11 Apr Assessing how much a doctor is worth
In previous posts we discussed the basics of doctor reimbursement. How does that translate into your take-home income? In this case, how much you get paid as a doctor is exactly how any other business works.
In the broadest sense, the owner gets the leftover sum after all of the employees are paid and all operational expenses are paid (rent, utilities, supply costs, equipment rentals…etc). If the doctor is the owner of an outpatient practice, it pays to watch expenses especially since the revenue a practice is pegged against insurance reimbursements (unless you run a cash practice or have ancillary income). Since insurance reimbursements aren’t really going to rise, the only way you can truly earn more is to work more.
In a hospital setting, the physicians are generally employees or contractors of the hospital. The hospital will often set a fixed salary for its employee physicians with the understanding that each physician will be able to generate a certain number of RVUs (and revenue). As contractors to a hospital, a physician group also negotiates a set income for a contracted number of RVUs generated.
The first step in understanding how much you are worth goes along with how much revenue you can generate in your field, the general operational costs required to run your practice, and/or the going rate for physicians in your region of the country. If you are an employed physician, understand that the owner of a practice will charge you an “opportunity cost” for having support facilities and patients that you don’t have to recruit.
Take home points:
- Learn how much revenue you can bring into the practice given the hours worked.
- Figure out the average revenue a specialist in your field brings in.
- Learn about the operational costs that an average practice in your field incurs.
- Compare that operational cost to a practice that you are negotiating with.
Questions? Sound out below!