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Hospital employed position with production only wRVU compensation after 2 years

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  • Hospital employed position with production only wRVU compensation after 2 years

    I'm looking at a couple of job offers now that I'm finishing residency and there's one hospital employed position which is offering a 5 year contract with a guaranteed 2 year base salary followed by 3 years of production-only income based on wRVUs. Is this typical of employed position offers or is there usually a salary PLUS a productivity bonus based on wRVUs for the length of the contract? I'd like to have the comfort of a guaranteed salary with the incentive of more reimbursement with more production, but I'm just not that familiar with how hospital employed contracts are usually structured. Any insight would be very helpful!

  • #2
    I can not speak for "typical" but my own contract was 2 years guarantee (plus productivity), followed by a salary determined 70% of the previous years RVUs (plus productivity).  So not a locked in salary but a middle ground between what you have proposed.  Certainly I would be nervous about straight RVU contract, depending on the circumstances.  For instance, do you have any control of patient volume?  Are there established physicians already in the system with whom to benchmark?  etc.  Keep in mind theoretically anything is negotiable.

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    • #3
      There is no universally standard contract or comp model.  The general structure could be fair though.  The idea is that a new doctor may need time to build the practice and acquire their patients.  The salary guarantee helps with income during that period.  Once doctors are busy it is better to be based on "productivity" rather than a fixed salary.  It allows for more flexibility in the schedule and for more upside potential if you are busy.  The key is the conversion dollar amount.  Consider how much they pay you per wRVU and check benchmarks for your specialty to see if that is reasonable.  Get details on what current doctors actually make in year 3 and 4 to know what your future holds.

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      • #4
        Mine is as you described. I had guarantee the first two years, straight production based on wRVU after that.

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        • #5
          I love my RVU only payout but you do have to be careful. But if you're in the right situation and willing to work you can have a lot higher ceiling.

          Things to look at:

           

          - is business booming or things tight?

          - what is the annual RVU numbers of your competitors (i.e., your partners)

          - is the community already saturated with well-like established docs or is ripe for the taking?

          - how are new patients divided up? non-claimed pts equally divided up? the current partners getting many direct referrals?

          - any other compensation (administrative work, outreach, call, etc) or is that included in your RVU payout.. if so, your RVU pay needs to be on the higher side to incorporate that.

          - do you get a portion of your production above your guarantee those first two years? If not, that could be something worth fighting for..

           

          I was guarantee in year 1, but I was able to break that a few months early as I had some leverage at the time and I was making a lot more than my base.

          Share your specialty, location and RVU/pay and many can chime in if its fair or not.

           

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          • #6
            As a hospitalist I was paid a base salary plus productivity bonus potential and quality bonus potential. There was a minimum rvu requirement (below which they could take money away from you) and a threshold to reach for getting a bonus. To be honest, part of the reason I left that position is because I felt it was an unfair arrangement. Basically the threshold for getting a productivity bonus seemed too high in my opinion. It was hard to get a bonus unless you billed a lot of level 3's. And since productivity is really out of ones control it seemed like bs to be penalized for low numbers when it wasn't something you could control.
            Its very important before you sign a contract to really do a good job going over the fine details. You're heading the right direction by posting here. Consider having a contract lawyer review it as well. That's something I plan on doing before I sign another contract.

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            • #7




              As a hospitalist I was paid a base salary plus productivity bonus potential and quality bonus potential. There was a minimum rvu requirement (below which they could take money away from you) and a threshold to reach for getting a bonus. To be honest, part of the reason I left that position is because I felt it was an unfair arrangement. Basically the threshold for getting a productivity bonus seemed too high in my opinion. It was hard to get a bonus unless you billed a lot of level 3’s. And since productivity is really out of ones control it seemed like bs to be penalized for low numbers when it wasn’t something you could control.
              Its very important before you sign a contract to really do a good job going over the fine details. You’re heading the right direction by posting here. Consider having a contract lawyer review it as well. That’s something I plan on doing before I sign another contract.
              Click to expand...


              .
              Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

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              • #8
                .
                Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

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                • #9




                  Mine is as you described. I had guarantee the first two years, straight production based on wRVU after that.
                  Click to expand...


                  Same for me. I'm still early in my guarantee period.

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                  • #10
                    Thank you all for your responses. The position I'm applying to is in a newer hospital so there's a bit more risk involved and may be harder to get high RVU numbers even after two years. A couple of other questions:

                    1. Since this is a newer hospital position with more risk, is it unreasonable to ask for a shorter contract (3 years instead of 5)? Is that even a wise request to make?

                    2. Is it common practice for employed physicians to make less to take call at a hospital than a non-employed physician in the call pool?

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