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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 $100,000 salary with benefits does not take much work at all.
Name Withheld
04/27/2016 Tip Sullivan, DPM
Current Compensation Rates for New Practitioners Out of Residency (Dieter J Fellner, DPM)
100K$ 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
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