The Truth About Physician Salaries

Good post @JustPlainBill

The vast majority of docs aren't paid by the hour. It's either salary + production bonus, or a percentage of what you collect, or percentage of what you bill vs overall group collection, etc

There's also regional variation to the average compensation as well. The mean salary for family medicine in the northeast region was $165k, $166k for southwest, and $198k for North Central region. The nationwide median compensation is around $229k (but that includes those who own their own practice or are partners in their own practices with ancillary income stream). As a young graduate from a residency, you should focus on "average starting salary" because that is what recruiters, hospitals, and potential physician employers will use (you're not going to be part-owner and divide the profit of the practice like the senior partners, you'll likely be the work horse, working more hours and more calls as part of your "contract")

Yes, you can always moonlight and make more money (ie work urgent care during your time off, or cover a rural ER with desperate coverage issues), or offer to do additional shifts/calls of a colleague or senior partner for $$, but at some point as you get older, you'll get tired working a residency schedule. One thing to keep in mind - as you work more, there are more charts to document, more labs/imaging to follow-up (hey, that cxr of the cough turned out to have an opacity - better make sure to follow-up on that), and with more patients, more phone calls (some urgent, some not) and paperwork to do (FMLA, social security disability, etc) as well as prior-auths and peer-to-peer review/appeal. They take a lot more time than you expect/realize. So seeing more/doing more means more stuff to do/follow-up on.

As I mentioned in my other threads, RVUs ultimately will drive your compensaton (whether directly or indirectly). The average RVUs that family medicine billed in 2015 was 4,975.

The wRVU for the most commonly billed code (99213) was 0.97. (to keep the math simple as well as not overwhelm med students/residents, I'm ignoring the Non‐Facility Practice Expense RVUs as well as malpractice RVU and assume that it will go towards practice overhead/expenses). Medicare 2015 conversion factor of $36/RVU,

If you assume the following: 248 working days in a year (includes 7 days off for holidays), 4 weeks of vacation (20 days), 1 week of CME (5 days), Work week 4.5 days ----> 223 days worked

To generate $225k in billing (again ignoring non-facility practice expense RVU), you will need to generate 27.2 RVUs per day worked.

Of course lots of assumption, including all your patients are level 3 outpatient established office visit, and all are medicare. Also assumes your overhead and practice expenses is covered by the non-facility practice RVU (otherwise, it comes out of your income stream). As discussed in my other thread, if you have medicaid patients, that RVU per day minimum to maintain that salary will go up just to generate that income.

Plus the reality is that your employer (the practice partners or hospital) will also want some "profit" as well for your hard work. If you are revenue neutral for too long (from their perspective), they might want to hire someone else who is "more productive"

Now your payor mix is really important - not only how many patients you see, nor the type of insurance you accept/bill (see my other posts on why medicare vs commercial insurance vs medicaid) but also if you are seeing kids for their sports physical, newborn visit, age-appropriate annual visits, sick visits, etc. since seeing kids will affect your overall compensation as well (the average pediatrician generated 5,448 RVU in 2015 but made less in median compensation than family medicine ... hmmm)

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The Truth About Physician Salaries