Young Physician Compensation 2017

[group_theory]

If you haven't seen these two threads, I think it would be worthwhile to read since the topics covered are not typically taught (or taught well) in medical school or residency but important for all physicians (and physicians in training) to know

How a doctor makes money?

How a doctor makes money (Part II)


For this thread, I thought it would be interesting to review an interesting report that Medscape released.

Young Physician Compensation Report 2017
Medscape: Medscape Access
*Note: Signing up for Medscape may be required to view the entire slideshow

Disclaimer: Neither this author nor SDN is sponsored by Medscape, nor does this post signify endorsement of Medscape by SDN or this author.

Conflict of Interest Statement: I have no actual or potential conflict of interest in relation to this post/presentation.


Their sample size (total physicians) who responded to the online survey was greater than 19200, but the breakdown by specialties who responded wasn't even across the board, which can affect the accuracy. For young physicians (defined younger than 40), the N size is 4100

First, here are the income broken down by specialties for Physicians younger than 40

There are certainly a lot of variables that can affect compensation - how many hours a week, the practice environment (Hospital, outpatient, ambulatory surgery center), the employment type (employed/salaried, bonus structure, partnership track), Payor Mix (Medicare? Medicaid? Cash Pay?), as well as procedures/visit types (procedure heavy vs cerebral/office heavy, well-reimbursed procedure vs medicare cuts for reimbursement, etc)

When you are finally done with training and start looking for jobs - you will see that certain region will pay more than others. The general rule of thumb (although not always true) is that you will take a pay cut to work in academic medicine than outside academia (whether your employer is a non-profit hospital, a for-profit hospital, etc). The more prestigious the hospital, often time the bigger the salary hit since it should be an honor to work for such Brand-Named Hospital (however prestige does not pay the bills)

Certain cities will offer a lower starting pay (even though cost of living is higher) due to "demand" - such as SF, Seattle, Manhattan, etc

A trend that I find disturbing is that more younger physicians are "employed" than self-employed. While it is certainly easier to be an employee than a business owner (whether single-solo practice, or a partner in a group practice), there will certainly be a direct impact on compensation. If you are a partner in a practice, or solo practice ... your income is that of a small business owner - your compensation is gross receipt minus all expenses. The more you bill (and less outstanding debt/collection), the more you make. For employees, the owners (whether they are the group partners who hire you as an employee/non-partnership track job) or company/corporation - the difference between your compensation and your actual reimbursement goes to the company (whether profit or loss)

It is a lot of headache when you are self employed (in addition to the paperwork and medical decisions related to the practice of medicine - there are business decisions to be made - rent or own? job benefits for your employees? how to keep expenses down?) so it is "easier" to be an employee. There are other benefits (if you are employed by a large healthcare organization, there is a buffer should there be dramatic changes in how physicians are compensated, such as bundled care, or ACO, etc) But being employed comes at a cost.

How many are still paying student loans? I can't find a common link between the specialties - it's not related to compensation (ortho and urology are at the top), length of training (emergency medicine, peds, family medicine are 3 year programs), practice environment (EM is hospital, ortho is either hospital or ambulatory surgery center, peds is mostly outpatient), etc.

So once you're done with training - there are bills to be paid. What are your expenses?

One thing they don't tell you, and you don't realize until you are done with training, is the amount of paperwork and administrative stuff you have to do. If employed by the hospital, they expect you to serve (uncompensated) on various hospital committees as part of your professional obligations. (and to be honest, if your goal is to be a hospital physician administrator such as chief medical officer, etc - you need to make connections and participate/chair various hospital committees as well as make connections/contact with other departments in the hospital such as nursing admin, pharmacy, etc)

But in the end, was it worth it? Most say yes

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[BorntobeDO?]

Ha, I will skip right past this young physician portion by staying in residency till I am over 40! Big money here I come.

Seriously tho, appreciate the info.

 

[Limvostov]

How did emergency report such high numbers? Wow... hats off to them for breaking the mold. Haha.

Our residency just had a job preparedness day and they basically said to expect to get the 25th percentile salary for any given profession in that regional area when you first start. The real thing to look at is the five year outlook and how your salary is structured for reimbursement. Is it a lot of pay the first year including a signing bonus then dramatically lower after that? Is there a guaranteed minimal salary? Are there production/volume requirements? Are there incremental raises? Is there a buy in fee like in a physician owned group? There is a lot to consider. What a place is willing to pay initially varies from region to region.

 

[BorntobeDO?]

How did emergency report such high numbers? Wow... hats off to them for breaking the mold. Haha.

Our residency just had a job preparedness day and they basically said to expect to get the 25th percentile salary for any given profession in that regional area when you first start. The real thing to look at is the five year outlook and how your salary is structured for reimbursement. Is it a lot of pay the first year including a signing bonus then dramatically lower after that? Is there a guaranteed minimal salary? Are there production/volume requirements? Are there incremental raises? Is there a buy in fee like in a physician owned group? There is a lot to consider. What a place is willing to pay initially varies from region to region.

No way I am taking 25h percentile. I think your residency is not helping you out. You want straight eat what you kill, always. See: How do all these DOs in primary care make a living? and posts below it (scpod, justplainbill). The only reason I would set RVU at 25th percentile is if they were guaranteeing me partnership in 3 years with appropriate raise at that time.

 

[Limvostov]

No way I am taking 25h percentile. I think your residency is not helping you out. You want straight eat what you kill, always. See: How do all these DOs in primary care make a living? and posts below it (scpod, justplainbill). The only reason I would set RVU at 25th percentile is if they were guaranteeing me partnership in 3 years with appropriate raise at that time.

Exactly, you have to look at the 3-5 year outlook. If that sucks then 25th percentile is bad. If the outlook on salary looks good then starting a little low may not be the worst thing provided you have some guarantees going into the position (you can also bargain for more loan reimbursement in direct to you and not to the lender payments to augment this low initial salary). I just wanted to point out that some places may start you high with unrealistic production requirements and you'll have a large drop in salary after year one or two if you can't keep up.

You'll also want to look into the non-compete clause. If you sign a contract with one and you hate your job once you start... you're stuck working in that area with that provider regardless of how you feel or forced to move if you want a new job even if there is a local group you want to work with. Some non-compete clauses are far reaching. The hospital I'm with has a 50mile non-compete clause which includes all satellite clinics regardless of the service that clinic/lab provides. Basically, if you quit and its not to retire you're gonna have to move. This is a huge burden if you have family.

 

[Rekt]

These numbers look incredibly inaccurate and nowhere close to anything that's posted on MGMA and Merritt-Hawkins.

 

[BorntobeDO?]

Exactly, you have to look at the 3-5 year outlook. If that sucks then 25th percentile is bad. If the outlook on salary looks good then starting a little low may not be the worst thing provided you have some guarantees going into the position (you can also bargain for more loan reimbursement in direct to you and not to the lender payments to augment this low initial salary). I just wanted to point out that some places may start you high with unrealistic production requirements and you'll have a large drop in salary after year one or two if you can't keep up.

You'll also want to look into the non-compete clause. If you sign a contract with one and you hate your job once you start... you're stuck working in that area with that provider regardless of how you feel or forced to move if you want a new job even if there is a local group you want to work with. Some non-compete clauses are far reaching. The hospital I'm with has a 50mile non-compete clause which includes all satellite clinics regardless of the service that clinic/lab provides. Basically, if you quit and its not to retire you're gonna have to move. This is a huge burden if you have family.

My plan is to start out about an hour out of the city in a NHSC site, and commute from about a half hour away (ideal plan). That way if I hate the practice, I can just flip after two years and commute 30 minutes the other way I agree about avoiding salary, it will be my number one goal, I want a straight RVU based compensation. It may be low the first 6 months to a year, but I am sure it will work just fine after that.

 

[group_theory]

These numbers look incredibly inaccurate and nowhere close to anything that's posted on MGMA and Merritt-Hawkins.

Medscape is physician self-reported online while MGMA and Merritt-Hawkins are physician recruiting firms with aggregate data. Neither are scientific survey and certainly lead to bias. MGMA tends to be the more "accurate" and what most employers use when they say they are offering competitive salaries. The data/salary is proprietary and you have to purchase access from MGMA

If you ever look at the breakdown of MGMA data, their pool of numbers aren't that great. Their average for a specialists for a given region may be from just 2-3 physicians in that specialty in that region, which will certainly not be reflective of that region. But it is good to see the 25%, median, mean, 75% and 95% percentile compensation to get a sense of where you stand

However, another source of discrepancy is "compensation". Since Medscape is physician reported, most likely what is being reported is "income" while MGMA and Merritt-Hawkins includes non-income benefits (CME, retirement, etc). If you ask me what my income is, I'll probably won't include health insurance, retirement contribution, CME money, medmal insurance premiums, etc

Plus it's easier to know your compensation if you are an employee (salary + bonus, or hourly wages + bonus) than if you are in solo private practice or a partner in a group practice

You can never compare apples to apples. Reimbursements differs from region to region, payor mix differs from practice to practice, etc. These sites never list how much RVUs the doctors are generating to get these compensations.

 

[lost777]

anyone know why IM always averages more than FM? Are they just looking at primary care providers, or do they factor in hospitalists, etc which typically make more and are more prevalent in IM?

 

[68PGunner]

Exactly, you have to look at the 3-5 year outlook. If that sucks then 25th percentile is bad. If the outlook on salary looks good then starting a little low may not be the worst thing provided you have some guarantees going into the position (you can also bargain for more loan reimbursement in direct to you and not to the lender payments to augment this low initial salary). I just wanted to point out that some places may start you high with unrealistic production requirements and you'll have a large drop in salary after year one or two if you can't keep up.

You'll also want to look into the non-compete clause. If you sign a contract with one and you hate your job once you start... you're stuck working in that area with that provider regardless of how you feel or forced to move if you want a new job even if there is a local group you want to work with. Some non-compete clauses are far reaching. The hospital I'm with has a 50mile non-compete clause which includes all satellite clinics regardless of the service that clinic/lab provides. Basically, if you quit and its not to retire you're gonna have to move. This is a huge burden if you have family.

Basically, I'm getting the vibe that one should just get a a lawyer to make sure that the offered contract is competitive bc it seems that most physicians don't know their own self-worths.

 

[group_theory]

anyone know why IM always averages more than FM? Are they just looking at primary care providers, or do they factor in hospitalists, etc which typically make more and are more prevalent in IM?

My guess - likely the average for IM is higher than FM is due to a few factors

Although there are FM hospitalists, there are more IM hospitalists and until recently, hospitalists were salaried and made more than outpatient office work (not about about RVU generation, a lot of time the hospital subsidizes the income for hospitalists so that they can improve hospital throughput, and also take care of ortho/ENT/plastics/etc patients so the surgeon can focus and spent more time in the OR --> more cases, more money for hospitals

Also, if the FM is seeing kids - higher percentage of Medicaid (and Medicaid HMO) in the pediatric population than adult population. Medicaid pays less than Medicare and commercial insurance so if your payor mix has a higher percentage of Medicaid, then your overall collection will be lower (in addition, some states are notorious for taking 6+ months to reimbursement for claims submitted).

While well-child visits generate the same amount of RVUs as 99214 visits, the sick child visits will more often be 99213 due to the single problem focus nature of pediatrics (viral exanthem, AOM, strep pharyngitis, etc) vs adults who can generate more 99214s (and a few 99215s). A follow-up stable HTN, HLD, DM is an automatic 99214 in the adult world.

I think that's why the averages for FM may be lower than averages for IM

Basically, I'm getting the vibe that one should just get a a lawyer to make sure that the offered contract is competitive bc it seems that most physicians don't know their own self-worths.

Not just any lawyer, but a lawyer who specializes in health care and physician contracts. The contract is there for when things go south (is a non-compete clause enforceable in your state, do the wordings of the non-compete clause include just the main hospital, or ANY satellite clinics and affiliated health system hospitals, etc). Is the med-mal occurrence or claims based? If claims, who pays for tail coverage? Is this a straight employment offer, any chance for partnership (and what are the criteria for partnership, what is the buy-in, how is the value of the practice determined, will the books be opened for you (and your legal representative and accountants) to review, etc)? If this is an academic appointment, is this tenure track, or term clinical appointment? What are the criteria for promotion, or re-appointment? Are there any obligations outside clinical work that is expected of you?

As you can see, you don't want any lawyer, but someone who is familiar with contracts, especially physician employment contracts. You don't want to use a cousin who does wills or probate to be doing this - it's akin to asking ortho for treatment recommendations for familial hyperlipidemia - while the orthopedic surgeon is a doctor, that doctor is not really the best person for the job at hand.

As for the 25th percentile salary offer - the only way I can see that being feasible for a doctor seeking employment is if it is a part-time job offer, an academic appointment, great non-income incentives and benefits, the job is highly sought after and the employer can offer a lower salary, or the lower pay is part of the buy-in for partnership in a practice where once you make partner, your income will dramatically be higher

 

[68PGunner]

My guess - likely the average for IM is higher than FM is due to a few factors

Although there are FM hospitalists, there are more IM hospitalists and until recently, hospitalists were salaried and made more than outpatient office work (not about about RVU generation, a lot of time the hospital subsidizes the income for hospitalists so that they can improve hospital throughput, and also take care of ortho/ENT/plastics/etc patients so the surgeon can focus and spent more time in the OR --> more cases, more money for hospitals

Also, if the FM is seeing kids - higher percentage of Medicaid (and Medicaid HMO) in the pediatric population than adult population. Medicaid pays less than Medicare and commercial insurance so if your payor mix has a higher percentage of Medicaid, then your overall collection will be lower (in addition, some states are notorious for taking 6+ months to reimbursement for claims submitted).

While well-child visits generate the same amount of RVUs as 99214 visits, the sick child visits will more often be 99213 due to the single problem focus nature of pediatrics (viral exanthem, AOM, strep pharyngitis, etc) vs adults who can generate more 99214s (and a few 99215s). A follow-up stable HTN, HLD, DM is an automatic 99214 in the adult world.

I think that's why the averages for FM may be lower than averages for IM



Not just any lawyer, but a lawyer who specializes in health care and physician contracts. The contract is there for when things go south (is a non-compete clause enforceable in your state, do the wordings of the non-compete clause include just the main hospital, or ANY satellite clinics and affiliated health system hospitals, etc). Is the med-mal occurrence or claims based? If claims, who pays for tail coverage? Is this a straight employment offer, any chance for partnership (and what are the criteria for partnership, what is the buy-in, how is the value of the practice determined, will the books be opened for you (and your legal representative and accountants) to review, etc)? If this is an academic appointment, is this tenure track, or term clinical appointment? What are the criteria for promotion, or re-appointment? Are there any obligations outside clinical work that is expected of you?

As you can see, you don't want any lawyer, but someone who is familiar with contracts, especially physician employment contracts. You don't want to use a cousin who does wills or probate to be doing this - it's akin to asking ortho for treatment recommendations for familial hyperlipidemia - while the orthopedic surgeon is a doctor, that doctor is not really the best person for the job at hand.

As for the 25th percentile salary offer - the only way I can see that being feasible for a doctor seeking employment is if it is a part-time job offer, an academic appointment, great non-income incentives and benefits, the job is highly sought after and the employer can offer a lower salary, or the lower pay is part of the buy-in for partnership in a practice where once you make partner, your income will dramatically be higher

For someone who's efficient and willing to work hard, what's a solid number coming out of residency? Should I be asking for the median compensation w/ heavy incentives for production and volume?

 

[AFMBHAM]

We are a successful group of 5 Family Medicine physicians partners. As we enter retirement ages, we have been searching new physicians to join our practice. Our practice is turn key, excellent compensation, 4 day work week, no hospital work, the business is established and running great for over 40 years. We are surprised at how few seem interested in this opportunity. We are hearing new young physicians say that they have been taught that private practice is dying and too much work. I don't know any physicians in successful private practice who would prefer to work for the hospital or other large organizations. Does anyone have any suggestions for where to recruit physicians who are interested in the advantages of private practice? Who doesn't prefer better compensation, autonomy, flexibility and the ability to create your own day to day reality all while being mentored by those who have made it work and have much to show for their efforts?

 

[group_theory]

We are a successful group of 5 Family Medicine physicians partners. As we enter retirement ages, we have been searching new physicians to join our practice. Our practice is turn key, excellent compensation, 4 day work week, no hospital work, the business is established and running great for over 40 years. We are surprised at how few seem interested in this opportunity. We are hearing new young physicians say that they have been taught that private practice is dying and too much work. I don't know any physicians in successful private practice who would prefer to work for the hospital or other large organizations. Does anyone have any suggestions for where to recruit physicians who are interested in the advantages of private practice? Who doesn't prefer better compensation, autonomy, flexibility and the ability to create your own day to day reality all while being mentored by those who have made it work and have much to show for their efforts?

These are questions meant for the general audience but geared towards someone who is from a practice looking to hire/recruit. You do not have to reply to any of these questions (but something to think about). For a graduating senior resident, something to think about as well.

Where are you recruiting? Are you going to area residency programs? Advertising with AAFP or ACOFP? WebMD Physician Recruitment Fairs? Headhunters? Do you know people (faculty) at residency programs who can spread the word that you're hiring?

Are your salaries "competitive"? - you mention excellent, but that is subjective. What you may consider excellent may no longer be competitive. Right now demand outstrip supplies so you have to be competitive. Location, job opportunities for spouses, activities/education for families, etc.

In addition to salary structure, what is the call schedule like? Is it shared evenly or will the new guys/gals bear the burden? While it may be worthwhile to make the new doc "earn" the equities of the sweat/toils that your group have created over many years, from the new person perspective it would be easier (work/life balance) to be an employee with defined salary structure, and bonuses for doing extra work (call, meetings, etc)

In addition to the above, it is also easier for a new FP doc to join as an employee and be hospital-own. Although financial compensation will ultimately be lower in the long-run as an employee, there is also less risks, and the onerous tasks of running an independent practice (ensuring compliance with all federal/state healthcare regulations, laws with regards to employment for your employees, keeping overhead cost down, negotiating with insurance companies, getting re-credential with insurance companies)

What are the risks of your group joining a larger group (ie being bought out by a healthcare system)? What if that happens before the new doc becomes a partner?

Are there a lot of independent groups in your area, or are you the few remaining independent private practice group?

Are you part of an ACO? Do you have electronic EMR and do you meet meaningful use criteria? How are you collecting and reporting MIPS data?

What is your payor mix? Do you deal with a more challenging population? Would value-based compensation be an issue if you have a more challenging non-compliant population?

You mentioned 5 physicians who are looking forward to retire. Do you expect your new doc (doctors) to buy out the partnership? If so, will it be through more loans OR ongoing payment from the account receivable until the buyout is paid off? (which will definitely hurt the compensations of the remaining partners since that is now a new expense as well as loss of revenue since the retired doc is no longer doing clinical services/billing for clinical services). If it is loan - how would a brand new FP doctor, 6-figure in debt (most likely $200k or higher) be expected to take out another 6 or 7 figure in loans to buy out the partnership? If it is not a buy-out, are there retirement/pension obligations for the practice? Or will it be a straight up "retirement" without any financial obligations to the practice and remaining partners?


None of this (how to run a practice, what to look for in a practice) is taught in medical school, or residency (or fellowship). With a good mentor, a young physician can flourish in private practice. But it is daunting and scary. For a new FP doctor graduating from residency, in his/her late 20s (or later), with 6-figure debt - it may be tempting to work for a healthcare system as an employee with defined compensation (base salary + compensation), and not have to worry about running an independent small business and keeping up with all the rules/regulations. Plus if the hospital is a 501(c)(3), then loan payments will qualify under PSLF (until DOE or Congress modifies or eliminates it or places income cap). It is easier to work as an employee than be part of a small business.

I know the worries/challenges of being in private practice. I also know the benefits (much higher compensation, having the ability to negotiate with the hospital when they want you to do something for them, the ability to set your on hours, vacation, etc).

But there are fewer and fewer opportunities for young physicians to join a partnership track in a private group (there are just fewer groups, and some groups are offering straight up employee position without advancement to partnership). For a young physician, it may be easier to be just a straight up employee.

 

[WingedOx]

While there's a lot of helpful info in this post, I'm not sure that there's a less helpful chart than something that groups me in Chicago with someone in Escanaba. Comparing by state is bad enough.

 

[Jinxapotato]

Thank you group_theory for teaching us! I do wish to one day own my practice, so this is much needed lecture that is completely left out of medical school!

 

[AFMBHAM]

Where are you recruiting? Are you going to area residency programs?

We are currently recruiting on Indeed and Practicelink. We have reached out to the local medical schools etc. with no response. You would think that young tech savvy people would use the internet rather than pay a recruiter a percentage of their income. Our biggest question is, where are new graduates looking?

Are your salaries "competitive"?

Our practice is most likely the best compensation in town for a Family Practice Physician

In addition to salary structure, what is the call schedule like?

1:5 Each physician is treated the same. No hospital, no OB, light phone calls every 5th weekend and 1 night per week. Sometimes you may receive a few calls per day, other times you may not get any. You don’t take the weekday call if you were on the previous weekend. If you want to take a vacation on your call day, someone is always willing to trade. Holidays are discussed and divided fairly.

...onerous tasks of running an independent practice (ensuring compliance with all federal/state healthcare regulations, laws with regards to employment for your employees, keeping overhead cost down, negotiating with insurance companies, getting re-credential with insurance companies)

A well established practice (over 40 years) runs itself. All of the above mentioned, we have people for that that do a great job. The perception that it’s a onerous task is incorrect. The older physicians mentor the new ones and the new ones bring energy and ideas to the team.

What are the risks of your group joining a larger group (ie being bought out by a healthcare system)? What if that happens before the new doc becomes a partner?

It appears that failing practices are purchased and thriving practices are not. We are a thriving practice. None of our physicians have any interest in being owned.

Are there a lot of independent groups in your area, or are you the few remaining independent private practice group?


There are a few independent practices in this town and one group that is not hospital owned, but affiliated with eachother.


Are you part of an ACO? Do you have electronic EMR and do you meet meaningful use criteria? How are you collecting and reporting MIPS data?

ACO- no, EMR- yes, MU and MIPS- yes

What is your payor mix? Do you deal with a more challenging population? Would value-based compensation be an issue if you have a more challenging non-compliant population?

Our population is not challenging. We serve private insurance, Medicare and Medicaid. No sliding scale.

You mentioned 5 physicians who are looking forward to retire. Do you expect your new doc (doctors) to buy out the partnership? If so, will it be through more loans OR ongoing payment from the account receivable until the buyout is paid off? (which will definitely hurt the compensations of the remaining partners since that is now a new expense as well as loss of revenue since the retired doc is no longer doing clinical services/billing for clinical services). If it is loan - how would a brand new FP doctor, 6-figure in debt (most likely $200k or higher) be expected to take out another 6 or 7 figure in loans to buy out the partnership? If it is not a buy-out, are there retirement/pension obligations for the practice? Or will it be a straight up "retirement" without any financial obligations to the practice and remaining partners?

There is no retirement/pension obligation. Each physician accounts receivable (AR) is accounted separately. Buy in could be paid through payments taken from AR from the new partner. Buy in fluctuates based on cash reserves. A new partner should be able to buy in by taking the salary that they were paid as an employee. We would like to bring in new physicians over an extended period of time so that the transition is seamless and successful. Of our 5 physicians, 3 will likely retire within the next 15 years.

None of this (how to run a practice, what to look for in a practice) is taught in medical school, or residency (or fellowship). With a good mentor, a young physician can flourish in private practice. But it is daunting and scary. For a new FP doctor graduating from residency, in his/her late 20s (or later), with 6-figure debt - it may be tempting to work for a healthcare system as an employee with defined compensation (base salary + compensation), and not have to worry about running an independent small business and keeping up with all the rules/regulations. Plus if the hospital is a 501(c)(3), then loan payments will qualify under PSLF (until DOE or Congress modifies or eliminates it or places income cap). It is easier to work as an employee than be part of a small business.


It’s unfortunate that this is not taught in medical schools. To make matters worse is that the exposure that residents get is from a physician who was purchased because they were failing. As a group of successful physicians who are looking to share their experience and hand over a successful business, we are surprised that there isn’t a line at the door.

I know the worries/challenges of being in private practice. I also know the benefits (much higher compensation, having the ability to negotiate with the hospital when they want you to do something for them, the ability to set your on hours, vacation, etc).

The business is up and running strong for over 40 years, compensation, choosing who you hire, vacation, setting hours etc. is great.

But there are fewer and fewer opportunities for young physicians to join a partnership track in a private group (there are just fewer groups, and some groups are offering straight up employee position without advancement to partnership). For a young physician, it may be easier to be just a straight up employee.

There are fewer opportunities like this, which is why we are wondering how to get the word out to new physicians. I’m sure it’s statistically easier to find a hospital owned job, but as far as day to day life, I would not call being hospital owned easier nor more lucrative.