Starting salaries

[Doctor Christmas]

---

Members don't see this ad.

So I was recently offered to sign on with a group with a starting salary of 200k. There was no mention of sign on bonus. Apparently there is a bonus that goes from 15%-45% depending on how much you bill. Is that how bonus structure typically works? It was my understanding that bonuses worked on rvu basis? Is that the same thing?

How common is it to have a sign on bonus? The group is in a pretty desirable market however it still seems on the lower end for me. There are 3 weeks vacation 1 week CME. That also seems a little on the more stringent side.

Since I'm pretty new at this, I would love others who have been in practice to comment. I don't know where this is a pretty standard offer or whether it's a bit on the low side.

 

[Jitter Bug]

Depends on your region and your market.

Look at the MGMA data for your specialty, practice type, and region to get ballpark ideas. New grads are usually offered 50% of the average yearly pay from large employers. Small employers or private groups can offer whatever they want, depends how hungry they are for help.

MGMA is about 600 bucks but you may be able to find some old copies of 1-2 year old numbers to at least get you in the general vicinity.

 

[Doctor Christmas]

Depends on your region and your market.

Look at the MGMA data for your specialty, practice type, and region to get ballpark ideas. New grads are usually offered 50% of the average yearly pay from large employers. Small employers or private groups can offer whatever they want, depends how hungry they are for help.

MGMA is about 600 bucks but you may be able to find some old copies of 1-2 year old numbers to at least get you in the general vicinity.

I have been pretty disappointed in starting salaries in PM&R. Have they dropped back down? It was my understanding that rehab salaries had gotten a nice bump in recent years. The latest one I got in a major hospital in the midwest was $170K + RVU based bonus. That seems quite low. PCPs even are making more than that. Have salaries dropped back down again?

 

[cowboydoc]

I have been pretty disappointed in starting salaries in PM&R. Have they dropped back down? It was my understanding that rehab salaries had gotten a nice bump in recent years. The latest one I got in a major hospital in the midwest was $170K + RVU based bonus. That seems quite low. PCPs even are making more than that. Have salaries dropped back down again?

That seems a bit low for the Midwest, but starting salary shouldn't mean much outside of your first year. A favorable setup and fair rvu structure means a lot more than 20-30k your first year, as long as you don't starve. Though, a crappy contract out of the gate is often a preview of coming attractions.

 

[Doctor Christmas]

Yep. I was almost speechless when I was told 170k for pm&r. Shouldn’t starting be closer to 220k or so? And this is a hospital that spent 200+ million on a renovation.

That seems a bit low for the Midwest, but starting salary shouldn't mean much outside of your first year. A favorable setup and fair rvu structure means a lot more than 20-30k your first year, as long as you don't starve. Though, a crappy contract out of the gate is often a preview of coming attractions.

also

 

[j4pac]

Yep. I was almost speechless when I was told 170k for pm&r. Shouldn’t starting be closer to 220k or so? And this is a hospital that spent 200+ million on a renovation.


also

Knowing someone who works contracts for PM&R...I think you're definitely on the low end. I was told that it's been about a decade since negotiating a contract for less than $200k. Of course, signing bonus, bonus in general, work hours, location, among other things probably will come into play. I've heard that NY and Chicago are notoriously competitive...and therefore, there salaries will be less (despite their insane cost of living)...but even still, I think that the $$$ is on the low end.

 

[Doctor Christmas]

Knowing someone who works contracts for PM&R...I think you're definitely on the low end. I was told that it's been about a decade since negotiating a contract for less than $200k. Of course, signing bonus, bonus in general, work hours, location, among other things probably will come into play. I've heard that NY and Chicago are notoriously competitive...and therefore, there salaries will be less (despite their insane cost of living)...but even still, I think that the $$$ is on the low end.

Yes, the above mentioned salary was in Chitown. I would imagine more around 220-230k to be the norm for starting no? What's an average starting salary these days in PM&R? Am I off on this? Although I know of a number of my fellow classmates who last year got offers around 180k-200k - not in Chicago.

 

[j4pac]

Yes, the above mentioned salary was in Chitown. I would imagine more around 220-230k to be the norm for starting no? What's an average starting salary these days in PM&R? Am I off on this? Although I know of a number of my fellow classmates who last year got offers around 180k-200k - not in Chicago.

Well...you can only get what someone is willing to pay you. I’d try to negotiate up and shop around unless they were willing to pay me that being a 0.8.

 

[Doctor Christmas]

Well...you can only get what someone is willing to pay you. I’d try to negotiate up and shop around unless they were willing to pay me that being a 0.8.

What would you say is a fair starting salary?

 

[PMR2008]

I am in Chicago and when applying for jobs right out of fellowship 150k to 200k was the range. This was in 2013. Not much has changed since there are enough desperate physicians out there who will take the pay cut to live in the city or to be close to family. Further away from the city(Rockford, Peoria) the starting salaries are in the 200k-250k range or higher. Chicago should not be categorized as the typical midwest city. Salaries in Wisconsin and Indiana are 25-30% higher.

 

[lejeunesage]

FWIW, I'm going to be doing 100% inpatient as an independent contractor in TN.
There's an income guarantee of $240K the first year and eat what you kill afterwards.

 

[RooAgg14]

AAPMR recently came out w/ their compensation survey results. I think it is very helpful especially since they have a separate section w/ numbers just for those starting out. It's free if you've renewed your dues for 2018 Compensation Survey

 

[Doctor Christmas]

FWIW, I'm going to be doing 100% inpatient as an independent contractor in TN.
There's an income guarantee of $240K the first year and eat what you kill afterwards.

Problem w that is that you have to pay for this ur benefits, insurance, no bonus, you take vacation and you don’t get paid, etc. w independent contractor. Chicago market sadly is very competitive.

 

[lejeunesage]

Yes, I know. But I still like that better. Besides, the 240 is a floor, not a ceiling.

 

[RangerBob]

Yes, I know. But I still like that better. Besides, the 240 is a floor, not a ceiling.

I'm pretty much in the same boat--likely staking an independent contractor position. Generally an IC job will pay a lot more than an employed position, or have much better hours. I don't think it's unreasonable at all to make over $300k as an IC with a reasonable work-life balance from talking with current practicing physicians with the same business model. Many make quite a bit more than that.

The downsides are you don't get health insurance, benefits/retirement, and the safety/structure of being an employee. The benefits are you can pretty much take as much time off as you want (you're your own boss, so as long as you can absorb the financial hit since you don't get paid, and someone can cover, it's ok). Plus you can put more money into a solo 401k, and pick whatever benefits you want. You have far more flexibility on your hours--by definition you're in charge of that. The entity paying you can only pay you to perform a task (ie, manage the IPR unit/patients). You can decide how you want to do that (ie., round in the AM, then take call from home if you finish early, etc.)

The new tax law should also significantly help independent contractors--you get up to a 20% deduction as a pass-through business. How that's going to be calculated out is yet to be determined, so whether you form an S-crop vs LLC vs sole proprietorship could make a difference. And if you make over a certain amount ($415k for married folks, I'm not sure what it is for single folk) the deduction gets phased out for those in healthcare (among many other service fields).

In general, people should not chose a job based on the job structure (employee vs independent contractor). WCI has a great post about this same issue.

 

[lejeunesage]

Yeah, I think it's the way to go.
Unfortunately, the new tax law is good for independent contractors in general, but was written specifically to exclude professionals like physicians and lawyers from taking advantage of the new 20% deduction...
Oh well. I still think it's a better deal.

 

[RangerBob]

Yeah, I think it's the way to go.
Unfortunately, the new tax law is good for independent contractors in general, but was written specifically to exclude professionals like physicians and lawyers from taking advantage of the new 20% deduction...
Oh well. I still think it's a better deal.

You're only excluded if you make above the limit. I'm married, and would need to make somewhere around $315-350k to start getting phased out, and over $415k to get phased out completely. And that limit appears to be based on all your net income (after all business expenses/above-the-line deductions, including 401k contributions, health insurance, etc.).

I have seen different ideas of how that 20% is calculated. Such as, with a S-corp, it may only apply to the dividend. And usually you wouldn't pay yourself more than 40% or so of your business income as a dividend. At this point I'm waiting for clarification from the IRS before I decide if I will go the sole proprietor route or s-corp route, but it appears to be very clear physicians and other professionals are able to take advantage of the deduction, but they get phased out that the lower dollar amount.

Still, jobs aren't about the money, and I would have accepted the same job regardless of how the 20% deduction is handled.

 

[Doctor Christmas]

I'm pretty much in the same boat--likely staking an independent contractor position. Generally an IC job will pay a lot more than an employed position, or have much better hours. I don't think it's unreasonable at all to make over $300k as an IC with a reasonable work-life balance from talking with current practicing physicians with the same business model. Many make quite a bit more than that.

The downsides are you don't get health insurance, benefits/retirement, and the safety/structure of being an employee. The benefits are you can pretty much take as much time off as you want (you're your own boss, so as long as you can absorb the financial hit since you don't get paid, and someone can cover, it's ok). Plus you can put more money into a solo 401k, and pick whatever benefits you want. You have far more flexibility on your hours--by definition you're in charge of that. The entity paying you can only pay you to perform a task (ie, manage the IPR unit/patients). You can decide how you want to do that (ie., round in the AM, then take call from home if you finish early, etc.)

The new tax law should also significantly help independent contractors--you get up to a 20% deduction as a pass-through business. How that's going to be calculated out is yet to be determined, so whether you form an S-crop vs LLC vs sole proprietorship could make a difference. And if you make over a certain amount ($415k for married folks, I'm not sure what it is for single folk) the deduction gets phased out for those in healthcare (among many other service fields).

In general, people should not chose a job based on the job structure (employee vs independent contractor). WCI has a great post about this same issue.

Where are all these independent contractor jobs ou guys talk about? In my area there are not that many.

 

[PMR2008]

I have been an independent contractor since I graduated from fellowship in 2013. It has its challenges but I would be independent over an employee any day. I make my own hours, take as much time as I want off and set my schedule. I don't work weekends or take call. Certainly financially I do better than most hospital employed phyiatrists and have a ton of freedom. Someone much smarter than me told me once that 'you get to pick 2 out of 3 options when looking for a job, live where you want to live, make a lot of money or do what you like to do'. I am fortunate enough to have all three. I made a S Corp when I started and the tax benefits are numerous. I don't think I will qualify for the pass through but it is nice to know that it is an option if I make less.
I think most graduating residents tend to be attracted to guaranteed paycheck and a safety net. There are plenty of opportunities out there to be independent and take some risks. It is better to take some risks early on in the career vs spending 5 years help build a practice for someone else and than start over. Read my previous posts regarding what I do and if you have any questions just PM me.

 

[j4pac]

This is a turning into a very interesting and helpful thread. Are there any resources (other than this thread) out there on independent contracting?

My wife will very likely be making decent money and have benefits (health insurance) provided for the family...so I'm in a position to take more risk. We do have a family, so having a schedule that is flexible is an enormous perk. My dream job would make decent pay, allow me to have a flexible scope of practice, and not work full-time.

 

[RangerBob]

Where are all these independent contractor jobs ou guys talk about? In my area there are not that many.

I didn't specifically seek one out, and personally preferred an employed position because I thought it'd be safer/more familiar. But the job I wanted was as an independent contractor, so it's just the route I'm going. I have seen a few other IC jobs out there. Generally speaking, any locums job will be as an IC, but there are some permanent ones too.

 

[lejeunesage]

Amen to that!

 

[RangerBob]

I have been an independent contractor since I graduated from fellowship in 2013. It has its challenges but I would be independent over an employee any day. I make my own hours, take as much time as I want off and set my schedule. I don't work weekends or take call. Certainly financially I do better than most hospital employed phyiatrists and have a ton of freedom. Someone much smarter than me told me once that 'you get to pick 2 out of 3 options when looking for a job, live where you want to live, make a lot of money or do what you like to do'. I am fortunate enough to have all three. I made a S Corp when I started and the tax benefits are numerous. I don't think I will qualify for the pass through but it is nice to know that it is an option if I make less.
I think most graduating residents tend to be attracted to guaranteed paycheck and a safety net. There are plenty of opportunities out there to be independent and take some risks. It is better to take some risks early on in the career vs spending 5 years help build a practice for someone else and than start over. Read my previous posts regarding what I do and if you have any questions just PM me.

If you discount the tax benefits of the s corp, are there really any reasons to go with an s corp over a sole proprietorship? I know you're on the hook regarding malpractice and personal asset risk equally between the two. If you're not going to have any employees that could get sued, or property that someone could trip over, is there really any reason to deal with the hassle of starting/maintaining a s-corp when a sole proprietorship is so much easier/simpler?

 

[lejeunesage]

Why do you have to stay in your area?
I was looking for exclusively independent contractor positions.
I also wanted to work with internal recruiters who weren't going to eat my lunch, so to speak.
HealthSouth has a ton of IC positions. Vibra Healthcare also has a few.
Now, if you have a significant other and you're geographically-restricted, that obviously limits your opportunities.
Most of my graduating classmates had a spouse to take into account. So, they had to choose between 2 or 3 opportunities.
I was flexible enough to be willing to move anywhere, as long as it had a decent population.

 

[Doctor Christmas]

Why do you have to stay in your area?
I was looking for exclusively independent contractor positions.
I also wanted to work with internal recruiters who weren't going to eat my lunch, so to speak.
HealthSouth has a ton of IC positions. Vibra Healthcare also has a few.
Now, if you have a significant other and you're geographically-restricted, that obviously limits your opportunities.
Most of my graduating classmates had a spouse to take into account. So, they had to choose between 2 or 3 opportunities.
I was flexible enough to be willing to move anywhere, as long as it had a decent population.

Yeah that's the thing - I do have a spouse who has a career (finance) so he can't be in the middle of nowhere - he has to be in a major city with a financial hub. Our families are in the Chicagoland area so again that's important to us. I also want to be involved in the more business type aspect of rehab - so I am looking into buying some therapy practices as well so I need some certain cash flow in addition to our savings to make this happen. I am not opposed to see what happens in the next year or two and become an independent contractor - I was contacted by the HealthSouth people and the job that they had locally unfortunately was snatched up. I do want the possibility of a medical directorship so that's one of the reasons that I like one of the job offered - I am hoping to negotiate the salary a bit as well.

 

[PMR2008]

If you discount the tax benefits of the s corp, are there really any reasons to go with an s corp over a sole proprietorship? I know you're on the hook regarding malpractice and personal asset risk equally between the two. If you're not going to have any employees that could get sued, or property that someone could trip over, is there really any reason to deal with the hassle of starting/maintaining a s-corp when a sole proprietorship is so much easier/simpler?

LLC Filing Taxes As An S Corp | The White Coat Investor - Investing And Personal Finance for Doctors

Honestly I don't know everything I need to know but the website helps a lot along with being married to a CPA. Initially it is recommended to form a LLC and later on filling as a S Corp or creating a S Corp. It would be best to discuss with your own accountant. Depending on your take home and structure you could save money.

 

[RangerBob]

LLC Filing Taxes As An S Corp | The White Coat Investor - Investing And Personal Finance for Doctors

Honestly I don't know everything I need to know but the website helps a lot along with being married to a CPA. Initially it is recommended to form a LLC and later on filling as a S Corp or creating a S Corp. It would be best to discuss with your own accountant. Depending on your take home and structure you could save money.

I agree, it's a great website. Unfortunately physicians cannot form an LLC in the state I will be practicing.I plan to get a CPA and will speaking with a lawyer to make sure I start everything up right--I'll see if they have any additional input.