Top Five Overlooked Financial Details for Physician Job Searches
Top five financial details that are often overlooked when considering a new physician opportunity:
When considering new job opportunities, it’s easy to become enchanted with a new community, your new colleagues, and a high base salary. However, before accepting, or advertising for any new position, please take these five, often overlooked, financial details into consideration:
1) Payer Mix: Practicing medicine is normally not a cash business. How are your new patients going pay you for your services? The answer to the question usually comes in the form of many different payment forms; Medicaid/Medicare, Private insurance, HMO, and yes, even cash. Practices with a lot of Medicaid/Medicare will likely produce reimbursement levels that do not meet or exceed those of practices that have a lot of privately insured patients. Seek out percentages of each type of payer that currently utilizes the group’s services. If the payer mix has a heavy load of Medicaid/Medicare patients, you will want to take that into consideration while negotiating the base salary level.
2) Local Economy: A thriving local economy leads to a well-insured patient base. Look into the local industries and check on who the community’s major employers are and what type of insurance they carry for their employees. Check the county’s unemployment rates; places with high unemployment rates will likely have more patients utilizing the Medicaid system and/or putting off necessary care due to lack of funds. Patients with high income levels generally tend to maintain regular appointments and often push for elective procedures that add money to a physician’s bottom line. In a nutshell, the better off the local economy, the more financially secure are the town’s physicians.
3) Where will your patients come from: Another way to look at this question is: Are your services truly needed in your new community? The American Medical Association and other organizations have established fairly accurate physician to patient ratios. Know what the ratio is for your specialty and know what the ratio is at the jobs you will consider. When a community is lacking physicians in any given specialty, the incoming physician can expect to be busy from the beginning and look forward to a successful long-term practice. On the flip-side, coming into a an over-saturated market will likely lead to the new physician having to attract patients away from another physician’s practice, a task that could take years and make the new physician not so popular. In addition to knowing the physician to patient ratio, another good measuring stick is how long new patients are currently waiting to see a physician. A practice with patients waiting several weeks for a new appointment is usually the sign of a busy practice.
4) Long-term Earnings of Group Members: This is pretty simple, but, is an often overlooked detail in the excitement of the new job offer and base salary negotiations. Base salary, signing bonuses and moving expenses are just a part of the physician compensation package to evaluate. Long-term earning potential is a much more significant figure for consideration. While asking for the information from current group members may seem pushy, it is likely the easiest route to the information. Groups whose members exceed national averages on a yearly basis are obviously more attractive than those that do not.
5) Cost of Living: This is probably the most overlooked financial aspect of any job opportunity. The information is easily found on numerous websites and will give you a better idea of how far your money will go. A $300,000 income in New York City or Chicago is much different than the same $300,000 income in college-town Iowa or rural New York. The cost of living will have a huge impact, positively or negatively, on your amount of disposable income and retirement plans.