Comparing 2 physician jobs

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S4C5
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Comparing 2 physician jobs

Post by S4C5 » Sat May 05, 2018 12:27 pm

I am about to graduate subspecialty residency training. I am in a unique position because my field is highly specialized and highly compensated. I currently have two incredibly different job offers and am curious the thoughts of others as I don't really have anyone else to discuss this with given the nature of it.

Offer #1: I would be an employee of a large, not-for-profit hospital system in a middle-of-nowhere rural area (town size ~20k people in the Midwest, literally nothing else around, nearest metro area is a 5 hour drive away). Salary is $600k/year. There is a production bonus on top of this, but given the volume I think it is unlikely I would ever bonus. I believe I could negotiate this to about $650k total compensation. Beyond that is unlikely given complexities regarding the Stark law and fair market value for compensation to physicians who are paid more than they bring in. I would be an employee an eligible for all the same retirement plans and health insurance benefits everyone else gets. There is also a $100k signing bonus (so my total compensation year one would be 700-750k). Due to location, nobody wants to come here and they can't recruit anybody, hence the maximum salary. State income taxes are in the 4-6% range. Cost of living is 90% of national average, Housing is 80% of national average.

Offer #2: Private practice in California (doctors legally cannot be hospital employees in the state of California). This is a 3 year partnership track. Salary year 1 is $330k with a $25k signing bonus, so total compensation year 1 is maxed around $350k. Year 2 I get the same base salary plus once I have earned my salary from collections, I get to keep 50% of everything above it (partners keep the rest). Year 3, I get to keep 75%. Year 4+ I am either kicked out or made partner. Partner income varies based on productivity but is typically around 600-700k (you get to keep 100% of what you bring in -- profits are not split in any form). This is NOT LA or Bay area, so cost of living is reasonable, although still above national average (overall cost of living 25% higher than national average, housing 60% higher -- which is still good for CA). I am assuming you are all familiar with CA taxes. Specialist jobs are highly desirable, and I expect zero to minimal negotiating power in this position (private practice jobs typically are not negotiable anyway). This is a partnership that collects professional fees only (i.e., they do not own any equipment or real estate). Billing is based purely on services provided.

In medicine, private practice jobs are generally preferred over hospital employeed jobs for numerous reasons. Beyond the autonomy you get with a partnership, you generally earn a lot more money. Income during the pre-partnership period, however, is typically a lot lower than hospital salaries. The advantage is that once you make partner, your income doubles and you make a lot more than you would at a hospital. This is called "sweat equity" as opposed to formally buying into a practice that actually owns stuff. Typically, a hospital salary will be around $450k. Most people are willing to put in a few years at $300k in a partnership track job instead knowing that they will eventually be making $700k or more for the rest of their career. In my unique situation, I have the opportunity to make $700k right off the bat as an employee.

Personal situation: I had saved a lot of money from a prior career, so I have no medical school loans. I have about $300k in cash and $100k in retirement accounts and stocks. I own a $450k house with about $330k of principal remaining on my mortgage. I am in my mid-to-late 30s. I have a SO who is just starting her career and earns around $75k. She could easily transfer to the area in CA where the job is and stay with her current company. There is no work for her in the small town in offer #1 - Her company has a facility about 2 hours away. She would have to commute during the week and come home on weekends. The only high paying jobs in this town are with the hospital. Everything else is food service, truck driver, or working at Lowes.

Anyway, this is an incredibly difficult decision. The only thing holding me back from taking the CA job is the money. The partners are great, and the area is much nicer with infinitely more things to do. I realize that working as a physician in CA involves taking a financial hit on numerous fronts. I'm just trying to figure out what that financial hit would be exactly, and curious what others would do in my situation.

Balefire
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Re: Comparing 2 physician jobs

Post by Balefire » Sun May 06, 2018 10:27 am

YOLO.
There is more to life than money.
I'd pick a job where you will be happiest.
Both of those offers you will do fine financially in the long run

afan
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Re: Comparing 2 physician jobs

Post by afan » Sun May 06, 2018 10:36 am

There is no work for her in the small town in offer #1
That would just about eliminate option 1.
Her company has a facility about 2 hours away. She would have to commute during the week and come home on weekends.
Non starter.

Job 2, without a doubt. I assume you have concluded your search and there are no other jobs you are considering.
The income you give up might eventually come back to you as new people join the practice and go through the same period as an employee.

The only thing you did not discuss is the prospect for making partner. Some practices always make new people partners. Some take advantage of desirable locations and exploit new people, replacing them before they make partner. Three years is kind of long, but you should know the typical deals in your field.

If you feel comfortable about the group there is nothing to argue against job 2. Even if you don't feel comfortable about the group the worst you could do is end up moving to a different practice after a few years.
Last edited by afan on Sun May 06, 2018 3:31 pm, edited 1 time in total.
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anil686
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Re: Comparing 2 physician jobs

Post by anil686 » Sun May 06, 2018 10:40 am

Just my 2cents as a fellow physician - I have seen some of my friends who are in very specialized areas of medicine take an employed job with a hospital system in the middle of nowhere with a high income guarantee out of a job in a few years. That is because if you cannot generate anywhere close to the service line cost (not just you but the hospital cost for nurses, scrub techs, instrumentation, labs, etc) over a few year period, they have no obligation to keep you or the service line on. I have seen a local hospital about 70 miles from the DFW area do this over and over again - hire a physician - keep the service line open for a year or two and then close it because it was not profitable and then do another service line with another area of medicine. That would make me value the second option with private practice more since it is established and not dependent on hospital administrators who - themselves - change periodically and the goals of hospitals change periodically.

JMO though and hope it helps...

jhwkr542
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Re: Comparing 2 physician jobs

Post by jhwkr542 » Sun May 06, 2018 10:41 am

Go with where you'd prefer to live and work and ignore the money. You'll be good financially in either place. There's no way your SO could work two hours away, so would they be ok not working? To me, I'd vote CA based on what you provided. Having a lot of money in a small town doesn't appeal to me unless your ultimate goal is to retire ASAP.

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ofcmetz
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Re: Comparing 2 physician jobs

Post by ofcmetz » Sun May 06, 2018 11:17 am

Life is too short as it is. Go to CA or some other place where you can do stuff and your other can find a job. No way I'd go somewhere for more money that I couldn't enjoy life and doing things or where my wife couldn't find work. Best of luck.
Never underestimate the power of the force of low cost index funds.

Vaporvalley
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Re: Comparing 2 physician jobs

Post by Vaporvalley » Sun May 06, 2018 11:55 am

Joining a private practice group with a partnership track is akin to being an entrepreneur. There is a potential payoff but you are taking a risk and there is no guarantee of making partner or seeing the payoff. Much can change during your 3-4 year track. If you are the kind of person who is OK with this uncertainty then private practice may be for you. I went this route and it worked out well for me but YMMV.

Chris K Jones
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Re: Comparing 2 physician jobs

Post by Chris K Jones » Sun May 06, 2018 12:11 pm

If SO is really important to you, then this is easy. Either job is good for you in the long run. Where do you want to live?

nyblitz
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Re: Comparing 2 physician jobs

Post by nyblitz » Sun May 06, 2018 12:23 pm

Congrats on nearing graduation!

Some things to consider:

-many relationships wouldn't survive option 1 long term, but you know that.

-does option 2 have a non-compete clause?

And I'm a bit surprised that there is no attractive option 3 with your salary ranges. Of course it's a personal choice, yet I'd gladly work for far less money to live relatively close to a spouse's place of work that is not in such a high cost of living state.

All the best to your decision! :-)

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ram
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Re: Comparing 2 physician jobs

Post by ram » Sun May 06, 2018 12:26 pm

1. I am a physician working in the middle of nowhere.
2. The partnership may not materialize. (stock like).
3. The rural job salary is guaranteed. (bond like)
4. More important than negotiating extra 50 K I would negotiate a longer duration of guaranteed salary. You did not say how many years guarantee is there for the 600K.
5. You are coming out of fellowship. Indeed you know a lot of procedures but you are not very fast with many of them. In a few years you will become more efficient and therefore more worth to a private practice. Lets assume you are a neurosurgeon and you do a procedure in 10 hours today. In 5 years you will be able to do 2 of these in 12 hours. You will use less OR time and support staff time and this results in higher profit margin for the private practice. Currently the rural hospital will be subsidizing your inefficiencies. Five years from now if you decide to go into private practice you can use your efficient work practices as a negotiating tool to get partnership in 1 or 2 years rather than 3, with its resultant financial benefits.
6. One option for you is to stay in the middle of nowhere for 15 years, spend like you were earning the California salary and let compounding do its magic with the savings. Then you can move to California and spend all your salary. Your retirement savings are all already done. This makes more sense especially if are interested in early retirement.
7. Your girlfriend's situation is the most challenging obstacle to overcome. Is she at all interested in retraining for a medical field. Radiology/ lab tech, social worker etc. These middle of nowhere hospitals are also short on other staff.
Ram

JHU ALmuni
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Re: Comparing 2 physician jobs

Post by JHU ALmuni » Sun May 06, 2018 12:33 pm

I will probably try option 1 for a year or so. The offer seems very competitive especially with the singing bonus. Your partner will be out of work during this time, but may be she can use this time to do what she really love, maybe do more travel, online degree/certification or even a small business. Worth mentioning maybe you can also negotiate more time off so you can travel to other places a little more.

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ram
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Re: Comparing 2 physician jobs

Post by ram » Sun May 06, 2018 1:05 pm

JHU ALmuni wrote:
Sun May 06, 2018 12:33 pm
I will probably try option 1 for a year or so. The offer seems very competitive especially with the singing bonus. Your partner will be out of work during this time, but may be she can use this time to do what she really love, maybe do more travel, online degree/certification or even a small business. Worth mentioning maybe you can also negotiate more time off so you can travel to other places a little more.
I doubt that the bonus will apply for a 1 year stint.
It will most likely be refundable with interest for leaving within 3 years.
Ram

Nthomas
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Re: Comparing 2 physician jobs

Post by Nthomas » Sun May 06, 2018 1:16 pm

I will be in a similar situation in a few years after my obligation to Uncle Sam. My only input is at least you are < 40. I will be in my mid 40’s and so the potential of a failed partnership track and having to start over is daunting. Moving stinks but at least you wouldn’t be too old to start over if the partnership did not materialize. I agree with the others, either way you will have plenty and will have a wonderful life. Best of luck to you with the decision.

rayson
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Re: Comparing 2 physician jobs

Post by rayson » Sun May 06, 2018 1:56 pm

This is obviously not going to be a financial decision. Pick an option that meets your expectations for quality of living. Congratulations!

TheNightsToCome
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Re: Comparing 2 physician jobs

Post by TheNightsToCome » Sun May 06, 2018 2:44 pm

ram wrote:
Sun May 06, 2018 12:26 pm
1. I am a physician working in the middle of nowhere.
2. The partnership may not materialize. (stock like).
3. The rural job salary is guaranteed. (bond like)
4. More important than negotiating extra 50 K I would negotiate a longer duration of guaranteed salary. You did not say how many years guarantee is there for the 600K.
5. You are coming out of fellowship. Indeed you know a lot of procedures but you are not very fast with many of them. In a few years you will become more efficient and therefore more worth to a private practice. Lets assume you are a neurosurgeon and you do a procedure in 10 hours today. In 5 years you will be able to do 2 of these in 12 hours. You will use less OR time and support staff time and this results in higher profit margin for the private practice. Currently the rural hospital will be subsidizing your inefficiencies. Five years from now if you decide to go into private practice you can use your efficient work practices as a negotiating tool to get partnership in 1 or 2 years rather than 3, with its resultant financial benefits.
6. One option for you is to stay in the middle of nowhere for 15 years, spend like you were earning the California salary and let compounding do its magic with the savings. Then you can move to California and spend all your salary. Your retirement savings are all already done. This makes more sense especially if are interested in early retirement.
7. Your girlfriend's situation is the most challenging obstacle to overcome. Is she at all interested in retraining for a medical field. Radiology/ lab tech, social worker etc. These middle of nowhere hospitals are also short on other staff.
I am also a specialist practicing in the middle of nowhere, and the advice above is excellent.

I ran a critical care staffing company after IM residency and met three young cardiologists who were turned out on the street when it was time to become partner. One of them worked for me for 3-4 months until he found a new position. He was a good doc and a good guy.

At the time I was stunned that colleagues would take advantage of one another that way, but it happens often. Beyond that, a high percentage of physicians leave their first attending job within a few years for a variety of reasons.

From a professional and financial perspective, the rural job is the better opportunity. You can always move on if you discover you don't like it, but unlike so many young physicians, you will have earned partner money from the jump.

Only you can decide which looks better from a personal perspective. My wife has an accounting degree and an MBA, and she could find a job in our little town, but she loves being "retired." Your SO might enjoy a break as well assuming you will support the household. There is no way I would expect my SO to commute two hours, and I would not want to live and work in the middle of nowhere if I was single.

mac808
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Re: Comparing 2 physician jobs

Post by mac808 » Sun May 06, 2018 2:52 pm

Beyond that is unlikely given complexities regarding the Stark law and fair market value for compensation to physicians who are paid more than they bring in.
I'm familiar with Stark laws and know a lot of physicians who earn more than they bring in, notably a couple sub-specialty surgeons who are taking solo trauma call for rural hospitals (sound familiar?). I'm sure there's nuance to it, but don't just assume there's a ceiling in place.

Beyond that, I agree with what ram wrote. I'd assume there's a 50% chance (at best) of making partner at the existing private practice. CA taxes post SALT reform are brutal for a wage earner in your income range.

ks289
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Re: Comparing 2 physician jobs

Post by ks289 » Sun May 06, 2018 3:20 pm

I chose something akin to option 2 years ago (private practice, lower starting salary, good fit with partners). The questions and concerns I would have about option 1 include:
1. Lack of opportunities for SO
2. More call/ER coverage (you didn’t mention if there were any others in practice in the area to share coverage with)
3. Lack of mentors/colleagues to help you reach your full potential
4. Duration of the salary guarantee?

On the other hand, the landscape in medicine today may favor hospital employment over private practice for more and more specialties. You should explore how the private practice in Cali is positioned for the future. How much competition do they have? What other revenue streams do they have, and what might the buy-in be for those assets?

Good luck.

TheNightsToCome
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Re: Comparing 2 physician jobs

Post by TheNightsToCome » Sun May 06, 2018 3:20 pm

ram wrote:
Sun May 06, 2018 12:26 pm
6. One option for you is to stay in the middle of nowhere for 15 years, spend like you were earning the California salary and let compounding do its magic with the savings. Then you can move to California and spend all your salary. Your retirement savings are all already done. This makes more sense especially if are interested in early retirement.
With your head start (net worth > $500K), $600K-$650K annual income, and a LCOL, you will be able to spend well above the median U.S. household income but still achieve what most people consider fatFIRE within 6-8 years based on brute force savings alone; any investment returns will be gravy.

At that point, the world is your oyster.

arsenalfan
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Re: Comparing 2 physician jobs

Post by arsenalfan » Sun May 06, 2018 3:24 pm

Job 2 for me, do what feels right in your gut.

We had friends in similar situation, EXCEPT for the job 1 option both had highly compensated jobs, AND family around.
After 4 years with all the trappings/material comforts maxxed in that area, they moved to the coast for lifestyle because of FOMO/YOLO.
They say they're much happier now. And I believe them. They say they knew they'd be better off staying in the job 1 situation fiancially forever/until all 5 kids launched, but they missed a lot of the cultural aspects. They're certainly fine now, not killing it, but are comfortable for sure.

If they'd done Job 2 from the beginning, they'd have been better off (versus hitting reset button with selling houses/etc).

Not sure what the right answer is for you personally, but money isn't everything.
Last edited by arsenalfan on Sun May 06, 2018 3:41 pm, edited 2 times in total.

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randomizer
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Re: Comparing 2 physician jobs

Post by randomizer » Sun May 06, 2018 3:27 pm

The numbers in this post are too large for me to make sense of them.
75:25 AA / Expected retirement: 2097

txranger
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Re: Comparing 2 physician jobs

Post by txranger » Sun May 06, 2018 4:05 pm

What subspeciality r u in if u don’t mind me asking?

EnjoyIt
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Re: Comparing 2 physician jobs

Post by EnjoyIt » Sun May 06, 2018 4:34 pm

ram wrote:
Sun May 06, 2018 12:26 pm
1. I am a physician working in the middle of nowhere.
2. The partnership may not materialize. (stock like).
3. The rural job salary is guaranteed. (bond like)
4. More important than negotiating extra 50 K I would negotiate a longer duration of guaranteed salary. You did not say how many years guarantee is there for the 600K.
5. You are coming out of fellowship. Indeed you know a lot of procedures but you are not very fast with many of them. In a few years you will become more efficient and therefore more worth to a private practice. Lets assume you are a neurosurgeon and you do a procedure in 10 hours today. In 5 years you will be able to do 2 of these in 12 hours. You will use less OR time and support staff time and this results in higher profit margin for the private practice. Currently the rural hospital will be subsidizing your inefficiencies. Five years from now if you decide to go into private practice you can use your efficient work practices as a negotiating tool to get partnership in 1 or 2 years rather than 3, with its resultant financial benefits.
6. One option for you is to stay in the middle of nowhere for 15 years, spend like you were earning the California salary and let compounding do its magic with the savings. Then you can move to California and spend all your salary. Your retirement savings are all already done. This makes more sense especially if are interested in early retirement.
7. Your girlfriend's situation is the most challenging obstacle to overcome. Is she at all interested in retraining for a medical field. Radiology/ lab tech, social worker etc. These middle of nowhere hospitals are also short on other staff.
Being a physician as well, the above is great advice. I have seen way too many people fall into the partner track just to get booted a few months before vesting. Personally I would choose the middle of nowhere job for 2-3 years or whatever your bonus demands and then re-evalaute. There will be plenty of partner jobs out there in the future and you will be that much more marketable after 2-3 years of experience. I would also live comfortably but well below my means during those 3 years. Being in your late 30s or early 40s with over $1 million in investment assets will put you in an amazing financial situation for the rest of your life.

I would also rather than negotiate increased bonus or increased pay, I would make sure you negotiate call and time off. You want plenty of vacation days to enjoy your life outside of medicine.

Congratulations on your successful completion of training and good luck in your future career.

inbox788
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Re: Comparing 2 physician jobs

Post by inbox788 » Sun May 06, 2018 5:10 pm

S4C5 wrote:
Sat May 05, 2018 12:27 pm
I am about to graduate subspecialty residency training. I am in a unique position because my field is highly specialized and highly compensated.

Offer #1: I would be an employee of a large, not-for-profit hospital system in a middle-of-nowhere rural area (town size ~20k people in the Midwest, literally nothing else around, nearest metro area is a 5 hour drive away). Salary is $600k/year. There is a production bonus on top of this, but given the volume I think it is unlikely I would ever bonus. I believe I could negotiate this to about $650k total compensation. Beyond that is unlikely given complexities regarding the Stark law and fair market value for compensation to physicians who are paid more than they bring in. I would be an employee an eligible for all the same retirement plans and health insurance benefits everyone else gets. There is also a $100k signing bonus (so my total compensation year one would be 700-750k). Due to location, nobody wants to come here and they can't recruit anybody, hence the maximum salary. State income taxes are in the 4-6% range. Cost of living is 90% of national average, Housing is 80% of national average.
Something doesn't add up for me. How many beds does a large rural hospital have? I would assume it's the only hospital in town. And how many specialists, not to mention subspecialists does a town with 20k need? How many doctors in the town? They should all fit in a small conference room. Unless you've got deep pocket clients (asbestos, chromium, etc.), and many patients, I don't see how most specialists keep their doors open with such a limited population. Unless you're talking about something like Iowa City, I wouldn't consider this a sustainable career path.
anil686 wrote:
Sun May 06, 2018 10:40 am
Just my 2cents as a fellow physician - I have seen some of my friends who are in very specialized areas of medicine take an employed job with a hospital system in the middle of nowhere with a high income guarantee out of a job in a few years. That is because if you cannot generate anywhere close to the service line cost (not just you but the hospital cost for nurses, scrub techs, instrumentation, labs, etc) over a few year period, they have no obligation to keep you or the service line on. I have seen a local hospital about 70 miles from the DFW area do this over and over again - hire a physician - keep the service line open for a year or two and then close it because it was not profitable and then do another service line with another area of medicine. That would make me value the second option with private practice more since it is established and not dependent on hospital administrators who - themselves - change periodically and the goals of hospitals change periodically.
Exactly. And 70 miles from a major metro isn't 5 hours away. Why do hospitals keep trying these unprofitable ventures? Is it because they think someday it may become profitable and sustainable? Or is there some other benefit that keeps these endeavors going? Charity? PR? Government and other subsidies?

FWIW, I know a subspecialist who a several decades ago was recruited to Phoenix, and the growth has been nonstop. But that's like picking AMZN, and not typical.

http://www.thegazette.com/2010/07/09/io ... of-doctors
Last edited by inbox788 on Sun May 06, 2018 5:17 pm, edited 1 time in total.

TheNightsToCome
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Re: Comparing 2 physician jobs

Post by TheNightsToCome » Sun May 06, 2018 5:17 pm

inbox788 wrote:
Sun May 06, 2018 5:10 pm
S4C5 wrote:
Sat May 05, 2018 12:27 pm
I am about to graduate subspecialty residency training. I am in a unique position because my field is highly specialized and highly compensated.

Offer #1: I would be an employee of a large, not-for-profit hospital system in a middle-of-nowhere rural area (town size ~20k people in the Midwest, literally nothing else around, nearest metro area is a 5 hour drive away). Salary is $600k/year. There is a production bonus on top of this, but given the volume I think it is unlikely I would ever bonus. I believe I could negotiate this to about $650k total compensation. Beyond that is unlikely given complexities regarding the Stark law and fair market value for compensation to physicians who are paid more than they bring in. I would be an employee an eligible for all the same retirement plans and health insurance benefits everyone else gets. There is also a $100k signing bonus (so my total compensation year one would be 700-750k). Due to location, nobody wants to come here and they can't recruit anybody, hence the maximum salary. State income taxes are in the 4-6% range. Cost of living is 90% of national average, Housing is 80% of national average.
Something doesn't add up for me. How many beds does a large rural hospital have? I would assume it's the only hospital in town. And how many specialists, not to mention subspecialists does a town with 20k need? How many doctors in the town? They should all fit in a small conference room. Unless you've got deep pocket clients (asbestos, chromium, etc.), and many patients, I don't see how most specialists keep their doors open with such a limited population. Unless you're talking about something like Iowa City, I wouldn't consider this a sustainable career path.
anil686 wrote:
Sun May 06, 2018 10:40 am
Just my 2cents as a fellow physician - I have seen some of my friends who are in very specialized areas of medicine take an employed job with a hospital system in the middle of nowhere with a high income guarantee out of a job in a few years. That is because if you cannot generate anywhere close to the service line cost (not just you but the hospital cost for nurses, scrub techs, instrumentation, labs, etc) over a few year period, they have no obligation to keep you or the service line on. I have seen a local hospital about 70 miles from the DFW area do this over and over again - hire a physician - keep the service line open for a year or two and then close it because it was not profitable and then do another service line with another area of medicine. That would make me value the second option with private practice more since it is established and not dependent on hospital administrators who - themselves - change periodically and the goals of hospitals change periodically.
Exactly. And 70 miles from a major metro isn't 5 hours away.

FWIW, I know a subspecialist who a several decades ago was recruited to Phoenix, and the growth has been nonstop. But that's like picking AMZN, and not typical.

http://www.thegazette.com/2010/07/09/io ... of-doctors
"And how many specialists, not to mention subspecialists does a town with 20k need?"

Four sub-specialists in at least two different fields.

"I don't see how most specialists keep their doors open with such a limited population."

The more common problem is an inability to attract and retain enough sub-specialists.

staythecourse
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Re: Comparing 2 physician jobs

Post by staythecourse » Sun May 06, 2018 5:25 pm

S4C5 wrote:
Sat May 05, 2018 12:27 pm
I am about to graduate subspecialty residency training. I am in a unique position because my field is highly specialized and highly compensated. I currently have two incredibly different job offers and am curious the thoughts of others as I don't really have anyone else to discuss this with given the nature of it.

Offer #1: I would be an employee of a large, not-for-profit hospital system in a middle-of-nowhere rural area (town size ~20k people in the Midwest, literally nothing else around, nearest metro area is a 5 hour drive away). Salary is $600k/year. There is a production bonus on top of this, but given the volume I think it is unlikely I would ever bonus. I believe I could negotiate this to about $650k total compensation. Beyond that is unlikely given complexities regarding the Stark law and fair market value for compensation to physicians who are paid more than they bring in. I would be an employee an eligible for all the same retirement plans and health insurance benefits everyone else gets. There is also a $100k signing bonus (so my total compensation year one would be 700-750k). Due to location, nobody wants to come here and they can't recruit anybody, hence the maximum salary. State income taxes are in the 4-6% range. Cost of living is 90% of national average, Housing is 80% of national average.

Offer #2: Private practice in California (doctors legally cannot be hospital employees in the state of California). This is a 3 year partnership track. Salary year 1 is $330k with a $25k signing bonus, so total compensation year 1 is maxed around $350k. Year 2 I get the same base salary plus once I have earned my salary from collections, I get to keep 50% of everything above it (partners keep the rest). Year 3, I get to keep 75%. Year 4+ I am either kicked out or made partner. Partner income varies based on productivity but is typically around 600-700k (you get to keep 100% of what you bring in -- profits are not split in any form). This is NOT LA or Bay area, so cost of living is reasonable, although still above national average (overall cost of living 25% higher than national average, housing 60% higher -- which is still good for CA). I am assuming you are all familiar with CA taxes. Specialist jobs are highly desirable, and I expect zero to minimal negotiating power in this position (private practice jobs typically are not negotiable anyway). This is a partnership that collects professional fees only (i.e., they do not own any equipment or real estate). Billing is based purely on services provided.

In medicine, private practice jobs are generally preferred over hospital employeed jobs for numerous reasons. Beyond the autonomy you get with a partnership, you generally earn a lot more money. Income during the pre-partnership period, however, is typically a lot lower than hospital salaries. The advantage is that once you make partner, your income doubles and you make a lot more than you would at a hospital. This is called "sweat equity" as opposed to formally buying into a practice that actually owns stuff. Typically, a hospital salary will be around $450k. Most people are willing to put in a few years at $300k in a partnership track job instead knowing that they will eventually be making $700k or more for the rest of their career. In my unique situation, I have the opportunity to make $700k right off the bat as an employee.

Personal situation: I had saved a lot of money from a prior career, so I have no medical school loans. I have about $300k in cash and $100k in retirement accounts and stocks. I own a $450k house with about $330k of principal remaining on my mortgage. I am in my mid-to-late 30s. I have a SO who is just starting her career and earns around $75k. She could easily transfer to the area in CA where the job is and stay with her current company. There is no work for her in the small town in offer #1 - Her company has a facility about 2 hours away. She would have to commute during the week and come home on weekends. The only high paying jobs in this town are with the hospital. Everything else is food service, truck driver, or working at Lowes.

Anyway, this is an incredibly difficult decision. The only thing holding me back from taking the CA job is the money. The partners are great, and the area is much nicer with infinitely more things to do. I realize that working as a physician in CA involves taking a financial hit on numerous fronts. I'm just trying to figure out what that financial hit would be exactly, and curious what others would do in my situation.
Doc here. Worked in a large private group got screwed and now love being a solo private guy. Wife was in academics for a year, then corporate medicine then went to private part time (her choice) in a concierge type practice (pretty unique in her field). So you can tell we have seen about every situation play out as you can.

Here are some reservations that I have...

First off what does your wife say of option #1. It will impact her A LOT. She won't be able to do what she wants for work AND will be living in a small town where you guys don't know anybody. Also don't forget about decreasing the total comp. by 75k as she wont' be working and making her future paycheck going forward. The only way I see this as a feasible option is if she wants to start having kids. If not then I don't see how she will be happy with that. Heck, the ONLY reason to do this options is if 1. You like small rural life, 2. You have nearby family (either side), or 3. You have A LOT of loans to pay off. None of the three seem to apply, no??

Option #2.... The first thing I would want to know is how many folks have they hired who did NOT make partner. You will not like working hard taking cr*p from the other partners and then in 3 years being told to leave just so they "coincidentally" can have your job filled by someone making at that point LESS Then 1/2 of what you would be making as partner. Heck, if I was a partner there is no way I would even make you a partner in 3 years. You build up the practice patient base wise, let you go, hire a new kid to takeover the same patient base and the delta in pay between you as a partner and the new kid is an extra 50- 100k to each of the existing partners WITHOUT doing anything different. A pretty smart business decision, no?

In either situation you don't have any autonomy. Either situation you will have to listen and do what they want. That is never fun.

If it was me in the end I would talk to the wife and see what she wants to do based on the negatives. The negative of no. 2 is you working A TON and high chance of being shown the door in 3 years and starting the whole process again. Negative of option 1 is what I discussed above.

Personally, I would keep looking for another gig. I really don't like either option. I will warn you the same as EVERY young physician and that is DON'T put such a premium on $$$ and a discount on autonomy. In your field no matter where you go finances in the end will simply not matter in 10-20 years. I know plenty of docs who made 10+ million in small cities who simply are not happy now in their 50+ age group. No matter how much money you have you can't go back and relive your 30's and 40's no matter how many zeros you have in the bank. The one's I have seen very happy are those that have a balance of work and time for friends/ family/ time for themselves and their own hobbies.

Good luck.

p.s. In the end it likely won't matter as many docs end up leaving their gig in 1 year anyway.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

inbox788
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Re: Comparing 2 physician jobs

Post by inbox788 » Sun May 06, 2018 5:39 pm

TheNightsToCome wrote:
Sun May 06, 2018 5:17 pm
"And how many specialists, not to mention subspecialists does a town with 20k need?"

Four sub-specialists in at least two different fields.

"I don't see how most specialists keep their doors open with such a limited population."

The more common problem is an inability to attract and retain enough sub-specialists.
Ah, I'm a little confused by the specialist vs. sub-specialist and the "highly specialized" made me think more along the lines of superspecialist like an "orthopedic surgeon who only did hip and knee replacement".

https://www.quora.com/What-is-the-diffe ... n-medicine

I can see the need for a cardiologist (sub-specialty of internal medicine) and a few that treat other more common conditions, but "highly specialized" sounded to me like more rare conditions. The degree of specialization and patient population should be considered and matched up to estimate sustainability.

I can't think of any places in the midwest 5 hours away from a major center, but if the opportunity is or becomes the major center in a 5 hour radius, then you'd be drawing patients from well over 100 miles away, and not just the 20k in town, and that number may be more significant.

EMwifey
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Re: Comparing 2 physician jobs

Post by EMwifey » Sun May 06, 2018 6:04 pm

I think financially both sound like good options. What does your wife want to do? If chances are not great she will be happy then the rural location is out. For many highly educated people moving to rural America is not a viable option. Given that you have no student loans, a sizable stack of cash quality of life is more important than money in my opinion.

A remote rural area is out for us: I wanted to work and there are no jobs suitable for me in rural areas. We are also atheist and very liberal so we do not fit in very well in a religious and conservative area. Third, the school options are not good enough in the rural areas around here. Our children would stick out as they are bookish and liberal too and I’m not sure they would be able to make friends as easily when many of their peers have parents with the attitude that says “my son Doesn’t need to read any books, I never read a book in my life and I do just fine”. In our area rural Hospitals have a lot of trouble attracting physicians and many physicians, including my husband who is a physician, commute 1.5 hrs one way to these rural locations but choose to live near the larger cities.

Scrapr
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Re: Comparing 2 physician jobs

Post by Scrapr » Sun May 06, 2018 7:14 pm

Does the work differ in each locale? I'm just guessing here but would the work in the big city afford more growth opportunities? See a more diverse set of Dx? Would this increase your marketability? Would the networking be better in big city? I know you can send a resume or whatever subspecialists do. It's a whole nother thing to have someone speak up for you in a meeting.

Natsdoc
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Re: Comparing 2 physician jobs

Post by Natsdoc » Sun May 06, 2018 7:39 pm

staythecourse wrote:
Sun May 06, 2018 5:25 pm


Personally, I would keep looking for another gig. I really don't like either option. I will warn you the same as EVERY young physician and that is DON'T put such a premium on $$$ and a discount on autonomy. In your field no matter where you go finances in the end will simply not matter in 10-20 years. I know plenty of docs who made 10+ million in small cities who simply are not happy now in their 50+ age group. No matter how much money you have you can't go back and relive your 30's and 40's no matter how many zeros you have in the bank. The one's I have seen very happy are those that have a balance of work and time for friends/ family/ time for themselves and their own hobbies.

Good luck.

p.s. In the end it likely won't matter as many docs end up leaving their gig in 1 year anyway.
Another doc here - I second this. You have plenty of money saved up and no loans - take your time and find a position that makes you happy in a place that makes your SO happy. If you are so sub-specialized that these are the only two options then figure out what makes her happy and do that- would she rather spend a few years living apart during the week and the two of you pile the money away or would she rather live together and make less money overall?

md&pharmacist
Posts: 262
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Re: Comparing 2 physician jobs

Post by md&pharmacist » Sun May 06, 2018 7:40 pm

OP, the questions you ask now are excellent. However, as you journey through your medical career and life, the most relevant questions to you will change, and you probably do not even know know what the most important questions for you will be. I guess what I'm saying is these are great questions for the short term, but also consider the long term.

I have been in practice for 17 years post residency. The first 6 years were at a multi-specialty group in a town of about 35,000. I then left to open my own private practice about 11 years ago. I also know many physicians who work at a local hospital, and since the hospital is non-profit, their salaries are actually required to be posted publicly (hard workers are very well rewarded, but it is active income so there are sacrifices).

In the short term, here are some considerations:

1- Option 1 initially pays significantly better, and as such you have to give it serious consideration, though as you noted more of a short term benefit. Often when a physician seeks a new physician, they meet their future colleagues. See how long they've been there. If a lot of people leave after a year or two (hospital or group), that may be a sign of problems. If many are still there (as was the case for many in my group) for at least 5 years, but even better 20-30+ years, there is generally a sense of satisfaction that signals a good position. How often do you have to work weekends and holidays, this is very relevant to your SO and future family. Hospitals don't close December 25, January 1, July 4 or any other holidays!

2- If you join a group, what percentage of physicians become partners after the probationary period and what is the cost to buy-in. If it is very high then that may be an obstacle. If it is low then great, almost all should become partners - If not then be weary of false promises. Don't assume anything is automatic. Do you get the same percentage of earnings as senior physicians and other specialties, or is there a hierarchy?

3- It doesn't matter how good an offer is, if the SO is unhappy (usually in small towns) then you will likely be leaving any position. That was one of the most common reason doctors left our group after just a few months, even if the provider was very happy.

4- A lower salary in a state without state income taxes, or even better a LCOL can be a world better, than a higher paying job if it is in a costly area, so make sure you compare apples to apples. Also, after a few years you may have to consider the quality of the local school systems, especially in a small town with more limited options/resources.

5- If you are super-specialized you can earn more in a hospital setting than a private practice as the indirect revenues to the hospital by your employment outside of your direct services justifies the higher salary (surgery, imaging, etc.). This is not unusual for neurosurgeons, thoracic/trauma surgeons for example.

6- I believe both offers are very reasonable and high quality, so no one can make the decision for you. Your gut will tell you how to proceed.

In the long term, the far more important questions to consider:

1- You will probably learn much more about the business of medicine in a private practice (if you care to). I say this because I value very much what I learned in group practice but, of all options, society has rewarded me most not as a physician, but as the business owner (keep reading any you will understand why, at least for me, my own business was best). First let me make it clear I would never have done it on my own before a-better financial stability, b-the education on the very complicated business of medicine afforded by my years at the group practice, c- knowing with my personality I welcomed the challenge, not loathed it, d- SO is on board. Not every physician has the ability to be or wants to be a business owner.

2- You are young and ready to go. I was there too. As young physicians, the lure of income for working longer hours is there and, in the beginning, there is nothing wrong with working very hard to establish yourself. I worked very hard in the group practice, including full office hours, hospital call/admissions, nursing home work, medical directorships, etc. Even hesitated to take the financial losses of vacation time. I made good money working hard, maxing out income, 401(k), partnership equity. It felt great, but in retrospect I do not work as hard in my own practice and still earn substantially more without the time sacrifice. How? All the ancillary profits come back to me as the business owner (ancillary profits, at least for a pcp, is not only more profitable than office visit income but passive as they are performed by assistants or contracted technicians). I also now employ other providers and have medical tenants building equity for me in my commercial office building (passive) - I ultimately have enough space to employ up to 10-12 providers if my tenants were to vacate over the years. Once the very long hours many physicians like to put in for extra income starts to strain your relationship, or butts heads with time necessary for children, the consideration for passive income becomes a much stronger factor. My kids are now in their early teens, and while my income (including business profits, stock sales, commercial real estate) is very good - I do not hesitate for a moment trading in income for time if I have to. What makes you happy in the beginning - mainly the draw of a great income, will not be the same over time, probably the health of your family relationships, passive income and time. Also, consider the impact of long hours on your health especially if you have/develop health issues.

3- We all make mistakes in life and hopefully they are manageable. As physicians we think we know everything and don't want to listen to others, and wind up squandering our income and missing out on great opportunities or make bad investments with the wrong people. There is good lifestyle creep and there is bad lifestyle creep. Looking forward to a later stage in your career, you will find too much stuff really will never give you the satisfaction you expected out of it - and sometimes it's okay if it gives you enough satisfaction. But often, rather than satisfaction it becomes a burden you hate. Resist the urge to buy because you deserve it or because you think it will make you feel better after a bad day..week. I have a rule not to buy anything I couldn't pay off within 5 years (this included my residence, cars, and office buildings) - nonetheless the hassles of high maintenance of exotic cars and a McMansion made me fell regretful not because of the costs, but the much more valuable the time it takes from me. Now I buy only if it makes my life easier. I always seek advice now from the older and wiser so I minimize learning by error. Combining these long term principles with your stellar income is a recipe for long term stability. At 45, I have a $10M net worth and a 7 figure annual income (FP and pharmacist entrepreneurs), with a lot of early sacrifice but I did buy what I wanted, now regretting some prior purchases. Regarding good lifestyle creep, one example is private tutoring and a private school education afforded to my kids, the ROI on this will always be the most satisfying - make sure you don't crowd out these things financially, in addition to experiences with your future family - time, time, time!

4- Always be thankful for the opportunities and responsibilities your career has afforded you. Don't ever let the bureaucracy and exhaustion let your empathy for those you care for wane over time. Remember to do for those that are less fortunate. Mind your future marriage and family. Forgive quickly and be slow to anger. Don't depend on things for happiness. These things are good for the soul, and no income in the world is better than waking up every morning looking forward to this wonderful life.

5- In the beginning of my career, I did not know the questions I would be asking now. I do not know the relevant questions I will be asking in retirement. With all major decisions, give it a lot of though (as you are), ponder the important questions, and be flexible when the answer is evident to avoid letting stubbornness cause you to make the wrong decisions. Make sure the family is on board to be unified in the big/financial decisions.

The best of luck to you!

huy178
Posts: 48
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Re: Comparing 2 physician jobs

Post by huy178 » Sun May 06, 2018 7:43 pm

Im not a doctor but been seeing doctors regularly last 20 years in local community hospitals to top nyc ones. I think you should factor in where you will continue advancing your skills.

md&pharmacist
Posts: 262
Joined: Fri Mar 23, 2018 7:05 pm

Re: Comparing 2 physician jobs

Post by md&pharmacist » Sun May 06, 2018 8:29 pm

I do agree hospital employment is the most unstable over the long term, with what appears to be the highest turnover. That's why I said in my previous post talk to prospective colleagues about their tenure. I've seen specialists also last a long time at a hospital position if they are in a highly valued specialty, but the hospital's history should tell the story.

toofache32
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Re: Comparing 2 physician jobs

Post by toofache32 » Sun May 06, 2018 10:18 pm

anil686 wrote:
Sun May 06, 2018 10:40 am
Just my 2cents as a fellow physician - I have seen some of my friends who are in very specialized areas of medicine take an employed job with a hospital system in the middle of nowhere with a high income guarantee out of a job in a few years. That is because if you cannot generate anywhere close to the service line cost (not just you but the hospital cost for nurses, scrub techs, instrumentation, labs, etc) over a few year period, they have no obligation to keep you or the service line on. I have seen a local hospital about 70 miles from the DFW area do this over and over again - hire a physician - keep the service line open for a year or two and then close it because it was not profitable and then do another service line with another area of medicine. That would make me value the second option with private practice more since it is established and not dependent on hospital administrators who - themselves - change periodically and the goals of hospitals change periodically.

JMO though and hope it helps...
Similarly, there was a hospital a few years ago in a rural area that had trouble recruiting physicians. Some of my physician colleagues took jobs there. They would sign on with a generous salary. Then 1-2 years later fire them and call them back the next day to negotiate a new contract. The hospital knew that the physicians would sign the new contract with lower salary because they had been there long enough that the wife had her friends, the kids were used to the school, and it was difficult to pick up and leave.

hmw
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Re: Comparing 2 physician jobs

Post by hmw » Sun May 06, 2018 10:37 pm

OP,

I am a doc and we live in the middle of nowhere.

What does your SO think? Does she have any preference? If she says that there is no way in hell that she is living in the middle of nowhere then it is an easy decision. Can she be happy living in a small town? I think 2-hour commute is out of question for most people. Do you have kids to keep your SO occupied? Are you going to be solo? What’s call going to be like for you in option 1?

Option 2 doesn’t sound great to me either.

If I were you, I would really look hard for an option 3.

Good luck

hmw
Posts: 488
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Re: Comparing 2 physician jobs

Post by hmw » Sun May 06, 2018 10:45 pm

toofache32 wrote:
Sun May 06, 2018 10:18 pm
anil686 wrote:
Sun May 06, 2018 10:40 am
Just my 2cents as a fellow physician - I have seen some of my friends who are in very specialized areas of medicine take an employed job with a hospital system in the middle of nowhere with a high income guarantee out of a job in a few years. That is because if you cannot generate anywhere close to the service line cost (not just you but the hospital cost for nurses, scrub techs, instrumentation, labs, etc) over a few year period, they have no obligation to keep you or the service line on. I have seen a local hospital about 70 miles from the DFW area do this over and over again - hire a physician - keep the service line open for a year or two and then close it because it was not profitable and then do another service line with another area of medicine. That would make me value the second option with private practice more since it is established and not dependent on hospital administrators who - themselves - change periodically and the goals of hospitals change periodically.

JMO though and hope it helps...
Similarly, there was a hospital a few years ago in a rural area that had trouble recruiting physicians. Some of my physician colleagues took jobs there. They would sign on with a generous salary. Then 1-2 years later fire them and call them back the next day to negotiate a new contract. The hospital knew that the physicians would sign the new contract with lower salary because they had been there long enough that the wife had her friends, the kids were used to the school, and it was difficult to pick up and leave.
I don’t know. If this happens to me, I would pick up and leave in a minute. I personally don’t see that I would stay at such a hospital for my wife’s 1-2 year old friendship, and our kid is young enough, it really doesn’t matter. I moved quite a bit when I was young, and I think moving is not as hard on kids as some people think.

Bmac
Posts: 282
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Location: Seattle

Re: Comparing 2 physician jobs

Post by Bmac » Sun May 06, 2018 10:48 pm

hmw wrote:
Sun May 06, 2018 10:37 pm
OP,

I am a doc and we live in the middle of nowhere.

What does your SO think? Does she have any preference? If she says that there is no way in hell that she is living in the middle of nowhere then it is an easy decision. Can she be happy living in a small town? I think 2-hour commute is out of question for most people. Do you have kids to keep your SO occupied? Are you going to be solo? What’s call going to be like for you in option 1?

Option 2 doesn’t sound great to me either.

If I were you, I would really look hard for an option 3.

Good luck
Completely agree with this. Plus, I would assume that option 1 would require quite onerous call responsibility. That may not seem bad coming out of fellowship, but will change rapidly as you age.

TroutMD
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Re: Comparing 2 physician jobs

Post by TroutMD » Mon May 07, 2018 12:57 am

Ive heard of so many stories where people got burned on the partnership track and never make partner. I think you have to approach that job just like that, you wont make partner. And if you do, pretend like you won a lottery. Although, I dont think its all rainbows.

I would do whatever options fits you and your SO personality and desires for living best. Forget the money numbers.

Like others, I am curious what you are about to practice? From what you typed up, I envision your some very particular sub specialist that only has a hat at a major health care center.

Lowly ER doc here.

bltn
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Re: Comparing 2 physician jobs

Post by bltn » Mon May 07, 2018 2:59 pm

I believe that working in the private practice allows more autonomy which is very valuable. If you like the partners in the private pracice group, and the practice has a history of low physician turnover, your chances for staying in the group are very good if you do a good job. The protocol for no splitting of income after the 3 buy in years allows each partner to earn what he produces, which is a very fair system.
Working as an employee at a big company gives you little control over your job or salary. A very high salary in a small area may not be sustainable. Would you be willing to stay following a 30% cut in salary after 2 years?
Option 2 sounds like the most likely to be successful long term. Many doctors wouldn't like a rural hospital administrator to be their boss.

staythecourse
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Re: Comparing 2 physician jobs

Post by staythecourse » Mon May 07, 2018 3:07 pm

bltn wrote:
Mon May 07, 2018 2:59 pm
The protocol for no splitting of income after the 3 buy in years allows each partner to earn what he produces, which is a very fair system.
For the OP, it is important to find out how the partners split the overhead. Is it right down the middle or unequal portions. Some practice have fixed and variable overhead costs. Fixed are usually split down the middle (lease space, electricity, etc...) and some are variable (PA and mid level help, etc...). The idea is the busier the practitioner the higher their consumption of the office personnel will be. So if it is "fair" or not is not as easy of a question to answer. Heck, the word "fair" is likely the hardest definition for folks to agree on especially when money is on the line.

IF you are considering this options it is NOT as simple as saying we use the "eat what your kill model". As you can imagine the higher a physicians overhead the lower the take home pay.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

TheNightsToCome
Posts: 314
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Re: Comparing 2 physician jobs

Post by TheNightsToCome » Mon May 07, 2018 5:33 pm

bltn wrote:
Mon May 07, 2018 2:59 pm
I believe that working in the private practice allows more autonomy which is very valuable. If you like the partners in the private pracice group, and the practice has a history of low physician turnover, your chances for staying in the group are very good if you do a good job. The protocol for no splitting of income after the 3 buy in years allows each partner to earn what he produces, which is a very fair system.
Working as an employee at a big company gives you little control over your job or salary. A very high salary in a small area may not be sustainable. Would you be willing to stay following a 30% cut in salary after 2 years?
Option 2 sounds like the most likely to be successful long term. Many doctors wouldn't like a rural hospital administrator to be their boss.
"A very high salary in a small area may not be sustainable. Would you be willing to stay following a 30% cut in salary after 2 years?"

Rural areas in the Midwest and Southeast tend to have the highest physician salaries in the nation, much higher than either coast (option 2 is Cali). I started in rural Midwest in '97 and have always earned way over national median.

A friend was finishing pain mgmt fellowship in LA in '97 when I told him I could get him a position in my rural town (anes and pain), but he would be giving up ocean and weather for the chance to earn more without the need to join an existing practice with uncertain path to partnership. He made the move and earned well above median from the beginning and earns 7 figures now. He told me last year, "I hope this never ends."

I'd be more worried about the high income projections for option 2.

hmw
Posts: 488
Joined: Sun Mar 02, 2014 11:44 am

Re: Comparing 2 physician jobs

Post by hmw » Mon May 07, 2018 6:32 pm

TheNightsToCome wrote:
Mon May 07, 2018 5:33 pm
bltn wrote:
Mon May 07, 2018 2:59 pm
I believe that working in the private practice allows more autonomy which is very valuable. If you like the partners in the private pracice group, and the practice has a history of low physician turnover, your chances for staying in the group are very good if you do a good job. The protocol for no splitting of income after the 3 buy in years allows each partner to earn what he produces, which is a very fair system.
Working as an employee at a big company gives you little control over your job or salary. A very high salary in a small area may not be sustainable. Would you be willing to stay following a 30% cut in salary after 2 years?
Option 2 sounds like the most likely to be successful long term. Many doctors wouldn't like a rural hospital administrator to be their boss.
"A very high salary in a small area may not be sustainable. Would you be willing to stay following a 30% cut in salary after 2 years?"

Rural areas in the Midwest and Southeast tend to have the highest physician salaries in the nation, much higher than either coast (option 2 is Cali). I started in rural Midwest in '97 and have always earned way over national median.

A friend was finishing pain mgmt fellowship in LA in '97 when I told him I could get him a position in my rural town (anes and pain), but he would be giving up ocean and weather for the chance to earn more without the need to join an existing practice with uncertain path to partnership. He made the move and earned well above median from the beginning and earns 7 figures now. He told me last year, "I hope this never ends."

I'd be more worried about the high income projections for option 2.
I agree with nightstocome. In general, the less attractive area, ie rural Midwest, “sportsman’s paradises” etc, will consistently pay more than the urban, coastal area. The law of supply and demand holds true here.

dknightd
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Re: Comparing 2 physician jobs

Post by dknightd » Mon May 07, 2018 6:42 pm

I'm not a physician, so should probably not reply, but I will anyway.
I would be very wary about accepting a job in a place you did not want to live. No matter the money.
You have spent years in school, likely you will spend many years working.
Now you have to decide how you want to spend your working years. Think long term.
Where would you be most happy in 10-30 years? Choose that

User avatar
giacomo_bogle
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Re: Comparing 2 physician jobs

Post by giacomo_bogle » Mon May 07, 2018 7:58 pm

Tough decision.
You will likely have more time to spend with your family in the small town.
Your SO will probably prefer to stay in the the city.
I can understand you predicament - been there...........

A-Commoner
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Re: Comparing 2 physician jobs

Post by A-Commoner » Mon May 07, 2018 11:17 pm

I did option 1 for 20 years (high income in a rural area). Made partner, then sold our practice to the hospital for a tidy sum. Worked as hospital employee for several years. Then finally got sick of snow, am now doing option 2 in sunny Los Angeles. Both options have their pros and cons. The money we made doing option 1 allowed us to be able to afford option 2. Now I don’t really care if I didn’t become partner doing option 2. I don’t really need to make that much money anymore. I won’t even mind doing part time work. I’m now just working for health insurance and to prevent us from dipping into the money we saved doing option 1.
Ymmv.

Edit: I have to add that I did option 1 in a college town in the Midwest. So while the place was rural, the inhabitants were young, quite educated, and liberal. That made the place moderately fun and tolerable to live in for 20 long years.

obgraham
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Re: Comparing 2 physician jobs

Post by obgraham » Tue May 08, 2018 12:15 am

dknightd wrote:
Mon May 07, 2018 6:42 pm
I'm not a physician, so should probably not reply, but I will anyway.
I would be very wary about accepting a job in a place you did not want to live. ... Think long term.
Where would you be most happy in 10-30 years? Choose that
Wise man here (or woman!). My view is that the type of community is the most important choice. Urban -- suburban -- small city -- rural. Whatever life style appeals to you. I accept that since residents are mostly trained in big places, most prefer that as a place to settle. But not necessarily.

It's a recurrent theme here that the only good physician jobs are in the big urban areas. I strongly disagree. I practiced in a small market for 30 years, had a wonderful practice, was able to offer every bit as current care as my urban colleagues. Amazingly there are some of us who like the smaller community -- less daily hassle, less traffic, less hospital politics, less time "getting ready to do stuff", etc.

The OP will obviously make a good living wherever he chooses. But it's not always about the money.

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BolderBoy
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Re: Comparing 2 physician jobs

Post by BolderBoy » Tue May 08, 2018 9:24 am

A-Commoner wrote:
Mon May 07, 2018 11:17 pm
I did option 1 for 20 years (high income in a rural area). Made partner, then sold our practice to the hospital for a tidy sum. Worked as hospital employee for several years. Then finally got sick of snow, am now doing option 2 in sunny Los Angeles. Both options have their pros and cons. The money we made doing option 1 allowed us to be able to afford option 2. Now I don’t really care if I didn’t become partner doing option 2. I don’t really need to make that much money anymore. I won’t even mind doing part time work. I’m now just working for health insurance and to prevent us from dipping into the money we saved doing option 1.
I did something similar to this for 10 years then finished out my career in a metro area making less money but with all the amenities lacking in option #1. No regrets.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

kenoryan
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Re: Comparing 2 physician jobs

Post by kenoryan » Tue May 08, 2018 9:29 pm

There are plenty of opportunities out there. You just haven’t looked hard enough. We are a 200 bed Hospital system in a city of 80,000. We do not have an ENT. We have 1 GI. We have no EP. No Urologist. I would look for an option 3 if I were you. Or I would send a private message to kenoryan!

Utahdogowner
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Re: Comparing 2 physician jobs

Post by Utahdogowner » Tue May 08, 2018 11:31 pm

afan wrote:
Sun May 06, 2018 10:36 am
There is no work for her in the small town in offer #1
That would just about eliminate option 1.
Her company has a facility about 2 hours away. She would have to commute during the week and come home on weekends.
Non starter.

Job 2, without a doubt. I assume you have concluded your search and there are no other jobs you are considering.
The income you give up might eventually come back to you as new people join the practice and go through the same period as an employee.

The only thing you did not discuss is the prospect for making partner. Some practices always make new people partners. Some take advantage of desirable locations and exploit new people, replacing them before they make partner. Three years is kind of long, but you should know the typical deals in your field.

If you feel comfortable about the group there is nothing to argue against job 2. Even if you don't feel comfortable about the group the worst you could do is end up moving to a different practice after a few years.
I have to agree. I took an "adventure" job chasing some money in a tiny town. They even tried to cobble together a job for my partner. She hated it. We left within a year.

Go to the job and location that you'll enjoy more. You're making enough that it doesn't matter. If you go to the place you wouldn't enjoy even for a couple of years just for some more money, that is an awful trade. You already endured residency, which probably wasn't your favorite. Don't tack on more years of suffering just for some more money. You'll be in good shape within a couple years either way. So go pay some California tax and enjoy!

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Re: Comparing 2 physician jobs

Post by 4nwestsaylng » Wed May 09, 2018 12:56 am

A difficult decision, too bad you don't see any other options. If you are in a super subspecialty, it is clearly capital intensive, hi tech. Thus you either need a hospital to foot the bill for all the equipment, techs, etc., maybe at a loss for them for a while, yes, maybe it won't work out and they want to exit the arrangement if not profitable. Otherwise you are looking at a group in private practice, since sharing of staff and equipment seems likely a requirement, and there is either a buy in directly or as you indicate, indirectly.

If the California opportunity is "non-negotiable", and is not in Bay area or LA/San Diego, and cost of living is "reasonable", then it may indeed be in one of those undesirable areas in California that is euphemistically described as "two hours from ocean, mountains, etc.". If you get in the inland valleys, it may not be optimal for raising your kids, for various reasons. There are many "Californias"- if you are not on the Coast you might as well be in the Midwest (my opinion of course). Huge Medical population you will be taking care of, Kaiser to compete with, etc..

There is a 70 percent chance you will not make partner, and if your specialty is such that you can't just move across town and join someone else or go solo, then you are basically starting over.As other posters have indicated, many practices just churn every two or three years and get a new fellowship graduate.You definitely want to know the track record of the group in this regard,

You know, on the Midwest salary you can jump start your investing and maybe not have to work so darn hard when you are in your forties.You are going to get tired in ten years or sooner, or at least want a more balanced life. Remember, I don't care what specialty you are in, medicine is not the "2% /20%" fee structure of a hedge fund guy. You are doing piecework, ie one patient at a time. Medicine is a fancy cottage industry, and the cottage industry economic model does not do well in the long run. You run faster and faster to maintain income. Physician fees are not rising, they have been drastically falling in real terms for years, docs have just increased productivity to try to compensate, it is illusory.

I know how much Medicare and insurance slash the "list price" for physician fees, so am amazed that you expect to generate $700k+ in a few years, net of all overhead, without working like a maniac, and what are the family costs of that?

Too many friends of mine in medicine are on their second or third marriage. Divorce can really ruin your 40lk etc..

If you really want California go for it, but if I had to live in the inland valleys I would rather be in the Midwest at twice the income. You can then fly out to L.A. and stay at the beach for a week or so, or Hawaii. :D

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Re: Comparing 2 physician jobs

Post by ks289 » Wed May 09, 2018 7:19 am

TheNightsToCome wrote:
Mon May 07, 2018 5:33 pm
bltn wrote:
Mon May 07, 2018 2:59 pm
I believe that working in the private practice allows more autonomy which is very valuable. If you like the partners in the private pracice group, and the practice has a history of low physician turnover, your chances for staying in the group are very good if you do a good job. The protocol for no splitting of income after the 3 buy in years allows each partner to earn what he produces, which is a very fair system.
Working as an employee at a big company gives you little control over your job or salary. A very high salary in a small area may not be sustainable. Would you be willing to stay following a 30% cut in salary after 2 years?
Option 2 sounds like the most likely to be successful long term. Many doctors wouldn't like a rural hospital administrator to be their boss.
"A very high salary in a small area may not be sustainable. Would you be willing to stay following a 30% cut in salary after 2 years?"

Rural areas in the Midwest and Southeast tend to have the highest physician salaries in the nation, much higher than either coast (option 2 is Cali). I started in rural Midwest in '97 and have always earned way over national median.

A friend was finishing pain mgmt fellowship in LA in '97 when I told him I could get him a position in my rural town (anes and pain), but he would be giving up ocean and weather for the chance to earn more without the need to join an existing practice with uncertain path to partnership. He made the move and earned well above median from the beginning and earns 7 figures now. He told me last year, "I hope this never ends."

I'd be more worried about the high income projections for option 2.
Regional compensation differences are real, but vary based on specialty. Urban/suburban/rural data are harder to find, but may account for some of the regional differences.

The MGMA data from 2015 for physician compensation by specialty and region includes net collections (which can hint at overhead costs) and work RVUs (which is very reliable for patient volume if coding methods are comparable).

For my specialty, differences were fairly modest. The South had the highest median compensation which was just 4% higher than the national average. Some of this was due to lower overhead (net collections 11% below national average) and higher patient volume (work RVUs 15% above national average). Indeed, it is likely that any area regardless of region with low overhead and high patient volume could support very high compensations.

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