One of the most gratifying moments of my training was Match Day. At that moment you know you're on the path to reach your goal, obtain a stable job and a reasonable income in a field you are passionate about.
I am nearing 14 years from match day. I wish there were a few things I'd known going into the job hunt. There are some essentials I feel every resident or transitioning physician should know about medicine as a business and being employed as a physician.
The current trend for graduating physicians is to seek employment, or a position as a W-2 employee. We are simultaneously seeing a climb in physician burn-out, and an increase in healthcare administrative pay.
There are many potential reasons physicians seek employment as opposed to being an independent contractor, sole proprietor, or creating an independent medical group:
- Ease. It is often the path of least resistance.
- Money. We have debt and starting a practice takes expense.
- Skill. We are told we can focus on practicing medicine without the headache of running the business. We may think we don’t possess the skills to run our own business.
As you weigh decisions, here are some important things to know about employed positions:
Most employed positions pay on a RVU (Relative Value Unit) basis. Familiarize yourself with these. Something to keep in mind with productivity-based pay is the harder you work, the more money you make your organization. If you opt to really work hard for a period, you may increase your productivity or pay. However, your organization's overhead does not drastically increase. You only reap the partial benefits of increasing your efforts. In contrast, in your own practice, or where you 'eat what you kill' so to speak, you reap more financial benefit from working harder or more efficiently.
Many employed positions promise some form of autonomy, and this can be built into a position to some extent. In the end, unless you are an owner or president of the organization, or a board member you will have no say for business matters. When push comes to shove the leadership must, rightfully so, act in a manner that is most beneficial for the organization, which may not be the most beneficial for you as an individual.
Side hustles and other income sources
These may be limited by non-compete clauses and conflict of interest agreements. These can be stringent in some organizations. Read the fine print.
Ingenuity and creativity
Any developments, ideas, or creations you come up with during your employment may legally belong to your employer.
These are difficult to enforce in some states, yet are often included in contracts, occasionally in the wrong context. In my state this can only be enforced if you take away employees and/or proprietary information. Many docs choose not to pick the fight or potential headache and voluntarily comply even if they are difficult to enforce.
You are ‘replaceable’
As an employed physician, putting in your time for five, ten, or even fifteen years, helping to build a practice for an employer with your energy, efforts, high quality work, don’t expect favors in return. If you leave, your employer simply finds the next eager soul to fill the spot. This is one of the challenges of an employed position, RVUs, and current reimbursement models. The rookie physician fresh out of training gets reimbursed the same as the seasoned 20-year veteran who is an expert in the field.
I recall the first year receiving a strictly W-2 income. I learned the hard way the tax burden of a strictly W-2 income in a higher tax bracket. My accountant suggested I start my own business of some kind, even on the side, to maximize deductions. Disclaimer: I am not an accountant, nor a lawyer. Just be aware, in a physician’s income bracket, with strictly W-2 income, your tax burden may be heavy.
Employed positions may make sense for an individual where other factors must be considered such as the quality and integrity of the organization, location, family situations, and many other intangible factors.
The following items will facilitate strong negotiations and protection of your income and value as a physician, employed or otherwise:
Understand medical billing
This includes familiarization with traditional CPT (Current Procedural Terminology) codes within your relevant field as well as new payment models affecting ACOs (Accountable Care Organizations) and BPCI (Bundled Payments for Care Improvement) and shared savings models.
Keep open communication lines with your employer and administration. Understand the revenue you generate and expense you are to your organization.
Don’t undervalue yourself
You have delayed retirement, taken on risk, and spent countless hours in training for this. As a human being treating and healing others, you are NOT replaceable. No one works for free and you shouldn’t be expected to either.
Take responsibility for your happiness
There is no perfect system, situation, or organization. Your happiness or discontent is solely up to you. If you are unhappy in your current position, this is not someone else's problem. If you are in an unfair or toxic situation you will know when you need to move on. You can deal with other's problems or your own. Being employed you will likely make someone else a lot of money. You need to be ok with this.
While employed physician positions may be a contributing factor to physician burnout, this does not mean the grass is greener in a contracted, ownership, or partner position. Regardless of the income source or contractual arrangement, staying in the know on policy, reimbursement, and the goals of your organization will be to your benefit. Become an advocate for your physician colleagues and a voice. We need to create cultures in organizations that support employed physicians with the first step being physicians understanding our industry and contractual arrangements as well as policy with transparency. We are not replaceable.
Cameron Peterson, MD, is board certified in Physical Medicine & Rehabilitation. He graduated from Ross University and completed residency training at the University of Utah in 2009. He is passionate about transitions of care and addressing core issues of health and disease.
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