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Whether you are looking at your very first offer after residency or are getting ready to renegotiate your 10-year-old contract, it can be challenging to know whether you’re being paid fairly.
Information available online at no cost can be outdated, inaccurate, or too generic to be meaningful. So how do you know if your offer is competitive, or if you’re leaving money on the table? Let’s break it down.
Clinical Compensation Structure
Understand the model they are using to pay you. In most contracts, four basic compensation structures are used.
1. Guarantee Only
This is a model with a guaranteed base salary that is not based on the achievement of any particular metrics. Usually, you will see this for a limited time only – anywhere from a few months to a couple of years.
If you are being paid with this structure, ask: How long is my compensation guaranteed?
2. Guarantee + Production
This model is a guaranteed-based salary with the opportunity to generate more income based on the achievement of certain metrics or goals. Productivity goals can be based on many things, including wRVUs, collections, patient encounters, etc. Often, a guarantee only model will transition to a guarantee plus production model.
If you are being paid with this structure, be sure that the productivity goals are reasonable.
3. Production Only
Traditionally called an “eat what you kill” model, this is a very straightforward structure for compensation. You will be paid based on production, looking at the same metrics noted above.
There are no guarantees in this model, which means there is inherently more risk. There is usually a lot of potential upside as well.
If you are being paid with this structure, ask about the new employer’s rate of collections: How much do you bill vs. how much do you collect? You also want to ensure that the formula they use to determine your compensation is reasonable.
4. Time-Based
Physicians who are paid by the hour, shift, session, etc. are paid based on this model. You will only be paid when you are on, but there are no requirements about your productivity while you are on. Typically, all doctors within the department will be paid the same rate.
If you are being paid with this structure, make sure you know if any hours are guaranteed in your contract.
Non-Clinical Compensation
You also want to be sure you know if any additional, non-clinical job functions will be compensated.
Quality/Performance Bonuses
The most common type of non-clinical compensation is a quality or performance bonus. Quality bonuses are typically offered as pre-set amounts – a certain dollar amount or a certain percentage of your total compensation. Usually, metrics will be applied system- or department-wide, but you should know if results are tracked collectively or individually.
Administrative/Educational Roles
If you are taking on any additional roles, you want to be sure that you’re also compensated for those. You should be paid for supervising advanced practice providers, working with residents or fellows, managing quality initiatives, and other similar tasks. If you are paid hourly, know if committee meetings or training time will be compensated.
Consider the Details
It’s also important to look at the specifics of the position and what you bring to the table. When comparing offers or negotiating, weigh factors like:
- Location and cost of living
- Type of practice (private, hospital-employed, academic)
- Access to support staff, technology, and referral base
- The organization’s financial health and history of recruitment
- Your own value-add, such as building a new service line or bringing a niche skill set
Compare with the Data
During a thorough assessment of your compensation, you should compare your compensation with data sources. Unfortunately, widely available, free data sources are often unreliable when it comes to doctors’ salaries.
Getting accurate, reliable data from a trusted source can help you understand how your offer or current compensation stacks up. Panacea Legal offers Compensation Reviews for just $49. Receive pay analysis from doctor-focused legal experts, plus data to help you determine if your offer aligns with the market.
