What's a fair salary for me? New contract soon.

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IDKwhattodoyet

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I will have new contract negotiation coming up and looking to make sure I'm paid fairly. A little information

- Current salary: 400k
- Jan to Jun 2024 total collections: 420k
- Projected collection for 2024: ~1mill
- Of note, these are just my collections. We have midlevels billing under my name that dont count towards my collections. IF you include those, likely 2024 collections ~1.5mill
- I travel to multiple offices, but so do most other docs.

I believe I should be paid ~50% collections and want to ask for $500k. Does that seem fair? I think me leaving would lead to substantial burden on current docs. Partnership is not available, therefore there is no "sweat equity" im building.

I can easily go do anesthesia making >600k with 12wks off with minimal call. I want to continue with pain at least for another year or two but only if it makes financial sense.

What do you practice owners think?
 
It's too hard to give advice without knowing more about the practice and the overhead. Well you may feel like 50% is fair, you have to realize the only thing they can pay you is with the money left over after they pay all of the expenses of the practice. If the overhead is high then they may not have any money left over to pay you. As a practice owner myself, my knee-jerk reaction is that your collections aren't very high. Each practice is different and in an environment with very low overhead these collection numbers you have might be OK. In our model and in other colleagues whose financials I'm familiar with, only collecting $1 million would barely be sustainable.
 
gdub25 said:
It's too hard to give advice without knowing more about the practice and the overhead. Well you may feel like 50% is fair, you have to realize the only thing they can pay you is with the money left over after they pay all of the expenses of the practice. If the overhead is high then they may not have any money left over to pay you. As a practice owner myself, my knee-jerk reaction is that your collections aren't very high. Each practice is different and in an environment with very low overhead these collection numbers you have might be OK. In our model and in other colleagues whose financials I'm familiar with, only collecting $1 million would barely be sustainable.
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I appreciate your insight. Would you not consider the value added from supervision into the calculation?
 
My part time doc collected around $250k in the same time frame. He only worked two days in January and hasn’t done any SCS.
 
My overhead was around 60% last year but that includes my cash balance plan contribution and the final payment on my buildout. But every practice environment is different. My rent eats up only about 3% of my gross collections.
 
gdub25 said:
It's too hard to give advice without knowing more about the practice and the overhead. Well you may feel like 50% is fair, you have to realize the only thing they can pay you is with the money left over after they pay all of the expenses of the practice. If the overhead is high then they may not have any money left over to pay you. As a practice owner myself, my knee-jerk reaction is that your collections aren't very high. Each practice is different and in an environment with very low overhead these collection numbers you have might be OK. In our model and in other colleagues whose financials I'm familiar with, only collecting $1 million would barely be sustainable.
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BobBarker said:
My part time doc collected around $250k in the same time frame. He only worked two days in January and hasn’t done any SCS.
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Would you not consider that I add intrinsic value to the practice by traveling to multiple offices and supervising medlevels?
 
Your personal collections are too low for that to matter. Start seeing more of the patients you are deferring to them.
 
BobBarker said:
Your personal collections are too low for that to matter. Start seeing more of the patients you are deferring to them.
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At what collection number would you consider a salary of 500k? I understand it varies a lot based on location/overhead etc.
 
This is an interesting conversation. I’d be curious to hear bobs and others input on this topic as it regards to private practice.

What is the collections number that would justify a 300k salary, a 400k salary?

Obviously so many factors. Specifically the one of asc based vs office vs split

I am going to be entering a situation where there is going to be significant push for me to do everything in an asc. I’m a small percentage owner and its majority ownership is actually with hospital system who acquired the center for 55%. There has been some talk of converting my production to rvu based on the asc as the sole “facility” in the group. There has been talk of carve outs and the like to make it fair as I would be losing a significant professional component. Is there any opinion on how something like this could work out to be fair?
 
Can’t ever win in an ASC that non physicians own 55% unless the hospital is going to schedule their employee physicians there and never allow them to be owners.
 
BobBarker said:
Can’t ever win in an ASC that non physicians own 55% unless the hospital is going to schedule their employee physicians there and never allow them to be owners.
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Supposedly that is what they are going to do
 
3x base salary for expected gross collections, then you can start working on a bonus structure at a better percentage collections for the employed doc. After the first 3x base, the static practice costs are paid including employees and every encounter is accretive for both the employed doc and the practice owner. Still have variable costs though to pay
 
hopefulgasman said:
How hard are you working to generate that mil? Must be pretty fairly hard with everything done in the ASC only?
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callmeanesthesia said:
If no office based procedures then what you really want to know and they won’t tell you is how much you’re making for them at the ASC.
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There was a misunderstanding. I should have placed a comma after "No" in my above comment.

All my procedures are in office setting. I have no ASC options.
 
IDKwhattodoyet said:
I appreciate your insight. Would you not consider the value added from supervision into the calculation?
Click to expand...
Added "value" does not equal added profit. Of course they appreciate you overseeing the mid-level's but it all goes back to profitability. If you're overseeing mid levels who break even then there is no money to give you. Mid levels are typically only paid 85% of what the doctor would be paid for for the samecode. So for example, if an office visit pays the Dr. A. hundred dollars, the mid-level seeing them would only get $85 in most cases. code. So for example, if a level four office visit pays the doctor $100, the mid-level seeing them would only get $85 in most cases. Also, midlevels don't do procedures so they're only ability to generate revenue through office visits. Those mid-levels are probably not making very much profit unless they are seeing 30+ patients per day.

Bob made a good point when he suggested to see the patients yourself and increase your productivity. I also agree that your collections should be 3x your salary as a good rule to follow. Once you start collecting over 1.5mil or so the overhead becomes less impactful because you have well eclipsed the fixed costs and any espenses that add up will be directly tied to the consumables like injection supplies (ie. you're collecting more because you're doing more injections and this will have to pay more for supplies but rent, staff, bills aren't changing)
 
I'm fascinated with this discussion. I have a guy in another region of my clinic who sees 55 patients per day in clinic and does 30 injections per day on procedure days (1/2 ASC, 1/2 office based) and is bringing in 1.25M. According to the 3X rule, he should be barely making over 400K. Not sure what you guys are doing to bring in 1.5M+ so easily.
 
knoxdoc said:
I'm fascinated with this discussion. I have a guy in another region of my clinic who sees 55 patients per day in clinic and does 30 injections per day on procedure days (1/2 ASC, 1/2 office based) and is bringing in 1.25M. According to the 3X rule, he should be barely making over 400K. Not sure what you guys are doing to bring in 1.5M+ so easily.
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how does one see 55 clinic patients in a day....
 
I suspect a lot of people here are confused about pro fee collections vs total collections.

Agree there's no way total collections for 55 pts a day is 1.25 m a year.

At the urgent care I worked in, 55 patients a day 5 days a week 48 wks a year would produce 990k AFTER overhead in purely professional fees.

Edit: I don't have firsthand knowledge yet on what a pain clinic produces but I have to imagine that 55 clinic patients a day and 30 procedures a day on procedure days has to be more than that by a significant margin.
 
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OP is a newish grad and I think they’re doing well where they’re at. I think asking for 50% is completely reasonable since they’re not seeing a dime from any facility fees and especially if they’re not in a super desirable area. Making 40% of just their pro fees with no facility fee gain or partnership prospects at all is not good.

I don’t think 1.5 mil is a reasonable expectation for someone 0-2 years into practice.

Ultimately the answer will depend on the lens you’re using to look at this.
 
3x base salary, but again isn’t it dependent on site of service? I currently have a management company running the practice side and a hospital system with ownership on the asc side. The management health care company has good contracts but has no vested interest on the asc side. Feels like competing interests because if I do more in office, the management agreement gets 4% of total practice side revenue. The asc however is a different entity and distributions are based on that hopd
 
At my current practice I work 3 days a week, roughly half procedures and half office visits. Procedures done in office. 35 patients per day max. I brought in between 1.3 and 1.4. No way a 5 day a week doc with those numbers is bringing in 1.25.
 
BobBarker said:
@knoxdoc the math doesn’t math. Not possible to collect so little with that much volume unless there is a failure somewhere.
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He sees 55/day with a scribe and very directed visits (no small talk). RVUs are 17K per year. Payor mix is ok, not great. Frankly, I don't know what the issue is with the collections because the billing is aggressive (obviously the RVUs are high). But I've seen all the numbers down to the last cent.
 
knoxdoc said:
I'm fascinated with this discussion. I have a guy in another region of my clinic who sees 55 patients per day in clinic and does 30 injections per day on procedure days (1/2 ASC, 1/2 office based) and is bringing in 1.25M. According to the 3X rule, he should be barely making over 400K. Not sure what you guys are doing to bring in 1.5M+ so easily.
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Agree with Bob, these numbers aren't adding up. Do simple math of just the office visits based on Medicare published reimbursement that anyone can Google for a level 4 follow up office visit. For 2022 per Google it was $131. Now times that by 55 patients per day x however many days in clinic (we'll call it 3) and assume 4 weeks off for the year (about what I take). 3 days/wk x 55pts x 48 weeks x $131 per patient = 1.037 mil. Then get realistic that they are not all follow up patients and new patients will pay significantly higher, add in the fact he's doing injections which pay a lot and you can see an obvious disconnect.



hopefulgasman said:
OP is a newish grad and I think they’re doing well where they’re at. I think asking for 50% is completely reasonable since they’re not seeing a dime from any facility fees and especially if they’re not in a super desirable area. Making 40% of just their pro fees with no facility fee gain or partnership prospects at all is not good.

I don’t think 1.5 mil is a reasonable expectation for someone 0-2 years into practice.

Ultimately the answer will depend on the lens you’re using to look at this.
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I can understand the supportive post but unfortunately this is all hopeful thinking that isn't realistic. I agree IDKwhattodoyet is doing fine and it may take more time to reach certain income goals. Helping them understand how to hit those goals is where we can be the most impactful. It's already stated they do the injections in the office so there is no facility fee being produced anywhere. This means all the fees coming in are professional fees which is standard for any office base practice. Pay structure of 40% of collections is reasonable and I have honestly never seen anything higher outside of bonuses above a certain total collected amount. You may not think 1.5 million is a reasonable collection amount for a new grad but I would gently disagree. Have seen it done by many.
 
knoxdoc said:
He sees 55/day with a scribe and very directed visits (no small talk). RVUs are 17K per year. Payor mix is ok, not great. Frankly, I don't know what the issue is with the collections because the billing is aggressive (obviously the RVUs are high). But I've seen all the numbers down to the last cent.
Click to expand...

I’m suspecting there is an accounting problem.

For OP, as everyone said - this really is a nuanced question but I tend to agree with what everyone has said re: 3x base salary for collections.

What’s your current productivity? I.e. how many patients are you seeing on clinic days? How many procedures? What kind of procedures? And what is roughly your payor mix?
 
BobBarker said:
They are just giving him the professional component on the office based procedures at the minimum. There are also probably other funny business or mistakes.
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You mean giving him pro fee like he was doing the injection in an actual facility? So getting credit for roughly $100 for an ESI instead of the $250 he actually collects? I mean, we can assume all day about what could be going on but we can very much agree that something for sure isn't adding up.
 
Meyer-Overton said:
Seriously? I know the anesthesia market is good but this sounds pretty crazy
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It’s one of the reasons why pain didn’t have too many people apply the last few cycles.

It is also another reason why ortho groups and hospitals love PM&R and not anesthesia because the former getting paid more than a general PM&R doc while the latter can get more time off and more money being a general anesthesiologist (usually).
 
Meyer-Overton said:
Seriously? I know the anesthesia market is good but this sounds pretty crazy
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Not exaggerating. Local hospital offering 600k base + profit sharing + 25k signing bonus + 60k towards student loans + 7.5k CME with 10wks off.

Not a trauma center.

So you can understand why it’s hard for me to swallow taking 400k.
 
gdub25 said:
Pay structure of 40% of collections is reasonable and I have honestly never seen anything higher outside of bonuses above a certain total collected amount. You may not think 1.5 million is a reasonable collection amount for a new grad but I would gently disagree. Have seen it done by many.
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My standard offer is 50% of collections and honestly at this point I'll even pay someone 60% of collections. Been over a year now, can't find anyone. New grads all doing anesthesia I guess?

I'm resorting to hiring PA's in lieu of hiring physicians because there are no physicians. Does OP wanna come work at my practice? You will make 500k if working 5 days a week.
 
knoxdoc said:
I'm fascinated with this discussion. I have a guy in another region of my clinic who sees 55 patients per day in clinic and does 30 injections per day on procedure days (1/2 ASC, 1/2 office based) and is bringing in 1.25M. According to the 3X rule, he should be barely making over 400K. Not sure what you guys are doing to bring in 1.5M+ so easily.
Click to expand...
In office procedures
 
So just for fun, I decided to put this question to chatGPT. There is the response:

Given the information provided, here are key points to consider when renegotiating your contract:
  1. Current Salary and Collections:
    • Your current salary is $400k.
    • Your projected collections for 2024 are approximately $1 million.
    • Including midlevel collections, the total is around $1.5 million.
  2. Industry Benchmarks:
    • Industry benchmarks for pain management physicians vary, but a typical salary can range from $300k to $600k, depending on factors like location, experience, and productivity.
    • Your collections suggest a high level of productivity, which should be reflected in your compensation.
  3. Productivity and Compensation:
    • A common benchmark is that physicians might earn around 30-35% of their collections.
    • Based on your projected collections of $1 million, a 30-35% compensation rate would suggest a salary range of $300k to $350k. However, since your collections are higher and include significant contributions from midlevels, aiming for a higher percentage or additional compensation may be justified.
  4. Additional Considerations:
    • The additional $500k from midlevels indicates that your role includes supervisory and collaborative work, adding value beyond direct patient care.
    • Traveling to multiple offices can be a factor to negotiate higher compensation due to the added burden and time.
Proposed Salary Range:
Given these factors, a reasonable salary for you could be in the range of $500k to $600k. This reflects:
  • Your high productivity.
  • The additional value from midlevel collections.
  • The logistical demands of traveling between multiple offices.
It's also beneficial to discuss other contract components such as bonuses, benefits, and incentives tied to productivity or quality metrics to ensure comprehensive compensation.
Click to expand...

@BobBarker @gdub25

I understand chatGPT is not running a practice.
 
You and the midlevels are breaking even at best. Multiple locations and multiple midlevels to pay eat up all of the profit.


I had an NP that collected about $260k in a year. She took around 7 weeks vacation and averaged less than 5 patients per day the first 3 months we were open. So your midlevels are not billing high enough or seeing enough patients if two only collect $500k
 
IAmTheOne1 said:
My standard offer is 50% of collections and honestly at this point I'll even pay someone 60% of collections. Been over a year now, can't find anyone. New grads all doing anesthesia I guess?

I'm resorting to hiring PA's in lieu of hiring physicians because there are no physicians. Does OP wanna come work at my practice? You will make 500k if working 5 days a week.
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where are you based?
60% of gross collections on a partnership track?
 
60% gross no partnership tract is necessary. If there is a hypothetical 10% more to get, you don’t need it. It is worth that not to have to deal with the employees, contracting, buying supplies, etc.
 
For now I’m office based. Not sure why anyone would even want partnership if they are collecting 60% of gross, which more than the overall practice gross.

Parternship of an office based practice doesn’t really make sense. Is there something to sell when you leave? Would anyone buy someone’s shares in an office based practice? I don’t think anyone would.
 
People want partnership to get that additional percentage between 40 and 60%. There isn’t enough to matter past 60%. If you are non partnership tract, 60% gross collections that is probably the best possible scenario. You have the owner pay your LLC which you set up as an s-corp and then set up your own retirement, benefits, spouse/kids comp, write off all of the screens, the Range Rover etc with no buy in.
 
IAmTheOne1 said:
For now I’m office based. Not sure why anyone would even want partnership if they are collecting 60% of gross, which more than the overall practice gross.

Parternship of an office based practice doesn’t really make sense. Is there something to sell when you leave? Would anyone buy someone’s shares in an office based practice? I don’t think anyone would.
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100% office based? Where do you do your implants?
 
BobBarker said:
People want partnership to get that additional percentage between 40 and 60%. There isn’t enough to matter past 60%. If you are non partnership tract, 60% gross collections that is probably the best possible scenario. You have the owner pay your LLC which you set up as an s-corp and then set up your own retirement, benefits, spouse/kids comp, write off all of the screens, the Range Rover etc with no buy in.
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Yes that’s my point, if someone is being offered 50 or 60%, having partnership becomes just additional headache and additional risk. There is no value in the shares as it relates to selling them down the road.
 
IAmTheOne1 said:
Yes that’s my point, if someone is being offered 50 or 60%, having partnership becomes just additional headache and additional risk. There is no value in the shares as it relates to selling them down the road.
Click to expand...
I agree with all this. 60% collections is like having all the upside of owning a practice, an efficiently run one at that, and not having to actually be the practice owner. We have also changed our model to midlevels vs hiring a doc to keep up with demand. Now facing the issue of too many injections to do and midlevels can't help there.
 
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