Graduating from guaranteed compensation to production-based pay is often a rocky transition for physicians, but it doesn't have to be. In Part 2 of this two-post series, we take a look at three keys for a smooth transition.
Are you concerned about increasing and maintaining your earnings throughout your career?
Earlier this week, I started my two-part blog series on physician compensation with a post about guaranteed salaries and the struggles of graduating to production-based pay. As I outlined in the first post, this is often a rocky transition for physicians, but it doesn’t have to be.
There are several ways you can stay on track to earn just as much — and eventually more — than you did with a guaranteed salary.
It all comes down to understanding your market, knowing how your productivity is measured and communicating with key leaders in your organization. By following the three steps below, I can’t promise your transition to production-based pay will be perfectly smooth, but I can promise you’ll have a better understanding of proactive steps you can take to maintain financial security.
1. Want better physician compensation? Be sure you understand your market.
This is one of the most proactive (and essential) steps you can take. Before you start any job, it’s crucial to understand your market and the current trends in healthcare.
For instance, rural areas typically pay much more than metropolitan areas. Average physician compensation varies per region. Some service areas are flooded with physicians, while others have very few physicians. All of this affects pay — sometimes dramatically.
For tools and resources to help you understand your specific market better, visit Stage 3: Physician Compensation Packages in the Adventures in Medicine Online Resource Library.
2. Determine how productivity is measured from the get-go.
Even if you’re still in the early months of your guaranteed salary, it’s key that you understand how your productivity is measured. If you put off understanding productivity until the last minute (right before your guaranteed salary expires), you might be in for a big shock.
Make it a priority to meet with the CFO or someone who can explain how productivity works before you start your job.
Productivity can be quite confusing. You might be paid on RVUs, collections, revenue, net profit or a combination of models.
No matter how your productivity is structured, make sure you know specifically what you need to do in order to maintain (or earn more than) your guaranteed salary.
You should also have a “safety net” plan, just in case it takes a while for you to get up to speed with production-based pay.
3. Communicate, communicate, communicate.
During your first years in a practice, communication is key — especially when it comes to understanding how physician compensation is structured.
Meeting with your CFO on a monthly basis for the first six months is an excellent idea. This is when good and bad habits are formed. Make your financial health a top priority!
Here are several key questions you can ask your CFO (and yourself) as you grow in your practice and work towards production-based pay:
• How many patients will I need to see per year, quarter, month, week, and day in order to maintain financial stability?
• Similarly, how many procedures will I need to complete per year, quarter, month, week, and day?
• How can I deliver quality care in a limited amount of time?
• How many patients should I anticipate to start with?
• What are some strategies I can use to build my practice?
• What are some marketing initiatives I can take to build my practice?
Finally, remember the importance of a positive attitude. Instead of dreading the day you graduate to production, challenge and motivate yourself. What can you do to increase your patient load by three per day? What can you do to build your practice overall?
Take it from Dr. Adriana Tobar, a family medicine physician and our resident advisor — patients are important, but your money is, too. You shouldn’t feel guilty about that.
In a recent conversation, she shared with me her perspective on balancing productivity with quality care: “Although most of my fellow colleagues became physicians to heal the sick and make a difference, we have an obligation to ourselves, our employers, and our community to understand the business aspects of medicine. After all, many of us have $150,000 to $200,000 school loans to pay off.”
Does graduating from a guaranteed salary to production-based pay make you nervous? How are you planning to grow your physician compensation along with your career?
About the Author
Todd Skertich is the founder of Adventures in Medicine (AIM), an innovative media company whose online platform is dedicated to delivering the highest quality career and life planning content and resources for residents and physicians.