because there is definitely a sense that people are really trying to match into specific top programs, even taking an extra research year after med school just to be especially competitive for these programs. If there is zero incentive to do this why are people doing it? Just feels good to match at a top ranked program or what?

I actually hope it is accurate because I would prefer to stay at a place near my home city to train if at all possible.

Agree with the above. No one cares where you trained once you get into PP. Maybe academic jobs would care slightly. The only regional bias will be if you grew up east coast, did training east coast, and now you want to move to Vegas, those private practice groups will be very hesitant to fly you out and give you the same level of interest as someone local to the area.

I have 16 partners in my PP, I only know where a few did their fellowships, let alone their residencies and no clue where they went to medical school. I just know we have 3 DO and 13 MD . The #2 producer in the group is a DO.

 

[VincentAdultman]

This is very strange to me because there is definitely a sense that people are really trying to match into specific top programs, even taking an extra research year after med school just to be especially competitive for these programs. If there is zero incentive to do this why are people doing it? Just feels good to match at a top ranked program or what?

I actually hope it is accurate because I would prefer to stay at a place near my home city to train if at all possible.

If people are taking research years to match at a “certain” program, in ortho, then they’re fools.

 

[Innocent2]

The value attached to "top programs" is not compensation. It is usually confined to "the next step". The reputation for quality of where you are (undergrad, MS, Res, Fellow) can open doors. Since most try to avoid "advertising" and "recruiting", networking counts as well. Former residents and fellows and the "top programs" would tend to maintain a network since it has potential value. When a department chair at a conference pulls several old friends aside at a conference and wants to introduce a candidate, the contact web is normally wider that a smaller program. Additionally, if looking for new attendings or a need, one would expect phone calls to old mentors. That does not imply that there is better training or a fit. The academic training leads to more networking that gets tapped. This applies in the fellowship process significantly but less so in the attending process. No openings for ortho-spine means no. But it can lead to a call back, two groups might have a need. The local chair and attendings will be much more knowledgeable in that region. Networks cut both ways. Big impact on "next step".

 

[OrthoRox]

Does anyone have experience with the subject of productivity bonuses or in general the subject of extra potential income on top of the base salary offered by employers?

I am sure there is a lot of variation, but I am just interested in knowing what this really means and what is the potential difference in income. Is it generally a marginal increase i.e. 5% or more significant?

Honestly if you're looking at a job, the starting salary should be considered irrelevant...productivity bonus is nice to have though.

You'll have to earn back your entire salary, all extra costs - nurse, advertising, moving expenses (yes those too), recruitment costs, overhead, licensing, legal etc etc etc all that stuff will be passed onto you by your group/employer...you need to earn all that back, then whatever they collect for you after that, you get a % of after. the first year. whatever it is 30%, 45, 50, 65% etc whatever. your agreement is. the rest goes to the group's partners.

so its nice, but you need to work hard for that - as a new ortho, you won't have full clinics or or's in the first couple months, so the only way to make up your salary and all those expenses and then be in bonus territory - you would need to take a lot of call, which is busy an brutal. your call stipend and whatever little you made on trauma would be huge. in getting you to bonus territory.

 

[Innocent2]

A physician needs to look at the components of compensation:
Base
Bonus
Retirement
Benefits

Private practice, hospital employed and academic are the basic types.
The region and the size of the population are potentially huge differences. It is normally city vs rural. That can be misleading financially. How desirable and how much business is available from the demand size and how many are available from the supply side. Medscape (free), MGMA, Sullivan Cotter, AMGA are four surveys a lot of places use. The combination of base and bonus can be weighted differently depending on the difficulty filling a position and subspecialties desired.