Hospitals employ almost 20 percent of all physicians

As more physicians choose an employment model, what will happen to independent physicians? What will happen to those physicians who are still in private practice?

These days, hospitals and health systems are seeing more requests from independent physicians about employment options. Hospitals are acquiring independent physician practices and offering compensation packages that include financial incentives (bonus payments) that are linked to patient satisfaction ratings and clinical performance and health care quality. These types of financial incentives may currently only be 3-5% of total physician compensation, but it is expected to increase to about 7-10% of physician total compensation.

If you are still in private practice, do you see yourself staying in that model until you retire? Or, will you be one of those independent physicians switching to an employment model?

If you are interested in learning more, read the Sullivan Cotter's 2011 Physician Compensation and Productivity Survey Report by Sullivan, Cotter and Associates, Inc.

@DrJosephKim quoted in this @CNN @Money article about health care #jobs

I'm quoted in this CNN Money article titled, "Health care jobs a bright spot for hiring." Many people choose to pursue careers in health care because of the job stability associated with the health care market. These days, even in a depressed economy, there are many new health care jobs that are being added on a regular basis. Why is this happening? Here's the bottom line: the aging population coupled with changes driven by health care reform will add a number of new jobs in the health care industry.

There are also changing trends in the ways hospitals are hiring physicians or practice groups. Many independent private practice physicians are choosing to be employed by hospital systems and they are choosing salaried models of reimbursement. When a hospital hires a private practice physician to work as a salaried physician employee, that's considered a new job for the hospital. Technically, the physician switched from working as an independent contractor to a salaried employee for the hospital. The hospital records that they added and filled a new job position.

In reality, these health care job statistics published by the U.S. Bureau of Labor Statistics may be a bit misleading right since so many physicians are switching from the private practice model to a salaried model.

2011 Medscape physician compensation report

Are you curious about physician salary results? 

Medscape's 2011 Physician Compensation Report provides physicians insights on current trends regarding pay and hours worked. This comprehensive report represents responses from over 15,000 US physicians and offers details on who is earning how much by specialty, geographic location, practice type, sex and more.

• How much do physicians earn?
• Which practice settings earn the most?
• How much time is spent with patients?

Methodology

• Survey fielded to 455,000 US physicians
• Total respondents*: 15,794 US physicians across 22 specialty areas
• Fieldwork conducted by Medscape from February 2-March 30, 2011
• Data collected via third-party online survey collection site

Entry-level non-clinical physician job salaries

Let me clarify what I mean by "entry-level" here: I'm referring to non-clinical jobs that physicians may find if they leave clinical medicine to pursue a non-clinical job in a company (such as a medical communications company, a health IT company, pharma/biotech, a consulting company, etc.).

So, let's look at several examples:

• A primary care physician who's making $120k/year leaves clinical medicine and begins to work in a a medical education company. How much could he/she make?
• A medical school graduate chooses not to pursue residency. He/she chooses to work in a consumer health company. How much could he/she make?
• An MD/MBA grad completes residency (earning around $50k/year as a senior resident) and finds a corporate consulting job. How much will he/she make?
• An oncologist who has been practicing medicine for 10 years leaves the practice of medicine to work in pharma. How much could he/she make?

Is there an "average" figure for the examples above? Suppose the range is roughly $80k to $250k/year, so the average is $165k/year. Is that accurate? Not quite. Should we be looking at mean, median, or mode?

The reality is that many entry-level jobs will not pay above $150k/year unless you're a medical specialist. If you lack corporate experience, then you're in a different category compared to physicians who have extensive corporate work experience.  Some sources will tell you that entry-level job salaries for an "average" physician ranges roughly between $90-130k/year.  How do you make an argument that you deserve $130k/yr if a company offers you $90k/yr?  Several key factors impact this salary range. They include:

• Geography. Living costs will greatly influence your salary.
• Budgets. Some companies have much more negotiating "flexibility" around budgets. Others have very rigid budgets.
• Risk. Some managers have a "high risk/high reward" mentality and they may be willing to take a big risk by paying a high salary to acquire the best talent. 
• Gender. Even today, men tend to earn higher salaries compared to women. It's not fair, but it's what frequently happens.
• Type of industry. Salaries for a "medical director" in industry #1 could vary tremendously compared to industry #2. Some companies simply have deeper pockets and bigger budgets. 
• Your negotiation skills. 

To ensure that you receive a competitive salary, you need to have very strong negotiating skills. I've found that most physicians lack such salary negotiating skills because they haven't had much experience in this area. If you're considering a new job, make sure you don't undersell yourself.

Annual salary of Los Angeles County's Superior Court judges

This may seem a bit off-topic, but I was reading a fascinating story on CNN about Richard Fine who's been held in solitary confinement at Los Angeles County Men's Central Jail for 14 months, even though he's never been charged with a crime. Fine, a 70-year- old taxpayer's advocate who once worked for the Department of Justice, is being held for contempt of court.

Here's the interesting part of the story:

For the last decade, Fine has filed appeal after appeal against Los Angeles County's Superior Court judges. He says the judges each accept what he calls yearly "bribes" from the county worth $57,000. That's on top of a $178,789 annual salary, paid by the state. The county calls the extra payments "supplemental benefits" -- a way to attract and retain quality judges in a high-cost city.

I have no way of knowing what's true vs. false, but I'm simply quoting a segment from CNN.

So, why am I blogging about this CNN story? It's to talk about the issue of salary. So many people think that doctors make very high salaries. Some certainly do, but so many don't. When we compare ourselves against other professions, how do we view ourselves? If we look at the legal sector, we know that judges aren't necessarily making more compared to private attorneys. Medical attorneys who work in the private sector may bill doctors $300-500 per hour for their services related to medical employment contract review/negotiation, medical malpractice defense, etc. Plus, lawyers get to charge for their time on the phone. Physicians generally don't charge their patients for a phone consultation.

If you're a physician, how do you view your salary expectations if you're considering a career change? Do you expect to see a dramatic change? Maybe you'll still find yourself moonlighting so that you can live and maintain a certain lifestyle.

A discussion about physician salaries on Sermo

On Sermo, you'll find physicians (and only physicians) discussing all types of things. A recent discussion has focused on the validity of national physician salary surveys.

Here's what one physician posted on Sermo:

I've researched average physician compensation for a number of specialties, including my specialty using stats from AGMA, MGMA, and other sources. I am consistently struck by how low these figures are compared with individuals I know and others I know about.

I know the limitation of these statistics is that they usually only represent employed physicians. I thought it might be interested to see whether you believe the average income (and upper and lower ranges) for your specialty is correct, and what you think the implications are.

The reality is that most physicians voted that these numbers are inflated. In some cases, they're up by 25-30%. In other cases, over 50%. As a result of these published figures, new graduates are feeling entitled to very high salaries.

Top Ten Highest Paid Medical Specialties

Here's some data from the 2009 AMGA Medical Group Compensation and Financial Survey. I got this table from National MedPoll. Do you think these numbers are accurate? If these are self-reported figures, then they could be inflated. Physician salary ranges tend to vary quite a bit based on your geography and your practice setting. Let's take a look: 

Specialty	Median Salary in 2009
Orthopedic Surgery – Spine	$641, 728
Orthopedic Surgery – Joint Replacement	$580,711
Neurological Surgery	$548,186
Cardiac and Thoracic Surgery	$507,143
Diagnostic Radiology – Interventional	$478,000
Orthopedic Surgery	$476,083
Trauma Surgery	$465,773
Orthopedic Surgery – Hand	$465,006
Diagnostic Radiology – Non-Interventional	$438,115
Transplant Surgery – Liver	$433,333

Source: 2009 AMGA Medical Group Compensation and Financial Survey

Salary negotiation tips

Are you a strong salary negotiator? Many physicians are not in the practice of negotiating salary. After all, what percentage of physicians are salaried? If you're in private practice, then you may feel like you're pulling some teeth from insurance companies to get paid, but that doesn't automatically make you a good negotiator.

So how should you negotiate salary when you're transitioning into the non-clinical sector? TheLadders.com has an article titled, "5 Ways to Negotiate Salary Requirements." This article has some solid tips that can be applied across any industry. However, the first point (Know what you’re worth in your geography) can be very difficult for physicians who are entering non-clinical industries. After all, do you know many physicians working for different types of companies? If you do, are you comfortable asking them about their salaries?

Websites like Salary.com, Payscale.com, Jobstar.org and Indeed.com provide good statistics on salary ranges for normal types of jobs, but physicians who work in companies are often filling atypical positions. Therefore, it can be a bit more challenging to evaluate your "worth" in the non-clinical industry.

• How much does a "medical director" make in a pharmaceutical company?
• What types of salaries can you expect if you work in public health?
  
• How much does a physician "medical writer" make in a communications company?
• What are the salary ranges for physicians working in government jobs?
  
• How much does a physician consultant make in a large consulting firm?

Do you know where to look for this type of information? Don't risk being underpaid. Work with someone who can help you negotiate a fair salary based on industry-specific market value rates.

The joys and challenges or working from home

I've worked from home in the past. I still work from home from time to time. However, I'm primarily in the office for my non-clinical day job as a medical director of an education/publishing company. I work from home when I'm involved in freelance/contract consulting jobs, blogging, (yes, blogging is work), career counseling, etc. I call it "moonlighting at home" and I try to balance work/life carefully.

There are certain joys and challenges of working from home that one must consider before choosing this path. My intent is not to compare self-employment vs. salaried employment. Many salaried employees work from home as telecommuters. I'm simply looking at the concept of working from home, whether you do this 5 days a week or 1 day a month. Let's take a look at some of them:

Joys:

• Extreme flexibility. You can set your own hours (unless you're simply a telecommuter). You can work in your pajamas. I think you get the picture.
• More time with family. It may not be as rosy as you think. If you're really to be productive while you're working at home, then you'll probably need to be in an office where you're not interrupted. However, even if you set strict boundaries, you can still spend more time with your family if you take breaks for lunch, snacks, etc.
• Less time in the car (train, or bus). This translates to savings on gas/commuting fees/parking/etc. Also, you now have time to exercise and do other things instead of traveling to and from the office.
• More privacy. If you're working in a company, your privacy can be limited. Suppose you're in a cubicle and all your colleagues can listen to all your phone conversations. You may have very little privacy. If you set up an office at home, you can control your privacy.
• Increased productivity. You may not believe it, but studies have shown that disciplined people who work at home are more productive than when they're in the office. You will probably have fewer interruptions and meetings if you're at home compared to the office. As a result, you can get much more done in a shorter amount of time.
  

Challenges:

• Difficulty managing others. If you're in a position where you're expected to manage others, this can be much more challenging if you don't interact with these individuals face-to-face.
  
• More distractions. Are you disciplined? Or are you easily distracted? When you're at home, you're surrounded by more distractions (TV, kids, chores, etc.), so you need to know yourself really well so that you can evaluate whether it makes sense to work from home. If you're easily distracted, then your productivity will obviously suffer and you place yourself at risk for job loss and unemployment.
  
• Limited brainstorming sessions. If you're not interacting face-to-face with your colleagues, it can be more difficult to have effective brainstorming session where you're writing on a whiteboard, drawing diagrams, using hand gestures, etc. Modern video conference call technology and tablet computing may overcome many of these barriers but nothing replaces the true face-to-face interaction.
• Isolation and less personal connections. Let's face it. When you're in an office, you can chat with people casually and learn about their personal lives. As a result, you can get to know your fellow colleagues really well. If you're at home, you're more isolated. It's more difficult to really get to know your colleagues or your boss.
• You're always working. Many people who work at home have a difficult time separating work and home. As a result, you're always working. Your family may eventually accept that, but you could also get burned out. Sometimes it's much healthier to leave work at work so that you never bring work home. However, if you're working at home, then your work is right in front of you all the time.
  

So, what do you think? Should you work from home? Have you ever tried it? Are you disciplined? Will it interfere with your work/life balance? If you thought that working from home would be "ideal," then perhaps you need to give it another thought.

In general, it can be more difficult to secure a new job as a telecommuter unless you have a proven track record of being an effective telecommuting employee.