Physician Job Search Tips: Your Future Physician Compensation Model Doesn’t Matter

All experienced physician recruiters have worked with candidates who insist on restricting their job search by considering only one type of compensation model.  These days many physicians focus only on finding employed positions, while others who have been burned by employment will focus only on private practice models.  Some physician candidates spend their time studying the technical differences between RVU and WRVU production incentives.  Collections based incentives and compensation models are slightly out of fashion, but they still exist and can give physicians another compensation model to analyze.  Physicians will usually focus on one model over another because of previous bad experiences or because of comments from colleagues who have had bad experiences.  Most potential physician employers have spent many years refining their compensation model, which means they aren’t going to change it just for one physician candidate. It also means that physicians who are overly concerned about the type of compensation they will receive have fewer options.  As an ex-contingency recruiter, I have worked with physicians and employers across the entire United States and dealt with almost every conceivable type of compensation model.  The truth about physician compensation models is that the type really doesn’t matter, and employment model should not be a part of your criteria for evaluating jobs.

The job market you’ll be entering, plus your own work ethic, is what really determines how much you’ll be earning in your next job.  99% of the time, a given practice or hospital’s employment model is created in response to market conditions and has been fine tuned over a period of time to work best for the physicians who practice there.  An oversupply of physicians for insured patients will reduce your earning potential, while the reverse is true for a market that is underserved.

Payor mix is a factor in most small or medium sized cities, but in big cities, finding the area with a good payor mix probably won’t solve any financial problems.  Keep in mind that in larger cities you’ll probably only be drawing patients from a small radius to your office, and in the “nicer” areas with better payor mixes, there will be competing and better established physicians within that same small radius.

Physicians often look to employed models to reduce their risk and provide financial security.  However, we’ve reviewed contracts from hundreds of different employers, and we’ve yet to see an employed physician contract that doesn’t contain a clause for lowering the salary if a physician’s production doesn’t justify the base level compensation. The lone exception is when a base salary is so low that it would be hard to imagine any physician not meeting the minimum expectations for volume.  It’s also much easier to terminate an employed physician than it is for other models where physicians are set up in more independent practices.

Despite the challenges noted above, we have worked with many physicians who are happy with their employment model across the entire range of possibilities from collections based to pure salary.  When physicians fixate on a given employment model, what they really want is stability and the best possible earning potential.  Physicians will find the best combination of those factors in areas where there is moderate to high demand for their services plus a reasonable payor mix.  Most physicians will have to compromise somewhat between an ideal location and an ideal job, and they’ll have more options to find the right fit if they remove employment model from the criteria for evaluation of jobs.