You can watch the recording of JPS Recruiters Live: Deciphering Physician Compensation on our Facebook page. (24 mins.)
If you are considering a job change or already interviewing, we can help you understand your compensation options.
When to Ask About Compensation
It’s important to know when to talk about compensation and what to ask. Wait until after a successful site visit to start talking about compensation. Ask what the employment model is. That will have a significant impact on taxes and benefits.
Then ask what the initial guaranteed salary is. Generally, the initial term is 1-3 years. In some cases, the term is negotiable, but be careful when negotiating. Asking for a shorter term may give the employer the impression that you are a job hopper.
After negotiating your guaranteed salary, ask about the formula used for determining compensation. This is usually productivity based. Meaning, you are going to earn to the level that you produce. Many factors come into play when employers calculate compensation. Percentage of collections or using an RVU model are common options. MGMA is the most common survey employers use to determine their compensation package. More saturated markets, like metropolitan areas, may pay less than rural areas. You can use our Salary Calculator to get a good idea of what to expect.
There are some questions you should ask if your compensation or bonuses are RVU based. Your RVU threshold is specific to your base salary and should follow MGMA guidelines. Employers can interpret MGMA information in different ways. They may look at nation numbers or regional numbers, so ask about it. You should also ask what your dollar per RVU will be if you exceed the threshold.
Now that you have discussed your main compensation, it’s time to inquire about bonuses. Bonuses may or may not be available during the initial term of your contract. They are either productivity or quality based. Like your compensation, the basis of your bonus depends on many factors. Payer mix, overhead expenses, the percentage of self-payed patients, and RVU are examples.
Quality bonuses are becoming more common. Quality of care is important to patients, physicians, and administration. Ask how you earn the quality bonus. Is it tied to patient satisfaction, throughput time, or paperwork completion? You should also ask what percentage of employees are earning the quality bonus. This will help you understand if it is attainable. The last question to ask about bonuses is, are they paid out quarterly or once a year?
Long-Term Earning Potential
Finally, ask about the level of productivity you’ll need to have to maintain your income. Another way of asking this question is asking about your long-term earning potential. You can also ask what you should expect once you’re established and how long it takes to get established.
Added to your compensation and bonuses, you might get offered perks. Don’t expect perks, but if you are considering several options, they are worth exploring. There might be a signing bonus in your offer. If you received an offer and it doesn’t include a signing bonus, you could ask. You should never ask about a signing bonus before receiving an offer. Your offer might include a commencement bonus instead of a signing bonus. You get a commencement bonus on the day you start your employment instead of the day you sign. Retention bonuses are becoming more common. A smaller signing bonus is paired with a retention bonus. They are rewarded for a re-commitment after your initial contract ends.
Relocation stipends are also becoming more common. The amount might be negotiable, and the payouts can vary. Requirements for receiving the stipend can be restrictive. Make sure you understand what it takes to receive the stipend before making arrangements. Residents and fellows can get education stipends usually one or two years in advance of their employment. Another useful perk for younger physicians is student loan repayment. This perk can come from the employer or from an outside source. If coming from an outside source, you may have to apply. Check the amount of reimbursement you qualify for, what the term is, and what the forgiveness period is.
Depending on your employment model you may or may not be eligible for benefits. Benefits can include malpractice coverage, paid time off (PTO), retirement, health insurance, a car allowance, or housing stipend. If offered malpractice insurance, the carrier and policy details will already be established. You should still take time to understand your coverage, what happens if a suit is filed, and what happens when you leave. PTO may or may not be negotiable and is generally 3-4 weeks. You’ll want to ask if that includes sick days, vacation, and CME days. Retirement benefits come in three main forms, a pension, 401k, or 403b. These depend on the employer, whether they are government, private, or non-profit. A car allowance might be available if you’re traveling to many facilities. Housing stipends are rare. They usually depend on housing limitations or distance from facility requirements.
Receiving an Offer
You will either get a letter of intent or a contract. A letter of intent is an outline of the offer. If you are unsure of any part of your contract you should contact an attorney. Take note, not all attorneys are familiar with physician employment agreements. Choose an attorney that is knowledgeable and can commit to a turnaround time that suits your needs. It is also beneficial to meet with an accountant to understand your tax burden and options. Once you sign a contract get a copy for your records.