|Three Keys to Practice Selection
What to Consider Before you Start Your Job Search
Selecting a practice opportunity can be one of the most difficult tasks a new physician will face in his or her career. The consolation, however, is that the process is a familiar one consisting of examination and diagnosis.
There are three areas physicians need to examine before they initiate a practice search or schedule interviews. They include:
Finances: Until recently, physician compensation data was somewhat limited. Now that physicians are routinely salaried, however, there is a greater interest in what physicians should be paid. A larger number of studies and surveys presently address this issue. The Medical Group Management Association (MGMA) and benefits consulting companies generate physician income data so that physicians in most specialties need have little doubt about what their peers are earning. For a review of some of these surveys, please click on Compensation.
Though compensation averages are commonly available, physician income does vary by region. Income packages often are smallest in expensive areas. These locations are typically desirable urban areas, from New York City to Chicago to San Diego. Such regions also may experience a good deal of competition and an oversupply of physicians. Both conditions make these areas ripe for managed care fee discounting and, consequently, lower incomes for physicians.
Physicians also must factor in debt, family obligations and investment and retirement goals when considering the financial potential of a practice. An opportunity that features loan forgiveness in exchange for a two- or three-year commitment to the community and a high level of compensation may ultimately be more attractive than an opportunity in a metro area that pays poorly and offers little job security.
An informed decision on financials requires some knowledge of the current business realities of medicine. Physicians should talk to their advisors or to recruiters regarding not just how much they should be compensated, but the form that compensation should take. There are advantages and disadvantages to salaries, income guarantees, loan forgiveness, signing bonuses and other forms of compensation. More information is provided on this topic in the "Contracts" section of our Resource Library.
Questions to ask of potential partners, associates or employers include: What is the starting and potential compensation, and how is potential measured or verified? How is income distributed in the group? What are the incomes of existing physicians? What is the overhead, collection rate, percent of managed care and percent of Medicare and Medicaid in the group? What is the financial posture of the affiliated hospital?
In addition, in today's rapidly evolving practice environment, it is important to understand the strategic direction of the hospital, medical group or other organization recruiting you. Are they moving toward collaborative, risk-sharing models, such as Accountable Care Organizations and bundled payments? If so, do they have a clear formula for how savings will be shared? Make sure to determine how the organization's compensation structure may change in the short and long-term.
By probing, physicians can get beyond the base financial offer and determine whether the opportunity really adds up financially. The key is to determine whether the practice will be viable financially after the income guarantee or salary contract period is over. Additional information regarding what to ask regarding financials can be found in the following articles: "How to Interview" and "Do They Really Need You?"
Once you have taken a detailed look at your financial needs and goals and thoroughly examined the financial opportunity being offered—both the immediate salary or guarantee and the longer-term potential—you are ready to make an informed decision. Again, the focus is on front-end research to ensure that the opportunity is viable financially.