This is an introduction to the Wild Wild West of physician compensation.
The Oxford Dictionary defines compensation as:
“something, typically money, awarded to someone as a recompense for loss, injury, or suffering”
As a physician who has spent countless years studying, working, and, yes, “suffering,” the idea of finally beginning a career is a daunting task. With all of those student loans and the intoxication of having enough money to buy things, many physicians get lost in how to approach taking a new position.
Most physicians, except for a select few, have little knowledge or experience in the business side of medicine. Hardly any medical schools or residencies teach anything about one of the most important facets of practicing medicine.
How will you get paid? It may be the first “real” job you have ever had.
Every physician needs guidance in navigating new opportunities, especially those just completing residency. Why?
One of the most respected thought leaders in business is Dr. Karl Albrecht and here are his descriptions of the components of fear. I have adapted questions for you to consider when evaluating a potential new job and what your compensation will be.
- Extinction: As a new doctor, you will have a fear of annihilation, of ceasing to exist. If I take this new job, will I fail or be replaced?
- Mutilation: If I take this job, will it change me?
- Loss of Autonomy: If I take this job, will I feel restricted, trapped, or suffocated? The corollary is: Will I feel helpless and have to do what I am told, even if I do not agree with it or want to do it?
- Separation, Abandonment or Rejection: If I take this job, no matter how much money I make, will I fit in? Most physicians should not fall into the trap of taking the biggest salary and the biggest sign-on bonus fresh out of residency since there is likely to be a reason for the generous offer. It may be a tougher job than you may anticipate for many reasons. It could be that the community, for example, has not had a doctor in your specialty for some time and you may face being overwhelmed. That is not worth any price.
- Humiliation, Shame, or Worthlessness: This is the death of your ego. Shame can be an excruciating feeling. If I take this job, is it going to satisfy my feelings of self-worth? You did not work this hard to feel infinitesimal like a small cog in a massive machine of a healthcare system. Whatever the salary and compensation package is, it must be balanced with your approach to your new career. You studied and struggled through late nights to help people, not worry about your own identity.
The complexities of deciding on the right position are personal. There are main concepts to consider in the big picture. One of which is becoming less important with the evolution of the business of medicine, but I will highlight it because there are now hybrid versions that exist, and you will need to understand the extremes.
In fact, many of the resident physicians will suggest sticking to the academic fulfillment and try to convince you that the money will follow. Nothing could be further from the truth. The reality is that no matter who you are, you are naïve and with your newly minted talent people will see you as a financial opportunity more than they will want to admit.
Keep in mind, your new direct deposit paycheck will be only one part of your future compensation. A better way to define compensation is exchanging your expertise, efforts, and time for money and benefits.
Make sure you consider that for the first time in your life, you are not only filling in time in your job, but you are also creating revenue by multiple sources: seeing patients, performing procedures, ordering tests, and utilizing services. In considering what an average physician compensation should be, it is vital that you take these things into account. Some physicians, particularly those who fall into Option 3 to use ancillary services to boost their income while still technically working under Option 1.
- Option 1: Work for someone or something.
This means accepting a job with a salary, benefits and possibly a bonus structure. Almost all physicians begin this way even if they chose Option 2 eventually.
- Option 2: Work for yourself.
Today, it is almost impossible to work for yourself in the beginning. The days of having a family medicine practice in an idyllic place like depicted on the TV show “Virgin River” are exceedingly rare. Even the new doctor and nurse who come to town are employees to start. But working for yourself can be done. The physician entrepreneur is alive and well, but there is more suffering and risk for later better potential returns. It is true, though, the physician entrepreneur is a dying breed.
- Option 3 The Hybrid: Work for yourself and someone else
In a sense, even physician entrepreneurs work for someone else like Medicare or private insurance when working for themselves. The only exception is fee-for-service like cosmetic surgery. But the concept here is more of a shared employment with some autonomy with a larger healthcare entity. That does exist.
Are you getting paid what you’re worth?
We can show what other physicians in your area are earning. Then help you optimize your compensation plan for greater income.
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