total compensation

[ZigZag]

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I am sorry guys, maybe it is a stupid question, but I am not able to find a clear answer to this one:

I am reading this article in Medical Economics Magazine:

http://www.memag.com/memag/article/articleDetail.jsp?id=123419

It defines practice revenue as collections after all adjustments, discounts, and write-offs.
Total compensation is earnings after tax-deductible expenses but before income taxes. For physicians in professional corporations, it’s the sum of salary, bonuses, and retirement/profit-sharing contributions made on their behalf.

Now, total compensation is the amount you take home after paying off malpractice insurance premiums if I understand this correctly.

200K is a lot of money, why do OBGYNs complain about malpractice rates?

I am probably missing something here. Can somebody please explain it to me?

 

[ZigZag]

So, is the question really dumb or nowbody knows the answer?
Please help me out guys, I know you can.

 

[jchernan]

I agree zig zag, 200K sounds like a lot of money. But, you have to figure in other things. For practicing ob's, the going rate on malpractice insurance is getting insane (ie. 100K type insanity). Also, the 200K dosen't cover the overhead costs of running an office or supporting a group if the ob is in private practice. Then, take into account the loans that we are taking with us into practice. Personally, I am leaving med school with 150K in debt. Then, realize that 200K is not where you will start, especially in desirable locations (ie. an offer of a starting salary of 115-130K in Los Angeles) is now the norm. When its all accounted for (especially if your planning on doing the family thing) that 200K evaporates quickly.

 

[doc05]

in some places, ob insurance is more like 200k-insanity. So yes, your pretax/post-expenses earnings is 200k, but just think how much it would be if you hadn't paid 200k for insurance!!

not to mention the constant threat of getting sued. Not to mention the possibility that if they're sued just a little too much, through no fault of their own, their insurance carrier may drop them, claiming they're "uninsurable." This has happened many many times, and basically means that all those years of training has been wasted, since you can't practice without insurance.

Think twice about going into obgyn, and if you do, practice in one of those few states that already has tort reform.

 

[CJMPre-Med]

To the OP:

How much OB's (or any doctors) make has no bearing on the propriety of the ludicrous malpractice rates for some of these specialties. Think any other professional would enjoy (hell, even ALLOW) an added ~30% expense (from their gross income, assuming $500K gross revenue and $150K malpractice), even if they're still making "$200K" pre-tax? I don't think any other professional would stand for it, quite frankly-- not CPA's, not stockbrokers and portfolio managers, not lawyers...nobody.


It's indefensible.

 

[jchernan]

To the OP:

How much OB's (or any doctors) make has no bearing on the propriety of the ludicrous malpractice rates for some of these specialties. Think any other professional would enjoy (hell, even ALLOW) an added ~30% expense (from their gross income, assuming $500K gross revenue and $150K malpractice), even if they're still making "$200K" pre-tax? I don't think any other professional would stand for it, quite frankly-- not CPA's, not stockbrokers and portfolio managers, not lawyers...nobody.


It's indefensible.

Well put

 

[ZigZag]

To the OP:

How much OB's (or any doctors) make has no bearing on the propriety of the ludicrous malpractice rates for some of these specialties. Think any other professional would enjoy (hell, even ALLOW) an added ~30% expense (from their gross income, assuming $500K gross revenue and $150K malpractice), even if they're still making "$200K" pre-tax? I don't think any other professional would stand for it, quite frankly-- not CPA's, not stockbrokers and portfolio managers, not lawyers...nobody.

It's indefensible.

Are you saying it makes more sense to be GP with $150k pre tax and low malpractice rate than OB with $200k after all expences?

Again, I am only talking about financial side of the thing, no other factors. And I am not trying to protect the stupidity of the current system in any way.

 

[ny skindoc]

I am sorry guys, maybe it is a stupid question, but I am not able to find a clear answer to this one:

I am reading this article in Medical Economics Magazine:

http://www.memag.com/memag/article/articleDetail.jsp?id=123419

It defines practice revenue as collections after all adjustments, discounts, and write-offs.
Total compensation is earnings after tax-deductible expenses but before income taxes. For physicians in professional corporations, it’s the sum of salary, bonuses, and retirement/profit-sharing contributions made on their behalf.

Now, total compensation is the amount you take home after paying off malpractice insurance premiums if I understand this correctly.

200K is a lot of money, why do OBGYNs complain about malpractice rates?

I am probably missing something here. Can somebody please explain it to me?

1) If malpractice premiums continue to rise it will eat up an increasing large share of the practice gross revenue.Thus total compensation will decline,since most OBs cannot easily pass this cost on to patients.were malpractice premiums to be more resonable then total compensation would indeed be far greater.
2) 200K does sound like a lot of money but considering the work/hours/stress that goes into making it and comparing it to what other specialties work for comparable or higher income its not that much take home after income taxes.OBs tend to work long hours, unless you know the amount of time worked to generate this compensation it does not tell you much.

 

[jchernan]

Wow, some of you guys really know your medical economy ****. No doubt that your know how in that sense is essential now a days. If only the general public knew these things, maybe they would have some sympathy...then again, they probably wouldn't.