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Confused by Complicated Compensation Models?

Jackson Physician Search
February 28, 2017

As you complete training and prepare to enter your first medical practice opportunity, questions about compensation will begin to rise to the top of your list of concerns. Compensation models in medicine can be complicated and confusing. Not only are there many variables, but the hiring organization must also follow strict rules regulating the way your compensation package can be built in order to ensure fair market value.

According to the Medical Group Management Association compensation survey, a 50% or more salary-based compensation plan with added incentive payments is the most common plan, and it becomes more common every year. Production-based compensation has been on a downward trend over the last four years, yet is still prevalent as the second most common compensation plan.

Asking the right questions about the factors that influence compensation will enable you to negotiate a package that is fair and in alignment with your professional and lifestyle priorities.

Three Types of Questions

We asked experienced physician recruiters to share the top three questions you should ask. Their recommendations fell into these categories.

Structure: Ask how the model works. Specifically, find out what production, quality and patient satisfaction metrics you must achieve to earn an incentive bonus.

Understand the payor mix, which is important if your compensation will be based on charges, collections or any revenue.

Malpractice insurance is expensive, so explore that topic, too. Employee agreements should state whether or not coverage is provided and who is paying for it.

Incentives: You may have opportunities to benefit from incentives outside your direct compensation. Ask about receiving a stipend while still in training and student loan repayment options. Find out if there are bonuses related to signing, commencing practice or achieving retention milestones.

You may also be compensated with an hourly or daily stipend for taking call or for serving in a medical director capacity.

Transparency: Your prospective employer should be able to explain how their compensation models work and provide a worst- and best-case scenario for your first and subsequent years.

It is “fair game” to ask to review the practice financials. You may also ask how much current physicians are making and how long it took them to ramp up to that level.

To ensure that there are clear expectations on both sides, decisions related to your compensation and benefits should be written into your employment agreement. If practice leadership changes, or should the memory of your negotiations fade over time, you will have supporting documentation of what you were promised.

Resources are Available

“Apples to apples” compensation comparisons are challenging, so consult a recruiter or other trusted resources to better understand all the factors that will influence your total compensation picture.

Check out the 15 questions these Jackson Physician Search recruiters recommend asking. Visit our online physician salary calculator, or visit Doximity’s own Salary Map.


Send us your questions – we’ll ask the experts and poll your peers for answers!

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