Chapter 27: Salary Compensation

Physician Salary and Compensation

[Modern Trends and Approaches]

By Brian J. Knabe

By David Edward Marcinko

By Hope Rachel Hetico

There are three compensation models. Last year’s which everyone hated. This year’s, which nobody likes, and next year’s which is the perfect answer George W. Shannon MD

Physician compensation is a contentious issue and often much fodder for public scrutiny. Throw modern pay for performance [P4P] metrics into the mix and few situations produce the same level of emotion as doctors fighting over how a seemingly collegial employment contract should be interpreted. This situation often springs from a failure of both sides to understand mutual compensation terms-of-art when the deal was negotiated.

Therefore, the following physician salary and compensation information is offered as a reference point for further individual investigations. 

Introduction 

More than a decade ago, Fortune magazine carried the headline “When Six Figured Incomes Aren’t Enough. Now Doctors Want a Union.” To the man in the street, it was just a matter of the rich getting richer. The sentiment was more precisely quantified by Dr. David E. Marcinko in a March 31, 2005 issue of Physician’s Money Digest, who reported that a 47-year-old doctor with $184,000 in annual income would need about $5.5 million dollars for retirement at age 65. 

Of course, physicians were not complaining under the traditional fee-for-service system; the imbroglio began when managed care adversely impacted incomes. Rightly or wrongly, the public has little sympathy for affluent doctors.

Today, the situation is vastly different with the financial markets collapse and specter of pubic health insurance and reform, as medical professionals struggle to maintain adequate income levels. While a few specialties flourish, others, such as primary care, barely move. In the words of Atul Gawande, MD, a surgeon and author from Brigham and Women’s Hospital in Boston, “Doctors quickly learn that how much they make has little to do with how good they are. It largely depends on how they handle the business side of practice.” 

And so, it is critical to understand contemporary thoughts on physician compensation and related salary trends.

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Physician Compensation: Salary Survey

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20 thoughts on “Chapter 27: Salary Compensation

  1. On Pre-Paid Cash-Based Medicine
    http://www.NoInsuranceClub.com

    We all know that patients take out private insurance policies for catastrophic events with high-deductibles [MSA/HSAs] and to keep monthly premiums down. They also turn to Medicaid, mini retail-clinics at grocery stores/pharmacies, and emergency room visits for common illnesses.

    This firm connects patients with participating board certified physicians that monitor and treat preventative healthcare needs for a one-time prepaid annual membership fee. Patients receive up to 12 office visits per year, including immunizations, in-office prescriptions and additional services like blood tests. There are no deductible, no co-pays, no premiums and no surprise bills.

    The services offers viable alternatives to COBRA for employees laid off from work, and/or a low cost preventative care option for the self-employed.

    Mark

  2. “Of the 125 medical schools in the USA, only one of them to my knowledge offers a class related to saving or investing money.”
    William C. Roberts, MD

    1. It amazes me how the cousre changed in later years. I have copies from 1961 and 1967 that eschews the stick figures for gesture drawings and solid form volumes. Very similar but not quite the same. You can see examples in the extremely cheap (a bargain at $7.95!) Famous Artists Course How to Draw the Human Figure or The Figure by Walt Reed (the book is made up of Famous Artists material.)

  3. Physician Salary Benchmarks

    Payscale.com and Salary.com are not accurate benchmarks for doctors and/or their Next Gen employees or employers.

    When the Next Generation needs answers – they Google for it! So it’s not surprising that they turn to human capital websites such as Payscale.com and Salary.com to get quotes on what they “should” be getting paid by their medical employers.

    But, this is bad theory and practice. Read this chapter to learn why!

    Ann

  4. 2. Healthcare Compensation Resources

    a. “Academic Practice Faculty Compensation and Production Survey.” (annual) Medical Group Management Association. 104 Inverness Terrace East, Englewood, CO, 80112-5306; (303) 799-1111. http://www.mgma.org.
    b. “Group Practice Physician Compensation Trends and Productivity Correlations Survey.” (annual) American Medical Group Association. 1422 Duke Street, Alexandria, VA 22314; (703) 838-0033. http://www.amga.org.
    c. “Hay Physicians’ Total Compensation Survey.” (annual) Hay Group. 101 Ygnacio Valley Road, Suite 250, Walnut Creek, CA 94596; (510) 945-8220.
    d. “The Healthcare Executive Assistants’ Professional Development Check-Up.” (annual) American Hospital Association. One North Franklin, Chicago, Illinois 60606. http://www.aha.org.
    e. “Management Compensation Survey.” (annual) Medical Group Management Association (MGMA). 104 Inverness Terrace East, Englewood, CO, 80112-5306; (888) 608-5601. http://www.mgma.com.
    f. “Medical Economics, Annual Physician Compensation Survey.” Medical Economics. Five Paragon Drive, Montvale, NJ, 07645-1742; (800) 432-4570. http://www.medicaleconomics.com.
    g. Merritt, Hawkins & Associates – survey of what physicians are being offered. (annual) Merritt, Hawkins & Associates. 222 W. Las Colinas, Suite 1920, Irving, TX 75039; (214) 868-2200.
    h. “Modern Healthcare, Physician Compensation Report.” (annual) Modern Healthcare. 965 E. Jefferson, Detroit, MI 48207; (800) 678-9595. http://www.modernhealthcare.com.
    i. “Physician and Ph.D. Total Compensation Survey.” (annual) Sullivan, Cotter and Associates. 32800 Fisher Building, 3200 W. Grand Blvd., Detroit, MI 48202; (313) 872-1760.
    j. “Physician Compensation and Production Survey.” (annual) Medical Group Management Association (MGMA). 104 Inverness Terrace East, Englewood, CO, 80112-5306; (877) 275-6462. http://www.mgma.com.
    k. “Physician Executive Compensation Report.” (annual) Physician Executive Management Center. 4014 Gunn Highway, Suite 160, Tampa, FL 33624; (813) 963-1800.
    l. “Physician Socioeconomic Statistics.” American Medical Association, Center for Health Policy Research. 535 North Dearborn Street, Chicago, Illinois 60610; (800) 621-8335. http://www.ama-assn.org.
    m. “Physician Salary Survey Report.” (annual) Hospital & Healthcare Compensation Service, John R. Zabka Associates, Inc., PO Box 376, Oakland, NJ 07436; (201) 405-0075.
    n. “Physician Starting Salary Survey.” (annual) The Health Care Group. Meetinghouse Business Center, 140 West Germantown Pike, Suite 200, Plymouth Meeting, PA 19462; (610) 828-3888.
    o. “Salary Survey.” (annual) Jackson & Coker. 115 Perimeter Center Place, NE, Atlanta, Georgia 30346; (800) 548-5393.
    p. “The Survey of Dental Practice: Income from the Private Practice of Dentistry.” (annual) American Dental Association Bureau of Economic and Behavioral Research. 211 East Chicago Avenue, Chicago, IL, 60611: (312) 440-2568. http://www.ada.org.
    q. “Survey of Physician Salary Expectations.” (annual) Physician Services of America. 2000 Warrington Way, Suite 250, Louisville, Kentucky 40222; (800) 626-1857

    The End

  5. Negotiable Elements of a Job Offer

    • Salary
    • Non-salary Compensation: signing bonus; performance bonus; profit-sharing, deferred compensation; severance package, stock options
    • Relocation Expenses: house-hunting, temporary living allowance, closing costs, travel expenses, spouse job-hunting/re-employment expenses
    • Benefits: vacation days (number, amount paid, timing), personal days, sick days, insurance (medical, dental, vision, life, disability), automobile (or other transportation) allowance, professional training/conference attendance, continuing education (tuition reimbursement), professional memberships, club (country or athletic) memberships, product discounts, clothing allowance, short-term loans
    • Job-Specific: frequency of performance reviews, job title/role/duties, location/office, telecommuting, work hours and flexibility, starting date, performance standards/goals
    • Partnership: equity buy-in or practice partnership track schedule.

    Mike

  6. Physicians have never needed to negotiate for their pay. Historically it was good enough to simply represent patients’ interests.

    Modern healthcare stakeholders, including insurers, favored vendors and the US government, have effectively excluded busy physicians a place at the bargaining table, and the AMA is powerless to represent patients’ needs.

    Patients need their physicians to be paid a fair wage, or their physicians will disappear.

    D. Kellus Pruitt DDS

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