understanding pathologist compensation

[pathstudent]

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I used to think it was absurd that junior faculty earned 1/2-1/3 of senior faculty at academic hospitals and that junior pathologists earned 1/2 of what partners did in private practice. I used to think it was dictated by greed, but now I see it was dictated by common sense.

The senior partners in private practice negotiate all the contracts, hobnob with the administration and established the connections with the community practice clinicians for the high reimbursement out patient biopsies. It would be absurd to think a new pathologist deserved an even cut right out the gate.

And in academics it would be similar. How absurd would it be to think a new first year junior faculty deserved what Barnes gets to sign out ENT at Pitt, or ODZE gets to sign out GI at BWH, or Harris gets to sign out lymphoma at MGH or Farrell gets to sign out liver at UCSF.

 

[Pathwrath]

Most people would agree that new docs in private practice or academics have to pay their dues. The question is for how long. More than three years in private practice is exploitation, regardless of what the group likes to call it. By that time, the senior partners have pocketed several hundred grand of work billed under your name, not to mention benefitting from your reduced vacation time and whatnot. That's enough.

 

[LADoc00]

at this point, the job market is such that there really is no reason to look for partner-level hires. A reasonable group can install one guy as CEO for life and create employment-level positions that mimic say Kaiser compensation for all new pathologists. Under this model, the group could still get exceptional applicants with lots of fellowship boards AND make a few hundred K per seat in extra profit/year. Why would you not do that??

To be ethical, I would probably explain at length in the interview process that the position is not owner/partner-tract. I would make it part-time/lifestyle friendly to compensate. In a desirable location, there just is not reason to cut new hires in on the profit. None.

I used to think differently, but there are just way to many solid pathologists struggling to find limited numbers of good jobs to have private groups at all bend over backwards to attract them. Applicants SWARM me regularly and I dont even have an opening.

Goes back to the way way too many trainees issue.

I would guess most young pathologists can now kiss off partnership unless they are lucky, for at least the next 10-15 years.

 

[cozmopak]

Does this apply to academic jobs as well? I just can't believe that a well-trained graduate from a top notch program would have trouble finding decent employment.

 

[LADoc00]

Does this apply to academic jobs as well? I just can't believe that a well-trained graduate from a top notch program would have trouble finding decent employment.

/slap forehead...did you read any of the posts?!

This wouldnt apply to academics...they are already employees.

 

[JPR22]

With the means, could a new grad start their own group and try to lowball for contracts? I cant imagine this would happen too often, as most new grads wouldnt have the capital.

 

[pathstudent]

With the means, could a new grad start their own group and try to lowball for contracts? I cant imagine this would happen too often, as most new grads wouldnt have the capital.

I find it odd how little people understand how pathology works. A group doesn't bid for a hospital to sign a contract with them. Hospitals/other doctors don't pay pathologists. Pathologist reimbursement is all based on CPT codes as dictated by medicare. You have no negotiation with that. You take it or don't take it. YOu negotiate contracts with insurance companes so you can bill their patients. They usually pay 120% or 150% of medicare. Some pay less than medicare.

When Chuck Zaloudek does a frozen on an ovarian tumor. He gets paid the same as every one else in the Bay Area for a doing a frozen section on anything. A frozen section is an 88331 and any frozen you do whether it be the hardest brain tumor ever or the simplest most obvious negative small bowel margin of a whipple, you get paid the same.

If you wanted to start your own group, then you need to convince the hospital administration or outpatient docs that you can provide better service, and then they give you a contract or start sending you specimens. You don't low-ball for hospital contracts or outpatient specimens. Now if you want to get the work from insourced pathology. Then you need to be willing to sell yourself for as cheap as you can go. Therefore, the previously discussed pathologists who were willing to sign out prostate biopsies at $10 a pop when medicare pays the urologist 35-40 and private insurance 45-60 for an 88305 professional component. You could low ball that and come in and say, "I will do it for $8" and then the going already doing it will say "OK I will do it for $5"

 

[yaah]

I may be incorrect about this because I am still learning and I haven't gotten involved in this side of things yet, but there's a difference between outpatient medicine (i.e. outreach) and inpatient/hospital medicine. Medicare inpatient reimbursement is based on hospital payments, per DRG. Pathology is just a part of it. You don't get paid for inpatient admissions like you get paid for outpatient procedures and specimens. Labs (and hospitals) essentially lose money the more tests are done on inpatients, because the reimbursement rate is the same per DRG whether you are admitted for 5 days and have 100 tests as compared to 2 days and 25 tests. The amount you do and bill for can be used to negotiate how much of the pie the hospital gives your specialty, however.

Many hospitals that employ pathologists do make money off of them (in private practice). The pathologists are paid a salary and the hospital pockets the rest. This is true for other specialties as well. This is how some large private hospitals do business.

 

[pathdawg]

"I find it odd how little people understand how pathology works. A group doesn't bid for a hospital to sign a contract with them."

You are incorrect. While its true that Part B reimbursment is based on Medicare rates, hospitals do indeed bid on pathology services (in the form of Part A).

 

[lipomas]

I'm fairly certain that hospitals and pathology groups (private groups, not hospital employees) negotiate the terms of the group's compensation for inpatient work and running the lab. Outpatient business pays better (in terms of more money for work performed) but it isn't everything.

 

[pathstudent]

I'm fairly certain that hospitals and pathology groups (private groups, not hospital employees) negotiate the terms of the group's compensation for inpatient work and running the lab. Outpatient business pays better (in terms of more money for work performed) but it isn't everything.

Well I guess I could be wrong but I thought pathologists weren't employed by hospitals, but were contracted to provide their services in managing the labs, taken care of AP and frozens.

Can any community private practice types comment? Are you employed by the hospital or do you bill for your own cases like all other physicians?

 

[mcfaddens]

Well I guess I could be wrong but I thought pathologists weren't employed by hospitals, but were contracted to provide their services in managing the labs, taken care of AP and frozens.

Can any community private practice types comment? Are you employed by the hospital or do you bill for your own cases like all other physicians?

Well, both scenarios are possible; you can be employed by the hospital and cannot perform private outpatient cases (same case with other hospital based specialities like gas and rads) or can contract with the hospital as an independent group to perform these services. From what ive seen so far as an independent group your reimbursement is made by negotiations for services by the individual insurance provider. If you are lucky the arrangements were made a long time ago and have good payments that were average for the 90's and look like gold by todays standards. Today no insurance provider wants to give you a dime, so if you may get lets say $80 for an 88305 if you are a decent negotiator now opposed to someone getting $130 on the same charge negotiated 10 years ago, well you can see the difference. Im sure someone knows more about this than I do and feel free to correct this partial information. My question is from the snippets of your posts that I have read it looks like you are trying to pursue an academic path, why do you care about billing then? Academics has its own set of crap to deal with and there is no safe haven from the daily aggravations that we will all experience, private or academics. enlighten me

 

[pathstudent]

Well, both scenarios are possible; you can be employed by the hospital and cannot perform private outpatient cases (same case with other hospital based specialities like gas and rads) or can contract with the hospital as an independent group to perform these services. From what ive seen so far as an independent group your reimbursement is made by negotiations for services by the individual insurance provider. If you are lucky the arrangements were made a long time ago and have good payments that were average for the 90's and look like gold by todays standards. Today no insurance provider wants to give you a dime, so if you may get lets say $80 for an 88305 if you are a decent negotiator now opposed to someone getting $130 on the same charge negotiated 10 years ago, well you can see the difference. Im sure someone knows more about this than I do and feel free to correct this partial information. My question is from the snippets of your posts that I have read it looks like you are trying to pursue an academic path, why do you care about billing then? Academics has its own set of crap to deal with and there is no safe haven from the daily aggravations that we will all experience, private or academics. enlighten me

It is important to walk into any situation with eyes wide open.

Revenue in medicine is created the same way whether in private or academic or reference lab with the exception of some that are their own entity say like Kaiser or the VA. But even in those situations the pay the doctors get is based on the pay scale in the free sector.

I can't imagine a hospital hiring pathologists and then billing for their services. The most they could skim would be a few hundred thousand. That has to be peanuts compared to their working budget.

 

[yaah]

I can't imagine a hospital hiring pathologists and then billing for their services. The most they could skim would be a few hundred thousand. That has to be peanuts compared to their working budget.

There are many private hospitals who employ most of their physicians. They may still have outside groups with admitting or surgical privileges, but oftentimes they employ most of the medical staff. It's kind of like academic practice.

 

[poutsara]

in theory, can't all the pathologists in a private practice group be salary employees and the partners non-pathologists or even non-MDs? wouldn't an MBA with some experience in our industry do just as well as or better than a pathologist with no management experience and mountains of diagnostic responsibilities?

 

[lipomas]

In theory that is true. Many groups have an arrangement where there are only 2-3 partners and everyone else is not a partner. In some groups the retired pathologists make up a greater percentage of the partners than the active ones.

An MBA could do fine, except for the fact that it is not very efficient to hire someone who doesn't do pathology to run your group if you can find someone who can run your group and also do pathology. Many practices have business managers but these are employees who do not make the same income as the partners.

 

[mcfaddens]

removed post
researched the above poster "poutsara"'s history and figured it was not worth my time or comments

 

[LADoc00]

in theory, can't all the pathologists in a private practice group be salary employees and the partners non-pathologists or even non-MDs?

No, this is dependant on state law. In the state of California, medical corporation MUST have a majority of shareholders with active medical licenses for the state. This is huge and one of the few reasons people do set up shop here even with the high cost of doing business.

Hospitals cannot employee physicians without going through highly complex hoops (setting up of private foundations etc). Even Kaiser in CA is essentially split into 2 companies in CA due to this: one for the hospital and hospital employees and one for the physicians.

The only exception here is the state itself ie- Department of Corrections, University system etc, the county government ie- local county hospitals and the Feds ie-Vet Hospitals/ Mil med.

I do feel somewhat bad for all the state docs who are planning on some form of Calpers pension....it will be LONG GONE before they retire.

 

[BrainPathology]

I do feel somewhat bad for all the state docs who are planning on some form of Calpers pension....it will be LONG GONE before they retire.

Do state docs retire? I'm sitting next to pathologists who are pushing 90 in some grand rounds here.

 

[pathstudent]

Do state docs retire? I'm sitting next to pathologists who are pushing 90 in some grand rounds here.

You will do the same If you getting ready to retire and the stock market crashes Pathology is sort of like internal medicieme where the older you get the better you are. It ain't like surgery.

If you were a private pratice pathologist in his sixties making six hundred thousand a year you wouldn't retire either If you had kids going to college or medical school and were trying to pay off your second vacation house and trying to spend three weeks in the south of France with your third wife in her thirties.


People that complain that they cAn't get jobs because old people don't retire are pathetic. You would do the same as them.

 

[BrainPathology]

You will do the same If you getting ready to retire and the stock market crashes Pathology is sort of like internal medicieme where the older you get the better you are. It ain't like surgery.

If you were a private pratice pathologist in his sixties making six hundred thousand a year you wouldn't retire either If you had kids going to college or medical school and were trying to pay off your second vacation house and trying to spend three weeks in the south of France with your third wife in her thirties.


People that complain that they cAn't get jobs because old people don't retire are pathetic. You would do the same as them.

No I'm going to work til I'm 90 regardless and hopefully past that, I'm not going to have kids nor a first wife and if I went to my third why would I only go down to the 30's? You make too many assumptions about why I asked. That habit is going to limit your growth in pathology if you really do fancy yourself a 'student' of it.