Any Kaiser (TPMG) docs here?

[oconnomo]

Hi all,

Quick question regarding the 'shareholder track' option. My wife will potentially be eligible for shareholder in ~2 years thus we've begun saving some money for the share purchases on the assumption that it makes financial sense to do so.  This assumption is, unfortunately, largely based on anecdotes of bonuses and assurances without solid financial data to back it up with. Further, our situation is such that we may end up moving 3-4 years thus needing to sell back the shares.

Anyone have any information that may help with this?

 

Thanks!

[jfoxcpacfp]

oconnomo wrote:

Hi all,

Quick question regarding the ‘shareholder track’ option. My wife will potentially be eligible for shareholder in ~2 years thus we’ve begun saving some money for the share purchases on the assumption that it makes financial sense to do so.  This assumption is, unfortunately, largely based on anecdotes of bonuses and assurances without solid financial data to back it up with. Further, our situation is such that we may end up moving 3-4 years thus needing to sell back the shares.

Anyone have any information that may help with this?

Thanks!

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It all depends on the contract. For starters, make sure your wife will be guaranteed to at least get her purchase price back when she leaves and that there is an objective method for calculation of any stipulated value beyond cost. Make sure if your wife passes while she is a partner that there is a mechanism for you to be bought out at a reasonable price. Many other thoughts and I'm sure others will have stories, but those are 2 that can easily be overlooked and leave you at a great disadvantage.

[AlexxT]

In order to be a partner, you MUST buy at least 2 shares ( called A and B).   Because of the high appreciation of the shares over the past 20 years ( they were $6,000 20 or so years ago) you now can buy the minimum, or more.  In 2017, the minimum cost $60k, the maximum was $95k. ( optional C share ).  I don't believe that the bonus is tied in any way to the optional C share, but you should check on that.  You might also be able to buy more than one C share ( not sure about that either).  In 2017, they went up 10%, now the maximum is $106k.

There are no guarantees, I believe, but shares have always appreciated over time.  As far as I know,  the shares aren't backed by any real assets.  They are simply a source of emergency equity for the medical group.  The value is simply the value of the invested money.

I would get the minimum and invest the rest yourself.  Last year the shares appreciated 10%.   The market went up 20%.   The other issue is that this is essentially like buying stock in your employer's company.   Don't do it.  If TPMG has financial difficulty, you could be out of a job and out the value of the stock.  It's a great investment for doctors who don't understand finance.

When you leave the group, you will get the current value of the shares within a couple of months.

[jfoxcpacfp]

AlexxT wrote:

In order to be a partner, you MUST buy at least 2 shares ( called A and B).   Because of the high appreciation of the shares over the past 20 years ( they were $6,000 20 or so years ago) you now can buy the minimum, or more.  In 2017, the minimum cost $60k, the maximum was $95k. ( optional C share ).  I don’t believe that the bonus is tied in any way to the optional C share, but you should check on that.  You might also be able to buy more than one C share ( not sure about that either).  In 2017, they went up 10%, now the maximum is $106k.

There are no guarantees, I believe, but shares have always appreciated over time.  As far as I know,  the shares aren’t backed by any real assets.  They are simply a source of emergency equity for the medical group.  The value is simply the value of the invested money.

I would get the minimum and invest the rest yourself.  Last year the shares appreciated 10%.   The market went up 20%.   The other issue is that this is essentially like buying stock in your employer’s company.   Don’t do it.  If TPMG has financial difficulty, you could be out of a job and out the value of the stock.  It’s a great investment for doctors who don’t understand finance.

When you leave the group, you will get the current value of the shares within a couple of months.

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I'm sorry - was the poster talking specifically about TPMG? If so, I'm afraid my response was not very helpful  :roll: 

[wally world]

AlexxT wrote:

In order to be a partner, you MUST buy at least 2 shares ( called A and B). Because of the high appreciation of the shares over the past 20 years ( they were $6,000 20 or so years ago) you now can buy the minimum, or more. In 2017, the minimum cost $60k, the maximum was $95k. ( optional C share ). I don’t believe that the bonus is tied in any way to the optional C share, but you should check on that. You might also be able to buy more than one C share ( not sure about that either). In 2017, they went up 10%, now the maximum is $106k. There are no guarantees, I believe, but shares have always appreciated over time. As far as I know, the shares aren’t backed by any real assets. They are simply a source of emergency equity for the medical group. The value is simply the value of the invested money. I would get the minimum and invest the rest yourself. Last year the shares appreciated 10%. The market went up 20%. The other issue is that this is essentially like buying stock in your employer’s company. Don’t do it. If TPMG has financial difficulty, you could be out of a job and out the value of the stock. It’s a great investment for doctors who don’t understand finance. When you leave the group, you will get the current value of the shares within a couple of months.

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Just to clarify a bit... At the time of TPMG partnership (typically 3 years after starting employment with TPMG), you must buy at least the one A share (regional voting share) and the one B share (your medical center voting share). The cost of these shares is $20,000 each, so the total minimum buy-in is $40k. There are also C shares available to purchase. C shares are also set at a value of $20,000 per share (however one can purchase fractions of shares). The increased annual value of your shares is represented by an annual granting of additional shares (ie the value doesn't change, you just get more shares representing around a 10% increase in total value each year). There is a maximum amount of shares any given physician can own, currently the maximum has a total value of $106k (as of early 2018) as AlexxT mentioned above. You can purchase up to the maximum at the time of partnership or at any time thereafter. You can buy the shares outright or there are options for financing from various banks/credit unions.

The increase in share values occurs once each year at the end of January/beginning of February. I agree that there are unknowns with regards to TPMG share finances... the big ones being what do the shares actually represent and where does the increased value of the shares come from? I've asked before and didn't receive really satisfactory explanations. However, the (reported) value keeps going up by 10% each year so I feel pretty comfortable with my ownership of the max share value (full disclosure: my buy-in was several years ago, so I only had to ante up mid-5 figures and have watched the value over double since then).  Also, each year it makes up a smaller and smaller portion of our overall net worth so I'm not too worried about "too many eggs in the TPMG basket."

[nachos31]

Wally World wrote:

AlexxT wrote:

 

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Aha! We should all consider ourselves lucky! A @Wally World sighting!

[AlexxT]

Thanks for the clarification and correction.  I'm not there, so I'm not up on the details.  I got my current information second hand from someone who doesn't quite grasp all the details.

[loeffy]

StarTrekDoc wrote:

There’s an inherent selection bias for asking any 10+ year person on their job satisfaction of choice.    I think the more telling one is 5-10 years who’ve gone through a few attrition cycles.

Kaiser is definitely worth a look and my family all enjoy being Kaiser docs because their mentality fits the Kaiser model.   Do not get lost in the weeds of compensation and retirement.  Match up the job and all the moving parts that surrounds it.

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Could you (or anyone else in this thread) elaborate on this a little more?  There may be a potential opportunity at Kaiser and I'm debating whether it'll be a good fit.  I'm also looking into a hospital employed position or private practice setup.  I'm ok and accepting of the possible differences with compensation and benefits, I'll make it work.  I'm more curious about the culture and mentality of Kaiser.

[AlexxT]

Every department and every facility has a somewhat different culture.   Getting a different dept. chief or hospital chief ("PIC") can change your job satisfaction overnight, in either direction.

Bottom line is that you have to be ok with being an employed physician and not in charge of your own destiny.

Some random specifics:

Good news:  You start out with a higher salary than if you started your own practice

Bad news: you may never get a great salary( again, varies by specialty.  And benefits make up much or all of the difference )

Good news: You are busy within a couple of weeks of getting a job

Bad news:  You can't tailor your practice to your strengths and interest.  You will have to do what the dept. wants.  You may not get to use your fellowship.  You will probably take call until the day you resign ( can be facility and dept. dependent ). You can't take more vacation in exchange for less salary.  You can't take vacation whenever you want; the dept chief has to approve.

Good news: you will pay nothing for medical care for you and spouse until you die. ( Just $5 rx copays )  Kids are covered until 26, even if you are already retired.  You will have a great 401k, with a match, with almost no expenses.  You will get some life insurance for free.  You will get a decent pension.  You get a lot of malpractice protection, above and beyond the malpractice insurance they provide.

Bad news:  You will make the median for your specialty.

Good news:  You will have a check twice a month

Bad news:  If you work hard, and have a great reputation, you will get more referrals, which gets you the Kaiser reward:  More work for no extra pay. ( although this is changing as more and more metrics are being tracked )

Bad news:  They track everything: time clocked in to OR.  Time in room.  Time of incision.  Time dressing is on.  Time out of room.  Time back in room. Total time of procedure.  Time room was empty between cases.

Good news:  Primary care docs tend to be very well paid and I believe take no (  or very little ) call.

Bad news: Some specialists are paid relatively less and might take more call than private practice ( specialty and facility specific )

 

[Amadeus]

Hello

Always thought that Kaiser docs were not well paid. Can you give us examples of physicians salaries in TPMG and SPMG? Thanks

Amadeus

[AlexxT]

Amadeus wrote:

Can you give us examples of physicians salaries in TPMG and SPMG?

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For TPMG generally total cash compensation ( salary plus bonuses ) will more or less match MGMA and Medscape median data.   All your expenses are paid: malpractice, tail, license, white coat, some dues, plus $3,000 (?) per year for books/conferences/dues.  Vacation starts  at 3 weeks plus 1 week education leave, goes up over time to a max of 5 weeks + 1 week.  If you are late in the OR or come in on call you get time for time.  Late in office, no .

To that add the value  of health care and pension  I calculate the pension as worth around 7% in pre tax, or 11-13% after tax dollars, but lot's of assumptions there.   Pension pays 50% of final average salary after 30 years, but there are options.  Full retirement available at 60 yo with full pension and medical care ( with 15 years minimum ).  But if you retire before 60, no benefits from 60 to 65.

I have spoken to docs in spine, anesthesia, Mohs, derm, all of whom said they could be making twice as much in some jobs but that would require too much work or inappropriate care, etc.   Of course, people who work at Kaiser  are a self-selected group.

It's certainly a great place to start your career, get experience, etc.  If you don't like it, you lose nothing as you made a pretty good salary in those early years.

Here's an example of why you may not like Kaiser:  Starting salaries are about 20% lower, and rise to 100% over 5 years.  But the increases are not formalized.   Most raise them around 4% a year.  However, typically all salaries rise around 2% a year, but sometimes more, depending on market conditions.  So it sometimes happens that you start at say 300k, and will expect 350k after 5 years.   So after 1 year you go up to 310, after year 2 you go up to 320.    Meanwhile, they may have raised the salary to a start of 340, and a 5 year target of 390.  They hire a new guy, who gets 340, while you are getting 320 or 330.  You complain, and your chief tells you too bad.   Now, some dept. will raise you to 340, some to 360, but others will keep you low.  Why?  Because some people are jerks.    So depending on your overall personality, your chief, your specialty, and your salary, you may like it or hate it.

[loeffy]

Thanks, good info. Definitely some cons there that give me pause, and for me as a younger doc I'm not sure how much weight I'm willing to put on something like pension or retiree healthcare benefits.  Who knows what will happen in 30 years.

[mcdouglas]

I know this an old thread, but this is related to TPMG...

So I'm approaching my one-year anniversary with TPMG. I've been contributing my pre-tax 401k @ $18,500 (on track to finish 12/2018) and have set up my separate back-door Roth through Fidelity.

TPMG has been contributing to a separate Fidelity account (Permanente Cont Plan ~ $5700 vs my Salary Deferral Plan @ 6% $15,300 - since 07/2017; will auto increase to 7% on 7/2018). Are these Plan 2 monies which I being vested in over the next 4 years? And even though I am an Associate Physician, will Kaiser contribute $20,080 this year ($54k - $18,500 - $15,420)? Because the monies in the Permanente Cont Plan don't appear to be on-track for the $20,080 figure.

As I'm a new attending and older (38M), my plan is to max out all retirement accounts this year. My understanding is the mega back door Roth is the last option for me. I'd like to set aside the $15,420 in the next 6 mos (@ 9% $2,570/mo post-tax dollars; my budget can handle it as I've cashed out extra shift units earlier this year to qualify for loan refinancing - will still be tight but I can also work extra shifts) but I want to make sure I understand the moving parts with all this and I don't do something silly. To that end, I called Fidelity and setup after-tax election @ 4% $1160/mo (for now) to make I'm not incorrect re: my budget.

So here's the big question(s):

1. Is the above correct re: the Permanente Cont Plan? Should this factor at all into my current financial decisions or just into the overall outlook? Again, I do not go up for my first vote until 7/2019 with the second vote in 7/2020. Currently, I like my group, my director and my site. Plan on staying.

2. Is my best move currently directing the balance of the post-tax $ to the mega back door Roth (assuming my budget can handle the stress)? My loans ($450k) have been refinanced to an average of 3% fixed, I have a safety fund of $75k sitting in non-growth banking accounts (going to work on that soon), have no CC debt/mortgage/other loans/liens/kids/alimony, etc. I'm also looking to start a brokerage account when appropriate.

Let me know any advice that you might have. (I know some of this has been written about before, and I've read the posts. I'm listening to podcasts and reading books to get caught up on all this. So please be patient with me.)

 

ETA: So I called Regional HR to discuss. I've met my hourly investment to qualify for Plan 2 starting in 2/2017. It is on track to pay the full $20,080 contribution ("match"), so if I throw the extra $15,420 post-tax dollars, I'll meet the $55k total for this year. I also opened an online high-yield savings account with a return ~ 2.1% for my $35,000 emergency fund. I plan to set up a brokerage account with the remaining $40k in my checking account (once I learn about those).

 

[Fatmadmd]

Can some one explain if new doc stayed with kaiser 7 years north. Cal and left after 7 years on average salary of 250 k.  How much do you get at retirement and when do you get it

[AlexxT]

Fatmadmd wrote:

Can some one explain if new doc stayed with kaiser 7 years north. Cal and left after 7 years on average salary of 250 k.  How much do you get at retirement and when do you get it

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I believe you would get 2% for each year of employment, 2 x 7 = 14%  x  250,000 (average of 3 highest years of salary )  = 35,000 per year beginning at age 65.

Very roughly, assuming you worked from age 30 to 37, you would need to save and invest around 20k per year at 7% for the seven years, and then let it continue to grow, to have 1 million at age 65, which would then allow you to withdraw 35,000 per year.  However, the value is less, because the pension is an annuity.   But basically, your pension is worth somewhat less than 20,000 per year, or around 7-8% of your gross income.