Physicians often feel undervalued and request salary raises. This is something that needs to be handled carefully if they want the answer to be “yes.”
Physician compensation is a nuanced topic, and many factors influence its value. From third-party surveys and practice financial performance to regulatory changes and other market forces, there’s a lot at play.
Still, physicians often feel undervalued and request salary raises. This is something that needs to be handled carefully if they want the answer to be “yes.”
Prior to requesting a raise, physicians should take time to carefully research and prepare for the conversation. Brian Clark, founder of United Medical Education, says it’s important for physicians to research industry standards for their specialty and geographic location. Websites such as Salary.com or Glassdoor can help physicians provide an idea of what other physicians in the area are earning and provide a benchmark for negotiations.
“Practice your pitch and be prepared to provide concrete evidence of your contributions to the organization, such as patient satisfaction scores or revenue generated,” Clark says. “Be open to discussing alternative compensation structures, such as performance bonuses or additional benefits.” It’s also helpful to approach the negotiation with a collaborative mindset, seeking to understand the organization’s perspective and find a mutually beneficial solution.
Lisa McDonald, president and founder of Integrated Connections, a national physician recruiting and practice consulting firm based in Fort Collins, Colorado, notes that once the research is done, physicians should make sure the raise they’re requesting is reasonable and feasible for what the market indicates for a physician in their specialty. “It may help to have a basic understanding of the business model, revenue streams, reimbursement/collections rates and compensation structure of one’s employer, including the overhead associated with employing the physician or supporting/funding the practice,” she says. “A physician should understand their value in a business sense and the revenue they generate for the practice based on productivity, patient volume, specialty and ancillary revenue streams.”
Eric Passon, founder and CEO of Ancore Health, a health care consulting firm based in Brentwood, Tennessee, says that it’s important for a physician to be prepared to articulate their value and the opportunities they bring to improve the practice’s performance.
“Of course, understanding survey data and productivity metrics (is) a given, but try to go beyond those traditional measures,” he says. “Where do you see inefficiencies in the practice? How could you leverage APPs (advanced practice providers) to grow your panel or improve access to care? How can you help to integrate technology to improve various workforce challenges? These areas will enhance the practice’s financial performance, thus funding market-competitive compensation.”
Instead of asking for a raise in passing, it’s best to schedule a formal meeting with a supervisor or employer. Clark says this shows that someone is serious and prepared for the conversation and gives both parties time to discuss the matter fully. Additionally, making a list of all achievements and contributions to the practice or hospital, including patient outcomes, research publications or leadership roles, will go a long way in showing why someone deserves a raise.
“When you ask for a raise, be specific about how much you’re asking for and why,” Clark says. “Be prepared to back up your request with data and evidence of your contributions.”
McDonald adds that physicians should be creative with a bonus plan and not limit their request to a base salary. “If they are paid partially or totally on a production-based income versus straight salary, consider asking for a tweak to the bonus structure instead of or in addition to a base salary increase, if applicable,” she says. “That would enable the physician to earn more with an increased percentage rate.”
The right time to ask
There are certainly better times than others when asking for a pay increase, and Passon says it goes back to the culture of the group and how often they meet to discuss performance reviews or annual budget changes. “In today’s culture, it’s nice to say we are taking physicians out of the business of the practice,” he says. “However, the physician must understand the fundamentals of the business. This will help them become better informed for these critical discussions.”
Timing is key. Passon notes physicians should choose a time to ask for a raise when their employer is most receptive, such as after a successful project or when the practice is doing well financially, and avoid asking during times of financial hardship or when employers are stressed or overwhelmed.
Learn from experts
Brian Gans, M.D., a board-certified physician in internal medicine and palliative medicine with Dignity Health Cancer Institute at St. Joseph’s Hospital and Medical Center in Phoenix, Arizona, says that physicians, like professionals in any field, can benefit from honing their negotiation skills when discussing matters such as salary increases. He recommends the book “Never Split the Difference: Negotiating As if Your Life Depended on It” by Chris Voss and Tahl Raz, which offers valuable insights and techniques that can be effectively applied to salary negotiations for physicians.
Voss introduces the concept of tactical empathy as a powerful tool in negotiations. Tactical empathy goes beyond simply understanding another person’s feelings or perspective; it involves actively recognizing and addressing the emotions, motivations and concerns of the other party, enabling the negotiator to foster a collaborative atmosphere and build rapport.
For example, when a physician starts the negotiation conversation, they should begin by acknowledging any potential concerns. They can say something along the lines of “I understand that the health care industry is constantly evolving, and our organization needs to be cautious about expenses while maintaining the quality of care we provide to our patients.”
“By demonstrating an understanding of the organization’s perspective, the physician shows empathy and fosters a cooperative atmosphere,” Gans says. “This makes it easier for the employer to be receptive to the physician’s request for a salary increase.” By learning from Voss’ expertise, physicians can develop strategies to navigate these crucial conversations and secure a compensation package that reflects their value and contributions to their organization.
When the answer is “no”
Even if a physician plans perfectly, makes great points and shows their value, many factors could lead to a raise being declined. “It may be budget constraints, or it may exceed fair market value, making it a legal or compliance issue,” Passon says. “It could even be due to fairness and transparency.”
If an employer can’t offer a raise or the exact amount you are asking for, be willing to negotiate. “You can ask for other forms of compensation, such as additional vacation time or a flexible work schedule,” Passon says.
McDonald notes that if initial research reveals a physician is already paid competitively for their role and/or the compensation structure is maxed out at the current rate, they have a tough decision to make. “They can either start a job search to look for another opportunity that can pay more money.”