Why Would Any Psychiatrist Opt for Income Guarantee?

[AD04]

Let's say income guarantee is $350,000 / year for the first two years. You are only able to generate $200,000 / year after overhead. You have to stay in the area until the loan is forgiven or until you pay off that remaining balance.

You're basically stuck for a few more years in an under-served area making less-than-optimal income.

Is there any upside?

If you want your income to be tied to productivity, why not just start your own practice?

If the facilities really thinks the area needs a psychiatrist, why don't they give you a salary and then bonus based on production?

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[dl2dp2]

You are basically correct. Temporary income guarantee is best conceptualized as a large sign-on bonus. However, a lot of fresh grads don't really understand the system well enough and fall into traps.

The upside is that you can leave after 2 years and move on to another place with 350k for two years. The facility is hoping that in 2 years the market will be more friendly for a lower salary.

 

[calvnandhobbs68]

You are basically correct. Temporary income guarantee is best conceptualized as a large sign-on bonus. However, a lot of fresh grads don't really understand the system well enough and fall into traps.

The upside is that you can leave after 2 years and move on to another place with 350k for two years. The facility is hoping that in 2 years the market will be more friendly for a lower salary.

It’s also the mentality with all sign on bonuses. They’re hoping that after you’ve put two years into setting up your life in that area, there’s a lot more keeping you there and at the same job you’re comfortable with than going through the pain in the ass of looking for another job, moving, getting used to a new system, finding your spouse a new job, finding a new school system for the kids, etc.

don’t underestimate the power of inertia.