In my last post, I tried to focus on finding your place in the world of doctoring. Some of that is clinical. Some of it is managerial. Some of it is public relations. In these next few articles, I’d like to explore some related topics that further define this theme. And since surgeons are not known to be shrinking violets, I would like to dive right in to the most indiscreet of these topics: compensation.
In my experience, most physicians don’t like to talk specifically about how much they make. I also see a huge amount of negative press in the social media about physician salaries. The purpose of this discussion is not to debate whether or not physicians [or administrators, or attorneys, or insurance firms, for that matter!] deserve their salaries. My intent here is to shed some light on the taboo topic of “How You Get Paid.”
Compensation comes in a variety of forms and flavors. The most obvious form is cash. Whether you own your own practice, work as a part of group of partners or if you participate in the growing movement of hospital-employed physicians, you expect some dollars to roll into your bank account at some point. After all, you have loans to pay off! If you sign a contract to work for a group or institution, this is usually a set number that everyone agrees upon for the term of the arrangement. If you have your own practice, this cash amount may vary over time based on the success of your business. There may be some variation based on taxes and benefits in each case, but these are usually predictable. The story often doesn’t end there, however…
The word “benefits” can be a bit nebulous. For most people, this includes health insurance and maybe a retirement account option. In the case of most physicians, there may be a few “extras” along the way. For instance, physicians in a larger practice often have some professional fees that may be covered by their contract. Sometimes, this comes in the form of a professional development account. This can be used to cover expenses related to continuing medical education fees and materials, professional organization memberships, board exams and the like. Certain fees, like a membership in the American Medical Association or your medical license renewal fee, may be covered by your group as an added benefit outside of your professional development funds. These are not always specified in a formal contract. During the negotiation phase of your interview process, be sure to ask your potential employer if any of these benefits are available. Often, a hospital or group recruiter won’t think of these details. Your lead physician contact [often a department chair] should be able to answer all of these questions for you.
Physicians are often salaried employees when they join a group or large organization. In other words, a doctor will get paid the same amount for the year regardless of how much actual work gets done. There are, however, metrics that will be in place to make sure that each doc is actually doing the work needed to justify his/her salary. How you earn money is different than how you are compensated for your work. This is a topic that we’ll visit in a future article. However, just keep in mind that a physician’s workday structure may vary widely. Often, the work will slide over regular business hours… By a lot. I mean, a lot. If you are in private practice, the work may never truly stop! In any case, it’s a good idea to have the discussion about taking time off up front with your potential employer. “Conference time” is not the same as vacation time. If you are given time off for educational purposes, you may be expected to attend a research meeting or review course and to submit proof of attendance. Maternity leave is often stipulated by a systemwide policy; however, paternity leave is not always as well-defined. Other emergencies, such as sick days or bereavement, should also be discussed. Generally, physicians don’t like to be away for too long unexpectedly; however, life tends to happen. If you need to take a few days off suddenly, will you be able to do that?
Taking call for emergencies is expected in many medical and most surgical specialties. This may have a huge impact on your work-life balance. Be sure to ask about call responsibilities as well as your on-call support system [residents, fellows, senior partner backup] when you discuss your compensation package. I think most physicians have heard horror stories of new junior attendings being left alone on their first holiday weekend while the rest of the senior staff evacuates the office. Although this may not seem like compensation in the same way as cash, don’t underestimate the importance of your quality of life. You could endure just about anything as a resident because you knew it would end eventually. Not only will your new staff position hopefully not end anytime soon, but your name will be on the chart for each patient you see. You will want to make sure that you have the support you need to do the best for each life you touch. If you need to negotiate a better support structure, this may be the time to ask those questions.
There is one more major compensation option that comes up sometimes, especially in private group practices — the Group Investment. Often, a group of physicians will invest in some kind of outpatient treatment center. An ambulatory surgery center, a dialysis access center, an imaging center… Something along these lines. In other cases, the group may have a professionally-managed investment fund. If these are managed well, they can be quite lucrative for the group. Sometimes, a new partner who hires into a practice that has this option will be given the opportunity to invest in the center as a way of bringing his/her salary up to par with the senior partners. While this may seem like a good idea, some pitfalls exist. Because the investment opportunity is there, a physician’s base salary may remain on the low side. The expectation is that the investment in the center will make up the difference. However, investing in the center often requires cash upfront. I have seen cases where a new junior attending is offered the “privilege” of investing after the first year with the group… for a sizable entry fee. Also, if you decide to leave the group, you may or may not be allowed to keep your stake in this investment. If you are forced to take a buyout in this case, you may want to ask before you invest how this will be handled and how much you should expect to receive back. And don’t forget — as an investor, you may be financially or legally responsible if some calamity befalls the center. Even though your money is invested, how much of a say do you have in how the business is managed?
The subject of compensation is vast… Far too great for the scope of one Lonely Surgeon to put into a single article. I will try to delve a little deeper into some of the points mentioned here in future posts. The best advice I can offer is to find yourself a good attorney and a good accountant who can help you sort through all of this before you make your commitment. You will want both opinions! Lawyers know contracts. Accountants know dollars. While there is some overlap, these are two very different fields. And as a physician, there’s a good chance you aren’t an expert in either of them! So build your team before you sign, and make sure to listen carefully to their advice. They have probably seen many more examples of this than you have. Take advantage of their experience!
In closing, I would like to offer a little checklist. This is far from complete. It’s just meant to get your brain thinking about the nuances of compensation so you can start making that list of questions to ask before you take the plunge. And as always, I welcome your feedback! Please feel free to share this information with anyone you feel may find this helpful. We’ll get into some more nuts-and-bolts about the ugly details of contracts and earnings soon. Until then…