Jarrod Shapiro, DPM Joined Mountain View Medical & Surgical Associates of Madras, Oregon July 2008

Starting Salaries Your feedback to the recent New Docs on the Block 108 - Employment Contracts was so overwhelmingly in reference to Starting Salary, I felt obligated to make it the focus of this weeks New Docs. So, here it is, Starting Salaries. Take a look at a few pertinent questions and letters I received on the topic, and as promised, I will share my responses and opinions about starting salaries.

First, I completely agree with Dr Downey’s comments from the prior editorial. Salary is important, but so is your quality of life and overall happiness. From my own situation I found after 2 years of practice in Michigan, with a vibrant, growing and healthy practice, seeing a good number of patients, making a good income, with partnership pending in the next few months, I was not completely happy. Among other reasons, I realized I wanted my son to grow up in the West with clean air and water. I wanted this for myself. I love sunshine, warm weather, open land, and rural towns, all of which I have now. My wife and I determined after much serious consideration that a move — in spite of the possible risks — would be best for us. I left an excellent professional situation for a more risky one because — as Dr Downey says — podiatry is not everything. You have one life to live, so make it a good one. I offer this only as food for thought, not as an advocate for any specific way of life or career choice.

Having said that, let’s talk about salaries. I think EVERY podiatrist coming out of a 3 year surgical residency should make at base $100,000. I once read in an editorial in Podiatry Management Magazine that ours is the only specialty that pays less than this to start. Think of the time, effort, sacrifices, and daily risk that go along with being a podiatrist. Don’t you deserve legitimate and competitive pay?

Now let’s talk about the real world. Your starting salary is not always fair or consistent with your skills. However, salary should be commensurate with skills, physician quality, potential, and expected value. If you have more skills to offer than the average candidate, you should be paid more. If you are hired to add rearfoot and complex reconstruction to a practice, then you should be paid more. If your potential employer will need to invest time and money into training you on coding and billing or bringing surgical skills up to par, then you’ll be paid less. Salary depends on so many factors, including what a practice can afford, what the applicant is expected/anticipated to bring to the practice, skills, and the specific situation.

If I were hiring a new podiatrist I would consider these factors (among others) after speaking with my accountant:

If I were a new physician looking for a good job, I first want to find a good fit with the doctor. Will they treat me with respect? Are they willing to show me their “books?” Do they appear upfront and honest? Will I see new patients or just their postops and follow-ups? Are they telling me how they’re going to lose money by having me? If so, walk away; they’re going to take advantage.

The question then becomes “what salary structure is the best?” After 2 ½ years in practice and multiple contract negotiations I can say I don’t know. As everyone says, it really does vary. It also depends on where you live. $100,000 in California may not go as far as $100,000 in Mississippi.

It seems the most common structure is base + bonus with any number or variations on the theme. Some advocate for a lower base with higher bonus. If you’re willing to work hard, and you have lower initial living costs, this may work best. For example, a $50,000 base with a bonus of 30% after 2 times the base, and a net practice income of $200,000 will earn you $80,000 total. If you brought in $300,000 net (which is a very high net profit from a new doctor), you would have made $110,000.

Remember, if you accept a low base, negotiate hard for a very high bonus. With a $20,000 base and 60% bonus after two times the base and that same net of $200,000, you’d end up with $116,000.

Sit down and do the math. Keep in mind you’re lucky to get 50% from the insurance companies when you bill for your services. Then you have to remove practice expenses. If you “bill out” $600,000 (gross receipts), that may end up closer to $300,000 after insurance write offs and even less after practice costs.

Every situation is unique. The offer should also include all the extras I mentioned in the prior editorials (plus malpractice as a must and tail coverage if you can manage it). If there were an absolute basement salary I would say $80,000, which, again, I think is unfair for the vast majority of current podiatric residents. Certain situations are likely to pay more. From people I’ve spoken with, multi-specialty clinics pay a higher base but are not as profitable in the long run. I would request well over $100,000 in this situation. In a similar manner orthopedic practices also offer more. I don’t know the long term profitability of this. If anyone knows write in and educate us.

Hopefully this provides some food for thought. The Young Members Association of the APMA did a survey a short while back that covered a variety of practice statistics. I would recommend reviewing this as well. Let’s continue the conversation; write in with your thoughts, concerns, and solutions. Best wishes.

Jarrod Shapiro, DPM
PRESENT New Docs Editor
[email protected]

GRAND SPONSOR This program is supported by an educational grant from STRATA DIAGNOSTICS MAJOR SPONSORS