Choosing the type of organization in which you want to practice is a big decision for all physicians. Despite the financial hit many medical practices incurred during COVID-19, you might have dreams of starting your own practice. Or, you might see yourself working in a hospital where the business burden of healthcare is on someone else’s shoulders, not yours.
Medical practices often offer unique benefits that those two options cannot. For example, partnership tracks offer enhanced income, profit sharing and other perks for physicians in established medical practices. And unlike starting out on your own where you’ll need time to build your patient load, working with an established practice means you’ll be up and running quickly with your own patient panel.
Still, medical practice work isn’t for everyone. Here are some tips on evaluating whether it is the right choice for you.
Research the compensation median and bonus structures available for the specialty and region.
We offer an online physician salary calculator to help you easily access physician compensation data customized by specialty, state and type of location. Other resources are helpful, too. The Medical Group Management Association (MGMA) sells a DataDrive Provider Compensation report with valuable information on the compensation differences among physician-owned, hospital-owned and academic practices for a variety of regions, practice sizes and provider experience levels.
For example, the 2019 report shows that median compensation for established providers increased 3.4% for primary care physicians from 2017-2018. Specialty physicians had a 4.4% increase.
The report also shows how median total compensation for primary care physicians varied greatly by state from 2017-2018. The District of Columbia was the lowest paying, with $205,776 in median total compensation. Nevada was the highest paying state with $309,431. States that saw much larger increases in median total compensation compared to the national rate were Wyoming, Maryland, Louisiana, Missouri and Mississippi. Two states—Alabama and New York—saw decreases in median total compensation for primary care physicians.
Understand the different employment models available (employed, partnership track)
There are five basic employment models used by physician practices.
The physician has a sense of security and a guaranteed level of income. The con aspect is that a straight salary model does not encourage innovation or cost reduction efforts.
Salary Plus Bonus
As a means of encouraging physicians to increase practice income, reduce costs or achieve other predefined performance metrics, a salary plus bonus payment model provides physicians with a guaranteed salary while also having an opportunity to earn a bonus.
Divides revenue equally among the group of physicians after expenses are covered. One of the pros of an equal shares model is that there is a natural aversion to the overutilization of resources. A downside of this payment model is that there is no incentive for creating efficiencies or higher productivity.
More physicians are finding that systems are implementing variations of a pay-for-performance model as a way to tie financial incentives to the achievement of predetermined performance goals. Physicians are being encouraged to innovate.
In this model, physicians receive a percentage of their billings, or are paid according to a scale that is based on procedures being performed or the type of patient visit. An advantage of productivity-based models is that physicians are rewarded for extra effort, and they are also encouraged to be mindful of excessive overhead costs.
According to MGMA, a 50% or more salary-based compensation plan with added incentive payments is the most common plan, with productivity-based compensation a close second. Which plan is right for you? With a myriad of factors and choices, we can help you ask the right questions to negotiate a package that is fair and aligned with your goals.
There are three basics:
Ask about the structure, how the model works, specifically what production, quality and patient satisfaction metrics you must achieve to earn an incentive bonus.
Ask about incentives, such as a stipend while still in training and student loan repayment options.
Ask about transparency, including a review of the practice financials, how much current physicians are making and how long it took them to ramp up to that level.
You can find additional advice from our experts on the most important questions to ask here.
Partner or employee?
The idea of becoming a partner in a medical practice was once the dream of many young doctors. The advantages are many: an equal vote on practice issues, due process protections, a culture of partnership. But there are risks involved when medical practices offer partnership tracks, including the burden of extra administrative duties and a buy-in process that can lower initial salary payments.
If you’re interviewing with a medical practice that offers a partnership track, be sure to discuss the length of the buy-in period and how the process works. Before accepting any offer, consult your own legal and financial advisers to be sure your bases are covered.
Make sure it’s a cultural fit
There are some simple questions you can ask yourself to see if the culture of the practice will be conducive to your happiness and success.
- Do you feel there is a shared mission that is clearly defined and followed at every level of the organization?
- Are behaviors and corporate decisions aligned with your own personal values?
- Is communication transparent from top to bottom?
- Does the organization value things like work/life balance and demonstrate a commitment to the well-being of the employees?
Notice how none of these questions involves compensation. Sure, you want to do your due diligence in finding a practice with a compensation plan that suits your needs, but you also want to be sure it feels good, too. Getting answers to these questions during the initial interview can make the difference between a successful experience and burnout.
Contact us if you’d like additional insight into working with a medical practice.
We recently published an article about taking charge of your physician career to avoid burnout.
The best part about having a high-demand career, like a physician, is the flexibility a competitive environment creates.