Realistic OMS salaries for a new grad

[osteotomy01]

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I can't speak for all DSOs, as I've only worked for two different ones and interviewed at a third. I did the associate to "owner" private practice model for years before going DSO. All DSOs are not that same. Some DSOs with a lot of time and effort will allow you some autonomy and safer surgery. Some don't care and will not allow much change.

I also interviewed at PE owned private practices. Out of all of them, I would say PE owned PPs are the worst option. No juice with the squeeze. My experience with DSOs is that what percentage you'll get will vary widely with region and DSO. I've saw anywhere from 40-50%. IMO if you're seeing <40%, walk away now. Be very cautious with any PP promising you partnership. Many PPs are looking to boost their numbers so that they can sell out to PE and ride off in the sunset. Read your non-competes and negotiate so that if it doesn't work out you will not have to uproot your life and family just to put bread on the table. Get a defined path to partnership and not something like "we'll evaluate in xx years" because you need to prove yourself. If you can do anything contract wise that would prevent yourself from getting the middle finger if/should they decide to sell out to PE mid way through your buy in process--do it. I'm not sure how something like that could be structured. But if you were to bring up the conversation early on, you'll probably get a good read on what their intentions are.

That's my $0.02

 

[OSOSOS]

I used ChatGPT to work through this dilemma for myself a couple of years ago. Ran some numbers for you making some assumptions:

• Gross annual income: $1,000,000
• W-2 salary: $300,000
• DBP contribution: $170,000/year
• Contribution period: 20 years
• DBP return: 6% (your DBP is limited to returns of 5-7% per year - it cannot grow too quickly)
• No state income tax in Texas
• Current federal marginal rate: ~35%
• Retirement effective federal tax rate: let's assume 25%

Future value of $170k/year at 6% = $6.25 million
After 25% retirement tax ≈ $4.69 million after tax

That's your target. What taxable return is needed to beat this?

Without the DBP, you'd pay federal tax on that $170k / year that you put into the DBP.

So the alternative investment is:

• $170,000 × (1 − 35%)
• = $110,500/year into taxable

After capital gains taxes, how much return is needed to reach the same $4.69 million after tax?
Using a typical long-term capital gains + NIIT rate of about 24%, the answer is roughly:

About 11.5%–12% annualized​

Approximate outcomes:

Taxable Return	After-Tax Ending Value
8%	~$3.1M
9%	~$3.6M
10%	~$4.2M
11%	~$4.7M
12%	~$5.4M

Break-even is around 11% (give or take a few tenths depending on future tax rates).

So:

• If you believe your taxable portfolio can realistically earn 12%+ annually for 20 years, taxable likely wins.
• If you expect something closer to 8–10%, the DBP likely wins.

I live in California where we pay 46.3% marginal tax rate so it becomes even tougher to beat the DBP returns, and I ended up deciding to do it. I also rather would take the yearly significant tax deduction.

Keep in mind DBP administration fees are on average about $3k / year, but you can take a deduction on this $3k. FYI, the CAGR of $SPY in the last 20 years is 11.4% and in the last 15 years is 14.2% (the 20 year number is significantly lower because it takes into account the 2008-09 financial crisis).

Yes. Good info for others to consider. One tweak. The credit rate of the DBP can be more than that. Often it’s set approximately 2% above prime since for a large company with a pension that’s a predictable return for them to hit with not much risk. You don’t want to be on the hook for big contributions when market is down and economy is weak and you have lots of employees on your plan. We are often talking about single member DBP (including spouse) so you can rewrite the target credit rate higher. It’s your money anyway. So might as well use the market to lift some heavier weight. If market tanks and you’re underfunded then yes you are on the hook to put more in to fund it. But you have a few years to do that. Hopefully you’ve got the cash and you pile it in when market is down and let the rebound really do some lifting for you.

Also, the money in the DBP and ultimately the IRA it ends up in has some protections from creditors as well. Especially when they came from employer plans initially. So for me that was huge. Bankruptcy usually exposes anything and everything except homestead.

Also the DBP/CBP is a lot harder to touch. I view it the same as the equity in the house. Technically I can borrow against it but I have to do a lot of work to do that. The money in traditional brokerage account is super easy to access and spend. So forced behavior. The actuary and plan administrator tells me once a year my bill to fund the various retirement buckets and about $200k goes in. Do that for 20 years and we all should be pleased.

 

[OSOSOS]

During those 20 years, can you tap into the money as needed or is it illiquid for all that time? Illiquidity for that long seems like a dealbreaker since savvy investors could be missing out on a lot of opportunities during that time. Also, you could take that hypothetical 170 and deduct it via other means and saving yourself 35% in taxes, while retaining access to your funds or making it work for you.

The DBP is tax deductible in the year it’s put in. Just think of it as a giant IRA. Some plans allow for Roth-like buckets also. So no tax benefits on the way in but no taxes ever again. That is not in the CBP/DBP bucket though. Usually in 401k/PSP buckets.

 

[omfs216]

My experience

1 year at a PP as a new grad. Promised "path to partnership". 500k base with a collection bonus. Ended up producing ~3 mil my first year barely taking any time off and making about 680k after bonus (22.6% of production..). Saw the writing on the wall I would never be afforded a realistic opportunity to be owner/partner. Left after a little over a year, they replaced me with another new grad who was finishing his last year of residency. They sold to PE later that year and told the incoming new grad in May (after he signed on with the same "path to partnership" and had already bought a house in that area).

Been working traveling for big corporate for two years since. I work 13 days a month and made 1.1 mil last year. Most days are 8-2ish with no lunch break, but some days end at 10am, some days end at 6pm (rare). I prefer doing 8-16 same day consult/surgeries vs seeing 40 patients a day in PP between surgeries/consults/follow-ups.

As others have mentioned, you definitely have to be careful and look out for yourself and the safety of your patients first and foremost. Big corporate offices have high turnover and surgeries are pushed by under-educated office managers.


As long as you are ethical with treatment and careful and provide safe responsible treatment for your patients, I've found it's a lucrative and rewarding job.

 

[teeth!]

My experience

1 year at a PP as a new grad. Promised "path to partnership". 500k base with a collection bonus. Ended up producing ~3 mil my first year barely taking any time off and making about 680k after bonus (22.6% of production..). Saw the writing on the wall I would never be afforded a realistic opportunity to be owner/partner. Left after a little over a year, they replaced me with another new grad who was finishing his last year of residency. They sold to PE later that year and told the incoming new grad in May (after he signed on with the same "path to partnership" and had already bought a house in that area).

Been working traveling for big corporate for two years since. I work 13 days a month and made 1.1 mil last year. Most days are 8-2ish with no lunch break, but some days end at 10am, some days end at 6pm (rare). I prefer doing 8-16 same day consult/surgeries vs seeing 40 patients a day in PP between surgeries/consults/follow-ups.

As others have mentioned, you definitely have to be careful and look out for yourself and the safety of your patients first and foremost. Big corporate offices have high turnover and surgeries are pushed by under-educated office managers.


As long as you are ethical with treatment and careful and provide safe responsible treatment for your patients, I've found it's a lucrative and rewarding job.

This is an awesome example, and a little counter to the trend what you hear a lot.
Can you disclose the corporate company? Do you have any ethical concerns?

 

[Torshammer]

My experience

1 year at a PP as a new grad. Promised "path to partnership". 500k base with a collection bonus. Ended up producing ~3 mil my first year barely taking any time off and making about 680k after bonus (22.6% of production..). Saw the writing on the wall I would never be afforded a realistic opportunity to be owner/partner. Left after a little over a year, they replaced me with another new grad who was finishing his last year of residency. They sold to PE later that year and told the incoming new grad in May (after he signed on with the same "path to partnership" and had already bought a house in that area).

Been working traveling for big corporate for two years since. I work 13 days a month and made 1.1 mil last year. Most days are 8-2ish with no lunch break, but some days end at 10am, some days end at 6pm (rare). I prefer doing 8-16 same day consult/surgeries vs seeing 40 patients a day in PP between surgeries/consults/follow-ups.

As others have mentioned, you definitely have to be careful and look out for yourself and the safety of your patients first and foremost. Big corporate offices have high turnover and surgeries are pushed by under-educated office managers.


As long as you are ethical with treatment and careful and provide safe responsible treatment for your patients, I've found it's a lucrative and rewarding job.

What is your % take-home of production working for the big corp?

 

[omfs216]

This is an awesome example, and a little counter to the trend what you hear a lot.
Can you disclose the corporate company? Do you have any ethical concerns?

I don't have ethical concerns because I have the final say on everything I do. Doing same day consult treatment, you're going to run into some referrals/treatment plans that don't make sense.

I think the vast, vast majority of the time a plan that is over-coded is from ignorance rather than malice and ultimately it's my responsibility to make sure things are coded and treated responsibly. This is the same as private practice except backwards (in PP you consult the patient first then send them to the treatment coordinator, in corporate the treatment coordinator sets up the treatment first).

 

[omfs216]

What is your % take-home of production working for the big corp?

"40%" but they take out supply cost and part of your DA wages from that so it usually shakes out close to 35-36%

I'm guessing the OGs at these places are grandfathered into a 40+% commission, but even in the last 2 years I can see the paradigm switching. Places like Aspen, PDS, Nuvia, Clearchoice were begging for oral surgeons practically every where 3-4 years ago when I was job searching in my final residency years. If you look at their job listings now, things are a lot more slim. It makes sense if you look at the current ownership landscape in OMS.

As has been discussed in this thread, practice owners are selling the profession out to PE and many younger surgeons, including myself, are opting out of that model. Even if you join a practice that hasn't sold to PE, the possibility always looms over the buyout discussion. Many owners use PE offer numbers to justify their very high asking price to the associate - I've seen this personally and had discussions with colleagues from residency encountering this.

My two cents for younger surgeons moving forward would be - if your ultimate goal is practice ownership, which is the case for many of us, figure out the best path towards opening a solo practice. For me, that's working corporate initially. Let these guys sell out to PE, and once they fulfill their 5 year or whatever contract, ride off into the sunset with their bag. But we do not have to be a part of keeping these practices going once they leave. Let these PE firms learn that the "practice" doesn't produce, the surgeon produces. They can sell it for parts once the old surgeon leaves when they can't replace him, meanwhile the new generation will be next door in their doctor owned office.

Sorry I got off on a tangent, lol. But I do feel strongly about this subject.

 

[OSOSOS]

Agree 100%

 

[3r4324]

"40%" but they take out supply cost and part of your DA wages from that so it usually shakes out close to 35-36%

I'm guessing the OGs at these places are grandfathered into a 40+% commission, but even in the last 2 years I can see the paradigm switching. Places like Aspen, PDS, Nuvia, Clearchoice were begging for oral surgeons practically every where 3-4 years ago when I was job searching in my final residency years. If you look at their job listings now, things are a lot more slim. It makes sense if you look at the current ownership landscape in OMS.

As has been discussed in this thread, practice owners are selling the profession out to PE and many younger surgeons, including myself, are opting out of that model. Even if you join a practice that hasn't sold to PE, the possibility always looms over the buyout discussion. Many owners use PE offer numbers to justify their very high asking price to the associate - I've seen this personally and had discussions with colleagues from residency encountering this.

My two cents for younger surgeons moving forward would be - if your ultimate goal is practice ownership, which is the case for many of us, figure out the best path towards opening a solo practice. For me, that's working corporate initially. Let these guys sell out to PE, and once they fulfill their 5 year or whatever contract, ride off into the sunset with their bag. But we do not have to be a part of keeping these practices going once they leave. Let these PE firms learn that the "practice" doesn't produce, the surgeon produces. They can sell it for parts once the old surgeon leaves when they can't replace him, meanwhile the new generation will be next door in their doctor owned office.

Sorry I got off on a tangent, lol. But I do feel strongly about this subject.

The worst part is thinking there is a bag for the people that sold to pe.
The bag doesn't exist. The surgeons are getting absolutely walked by finance bros.

tldr this podcast outlines that pe rarely gives cash offers these days and pe/dso stock is a worthless scam

 

[osteotomy01]

My experience

1 year at a PP as a new grad. Promised "path to partnership". 500k base with a collection bonus. Ended up producing ~3 mil my first year barely taking any time off and making about 680k after bonus (22.6% of production..). Saw the writing on the wall I would never be afforded a realistic opportunity to be owner/partner. Left after a little over a year, they replaced me with another new grad who was finishing his last year of residency. They sold to PE later that year and told the incoming new grad in May (after he signed on with the same "path to partnership" and had already bought a house in that area).

Been working traveling for big corporate for two years since. I work 13 days a month and made 1.1 mil last year. Most days are 8-2ish with no lunch break, but some days end at 10am, some days end at 6pm (rare). I prefer doing 8-16 same day consult/surgeries vs seeing 40 patients a day in PP between surgeries/consults/follow-ups.

As others have mentioned, you definitely have to be careful and look out for yourself and the safety of your patients first and foremost. Big corporate offices have high turnover and surgeries are pushed by under-educated office managers.


As long as you are ethical with treatment and careful and provide safe responsible treatment for your patients, I've found it's a lucrative and rewarding job.

Your experience with PP sounds exactly like mine. I wish I could tell every new grad NOT to fall for the trap of associateship. Current times are not like stories we've heard of the past.

Similarly, corporate seems to be the ideal scenario for the time being. In my region and surrounding regions, landing a good DSO job is becoming competitive. This probably speaks for itself. If PE leaves oral surgery, maybe the dynamic can change.

 

[702]

Your experience with PP sounds exactly like mine. I wish I could tell every new grad NOT to fall for the trap of associateship. Current times are not like stories we've heard of the past.

Similarly, corporate seems to be the ideal scenario for the time being. In my region and surrounding regions, landing a good DSO job is becoming competitive. This probably speaks for itself. If PE leaves oral surgery, maybe the dynamic can change.

You'd take a corporate job over being the owner of a successful private practice?

 

[osteotomy01]

You'd take a corporate job over being the owner of a successful private practice?

The idea of associate to "owner" is a pipe dream in today's market. Fool me once, shame on you. Fool me twice, shame on me.

 

[Contach]

word of caution: don't trust these big corporations promising big numbers to you. They will say average OS will produce "X" amount in any given day. Been there done that. They quadruple book patients on your schedule, and they are all sick and have questionable treatment plan. You travel to new locations everyday. working with new managers everyday, high turnover, no training. I felt like I was the only one trying to prevent disaster from happening everyday. You will see what i mean when that jaundiced patient is in your chair, already paid, for full mouth ext under deep sedation as part of the quadruple booked pt.

More like you will produce "x" amount each day when you do what the corporation want you to do. I didn't last long.

Why do you expect them to know what is safe and not safe? A dentist wouldnt know, how would the suits? It's up to you to screen the patients. Put the work in ahead of time, look at your schedule on your evenings or weekends or whatever. It is your fault if you walk into a day where there is a jaundiced patient who needs to be sedated.. I see this all too often when specialists join DSOs.

You need to look at it as: you are building an OS or Endo practice within their practice and work with the people around you, and develop your own systems, whatever that may be.