THE BUSINESS OF MEDICINE FOR RESIDENTS AND FELLOWS: Salaries Offers, How They Are Derived, And How To Analyze These Sources
By Tom Ellis/FirstMEDPractice.com blog
In late 2019 Modern Healthcare published its annual Physician Compensation report, a comparison of average compensation ranges as reported by a variety of different groups for 23 select medical specialties. Included were Cardiology, Dermatology, Pediatrics, Internal Medicine and a host of specialties that see patients under a wide range of business models. The salary ranges presented were gleaned from ten different source--a mix of recruitment agencies and healthcare organizations that track this data for their memberships.
For residents and fellows these salary surveys are important, whether you are dealing with hospital attached employers or private group practices. Upon examination you’ll find there can be significant swings in the salaries reported for each given specialty. Analyzing pertinent results for your specialty and understanding the way the information presented has been gathered is important as you consider and counter salary offers as part of your negotiations.
Most employers utilize salary data like this as they compile offers, usually as a requirement of regulations and/or justification for salary offers. It’s important that you understand why there are significant swings in the salary amounts reported by the sources, how to read changes as reflected from the prior year, and how sample size impacts the value of reported data.
For example, let’s look at information reported for OB/Gyns. The top salary was reported by Sullivan Cotter, an organization, and reflects the salary within a group practice of $376,000. That reflected a 2.4% increase from the prior reporting year. Sullivan also reported a salary of $357,000 for private practice, a jump of .34%. The lowest salary was $297,000, reported by recruiting agency Pinnacle Health Group, a 7% increase for the prior year (no mention of whether this was group or private practice).
Let’s break that down. First, let’s look at the change from year to year. The 2.4% change reflected in the group practice salary is significantly more than the .34% change in private practice salaries; the latter might reflect stagnant growth in the private sector. However, the 7% increase reported by Pinnacle is a big jump but means that in the prior year the reported salary was $276,000, far less than what Sullivan-Cotter reported for group and private practice this year or the year prior.
And then there’s the total difference between Sullivan and Pinnacle—Sullivan is almost $80,000 higher than Pinnacle. That’s a difference of well over 20%. Which salary would you prefer?
And it’s also important to know the sample size of those contributing to each listing. You’ll usually find that organizations like Sullivan and the MGMA have a sample size that is significant (in fact, they can usually provide region specific data as well); they pride themselves on giving accurate “national” data. Conversely, the recruiting firms rely on a much smaller in sample size, and report primarily from the placement activity they have had. Which isn’t necessarily a bad thing. Sometimes they have a number that’s higher.
Urology might point this out. Sullivan shows a salary of $497,000, a .72% change upward. But Pinnacle Health group, a recruiter, shows a salary of $210,000, a 51% drop from the prior year. Obviously, there is an issue with their sample size as compared to Sullivan. If your potential employer told you they relied on Pinnacle to set your salary as a urologist, you might want to take a few steps to examine other reporting data!
My read is that, in general, the organizations will report a larger sample size and that usually their data reflects higher salaries. But you have to look at all. Knowing the sample size, and especially where the majority of respondents are located geographically, is important to your analytics. You’ll probably find that certain areas of the US pay more or less, depending on the specialty.
You can also use this data as an example of salary potential. If you’re being offered a starting salary as a urologist of $350,000, current reporting numbers of a $497,000 average imply some significant upside when your practice matures (remember that the salary numbers shown are averages, not maximums).
Finally, if you’re trying to decide on what specialty to pursue, these income numbers may be of help.
There are other ways to slice and dice this information, but you must ask lots of questions about how salary offers are determined when looking at job offers.
Tom is the Founder of www.FirstMEDPractice.com, a platform for residents and fellows entering the job market, that addresses key business of medicine issues related to vetting job offers and structuring a first practice.
THE BUSINESS OF MEDICINE FOR RESIDENTS AND FELLOWS: The Patient Visit, Your Revenue Stream and Metrics Useful in Job Negotiation—PART II.
In the first part of this two part blog I addressed the patient visit, looking at the amount of time spent with patients and how it can be affected by the visit reimbursement. The more money for the visit, the more opportunity to break from the 15 minutes per patient model (I am still unable to find how the 15 minute visit time limit was devised, and if doctors had any input.).
In this second part, I’ll discuss how scheduling affects this, as well as the impact of both on patient engagement and satisfaction.
There’s a non-ending amount of information that has emerged about patient relationships, and the entire patient experience has been parsed into a range of specific topics. “Patient engagement” seems to be the umbrella over these, incorporating all or some depending on the approach. From my perspective, patient engagement starts with the first contact a patient makes with a physician office and ends after the visit(and/or follow-up visits) and patient issue solved.
Scheduling can be extremely problematic. When you consider the time it can take to adequately diagnose a patient’s condition, along with regular problems like late arrivals, more than the allotted time needed for a diagnosis, regular interruptions like unpredicted hospital visits, medical emergencies, procedures or surgeries that run long, etc., it’s easy to see why practices often struggle to minimize or eliminate all of the problems that arise when patients stack up in the waiting room.
Obviously, if you are looking at an average reimbursement per patient visit, easily converted into a revenue/day amount, you are also, de facto, arriving at a revenue per day based on a total time you spend on visits. But there’s more to consider: If, for example, you’re an FP doc, seeing patients all day, you will have some non-reimbursed time spent during the day—the goal should be to minimize this by tracking it, analyzing it, and seeing how to compress it through making it part of your overall daily schedule.
What you’re looking for here is doctor satisfaction: Predictability of how your day will flow! Maximized revenue for the total time you spend working. How can a practice/employer help you improve workflow and still get you out of the office and home to your family? When and how is this reviewed? Who oversees this issue within the practice? And how are they looking at ways to minimize the physical and emotional drain of extensive non-reimbursed time, a major contributor to fatigue and burnout?
This kind of information can be built back into your patient schedule to minimize wait times. There is nothing more detrimental to patient engagement than long wait times. Patients have expectations and have frequently had to schedule much further in advance of their appointment date than they would have liked. Given the importance of social media in your reputation, and your total lack of control over it, you have to address all of this, and keep it on the radar.
Although most patient satisfaction studies ask generic questions about wait and visit times, it’s worthwhile to do more focused analysis with a small patient group. Large studies often don’t really address all of the questions necessary for a practice to get the granular data needed to help. To solve these kinds of problems a ranking system of one to five stars will usually need a higher level of explanation and specificity.
But don’t forget that all of this should be driven by the desire to improve both—patient and doctor satisfaction, with emphasis on efficient utilization of your time. The latter will have a concurrent impact on patient satisfaction (and revenue).
Telemedicine, in it’s infancy, will certainly serve as a balm and possibly a cure to this situation, especially by involving mid-levels in the review of patient records (submitted by the patient) and their interaction by phone to deal with frequent ailments like colds, flu, etc. But it is going to require more clarity from payers and, in my opinion, more definition of the medical protocols. Regardless, you should look for practices that are engaging in telemedicine. And if they are not, ask why. I recently saw an advertisement from a large healthcare system pushing telemedicine of late; the ad read, “You can now eliminate the hassle of visiting the doctor’s office.” This was the first time I’ve seen this kind of diminution from a big player. But it certainly charts the future (oddly, while deriding the value an office visit!).
Of course, there are other important factors in the patient engagement and satisfaction equation. More on those in a future blog entry. ---TOM ELLIS
Tom is the Founder of www.FirstMEDPractice.com, a platform for resident and fellows entering the job market, that addresses key business of medicine issues related to vetting job offers and structuring a first practice.
THE BUSINESS OF MEDICINE FOR RESIDENTS AND FELLOWS: The Patient Visit, Your Revenue Stream and Metrics Useful in Job Negotiations.
Over the past year or two I’ve spoken to a number of physicians who have left their current jobs, transitioning away in variety of directions. Some have moved into the “business” of medicine or joined med-tech firms. Others, complaining about the “corporatization” of medicine have moved to smaller, private practices. And, of course, everyone is aware of the growth of concierge medicine, as well as the steady flow of doctors to Functional Medicine or it’s more wholistic relatives.
Most have come from primary care, IM, or OB/Gyn. All have complaints and issues that led to their decisions. But one reason that has been echoing through medicine for over a decade now (and I always hear from them) is the inability to spend more time with patients. They chafe at the current formula that visits not exceed 15 minutes or less and are worn out by the way this plays havoc on their desire to have real patient relationships and the emotional and physical demands of seeing an average of 30-40 patients a day.
I have tried to find out just who established the 15 minute rule, but there seems to be no evidence or study that supports it (and where did new patient visits and annuals fit in?). More likely it’s one of the holdovers from the HMO days, when employed doctors came under the control of bean counters. If I’m right, you can be assured there was little or no physician input.
For physicians finalizing residency or a fellowship there may not be many options to make significant changes. And income is a major factor with medical school debt to deal with. But don’t agree to anything without doing some shopping and comparisons. You’ll probably see as many as 50 offers, and you have real leverage to get ALL the information you need to make a good decision.
You need to understand the patient visit formula of a prospective employer and go beyond it to understand how this relates to your revenue stream, the scheduling process and the important issue of patient satisfaction. These key components of any practice need to be discussed and fully understood.
Let’s start with the revenue piece. Request the average reimbursement for the top five codes you will use in your practice as well as the payer mix of the potential employer. With this in hand, ask for a history of the average gross reimbursement amount per patient visit over the last 3-5 years. Has it increased? Decreased? Why? What about the payer mix? How has it changed?
Has the practice made any attempt to renegotiate pay rates (this would apply to RVUs as well)? Is there a mechanism to do so within the practice? Is there an IPN or other entity that would provide negotiating leverage?
These questions will give you an idea about a practice’s attention to income. Now ask about costs. What is the cost for the average patient visit? Has it increased or decreased during that 3-5 year term. If it’s increased, what actions have been taken to minimize the increase? Who chases “costs” and is responsible for this extremely important metric?
Your time is the way you generate income. What you want to do, obviously, is to engage with an employer who has a terrific net revenue per patient total. Compare this amount among the offers you receive. What you find may surprise you; for example, it may be that smaller, private practices are competitive and more with the larger employer groups.
And if you have more revenue per patient visit, you may be able to adjust the 15 minute rule upward, and get more time in the exam room to develop the kind of doctor/patient relationship you want. An extra five minutes can be extremely rewarding.
If all is running smoothly, and net revenue is being realized, try to find out what kind of salary or income a full-time doc in your specialty should expect. Compare this to your offer, or the salary your employer projects you can make when your practice has matured.
Scheduling can play a very important role in all of this. And then there’s the issue of how all of this can impact patient satisfaction. In Part 2 of this blog we’ll address these subjects. ---TOM ELLIS
Tom is the Founder of wwwFirstMedPractice.com, a platform for residents and fellows entering the job market that address key business of medicine issues related to vetting job offers and structuring a first practice.
I welcome your comments and thought. Please send to me at firstname.lastname@example.org