September 16, 2015
Some how-to books on job interviewing advise you never to bring up money. Baloney. If you’re interested in the job, you’re entitled to know what it pays, as well as other details that affect your economic future.
The time to raise the issue is toward the end of your first full day of interviewing, if the interviewer hasn’t raised it himself. Here’s what to ask:
How much will you pay the first year? There’s no need to dance around this question. Once the time has come to talk money, be straightforward.
What’s the compensation plan? Remuneration can take many forms. You may be offered a flat salary. Or a salary and benefits. Or a salary, benefits, and bonus if you hit certain performance targets.
Or instead of a salary, you may be offered an income guarantee. It works just like a salary, but it lasts for a limited time, usually one year. After that, you’re on your own, with your compensation tied entirely to your productivity. If, during that first year, your collections exceed your guarantee, you’ll earn more. But if they fall short, you don’t have to pay back the difference. If you leave the job early, however, you may have to repay the money in full.
An interest-free loan, paid to you like a salary, is another possibility, particularly with a small group or non-profit hospital. If your collections are less than the loan, you must repay the difference. But you won’t be at risk for overhead-the employer will cover your expenses. Still, you could have a substantial shortfall at year-end.
How is income shared? If part of the group’s income is divided equally among the doctors, ask how big the pool is and who’s eligible to participate. In one 45-doctor primary-care group, 50 percent of income was divided only among shareholders, and 50 percent according to individual production. Because physicians joining the practice didn’t become shareholders for five years, they participated in only 50 percent of its income.
Ask how money is allocated for the full range of services you’d be expected to perform and delegate. If you’re an allergist, for example, would you be paid for injections. Some employers don’t pay, even though services incident to yours may bring in 50 percent of your revenue. Some employers give partial credit of 25 or 50 percent.
How can I build my practice? You can’t earn a decent living without patients. How are patients allocated. Will senior physicians get all the insured ones while you get all the uninsured and underinsured. Are the other doctors in the group closed to new patients. If not, will your appointment book remain blank until theirs are filled up. Or are new patients shared equally so that you get, say, every fourth one?
What are the perks? Benefits may or may not include life, health, and disability insurance; pension plan and/or matching 401(k) contributions; and vacation. Your earning power is diminished by whatever you must pay out of pocket to fill any gaps in the benefit package.
And if the employer doesn’t pay direct expenses, you’d need to pick up such things as dues and subscriptions, CME allowance, and-the big one-malpractice insurance. If your first-year package includes reimbursement for these expenses, find out how long that will continue. Once your pay is based on production, will your malpractice premium and other direct costs be subtracted from it?
What does the top physician earn? Asking what salary is realistic to expect in three years tells you what an average physician in the practice earns. Knowing how much the top-producing physician in your specialty makes completes the picture by telling you how good the money gets.
How hard does the top physician work? If your work ethic is out of sync with that of the organization you join, fitting in will be tough, unless you’re a veteran physician who’s being hired to be a dynamo or a rainmaker. The top physician’s workload normally sets the gold standard for performance, suggests how you’ll be evaluated, and, if you level with yourself, can serve as a barometer of your own prospects.
How much work must I do? Some salaries make sense only when workload is considered. Find out what it is. Say you interview with a primary-care group for a $125,000 job. You ask about your earning potential in three years. The interviewer replies, “$140,000.” You ask what the average doctor earns. The answer: $100,000. And even the top doctor, it turns out, makes only $110,000. Why is your earning potential so much greater?
The answer could lie in the workload. Suppose doctors in the group see an average of 12 patients a day, and the top doctor 15. They’re not working very hard, and perhaps that’s one aspect of the group’s culture that it’s trying to change by hiring you. If you can see 30 patients daily, greater remuneration should reflect your greater productivity.
Is there a buy-in? If so, find out when you’d be eligible and what you’d be buying. The standard buy-in price is a nominal $1,000. For that, you get only a shareholder vote, not a stake in a group’s assets.
To get such a stake, or a partnership, expect to pay a lot more. How much depends on the value of the assets at the time the buy-in agreement is signed-usually a year or two down the road.
One young OB/GYN landed a starting salary of $200,000. After a year, the group offered him a partnership buy-in-for $500,000. He has no choice but to pay the price. He’d relocated his family to take the job. He has a restrictive covenant that prevents him from opening his own practice in the community. And it’s an either-or deal: Sign the shareholder agreement or leave town.
He could have avoided the sticker shock-and so can you-by asking, “What did the last doctor pay, and when?” An evasive answer should sound an internal alarm that something isn’t right.
This article was published by Cejka Search and originally appeared in Medical Economics Magazine. Copyright by Medical Economics Company Inc. at Montvale, NJ 07645. All rights reserved.