It’s that time of the year again. Graduating med students have started their first jobs, existing residents have been promoted to a new post-graduate level, and experienced attendings are in the midst of contract renewals. As you continue working, make sure you get the pay and the benefits that you deserve. Be sure to check for these 7 things as you enter the next phase of your career:
1. Look for a salary increase and cost-of-living adjustment. Within this past year inflation has skyrocketed. The price of homes, cars, food, and other items has increased dramatically. In order to keep up with the rising cost of goods, you should receive a cost-of-living adjustment to your pay. This will help you maintain your buying power and standard-of-living over time. A cost-of-living adjustment is automatic in most jobs, but it is not always included in physician contracts. If you haven’t noticed a cost-of-living adjustment to your base pay, reach out to your human resources department to inquire about it. Be sure to negotiate that in your next contract if it is not in your current one.
2. Enroll in health insurance for yourself and your family. Health insurance is something we all need. Although we may live healthy lifestyles, we cannot predict the future. We don’t know if we’ll get sick, get in an accident, or be diagnosed with an illness that requires specialized care. In order to reduce the financial burden of these unexpected costs, we need health insurance. Health insurance can be quite expensive but, most, if not all, of the cost is usually covered by your employer. Be sure to clarify this and ensure that you’ve enrolled. If you have a spouse, children, or other family members that you support, ask about the monthly cost of adding them onto your health insurance plan. Inquire about vision and dental insurance as well. These additions tend to be quite affordable but usually require separate insurance policies that you can get through your employer.
3. Make Health Care FSA and Dependent Care FSA contributions. A Health Care FSA is a flexible spending account. Money in this account is used to pay for out-of-pocket health care expenses like the cost of prescription drugs, surgeries, fertility treatments, and doctor’s visits. While you can pay for these expenses with money from your regular checking or savings account, you may want to consider using a Health Care FSA instead. Why? Because any money you put in this account is exempt from federal, state, and FICA taxes (which could save you hundreds if not thousands of dollars each year).
A Dependent Care FSA is very similar. Instead of using the money in this account for out-of-pocket healthcare expenses, the money in a Dependent Care FSA is used to pay for childcare expenses or nursing home expenses you may have to spend on your children, aging parents, or other dependents. You can put a couple thousand dollars into a Health Care FSA each year and up to $5,000 (per household) into a Dependent Care FSA each year. Any money you contribute is protected from taxes. Just be sure to only put in the amount you will use because any unused money does not roll over to the next year.
4. Contribute a percentage of your pay to retirement accounts and see if you get a match. Another benefit to clarify is retirement. Most organizations will have a 401K (if you work for a for-profit business) or a 403b (if you work for a non-profit organization). You can contribute to these investment accounts with pre-tax dollars and stack money for your retirement over time. Doing so not only allows you to start building wealth but it also helps you to save thousands of dollars in taxes each year. The max amount you can contribute each year changes but is currently at $20,500. Some organizations also have a 457b account, which is similar to a 401K, and gives you a chance to stuff an additional $20,000 in pre-tax dollars into investment accounts each year. Using this account allows you to build even more wealth and save even more money in taxes.
Along with contributing your own money in these accounts, many organizations also offer a retirement match. This is when they incentivize you to invest money for your own retirement by giving you extra money to do so. Oftentimes, they will match what you contribute to retirement up to a certain percentage of your salary. This can result in $10,000 to $20,000 (or more) dollars each year that your organization puts inside of your own personal retirement account. This retirement match is a free benefit you may be eligible for after your first full year of working at that organization so don’t hesitate to ask about it and utilize it. It could net you thousands of extra dollars per year, expediting your ability to reach financial freedom.
5. Check for disability insurance and life insurance. Most jobs will offer long-term disability insurance. This means they will pay you a certain portion of your salary (up to a certain amount) each year, if you were to get disabled and were unable to work. This is a great benefit that is usually free for most people. Unfortunately, it may not be enough. You will likely need to take out your own independent, specialty-specific, own-occupation disability insurance that you can get through an independent insurance agent. (The benefit given by your job is nice but insufficient to meet most people expenses). Along with disability insurance, your job may also offer life insurance. This is a benefit that pays a certain amount of money to your family if you were to die. Similar to disability insurance, this benefit is often free and can be a great addition but is usually insufficient. Most people will need to purchase their own term-life insurance policy and long-term disability insurance policy through an independent insurance agent.
6. Reexamine your malpractice insurance. As a physician, lawsuits aren’t uncommon. Patients may sue for all kinds of reasons, and regardless of whether it was your fault or not, hiring an attorney to defend you can be expensive. All doctors need malpractice insurance. Thankfully, this is usually given to you by your job. Just clarify what it covers and what type of policy you have. If you have an occurrence policy (which is the most protective) then great! If you have a claims-made policy (which is less protective), make sure that they also offer you tail insurance (which will protect you against lawsuits that are filed even after you leave the organization). Unlike life insurance and disability insurance, the malpractice insurance you get from your job should be sufficient. Just be sure to clarify which type you have, what it covers, and ensure you are protected from lawsuits even after you leave the organization.
7. See if you have access to any perks (tuition assistance, mortgage assistance, or discount tickets). Some jobs offer even more perks and incentives than money and insurance. For example, if you work for a large health system that is affiliated with a university, they may offer tuition assistance for yourself and your kids. After you have worked at the organization for a set amount of time, they will pay part of the cost for you to take courses at the university. Many jobs will also pay a portion of the cost for your children if they choose to pursue a degree there. Other jobs have even offered mortgage reimbursement. This is when they pay up to 10% of the cost of a mortgage for physicians who chose to join the organization and stay in the area for a certain number of years. Some jobs may not have the funds to do tuition assistance or mortgage assistance but may be able to offer other perks such as reduced costs for attorney fees to help you set up a living will or trust fund for your family. Others may even offer discount tickets for community events, concerts, and professional sports in your area. Ask your human resources department which perks you may be eligible for.
To summarize, don’t let another year go by without looking at your contract and double checking your benefits. You could be missing out on tens of thousands of dollars each year. Check and see what you’re eligible for and don’t forget to negotiate for what you want.
8 Questions to Ask Before You Join a New Practice
The following article is tailored for medical doctors but certain aspects may be applicable for young professionals in other fields.
Starting a new job can be nerve-wrecking and exciting. Along with negotiating salary and benefits, you should also ask about a few other factors to make sure you know what you are getting into. Here are 8 questions to ask before you join a new medical practice.
1. Why are you hiring? Some practices are hiring because they are growing. Other practices are hiring because people are quitting. What is the case at this location? Are people getting promoted which creates new openings? Or, have multiple people decided to leave the practice for one reason or another? Don’t just take their word for it. Ask to speak to a couple of the physicians at that practice. Find out what they like about the place they work and also ask what they would like changed. Speaking to other physicians will help you get an idea of what working there would be like. You want to go into your new job with your eyes wide open.
2. What is the turnover rate of staff? Reliable support staff is key for a good work environment and quality of life. Find out what it is like at this practice. Have most doctors had their support staff for years or is there frequent turnover? How many medical assistants and nurses are there per doctor? Is there someone to assist with portal messages, medication refills, and patient forms? Many doctors get burned out due to lack of support and increasing administrative tasks so be sure that you understand the workload and have reliable support needed to get it done. The recruiter may not know this information offhand so reach out to the nurse manager or clinic manager, if needed.
3. Am I expected to supervise or work alongside mid-level providers? There has been an influx of physician assistants and nurse practitioners in the medical field. Are they hired at your hospital or clinic? If so, what is their role? Some practices have the mid-level discuss every patient with the physician. At other places, the mid-levels seem to practice independently. Find out how they are utilized where you are. Also find out if you are expected to supervise them. If you are, realize that you are now taking on more medical liability. Is the practice compensating you more for this risk? If you are expected to review their charts, are you given more admin time to accomplish this goal? Make sure you clarify this BEFORE you sign the contract.
4. What happens if I leave? No one goes into a marriage, expecting to get divorced. Nevertheless, break ups happen, especially when it comes to jobs. It is much easier to discuss terms ahead of time so make sure you ask. Inquire about the notification policy. Who do you need to tell and how far in advance must this be done? Also clarify if there is any money you will have to repay if you leave before a certain time frame? Are you expected to payback the full sign-on bonus or just a part of it? Also ask about malpractice and health insurance coverage. How does malpractice work if you leave? How long do you keep your health benefits? Lastly, clarify any rules or stipulations. Is there a non-compete or are you able to take a job nearby if you desire? Make sure you have all of these terms in writing in a place that is easily accessible.
5. Am I able to work part-time? Not every practice or healthcare system has kept up with the times or is structured in a way to handle part-time workers. Make sure you ask. Just because you plan to work full-time now, does not mean you won’t want to cut back to part time at some point in the future. Will this practice accommodate that? If so, what would be the pay difference? If you work part time are you still eligible for health insurance benefits? Will you have to repay part of your sign on bonus? Will you be given a different productivity threshold to reach? Understand the rules in place for part time workers and get a sense for how accommodating they will or won’t be with this schedule change if you were to desire it in the future.
6. What is the patient panel and insurance payer mix? Patient panel and insurance mix can drastically impact the revenue of the practice and your own personal satisfaction so be sure to ask about it. What are the patient demographics? Do you serve a diverse group of patients (in terms of gender, race/ethnicity, economic status, etc)? What percent of billing does the practice get paid for on average? Is this practice located in an underserved community with lots of Medicaid patients? Or, does the practice serve a more affluent population that tends to have private insurance? The type of insurance patients’ have will impact clinic reimbursements and your overall pay.
7. What are the clinic policies? Get a feel for the operations and interworking’s of your clinic. Is there a late policy for patients? Who handles forms like FMLA, prior authorizations, and work/school clearances? Also, understand how holidays work. Is your clinic open or closed for certain ones? Is there a chance you could be on-call? Make sure you understand how time-off works. Do you have to ask for it months in advance? Do you have to take it in 1-week chunks or can you request each day as needed? These are some of the intangible factors that can heavily influence your qualify of life.
8. How are bonuses structured? You deserve to be paid well for the work you do and rewarded for the efficiency you provide. Be sure to understand how bonuses work and clarify which milestones are required. For example, if you get a sign-on bonus find out if you get all the money up front when you sign the contract or if you have to wait until you start working. Also clarify if it is given in a lump sum or dispersed evenly over time? Along with the sign-on bonus, ask about productivity bonuses. Usually this is extra money you get for hitting a certain RVU target. Figure out what that RVU target is and whether or not it is feasible for you to reach. Healthcare systems may even have additional bonuses based on the practice revenue or patient satisfaction scores so ask about those as well. Lastly, inquire about a longevity bonus or a reward for staying with the same organization for a certain length of time. Is there some sort of reward for your loyalty in terms of an increased retirement match, a higher bonus, tuition reimbursement for your kids, a partnership promotion, or a cost of living adjustment? Their answer may be “no,” but it certainly doesn’t hurt to ask or negotiate something like that into your contract.
8 Things to Negotiate Besides Salary
The following article is focuses mainly on physician contract negotiation
Whether we are considering a new job or up for review at our current place of employment, there are several things we should negotiate. Many of us focus solely on salary, but there are other things we should be sure to negotiate as well:
1. Benefits and Insurance: One of the first things to consider besides salary is benefits. For physicians and other young professionals with college degrees, student loan forgiveness may be one of the top things to look at. Some jobs offer direct loan forgiveness. Other jobs qualify for federal loan forgiveness through the public service loan forgiveness program. Be sure to see if either is offered at your job. Along with loan forgiveness, also look at retirement matching. Retirement matching is when your employer gives you extra “free” money to invest in your work retirement accounts. They may “match” the amount of money you invest up to a certain amount, which can add up to tens of thousands of dollars per year. I’ve seen some jobs in which the salary was $10-$15K less than another place but the retirement matching was so good that it more than made up for it. Another benefit to look at is malpractice insurance. Ensure that your job covers you if a patient or client tries to sue and that the insurance in place will cover you for claims made while you work for the organization AND even after you leave.
2. Sign-on bonus: One of the initial bonuses doctors get when they sign their first attending physician contract is a sign-on bonus. There are many nuances involved with a sign on bonus that doctors should be aware of but in general, a sign-on bonus is a 4 to 6 figure amount of money that many businesses provide to newly hired doctors. It can be given in one lump sum or in smaller installments. It is usually structured as a loan that gets “forgiven” after you work at the company for a certain period of time. This free money can be great, but the first amount they mention is unlikely to be their best offer. Ask for more.
3. Productivity Increases: Along with a sign-on bonus, it is also important to inquire about productivity bonuses. Most places want you to be as efficient as possible since increased efficiency leads to increased profits. If you’re actively increasing the business’s revenue because of your efficiency, then you should get a share of the profits. Be sure to negotiate this ahead of time and be aware that the amount they offer may differ for people in certain specialties. Some places will pay you a flat salary until you hit a certain work productivity threshold. Other places will pay you based on productivity from the onset. There are even businesses that offer a set monthly pay but provide annual or semiannual bonuses to employees based on the total company revenue. The exact structure of the productivity bonus can differ. Make sure you understand what other folks in your profession are getting so you can ensure you are being compensated adequately for the efficiency you provide.
4. Vacation and Personal Leave: Whether you love your job or not, everyone needs periodic breaks to step away and recharge. Do not forget to negotiate paid vacation time. While 3 weeks may be standard at most places, who says you have to settle for average? Why not ask for more? Aim for 4 weeks or negotiate additional vacation time after you have been with the organization for a certain length of time. Many jobs like to lump vacation time and sick time together as “personal time off” but try to keep this separate if you can. If you or a loved one gets sick or diagnosed with an illness, you shouldn’t have to use all of your vacation time dealing with medical issues. See if you can get at least 5 days of sick time in addition to your vacation time. If you’re a parent or plan to be, be sure to ask about parental leave for the birth or adoption of a child. Although FMLA holds your job while you are out, you may not get paid during that time. Negotiating paid family leave is vital.
5. Work Schedule Flexibility and Expectations: Along with personal time off, it’s also important that you negotiate a healthy work schedule that allows you to be productive without causing you to burn out. Perhaps you decrease the frequency you are on call? Maybe you negotiate a 4-day work week. Or perhaps you consider starting and/or ending work a little earlier or later some days to accommodate your family needs. You have the power to create the work schedule you desire. Figure out what type of work schedule you want and negotiate for it. If you can articulate how you will maintain productivity with your desired schedule, employers will be more likely to consider your requests.
6. Automatic increases: I am amazed by the number of physicians and other young professionals who don’t get automatic raises each year at their job. Because of inflation, things get more expensive each year. If you don’t get a cost-of-living adjustment to account for inflation, then you may actually be losing money year after year. Cost-of-living adjustments may not be standard at many places, so be sure to negotiate that in the contract if you don’t see it. It may also be wise to negotiate general productivity targets or a longevity increase. The goal is to get an automatic increase in pay after working for the organization for a certain length of time, like 3 years, as well as an automatic increase for bringing in “X” amount of revenue for the company. These types of automatic increases help you continue to be paid your worth over time and ensure that people hired after you don’t start off making more than you.
7. Licensing and Continual Education: As physicians, this is an important expense to inquire about. State medical licenses (to practice medicine), DEA licenses (to prescribe medicine), and board certifications (to maintain your medical credentials) can cost thousands of dollars in fees. It’s standard that the business pays for these expenses so if you don’t see it in the contract, ask for it to be added. Along with getting these fees covered, most medical societies require you to stay up to date on new medical treatments by doing a certain amount of continual medical education (CME) each year. Ensure that your job provides you with an adequate amount of CME funds to attend conferences and programming that provide these CME credits.
8. Autonomy (Intellectual property and non-compete clause): A surprising number of physicians do not have autonomy over their work. Don’t let that be you. Ensure that your intellectual property (ideas, products, or services that you create) are yours and not the job you work for. Be sure that you have the freedom to do other projects and work at other places outside of your job should you choose to do so. Lastly, watch out for non-compete clauses. These phrases in contracts prevent you from doing similar work at a nearby organization if you were to leave your current job. As you can imagine, they can cause a huge problem because they may require you to uproot your entire family or drastically increase your work commute if you were to quit your job since these non-compete clauses prevent you from getting another job at a different location in the same city. Try to avoid non-competes if you can.
Was this helpful? Do you plan to negotiate these things in your physician contract? Are there other things you plan to add?
5 Things to Know about the Sign-on Bonus
When it comes to physician pay, things can get a little nuanced. Many of us take out hundreds of thousands of dollars in student loans for med school, then spend 3 to 9 years getting additional training while being paid much less than we are worth. But after that time period, usually when we are in our 30s, things finally start to improve. We become “attending physicians” which means we are able to work fewer hours and enjoy a drastic increase in pay. As part of the compensation package, many of us will receive lucrative salary offers which include a sign-on bonus. Similar to professional athletes who sign new contracts, the physician sign-on bonus is an amount of money we receive, in addition to our salary, for agreeing to work for an employer for a certain length of time. This sign-on bonus can be a great addition to our wallet, but there are a few nuances we all should be aware of.
1. The amount varies based on specialty. Although most doctors get one, the amount we each receive can vary greatly. Doctors who work in primary care tend to get a lot less than doctors who specialize or perform more procedures. Doctors in private practice may get a lot more than others who are employed by academic centers. A report released by a consulting firm in 2021 showed that some doctors got a sign-on bonus of only $1,000 while others got $75,000.[1] Regardless of how much you are initially given, it is important to ask for more. Oftentimes, this is one of the things that employers will be willing to increase if you ask. The amount may vary from person to person but most employers are willing to increase the amount if you ask.
2. The amount you received is taxed (so you get less than you think). Many doctors see the sign-on bonus amount in the offer letter and think that is how much they will receive in their bank account. Unfortunately, the amount that is given to you is less than the amount on the contract. Why? Taxes. You have to pay taxes on this money and it is usually taxed at your ordinary income tax rate. If you are in the 35% tax bracket, then you’ll have to pay 35% in taxes. If you are in the 24% tax bracket, then you will have to pay 24% of it in taxes. In addition to federal taxes, many doctors will have to pay state taxes on the money as well. My point? Before you start thinking of all the ways you will spend your sign-on bonus, make sure you account for taxes. Also note, that the amount you pay in taxes depends on your tax bracket for the year (so the best time to receive the money is usually in the year you are in the lowest tax bracket).
3. There’s a chance you may have to pay it back. This usually comes as a surprise to many doctors, but it happens much more than you may think. Oftentimes when employers give you a sign-on bonus, it is not just free money for you to keep. Instead, it is often structured as a “forgivable loan.” This means that you get the money as a loan, and if you stay at the company for a certain length of time, usually 2 or 3 years, then the loan is forgiven and you get to keep all the money. However, if you leave the job prior to that set time period, then you have to pay the money back. The unfortunate thing about having to pay the money back is that they usually make you pay back the pre-tax amount. If your sign on bonus was $10,000, chances are you may have only gotten $7,500 after taxes, but if you leave before that set time period you will have to pay back the full 10,000 (the pre-tax amount).
4. You should negotiate how it is structured. To avoid having to repay the full pretax amount of your sign-on bonus if you leave before the stipulated time, negotiate how it is structured. Instead of having the full amount forgiven after 2 or 3 years, get a fixed amount forgiven each month that you are there. For example, if your sign on bonus states you have to stay at the job for 2 years to keep the money (or have the loan forgiven) then negotiate in the contract that 1/24 is forgiven each month. That way if you stay for 1.5 years you aren’t on the hook for the entire amount.
5. People receive it in different ways. To my surprise, there’s a good deal of variability in when a doctor actually receives his or her sign-on bonus. Some docs receive the full amount the day they sign the contract. Other doctors don’t receive the money until the first day they work. Some employers will split it up and give you half the first year and half the second year. There are others who will give you a small portion of it as a residency stipend to help supplement your income while you are still in training. My point? The timing on when you receive the sign-on bonus can vary greatly. Be sure you understand how yours works and negotiate a different structure if you’d prefer to get it sooner or later.
To summarize, there are quite a few nuances involved with physician sign-on bonuses. Make sure you understand how yours work and negotiate a different structure if you desire.