04/27/2016    Tip Sullivan, DPM

Current Compensation Rates for New Practitioners Out of Residency (Dieter J Fellner, DPM)

100K$ to 180K$? Where does Dr. Fellner get his
data? I would hope that the APMA had this type
of data. I don’t take home that much money and
I did three years post-graduate studies (PSR24
and a fellowship) and have been in solo private
practice for 27 years! There are some of us
that are considering retirement and developing
a plan to that end. We are not BAD people. We
want our young associates to be successful.

There have always been those practitioners who
try to take advantage of podiatrists right out
of residency. Wake up Dr. Fellner - this is not
a new dilemma. I will give you some advice that
was given to me some 30 years ago by a doctor
whom I have great respect for—(Bruce Dobbs,
DPM). Don’t worry too much about the money
thing. Be smart. Practice where you want to
live and be happy. If you are good at what you
do you will be able to make enough to get by.

While I understand that the practice
environment is changing—and that fault is on
all of our shoulders—the reality is that the
financial demands made on us older guys by the
recent residency graduates is going to be a big
part of why private practices will be doomed. I
hear all the time about how our profession is
devouring our young—hogwash, just look at the
changes we have made in our profession that
benefit the new podiatrist! — from my
perspective I see our young having an
entitlement issue and unrealistic expectations.

Tip Sullivan, DPM, Jackson, MS

Other messages in this thread:

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04/28/2016    David N. Helfman, DPM

Current Compensation Rates for New Practitioners Out of Residency (Dieter J Fellner, DPM)

I have been quiet over the past couple of years
for many personal reasons, but mainly because I
was focusing on transforming our industry,
testing new concepts and truly enhancing the
group model experience. I always find it
interesting when doctors ask:” How much should
a new associate make?” How much should a
partner make?

To truly answer this question, it’s imperative
new doctors and established doctors realize
that this answer is truly a moving target and
most statistics you read about salary usually
have a small sample size. Therefore, the data
you obtain is probably not the most accurate
number. The reality is that most very high
earning doctors aren’t going to fill out what
they truly make on surveys because they are too
busy working and often times are very private
about their true earned income.

I personally have no issue telling you what I
think an associate should make or a physician,
but I can’t be honest unless you are comparing
apples to apples. If you go into a solo
practitioner’s office who is retiring in 5
years with no ancillaries, that will be much
different than joining a group like ours where
we own many ancillaries as part of the group
practice. Also, hospitals can pay you more but
you truly are now at their mercy and have now
become a “high paid employee” and are locked
into a system that will restrict your upside
and future.

Some associates can start at 120K, 140K, and
end up at 350K in any environment and some
doctors can make 400K-1.0M per year. However,
every contract comes with conditions and
different opportunities, some good and some not
so good. The reality is that residents these
days expect big paychecks because their co-
residents tell them how much they are being
offered. Every time I have asked a resident to
show me their friends contract taking off all
their names, and I would match their offer, I
have yet to receive a copy. That says to me
their friends are not being 100% transparent
and if they are, you need to read the entire
agreement.

Everything comes down to business and economics
and if you read all the major research reports
from firms like Deloitte, PWC and Equity
Research publications, you will see that with
3.0 Trillion being spent on healthcare, getting
close to 17% of GDP, our current system is
unsustainable. My suggestion is look at the big
picture and not just what you will make year 1,
year 2 or year 3. Look at your opportunities
and decide where you want to make a life. Once
you decide on that, you will be paid based on
your abilities and contribution to an
organization's success.

I have a lot of empathy for new docs, but I
also know what is coming down the road. The
biggest mistake new doctors make is to be short
sighted and stuck on their first year salary.
Focus on how much value you can bring to an
organization and if you are able to deliver and
get along with others, your upside and future
is unlimited.

If you would like some advice, feel free to
contract me. As I have learned when you focus
on yourself rather than others, you never
really achieve true success!

David N. Helfman, DPM, Atlanta, GA

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04/27/2016    Name Withheld

Re: Current Compensation Rates for New Practitioners out of Residency (Dieter J Fellner, DPM)

I’ve been reading the responses to this
question and felt as a fairly new practitioner
(on my 4th year of practice) that I should
chime in. I feel that my answer not only
addresses this question but also dives into a
fairly recent debate on PM News about “where
are the new graduates finding jobs.”

I think that starting salaries greatly depend
on the type of practice this new graduate is
joining. If the graduate is joining a solo or
single specialty group practice they may not be
able to absorb losses as well on the front end
as say a hospital employed position could.
However, when I came out I interviewed with
several private practices and on more than one
occasion I heard “now there will not be
patients waiting on you and I myself don’t want
to slow down so you will be responsible for
building your own client base.”

This was typically followed by a salary offer
closer to what an RN is offered when they
graduate from nursing school. My thought is,
if you do not have the patient excess to give
someone a footing you are in no way ready to
take on an associate/partner.

The majority of my private practice offers were
around $60,000 per year for 1 or 2 years. Then
you would get 20-30% of collections over
$300,000 with no promise of partnership. This
is insane. If you see a contract like this then
run far and fast because your max earning
potential will be in the mid 100's. Now, if you
see this contract and the money made off you,
for say 5 years, is considered your practice
buy-in then that might be a different story but
I bet you don’t see that contract (Please note
that when an ortho group brings in a new
associate once they hit a certain revenue
threshold then they are considered a full
partner. No money exchanges hands on a "buy-
in").

Please don’t reply about the expenses you’ve
incurred bringing this associate on board. I do
not want to hear it. My father was in private
practice for 44 years. I know exactly the ups
and downs involved and he never once brought
someone in under such deplorable terms and they
always turned out to be equally beneficial
relationships.

So, in my opinion no one should start at less
than $100,000-$120,000 annually. If your
practice can not support this then you are not
ready for an associate. I joined a multi-
specialty group owned by a hospital and showed
many of my orthopedic partners some of the
contracts I received and they all just laughed.
They found it funny that the other doctor
wanted to view the associate as a cash cow and
not as a needed addition to their practice.
With this said, I would encourage all new
graduates to equally look into joining an
established solo practice, multispecialty
practice, orthopedic group, and hospital
employment. I went the multispecialty/hospital
route and it has been the best decision I ever
made for me and my family.

As for myself, my starting salary was $200,000.
I made $298,000 my first year in practice after
my bonus. I just started my 4th year in
practice and made $507,000 my 3rd year in
practice. Naysayers wondering if this is
sustainable or if the hospital just baited me
in? Well, I just signed another 5 year contract
under even better terms financially. Now, I do
have the benefit of ER consults, hospital
consults, and a strong surgical referral base
making my out-patient surgery schedule much
busier than most people in private practice
will ever encounter (approximately 30-40 cases
per month).

I am not saying that everyone should expect to
make ½ a million dollars per year. You must
realize, I work at least 60+ hours per week but
what I do know is to earn and cover a $100,000
salary with benefits does not take much work at
all.

Name Withheld