Why aren't we educating residents about.....

[EctopicFetus]

Oh man. I did all this for a while. Couldn't find any SDGs, but earning as much as I can. Had one kid and still lived off around 10k/mo. Now it's been almost 5 years and having two more kids. So needed a house. Prices already jumped before we got in, so now that 10k is quickly looking like 18k.

5 years should be plenty To get ahead of the curve.

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[EctopicFetus]

50K a year may not seem like a big deal to some, but it's a big deal to me and it should be a big deal to a new grad who needs to pay down their loans immediately and escape the 7% interest albatross around their neck. If they do an SDG, more times than not, they are going to enter a sweat equity partnership track with no sign on whatsoever.

Plus, not every CMG is a USACS dumpster fire. The CMG jobs over in my area are not bad at all and compensation is still in the top 5% nation wide. And let's get real...every hospital system/ED has their own baggage. It's not like an SDG protects you from that so it's no guarantee you are going to love the job. That's still a huge unknown for a new grad.

I mean i dont know but i highly highly doubt CMG jobs anywhere are op 5% nationwide. Maybe top 5% of CMG jobs but not top 5% EM doc comp.

As you astutely pointed out.. there are 2 levels to professional suffering in EM. Your employer and your hospital system.

The 50k sounds like a ton but after you pay taxes it is 30-35k Or less depending on where you live And what you earn. When you divide it my hours worked it just isnt much. New grads see big numbers and jump and make dumb decisions.

Ask yourselves, why wouldnt they just raise pay by x instead. The answer is 2 fold, 1) they dont want to pay their current docs that much and 2) they hope once they lure you in with a bonus they will retain you for free.

To the company whether This $ is loan repayment or a sign on bonus or retention bonus the money all counts the same. Same as if they rolled it into your hourly. They do this because THEY not you get the financial win from this setup. How? Well lets say I expect to pay a doc $200/hr (for the sake of simplicity) and i tell them hey this job pays $180/hr but you have to work 1500 hours a year for 2 years to get a 60k bonus/loan repayment/whatever. They hope you will work 1700 hours a year and guess what.. they saved themselves $20/hr x 400 hours.. 8k. Apply this logic to thousands of people and suddenly their profit skyrockets.

This is the game they are playing with us.

 

[EctopicFetus]

If I were a new graduate and single, I would find a decent job that pays 4-500K/yr. Pay off debt and save 200K/yr. There will be some really good RE buying opportunities. Put 200K down onto a 600K property. When rates drop in the next 2 yrs, refinance it and that 600k Property will be probably 800K.

This is a great way to create perpetual wealth. Sadly, for some this is “too hard” And instead they will grind themselves to the end at a craptastic job.

 

[WhatJobDoIPick]

Hey.. i resemble this remark. I’m in my 40s. I’m FI.. i owe over 100k in loans. My payment is 1k a month. Rate is under 2%.. been out 10+ years.. the market has been good to me. COVID also allowed my employer to pay $5k a year in tax free payments vs my loans. The “everyone must do x” is never the right advice. Personal finance is personal. Sure there is nothing wrong with hitting the “easy” button and that will be fine but people who know a little bit about money can be a lot smarter and max things out for themselves.

You missed the part where I literally created an exception for people with low interest debt who diverted cash to higher return investments.

Like you.

 

[Groove]

I mean i dont know but i highly highly doubt CMG jobs anywhere are op 5% nationwide. Maybe top 5% of CMG jobs but not top 5% EM doc comp.

As you astutely pointed out.. there are 2 levels to professional suffering in EM. Your employer and your hospital system.

The 50k sounds like a ton but after you pay taxes it is 30-35k Or less depending on where you live And what you earn. When you divide it my hours worked it just isnt much. New grads see big numbers and jump and make dumb decisions.

Ask yourselves, why wouldnt they just raise pay by x instead. The answer is 2 fold, 1) they dont want to pay their current docs that much and 2) they hope once they lure you in with a bonus they will retain you for free.

To the company whether This $ is loan repayment or a sign on bonus or retention bonus the money all counts the same. Same as if they rolled it into your hourly. They do this because THEY not you get the financial win from this setup. How? Well lets say I expect to pay a doc $200/hr (for the sake of simplicity) and i tell them hey this job pays $180/hr but you have to work 1500 hours a year for 2 years to get a 60k bonus/loan repayment/whatever. They hope you will work 1700 hours a year and guess what.. they saved themselves $20/hr x 400 hours.. 8k. Apply this logic to thousands of people and suddenly their profit skyrockets.

This is the game they are playing with us.

CMG gigs in my metro area are $265-$305/hr. If that's not top 5% then what is it....top 10%? Don't use your SDG as an example because I know that your unicorn gig is way outside the scatter plot for the state.

You act like this is a Dave Ramsey budgeting problem for the new grad. You're trying to minimize 150K worth of checks to a resident for hours that they are literally not required to work. Who cares what the taxes are....it's a bonus. Call it sign on, loan repayment, incentive/retention bonus, etc.. Sign on bonuses are ubiquitous in not just healthcare but every sector in our economy. You think doctors are the only ones that qualify? You think other white collar high wage workers are equally as dismissive? That everyone receiving them is being cheated? That's crazy talk. This is business recruiting 101. This is how you hire high wage earners with specialized skillsets. Yes, of course the business is interested in hiring people for less than they are worth. Welcome to America. We also pay $2 for that bottled H20 at our local sandwich shops. 50K/yr is like....500 hours worth of work over 3 years that they get paid for every year. Let's say they decide to work those extra 2 shifts/mo to earn even more loan money. Now they have an extra 153K to add to their 150K. That's 303K. Man, if that's a "dumb decision" as you put it, I wish I made more of them.

Plus, you're completely forgetting the economies of scale that CMGs bring to the table. Far more negotiating power, lower rates, better financial liquidity, economic resilience, better profit margins, the list goes on. These things also contribute to their ability to offer large sign on incentives. I hate that they have taken over our specialty but hey...that's what happens when you hire IVY league white collar business leaders and lure them in with fat "retention bonuses" to help run your business.

It's not such a black and white situation for new grads where they have to consider delayed partner compensation, delayed educational loan repayment at 7% annual interest, contract stability, hospital unknowns, half transparent books, etc.. I love how SDGs frequently tout contract stability ("We've been here 20 years!") when the hospital personnel that actually make the decisions about those contracts generally turn over once every 3-5 years. How many hospital CEOs have you guys gone through? I can count 3 during my longest gig and 2 with my current gig. How do CMGs get around this? Simple....multiple service lines. Provide the ED physicians, the hospitalists, as many services as you can provide to the hospital and make them unable to live without you. Leverage those economies of scale, eschew the subsidy to obtain market penetration where the SDG would have been forced to request one. I hate how the future looks for our specialty but that's getting off on a tangent.

 

[finalpsychyear]

If I were a new graduate and single, I would find a decent job that pays 4-500K/yr. Pay off debt and save 200K/yr. There will be some really good RE buying opportunities. Put 200K down onto a 600K property. When rates drop in the next 2 yrs, refinance it and that 600k Property will be probably 800K.

is this easy to do in EM these days that is sustainable for 4-5 years being one job in the 400-500 range that won't burn you out?
I know it was much much better in 2015 ish era for my classmates who became attendings.

 

[finalpsychyear]

5 years should be plenty To get ahead of the curve.

5 years gets you ahead but 10 years you enter into another stratosphere of financial security. Now not saying live like a resident in years 6-9 but ladder up every year and if your not spending more than 120-130k gives you life changing capital if you invest it correctly instead of buying the porsche, boat, mcmansion, etc.

 

[WhatJobDoIPick]

CMG gigs in my metro area are $265-$305/hr. If that's not top 5% then what is it....top 10%? Don't use your SDG as an example because I know for a fact that your unicorn gig is way outside the scatter plot for the state.

You act like this is a Dave Ramsey budgeting problem for the new grad. You're trying to minimize 150K worth of checks to a resident for hours that they are literally not required to work. Who cares what the taxes are....it's a bonus. Call it sign on, loan repayment, incentive/retention bonus, etc.. Sign on bonuses are ubiquitous in not just healthcare but every sector in our economy. You think doctors are the only ones that qualify? You think other white collar high wage workers are equally as dismissive? That everyone receiving them is being cheated? That's crazy talk. This is business recruiting 101. This is how you hire high wage earners with specialized skillsets. Yes, of course the business is interested in hiring people for less than they are worth. Welcome to America. We also pay $2 for that bottled H20 at our local sandwich shops. 50K/yr is like....500 hours worth of work over 3 years that they get paid for every year. Let's say they decide to work those extra 2 shifts/mo to earn even more loan money. Now they have an extra 153K to add to their 150K. That's 303K. Man, if that's a "dumb decision" as you put it, I wish I made more of them.

Plus, you're completely forgetting the economies of scale that CMGs bring to the table. Far more negotiating power, lower rates, better financial liquidity, economic resilience, better profit margins, the list goes on. These things also contribute to their ability to offer large sign on incentives. I hate that they have taken over our specialty but hey...that's what happens when you hire IVY league white collar business leaders and lure them in with fat "retention bonuses" to help run your business.

It's not such a black and white situation for new grads where they have to consider delayed partner compensation, delayed educational loan repayment at 7% annual interest, contract stability, hospital unknowns, half transparent books, etc.. I love how SDGs frequently tout contract stability ("We've been here 20 years!") when the hospital personnel that actually make the decisions about those contracts generally turn over once every 3-5 years. How many hospital CEOs have you guys gone through? I can count 3 during my longest gig and 2 with my current gig. How do CMGs get around this? Simple....multiple service lines. Provide the ED physicians, the hospitalists, as many services as you can provide to the hospital and make them unable to live without you. Leverage those economies of scale, eschew the subsidy to obtain market penetration where the SDG would have been forced to request one. I hate how the future looks for our specialty but that's getting off on a tangent.

If a CMG was the highest paying tolerable job in my market I'd probably take it.

I Iike sign on bonuses as long as the clawback terms aren't honorous (i.e. tied to multiple years service, not tied to the group retaining the contract) because I view them simply as an advance of my salary and dump it into the S&P.

 

[EctopicFetus]

You missed the part where I literally created an exception for people with low interest debt who diverted cash to higher return investments.

Like you.

I didnt.. i saw it..

CMG gigs in my metro area are $265-$305/hr. If that's not top 5% then what is it....top 10%? Don't use your SDG as an example because I know that your unicorn gig is way outside the scatter plot for the state.

You act like this is a Dave Ramsey budgeting problem for the new grad. You're trying to minimize 150K worth of checks to a resident for hours that they are literally not required to work. Who cares what the taxes are....it's a bonus. Call it sign on, loan repayment, incentive/retention bonus, etc.. Sign on bonuses are ubiquitous in not just healthcare but every sector in our economy. You think doctors are the only ones that qualify? You think other white collar high wage workers are equally as dismissive? That everyone receiving them is being cheated? That's crazy talk. This is business recruiting 101. This is how you hire high wage earners with specialized skillsets. Yes, of course the business is interested in hiring people for less than they are worth. Welcome to America. We also pay $2 for that bottled H20 at our local sandwich shops. 50K/yr is like....500 hours worth of work over 3 years that they get paid for every year. Let's say they decide to work those extra 2 shifts/mo to earn even more loan money. Now they have an extra 153K to add to their 150K. That's 303K. Man, if that's a "dumb decision" as you put it, I wish I made more of them.

Plus, you're completely forgetting the economies of scale that CMGs bring to the table. Far more negotiating power, lower rates, better financial liquidity, economic resilience, better profit margins, the list goes on. These things also contribute to their ability to offer large sign on incentives. I hate that they have taken over our specialty but hey...that's what happens when you hire IVY league white collar business leaders and lure them in with fat "retention bonuses" to help run your business.

It's not such a black and white situation for new grads where they have to consider delayed partner compensation, delayed educational loan repayment at 7% annual interest, contract stability, hospital unknowns, half transparent books, etc.. I love how SDGs frequently tout contract stability ("We've been here 20 years!") when the hospital personnel that actually make the decisions about those contracts generally turn over once every 3-5 years. How many hospital CEOs have you guys gone through? I can count 3 during my longest gig and 2 with my current gig. How do CMGs get around this? Simple....multiple service lines. Provide the ED physicians, the hospitalists, as many services as you can provide to the hospital and make them unable to live without you. Leverage those economies of scale, eschew the subsidy to obtain market penetration where the SDG would have been forced to request one. I hate how the future looks for our specialty but that's getting off on a tangent.

The key here and how docs are different than other businesses is that really good white collar jobs will pay for you to move and usually not a “signing” bonus. We think just cause we see that with pro athletes it is a big thing. Harvard MBAs may get one right out of school but the really elite jobs don’t offer that they offer equity and if you do a great job then you make more money.

The real point is most people take less money and work in a horrible environment for this dough. I can give you an example of a dude my group just hired and the stupidity of his decision. This doc got a 40k sign on bonus. For that he is earning roughly 50/hr less than my group would have given him (on average) and he would have been climbing up his pre partner track.

If job A is a CMG and pays 200/hr PLUS a bonus and job B is an SDG that pays 200/hr then let’s chat. For the most part thats not what I have seen. It’s usually here is a 50k bonus now work for 150/hr while the market is 200/hr. The job at the place that pays 150/hr is a dumpster fire.

Re CMGs how do those economies of scale help you the doc? Also what you left off is a mountain of debt. I am 100% sure my sdg pays more for our schedule to be made than team health. You cant on the one hand say I am sure the SDG makes more but look at how much more efficient a CMG is. The “economic resilience” is a joke right. Envision, APP? How many SDGs have gone belly up? Their economic resilience of the CMGs went away with the NSA and their mountain of debt. As a SDG my pay might drop from 300/hr to 280/hr, heck maybe 250/hr but im still there to fight another day.

All those contracts are available. Thats the truth. The other part of that question is why are you worse off. If I work for a CMG and make $200/hr and a new cmg comes in and i make 200/hr is that better than being in an SDG making 300/hr and losing my contract and now getting 200/hr? On top. Of that the SDG is likely to be much more cohesive and will squeeze out a better deal from the new CMG. Back in the day this happened. Hospital dumped a SDG for a CMG. The docs got together and each got 500k to stay on. You dont play that game with the CMG to CMG move. At best you squeeze out some premium pay for a short period of time until they can hire all the cheap new fresh labor.

 

[EctopicFetus]

5 years gets you ahead but 10 years you enter into another stratosphere of financial security. Now not saying live like a resident in years 6-9 but ladder up every year and if your not spending more than 120-130k gives you life changing capital if you invest it correctly instead of buying the porsche, boat, mcmansion, etc.

I guess whats the point? The money isnt the end goal itself. I’m not shy to say i spend like crazy. I also earn well. Earn, then save then spend. Once I am done saving and hit my goal for the year i feel like i can spend every other penny i earn. Depending where you live spending 120/yr just isnt that much if you want to enjoy life. Reality is a million dollar home is gonna cost 8-10k A month in mortgage and taxes and upkeep depending on down payment and terms.

 

[WhatJobDoIPick]

I didnt.. i saw it..

The key here and how docs are different than other businesses is that really good white collar jobs will pay for you to move and usually not a “signing” bonus. We think just cause we see that with pro athletes it is a big thing. Harvard MBAs may get one right out of school but the really elite jobs don’t offer that they offer equity and if you do a great job then you make more money.

The real point is most people take less money and work in a horrible environment for this dough. I can give you an example of a dude my group just hired and the stupidity of his decision. This doc got a 40k sign on bonus. For that he is earning roughly 50/hr less than my group would have given him (on average) and he would have been climbing up his pre partner track.

If job A is a CMG and pays 200/hr PLUS a bonus and job B is an SDG that pays 200/hr then let’s chat. For the most part thats not what I have seen. It’s usually here is a 50k bonus now work for 150/hr while the market is 200/hr. The job at the place that pays 150/hr is a dumpster fire.

Re CMGs how do those economies of scale help you the doc? Also what you left off is a mountain of debt. I am 100% sure my sdg pays more for our schedule to be made than team health. You cant on the one hand say I am sure the SDG makes more but look at how much more efficient a CMG is. The “economic resilience” is a joke right. Envision, APP? How many SDGs have gone belly up? Their economic resilience of the CMGs went away with the NSA and their mountain of debt. As a SDG my pay might drop from 300/hr to 280/hr, heck maybe 250/hr but im still there to fight another day.

All those contracts are available. Thats the truth. The other part of that question is why are you worse off. If I work for a CMG and make $200/hr and a new cmg comes in and i make 200/hr is that better than being in an SDG making 300/hr and losing my contract and now getting 200/hr? On top. Of that the SDG is likely to be much more cohesive and will squeeze out a better deal from the new CMG. Back in the day this happened. Hospital dumped a SDG for a CMG. The docs got together and each got 500k to stay on. You dont play that game with the CMG to CMG move. At best you squeeze out some premium pay for a short period of time until they can hire all the cheap new fresh labor.

I think we will see more and more contracts going from CMG to SDG than the other way around. The CMGs can't just load up on debt they way they used to.

 

[Arcan57]

I think we will see more and more contracts going from CMG to SDG than the other way around. The CMGs can't just load up on debt they way they used to.

That's an optimistic take that ignores a lot of what motivates the SDG to CMG switch.

 

[EctopicFetus]

That's an optimistic take that ignores a lot of what motivates the SDG to CMG switch.

I don’t think a lot of groups left will sell. We did see some new private equity type groups come in recently. IES for example with a bunch of envision washouts.

Emergency care partners is another. That’s a wanna be usacs type company. The motivation for sdgs to grow is minimal which is the challenge. The other challenge is to form a new sdg requires someone who knows what they are doing and motivated on the business side and that’s few and far between.

 

[WhatJobDoIPick]

That's an optimistic take that ignores a lot of what motivates the SDG to CMG switch.

Local to me the CMGs are doing poorly and the SDG in town has taken two CMG contracts.

 

[EctopicFetus]

Local to me the CMGs are doing poorly and the SDG in town has taken two CMG contracts.

Where u at?

 

[Janders]

I think the economy of scale of CMGs is sometimes overstated, especially on the cost side.
—I’m sure their coding and billing costs are low, but we use a well respected large national group and we don’t pay that much. Perhaps a CMG is 1-2% cheaper (eg 5% of gross instead of 7%?)
—We schedule internally and pay ourselves to do so. We’ve had outside schedulers approach us and none can match our penny pinching cheapness. I don’t think a CMG does it any cheaper.
—Our other costs (chief / assoc chief, PA lead, whatever) are NOT higher than an CMG.
—Our malpractice is competitive; our other benefits are competitive and negotiated through a large multi-disciplinary group. Again, perhaps a huge CMG could be cheaper on the order of a couple grand per doc per year?

Against this, weigh the 5-15% the CMG takes off the top to afford tiers of admin, advertising, loan servicing and pay investors.

So on this side, medium sized SDGs can absolutely compete.

This OTHER side of the equation is the insurance contracts. This is much more opaque. IF a CMG can negotiate 25% more payment from BCBS for the same level of service as a SDG, that is a big deal that is hard to overcome.

 

[finalpsychyear]

I guess whats the point? The money isnt the end goal itself. I’m not shy to say i spend like crazy. I also earn well. Earn, then save then spend. Once I am done saving and hit my goal for the year i feel like i can spend every other penny i earn. Depending where you live spending 120/yr just isnt that much if you want to enjoy life. Reality is a million dollar home is gonna cost 8-10k A month in mortgage and taxes and upkeep depending on down payment and terms.

Im assuming someone was making 300-400k for that type of spending. Obviously if your making a lot more and your plenty happy saving/investing for example 200-250k and spending the rest that is great.

For example I live in the midwest as a DINK (for now) with no loans and renting a house that is 800-900k for about 4k/month. For my situation 120k goes far. Its not crazy to have goals of a 10m NW sub 45 but of course a lot of that would have to do with investment returns.

Doctors have no idea what a horrible delay it is to be in their early 30s for a lot of them before they start earning 6 figs with loans to boot. But if true financial freedom is your goal and your not making specialist money you have to compensate in those first several years to maximize the small window of compounding growth that your peers in their 20s have had for a decade + before you broke into 6 figs assuming you dont want to work into your late 50s unless by choice.

 

[EctopicFetus]

I think the economy of scale of CMGs is sometimes overstated, especially on the cost side.
—I’m sure their coding and billing costs are low, but we use a well respected large national group and we don’t pay that much. Perhaps a CMG is 1-2% cheaper (eg 5% of gross instead of 7%?)
—We schedule internally and pay ourselves to do so. We’ve had outside schedulers approach us and none can match our penny pinching cheapness. I don’t think a CMG does it any cheaper.
—Our other costs (chief / assoc chief, PA lead, whatever) are NOT higher than an CMG.
—Our malpractice is competitive; our other benefits are competitive and negotiated through a large multi-disciplinary group. Again, perhaps a huge CMG could be cheaper on the order of a couple grand per doc per year?

Against this, weigh the 5-15% the CMG takes off the top to afford tiers of admin, advertising, loan servicing and pay investors.

So on this side, medium sized SDGs can absolutely compete.

This OTHER side of the equation is the insurance contracts. This is much more opaque. IF a CMG can negotiate 25% more payment from BCBS for the same level of service as a SDG, that is a big deal that is hard to overcome.

Compete in what way? Even when things were upside down sdgs outearned cmgs. What competition? Better doc pay? Happier docs? I dont think sdgs ever lagged cmgs and i dont think it was ever close.

 

[Groove]

I didnt.. i saw it..

The key here and how docs are different than other businesses is that really good white collar jobs will pay for you to move and usually not a “signing” bonus. We think just cause we see that with pro athletes it is a big thing. Harvard MBAs may get one right out of school but the really elite jobs don’t offer that they offer equity and if you do a great job then you make more money.

The real point is most people take less money and work in a horrible environment for this dough. I can give you an example of a dude my group just hired and the stupidity of his decision. This doc got a 40k sign on bonus. For that he is earning roughly 50/hr less than my group would have given him (on average) and he would have been climbing up his pre partner track.

If job A is a CMG and pays 200/hr PLUS a bonus and job B is an SDG that pays 200/hr then let’s chat. For the most part thats not what I have seen. It’s usually here is a 50k bonus now work for 150/hr while the market is 200/hr. The job at the place that pays 150/hr is a dumpster fire.

Re CMGs how do those economies of scale help you the doc? Also what you left off is a mountain of debt. I am 100% sure my sdg pays more for our schedule to be made than team health. You cant on the one hand say I am sure the SDG makes more but look at how much more efficient a CMG is. The “economic resilience” is a joke right. Envision, APP? How many SDGs have gone belly up? Their economic resilience of the CMGs went away with the NSA and their mountain of debt. As a SDG my pay might drop from 300/hr to 280/hr, heck maybe 250/hr but im still there to fight another day.

All those contracts are available. Thats the truth. The other part of that question is why are you worse off. If I work for a CMG and make $200/hr and a new cmg comes in and i make 200/hr is that better than being in an SDG making 300/hr and losing my contract and now getting 200/hr? On top. Of that the SDG is likely to be much more cohesive and will squeeze out a better deal from the new CMG. Back in the day this happened. Hospital dumped a SDG for a CMG. The docs got together and each got 500k to stay on. You dont play that game with the CMG to CMG move. At best you squeeze out some premium pay for a short period of time until they can hire all the cheap new fresh labor.

Man, I don't even know what you're talking about anymore. Have you worked outside medicine at any point in your life? We gave sign on bonuses all the time in my previous career and they weren't even white collar jobs. Here's a list of non white collar sign on bonuses from a variety of companies.

From $100 to $20,000: Here Are 17 Companies Offering a Hiring Bonus

Amid a tight labor market, many employers continue to look for ways to counter staffing shortages and lure potential hires back into the workforce. While some use creative benefits or work-from-home options as hiring draws, others hope to attract employees quickly with immediate cash in the form...

www.thepennyhoarder.com

Do a google job search for pharmacist sign on bonuses and you'll see a bunch for 20K in your area. Do another for nurses and you'll get a bunch for 10K.

Here's an article on attorney sign on bonuses:

It’s not just Wall Street: Lawyers are cashing in on a bonus bonanza

Signing bonuses for lawyers are at a record high with some junior partners nabbing as much as $1 million to jump ship, according to recruiters in the legal space.

nypost.com

Better yet, just google "sign on bonus" on reddit and read to your heart's desire. One of the first threads is in the accounting forum discussing CPA sign on bonuses.

I can't believe I'm having to link this stuff.

And yes, the CMG has better economic resilience, especially with economic downturns. It's the same way Apple can withstand more duress compared to a small business startup. The big fish have more resources dude. They are the well watered camels in the Sahara while the small fish are huddled under a rock with a nalgene bottle.

If the SDG model is so superior and works so well then how have CMGs grown to take over 25-40% of ED contracts? The rest of your argument is just hasty generalization fallacies. You know someone or some job where an SDG gig was superior and the resident made a poor decision therefore all SDG vs CMG jobs are equally disparate. You know one or two CMGs that went belly up, therefore all have incipient insolvency and are also about to go belly up. One or two CMG gigs were dumpster fires therefore most CMG gigs are dumpster fires. The advancement/penetration/encroachment into our field isn't really happening. Really?

I wish I had your rainbow and skittles SDG world view but Wall Street is coming for physician practices everywhere. They've got more money, they've got more lobbyists, they've got more resources, they've got smarter business people. They've got better sign on bonuses. You assume they can't negotiate any contract or with any insurance carrier better than your SDG (which I think is insane) and so you assume that every SDG can automatically pay their docs more therefore CMGs will always fail in talent acquisition. Then why are the CMGs growing and SDGs dwindling? How many SDGs are in your metro area? Every major city in my state has an overwhelming CMG presence. I mean, I can think of a couple SDGs that are within 1.5 hours from me. Everyone else is CMG. That's probably a radius involving 20-30 hospitals. It's a completely overwhelming ratio. The largest SDG was in the eastern part of the state and sold out to PE years ago.

 

[Groove]

@EctopicFetus , you're this forum's ultimate SDG defender for as long as I can remember. Much respect for your grit and tenacity. I've secretly started calling you the "SDGHoneyBadger". I forgot how it's impossible to get the last word in when arguing about CMGs and SDGs with you so I'm going to quit now.

 

[EctopicFetus]

Man, I don't even know what you're talking about anymore. Have you worked outside medicine at any point in your life? We gave sign on bonuses all the time in my previous career and they weren't even white collar jobs. Here's a list of non white collar sign on bonuses from a variety of companies.

From $100 to $20,000: Here Are 17 Companies Offering a Hiring Bonus

Amid a tight labor market, many employers continue to look for ways to counter staffing shortages and lure potential hires back into the workforce. While some use creative benefits or work-from-home options as hiring draws, others hope to attract employees quickly with immediate cash in the form...

www.thepennyhoarder.com

Do a google job search for pharmacist sign on bonuses and you'll see a bunch for 20K in your area. Do another for nurses and you'll get a bunch for 10K.

Here's an article on attorney sign on bonuses:

It’s not just Wall Street: Lawyers are cashing in on a bonus bonanza

Signing bonuses for lawyers are at a record high with some junior partners nabbing as much as $1 million to jump ship, according to recruiters in the legal space.

nypost.com

Better yet, just google "sign on bonus" on reddit and read to your heart's desire. One of the first threads is in the accounting forum discussing CPA sign on bonuses.

I can't believe I'm having to link this stuff.

And yes, the CMG has better economic resilience, especially with economic downturns. It's the same way Apple can withstand more duress compared to a small business startup. The big fish have more resources dude. They are the well watered camels in the Sahara while the small fish are huddled under a rock with a nalgene bottle.

If the SDG model is so superior and works so well then how have CMGs grown to take over 25-40% of ED contracts? The rest of your argument is just hasty generalization fallacies. You know someone or some job where an SDG gig was superior and the resident made a poor decision therefore all SDG vs CMG jobs are equally disparate. You know one or two CMGs that went belly up, therefore all have incipient insolvency and are also about to go belly up. One or two CMG gigs were dumpster fires therefore most CMG gigs are dumpster fires. The advancement/penetration/encroachment into our field isn't really happening. Really?

I wish I had your rainbow and skittles SDG world view but Wall Street is coming for physician practices everywhere. They've got more money, they've got more lobbyists, they've got more resources, they've got smarter business people. They've got better sign on bonuses. You assume they can't negotiate any contract or with any insurance carrier better than your SDG (which I think is insane) and so you assume that every SDG can automatically pay their docs more therefore CMGs will always fail in talent acquisition. Then why are the CMGs growing and SDGs dwindling? How many SDGs are in your metro area? Every major city in my state has an overwhelming CMG presence. I mean, I can think of a couple SDGs that are within 1.5 hours from me. Everyone else is CMG. That's probably a radius involving 20-30 hospitals. It's a completely overwhelming ratio. The largest SDG was in the eastern part of the state and sold out to PE years ago.

I worked a white collar job pre medicine. Got a 5k sign on bonus and some money to move. Ive been at this a while so I know. Does it exist, sure, is it common? no? I went to fancy pants undergrad and amongst my closest college friends are an ortho trauma guy and the rest are MBAs, harvard, wharton, NYU, michigan etc. My wife is a lawyer.. So I have plenty of exposure to this. All im saying is for most $400k+ type jobs there arent signficant signing bonuses. Moving allowances sure those high end jobs arent messing with that. People switch jobs for equity a better pay structure etc.

I think regarding the growth of CMGs its not because they have a better model. The answer is they sell their services and have much to gain from growth on the one hand and on the other it is greed of doctors. As a group of docs ages in EM they look and say now what? They usually create a setup that benefits them and they want the payout at the end of their career. This isnt uncommon in EM, law or anything else. So now those guys pushed for a sale and SDGs are not buying. When APP went belly up the advantage for an SDG to take those contracts was 0. This is the obvious issue. Where do you think their debt comes from? Buying up these practices using debt, thats where. Now it is time to pay up.

2 CMGs went belly up, they were not exactly small and now we see the financial strain on TH and Sound (public info) and privately it is clear USACS is in trouble. SCP is the only one i havent seen anything negative relating to its debt load.

Wall street is heeding the warning that running physician practices is painful. More painful than herding cats. I have no doubt they can negtoiate a better contract you surely have never seen me say that. My point is that it doesnt matter because they have to service their debt plus make profit plus navigate staffing. Because of this SDGs pay more. Heck I would be the first to say if an sdg and cmg paid the same the cmg job is better. It requires less of you. My sdg and my prior one require me to do stuff for free. Its not a lot but it is slightly painful but my hourly pay makes it make sense. Other groups pay people for this admin stuff. Mine chooses not to do that. There are 3 SDGs in my metro area, to answer that question. I agree it is tougher. I saw a stat where only about 10-12% of ED patients are seen by an SDG. Tiny for sure. I think hospital employed and CMG are equal otherwise in terms of patients seen.

So yeah, im not saying it is easy to find an SDG, I am saying it is much much better.

 

[EctopicFetus]

@EctopicFetus , you're this forum's ultimate SDG defender for as long as I can remember. Much respect for your grit and tenacity. I've secretly started calling you the "SDGHoneyBadger". I forgot how it's impossible to get the last word in when arguing about CMGs and SDGs with you so I'm going to quit now.

I dont view our discussion as an argument.. i definitely am a hardcore proponent. I dont doubt that. I see little in letting some limp - weenie suit on wall street own my career. I also get that for some people there is no reasonable choice. To those I say earn the money, reach FI and life will be happier. FI means something different for all. The SDG life has been good to me no doubt.

 

[WhatJobDoIPick]

@EctopicFetus , you're this forum's ultimate SDG defender for as long as I can remember. Much respect for your grit and tenacity. I've secretly started calling you the "SDGHoneyBadger". I forgot how it's impossible to get the last word in when arguing about CMGs and SDGs with you so I'm going to quit now.

I mean it's obvious you guys are in different markets and are talking past each other.

I'm not seeing CMG rates by me like @Groove , but I am seeing short term non partner SDG rates around 350/hr.

 

[Groove]

SDGHoneyBadger FTW

 

[Janders]

Compete in what way? Even when things were upside down sdgs outearned cmgs. What competition? Better doc pay? Happier docs? I dont think sdgs ever lagged cmgs and i dont think it was ever close.

I was replying to this sentiment—

Plus, you're completely forgetting the economies of scale that CMGs bring to the table. Far more negotiating power, lower rates, better financial liquidity, economic resilience, better profit margins, the list goes on. These things also contribute to their ability to offer large sign on incentives. I hate that they have taken over our specialty but hey...that's what happens when you hire IVY league white collar business leaders and lure them in with fat "retention bonuses" to help run your business.

In which some things are obviously true— a CMG with 200 ED contracts has a bigger war fund, more liquidity and (already has used) the ability to secure large loans compared to a small group staffing 3-4 EDs. However the BIGGEST cost by far is the salary/bonus/retirement/insurance of the physicians (and potentially PAs) working in the ED. The rest of the overhead (coding/billing, admin stipends, scheduling, corporate costs for HR etc) is in the order of 10-15% of the cash flow. Even if the CMG is somehow markedly superior at this part of the game, saving 25% of 10% isn’t much cash, compared to the new costs they invoke.


And I agree with your general sentiment; it isn’t that CMGs are naturally superior to SDGs for the workers, and thus have taken over the market. It is that it is difficult and risky to start a SDG, and the life cycle of a typical SDG involves the founding partners selling out to a CMG after their 20 years of efforts nets them at 2+ Million dollar buyout. As much as it would be so friendly of them to leave the SDG running for future generations, CLEARLY the move is to sell out to someone with the leveraged debt to show you the money.

 

[Mount Asclepius]

We need more SDG Honey Badgers.

 

[EctopicFetus]

I was replying to this sentiment—

In which some things are obviously true— a CMG with 200 ED contracts has a bigger war fund, more liquidity and (already has used) the ability to secure large loans compared to a small group staffing 3-4 EDs. However the BIGGEST cost by far is the salary/bonus/retirement/insurance of the physicians (and potentially PAs) working in the ED. The rest of the overhead (coding/billing, admin stipends, scheduling, corporate costs for HR etc) is in the order of 10-15% of the cash flow. Even if the CMG is somehow markedly superior at this part of the game, saving 25% of 10% isn’t much cash, compared to the new costs they invoke.


And I agree with your general sentiment; it isn’t that CMGs are naturally superior to SDGs for the workers, and thus have taken over the market. It is that it is difficult and risky to start a SDG, and the life cycle of a typical SDG involves the founding partners selling out to a CMG after their 20 years of efforts nets them at 2+ Million dollar buyout. As much as it would be so friendly of them to leave the SDG running for future generations, CLEARLY the move is to sell out to someone with the leveraged debt to show you the money.

Exactly. FWIW I have some inside info on a handful of groups who sold. I know of only 2 groups where the docs got $2m+. Speaking to EM specifically. One of them got a fair bit more but had a permanent pyramid whereby there were a few partners and many employed docs. There was a guy in AZ who owned a handful of contracts also and sold them to TH but im not counting that. He got I think $20m.. Paid minimal bonuses to the docs who worked for him.

Another group had a great payer mix and good contracts and got a bit over the 2. All of the other groups got between 500k and 1.2m with most landing right at the +/- $1m mark.

If you are at the end of the line and about to retire the extra $1m bump sure is nice. Hence the push to sell. My group has been asked to expand but it is hard to justify this financially.

Also some of the valuations are in dollars but they want you to take stock. This was the APP way minimum 30% stock but you could take more. That didnt work out so great for those guys. Same is likely to happen to the USACS folks. They pitch their return which boils down to uncompensated risk since it has not outperformed the SP500 and at this point will be far below that as their debt service comes calling.

 

[EctopicFetus]

We need more SDG Honey Badgers.

 

[Porfirio]

We need more SDG Honey Badgers.

“The honey badger does all the work when the other animals get it all.”

 

[TooMuchResearch]

I don’t think a lot of groups left will sell. We did see some new private equity type groups come in recently. IES for example with a bunch of envision washouts.

Emergency care partners is another. That’s a wanna be usacs type company. The motivation for sdgs to grow is minimal which is the challenge. The other challenge is to form a new sdg requires someone who knows what they are doing and motivated on the business side and that’s few and far between.

Eh, ours is still growing but geographically it's been a challenge and we haven't come up with a good solution yet.

 

[TooMuchResearch]

Exactly. FWIW I have some inside info on a handful of groups who sold. I know of only 2 groups where the docs got $2m+. Speaking to EM specifically. One of them got a fair bit more but had a permanent pyramid whereby there were a few partners and many employed docs. There was a guy in AZ who owned a handful of contracts also and sold them to TH but im not counting that. He got I think $20m.. Paid minimal bonuses to the docs who worked for him.

Another group had a great payer mix and good contracts and got a bit over the 2. All of the other groups got between 500k and 1.2m with most landing right at the +/- $1m mark.

If you are at the end of the line and about to retire the extra $1m bump sure is nice. Hence the push to sell. My group has been asked to expand but it is hard to justify this financially.

Also some of the valuations are in dollars but they want you to take stock. This was the APP way minimum 30% stock but you could take more. That didnt work out so great for those guys. Same is likely to happen to the USACS folks. They pitch their return which boils down to uncompensated risk since it has not outperformed the SP500 and at this point will be far below that as their debt service comes calling.

Honestly yes it would be difficult to turn down a large payday if I wasn't planning on sticking around for a while.

 

[EctopicFetus]

Honestly yes it would be difficult to turn down a large payday if I wasn't planning on sticking around for a while.

I agree. I can understand why the old dudes want to sell at the end it is a nice “cherry on top”. The issue is they end up making all their dough during their careers and in EM then sell the future of the younger/future docs.

 

[Arcan57]

I agree. I can understand why the old dudes want to sell at the end it is a nice “cherry on top”. The issue is they end up making all their dough during their careers and in EM then sell the future of the younger/future docs.

Which is the most boomer thing possible…

 

[Siggy]

Which is the most boomer thing possible…

Boomers gonna boom. Why expect anything else?

 

[Arcan57]

Boomers gonna boom. Why expect anything else?

It’s not expecting anything else, just always worth pointing out how abnormal is the desire to pass on a world that’s worse for your successors than it was for you.

 

[Backpack234]

If I were a new graduate and single, I would find a decent job that pays 4-500K/yr. Pay off debt and save 200K/yr. There will be some really good RE buying opportunities. Put 200K down onto a 600K property. When rates drop in the next 2 yrs, refinance it and that 600k Property will be probably 800K.

400k/yr is tough. 500k/yr is tougher. Just thinking most average jobs I'm seeing now are anywhere from 200-230/hr, that's1739-2000 hours/yr to get to 400k. Considering FT is 120 hrs/mo or 1440/yr, that's significantly more hours to get there. (probably fits the grind when your young culture mentality).

Add to that, a 600k property (at least in my area) is probably a 1200 sq ft 2/2 condo. Looking closer to 800k to get into any decent sized house. Ugh.

 

[EctopicFetus]

It’s not expecting anything else, just always worth pointing out how abnormal is the desire to pass on a world that’s worse for your successors than it was for you.

I don’t agree with what those guys did but maximizing the income from your labor is basic economics. So selling “your” group at the end is economically the smart thing to do. Our healthcare system is designed to allow the abuse of docs.

It’s only gotten worse recently. Hospitals get their Medicare increase and docs get a cut. This will force docs to work for hospitals.

 

[EctopicFetus]

400k/yr is tough. 500k/yr is tougher. Just thinking most average jobs I'm seeing now are anywhere from 200-230/hr, that's1739-2000 hours/yr to get to 400k. Considering FT is 120 hrs/mo or 1440/yr, that's significantly more hours to get there. (probably fits the grind when your young culture mentality).

Add to that, a 600k property (at least in my area) is probably a 1200 sq ft 2/2 condo. Looking closer to 800k to get into any decent sized house. Ugh.

In my area you can find easy jobs making 240/hr. Harder jobs 275-300+.

The avg em
Doc was making upper 300s. That’s with a lot of very PT docs in there.

 

[emergentmd]

I don’t agree with what those guys did but maximizing the income from your labor is basic economics. So selling “your” group at the end is economically the smart thing to do. Our healthcare system is designed to allow the abuse of docs.

It’s only gotten worse recently. Hospitals get their Medicare increase and docs get a cut. This will force docs to work for hospitals.

It’s almost impossible to turn down. If u owned a group and looking at a 5M payday and you know things are getting worse and the value of the group could be zero in a few years, it would be dumb to go down with the sinking ship.

Sorry, most would sell.

 

[emergentmd]

400k/yr is tough. 500k/yr is tougher. Just thinking most average jobs I'm seeing now are anywhere from 200-230/hr, that's1739-2000 hours/yr to get to 400k. Considering FT is 120 hrs/mo or 1440/yr, that's significantly more hours to get there. (probably fits the grind when your young culture mentality).

Add to that, a 600k property (at least in my area) is probably a 1200 sq ft 2/2 condo. Looking closer to 800k to get into any decent sized house. Ugh.

120/mo although full time is somewhat light. Go to 130hrs/mo @250/hr and ur at 400k.

Sometimes u gotta move to maximize ur income/COL ratio. If I live in SF, ur screwed and that’s a choice.

 

[EctopicFetus]

It’s almost impossible to turn down. If u owned a group and looking at a 5M payday and you know things are getting worse and the value of the group could be zero in a few years, it would be dumb to go down with the sinking ship.

Sorry, most would sell.

No equally owned group is getting $5m/doc. Heck if you were you were making so much profit I would agree. sell. Most of the groups are getting about $1m per doc. Thats not chump change but it is double dipping. Im glad the market went to poop and has mostly shriveled up.

 

[emergentmd]

No equally owned group is getting $5m/doc. Heck if you were you were making so much profit I would agree. sell. Most of the groups are getting about $1m per doc. Thats not chump change but it is double dipping. Im glad the market went to poop and has mostly shriveled up

8 yrs ago our group sold. The two big owners pocketed prob $10M. All other “owners” mid 6 figures.

Looking back, owners made the right decision. Looking back, im glad we sold bc the continuous pressure from the c-suite would have been unbearable and put me on the path to stop working for others.

 

[EctopicFetus]

8 yrs ago our group sold. The two big owners pocketed prob $10M. All other “owners” mid 6 figures.

Looking back, owners made the right decision. Looking back, im glad we sold bc the continuous pressure from the c-suite would have been unbearable and put me on the path to stop working for others.

Exactly. I bet the “avg” amongst all owners is probably $1m.. if your group was very profitable maybe you touch 2/doc. My guess is 1/doc based on what you said

 

[emergentmd]

Exactly. I bet the “avg” amongst all owners is probably $1m.. if your group was very profitable maybe you touch 2/doc. My guess is 1/doc based on what you said

Less than 1M avg but lets be honest.

If someone told you that they will pay your SDG 3 years worth of salary to sell, you would have to at least entertain it. 1M Long term cap gain = 800K = 1.15M at 30% rate.

if your group distributes 200K/yr to each partner (high), that is still 6+ yrs of distribution when you account for the value of money.

 

[EctopicFetus]

Less than 1M avg but lets be honest.

If someone told you that they will pay your SDG 3 years worth of salary to sell, you would have to at least entertain it. 1M Long term cap gain = 800K = 1.15M at 30% rate.

if your group distributes 200K/yr to each partner (high), that is still 6+ yrs of distribution when you account for the value of money.

Been there..