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The New Podiatrist: How Much Money Should I Make?
The New Podiatrist: How Much Money Should I Make?
Well, PGY-3 senior residents, you’re six months away from graduation and about to enter the “real world.” Get ready, cuz it’s coming whether you want it to or not. Given the inevitability of this, it makes “Practice Perfect” sense that I would receive an email from an upcoming graduate asking questions about contracts and salary. Way back in 2008, I wrote a New Docs On The Block editorial entitled, “Starting Salaries”, about salaries for new doctors, and I’m actually a little surprised it’s been 12 years since this topic came up again – especially considering its importance. So, let’s update the conversation for 2020. Before we start, I’m going to post the disclaimer that everything I write from here on is one doctor’s opinion. There are many forms of jobs and physician reimbursement, and the details are very important.
First, as a 3rd year resident, if you’re not close to finding a job here in mid-December, then you’re way behind. I suggest starting your job search during the middle of the 2nd year, getting yourself organized, figuring out where you want to practice, what type of position you want, and solidifying your search strategy. There’s nothing wrong with making contacts and connections as early as possible. If you haven’t found a job by the middle of your 3rd year, then get moving! Make it a priority.
Next, salary is important – we all want to make great money – but what’s more important by far is your job satisfaction and satisfying your sense of purpose.
Salary is important but what’s more important by far is your job satisfaction and satisfying your sense of purpose.
“What’s my purpose?” you ask? “To be a podiatrist, of course!”
Yes, that’s obvious. But what do you want to do with your career? Think it through. If you don’t understand these comments, then watch Simon Sinek’s TED talk called Start With Why. You should at least consider what type of practice you want to work for. All surgical? Lots of wound care? Lots of clinic? Home visits? Nursing homes? Hospital work? Academia? Research? Find a job that pays a lot, but you hate, and I guarantee you’ll either be miserable for a long time or you’ll leave that job quickly. Perhaps a slightly lower salary at a job you love that you can build over time is also a good option.
You should at least consider what type of practice you want to work for. All surgical? Lots of wound care? Lots of clinic? Home visits? Nursing homes? Hospital work? Academia? Research?
Now, because there are so many possible job types but with most podiatrists going into either associateship or large organizations, I’m going to focus the discussion on these types. It’s rare (but not impossible) to start a new practice straight out of residency, so I’ll avoid that aspect.
Ok, one more comment to make before we get to the details. You may be unhappily surprised to learn that doctors aren’t reimbursed nearly as much as they should, and this is going to affect your salary. If you want to keep salary simple, then work for a large organization such as a Kaiser or VA with a very clear salary and benefits package. For the rest of you working in the average practice, your salary and bonus is going to be a little complicated. For example, let’s say you do an in-office matricectomy, and your fee schedule says you bill $300 for the procedure. The patient’s medical insurance might pay somewhere around 50%, reimbursing the practice $150 (hopefully your region pays better than 50%). Your bonus, then, is based not on your gross receipts (the $300) but rather the net reimbursement (the $150). Don’t get lost on the specific numbers, but rather consider that you have to bring in more income to make a bonus than you realize at first.
What Base and Bonus Should I Ask For?
There really is no one right answer to this question. It’s going to depend on a lot of factors. The basic advice I was given as a new doctor some time ago is if you’re a hard worker and willing to put in the effort, then you’ll generally make more money in the long run with a lower base and larger bonus. The one addition I’ll make after my time in the field is that your practice must have the chance to build a higher volume. If it’s just not possible to be busy, then you’re not going to do as well monetarily as you might want.
Here’s a hypothetical example. Let’s say you signed a contract for a $100,000 base and bonus consisting of 30% of every dollar you make after three times the base. This is a not uncommon set up with the base and bonus varying somewhat. What will this mean for your take home? Let’s stipulate (to use round numbers) you billed out $600,000 in your first year of practice. After insurance reimbursements you brought in somewhere around $300,000 (again, this will vary by region). You brought in exactly 3 times your base, so you won’t make any bonus. You made $100,000.
Now, let’s change base and bonus to $70,000 and 40% after 3 times the base, respectively. If you bill $600,000 gross ($300,000 net), then 3 times the base is $210,000, and the bonus is calculated from the remaining $90,000. Forty percent of $90,000 is $36,000. You now made $106,000 or $6,000 more using this formula. It’s not a huge amount of money, but if you play with the numbers the differences can become substantial.
As another example, you decide to go “straight percentage”, earning 45% of your net billing. With a net of $300,000, then, you’ve made $135,000, or $35,000 more using this formula. It’s easily possible to bring in much more money than this in practice and to have different base/bonus structures, so don’t get too lost in the numbers. Understand instead that the combinations have different effects, and this can get complicated. You also, again, need to ask yourself how much money happiness is worth? If working 80 hours/week makes you unhappy, but that’s the only way to make money, then is that really the right job for you?
But Isn’t My Boss Making a Lot of Money Off of Me?
Maybe, but it’s also important to consider how much it costs a practice to have a new doctor. First, will the practice have to spend time (which equals money) training you? Do you know CPT and ICD-10 coding, or will they have to teach you this? That education that they are providing to you is valuable. Are your practice management skills up to par? Will your new boss have to teach you? If so, then you just became less valuable to them. Are they going to have to teach you surgical procedures not learned in residency? Again, you’re now worth less money. Also, they’re going to have to wait somewhere around 2-3 months to begin receiving significant reimbursement for your work and possibly longer if it takes you a long time to get credentialed with insurances and hospitals.
The other part to consider is what kind of benefits package you’re going to receive. Is the practice going to cover your malpractice, licensing, CME, hospital fees, health insurance, boards, certifications, 401K, and the tons of other expenses involved with being a doctor? Yes, my friends, it’s not cheap being a physician. These costs can easily hit between $50,000 - $70,000/year. My personal benefits package costs Western University near $70,000/year. If you hire on as a 1099 private contractor (the typical way that straight percentage agreements are structured) then you’ll have to cover all that yourself. Maybe that formula wasn’t really the best deal for you?
Now, let’s say your contract is structured at $100,000 base and 30% bonus above 3 times your base with a $50,000 benefits package. Maybe you think this isn’t generous. Well, you now cost your employer at least $150,000. If you gross that $300,000, we talked about before (where you broke even and didn’t receive a bonus), your employer broke even on you. It’s up to you to determine if that’s fair, remembering they’re taking on the risk and expenses of a new doc.
Also, remember that if you were to leave, they must go through the expense of finding someone else and starting the process all over again. It’s not in their best interest for you to fail, so the situation should be as fair to everyone as possible. A good relationship between employer and employee is just good business.
There are as many types of employment relationships as there are doctors, so once you have a possible job lined up, take time to review the contract and have your knowledgeable attendings look. Certainly, have a lawyer make sure everything looks appropriate. Also, consider, while negotiating with your potential new employer, that balance is important. The relationship should be respectful of your worth, while also noting that you’re a new physician that is still developing skills.
Consider, while negotiating with your potential new employer, that balance is important. The relationship should be respectful of your worth, while also noting that you’re a new physician that is still developing skills.
Similarly, the job should balance your desires, goals, and purpose as well as possible while giving you some chance to have a personal life. Finally, if you have a bad gut feeling about your future employer or they appear shady in some way, then proceed with immense caution. It is possible to have a reasonable job after residency, but in all things, what you get out of it will depend on what you put into it.
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