Help! My dept is trying to cut our salaries!

[The White Coat Investor]

I was asked to post this via email by someone who wanted to be anonymous.

Anyone here in academics with experience in negotiating salary changes?

Our dept apparently is not making enough money (don't understand how this can be the case, I think due to bloated admin pay, but that's another topic). So they want to basically penalize the MDs for this by trying to reduce our pay.

They are trying to lower our base salary and lower our collections rate - meaning lower base salary and making it harder to make incentive pay. They are "increasing" other revenue streams for us, but this does not help in the big picture since those revenue streams are relatively small.

Besides the fact that this SUCKS, changing our base salary affects how our employer matches for things like 403b match and pension plan since it is based as a % of our base salary.

In the meantime, we are trying to collect data on how surrounding academics pay for the same job. Unfortunately, my dept does not seem to know how make our practice efficient and there is a lot of bloat and inefficiencies preventing us from seeing more patients (which we can easily do without impacting patient care).

Any advice would be appreciated.

[Hatton]

Hard to comment without knowing your specialty etc.....  This is a great argument for private practice and control.  This kind of thing simply cannot happen to you if you have some degree of ownership and control.

[Zaphod]

Its easy for departments to not make money and be presented this kind of scenario and it can be 100% a book keeping issue and used to clamp on salaries. They purposefully omit parts of collections/revenues that you may not be aware of to use one part as a bludgeoning tool. Part also to do with giant mixed budgets when you may not be getting credit for what youre adding.

Have to think about how much you allow other providers to make by just being there, etc...However, its unlikely you'll be given enough ammo by the admins to properly negotiate, they have no reason to. If you have real obstacles to improving efficiency those should obviously be addressed first.

 

[Craigy]

Is it even open for negotiation?

Often in this situation you are forced to negotiate with your feet.

[Peds]

Sounds like if you feel admin is bloated pay wise and your system is inefficient and impeding future revenue, that its time to find a new location.

 

Good luck.

[doclude]

I work in academics. all i can say is that you need to have as much transparency as possible and put in writing how you are compensated for productivity and milestones. these days, the money is so tight in academia, that you have to keep on top of what you bring in and value to the department/hospital.

i will say that productivity alone isn't valued in academia--they value other attributes almost equally (publications, research, hospital admin role). teaching is a given unless you are fellowship/residency director.

 

i would ask for reasonable base and incentive, and if they can't offer that--you have to start interviewing elsewhere. at a minimum you should get what the surrounding area offers.

[blowhard]

Having been in an academic practice for 5 years prior to leaving for private practice, I will tell you that the only substantial raise (more than 10%) I was offered was when I told them I was leaving...

It is the in the administrator's and chairperson's best interest to reduce costs, the largest of which is physicians salaries. In many cases, the administrator's bonus is tied to overall department budget. Think about that for a second - you get paid more for generating more revenue, they get paid more for lowering expenses. Now if you threaten to leave (and actually mean it), that changes the paradigm.

You will get nowhere by showing them data on how surrounding academic groups are getting paid - they will drown with you data that shows otherwise.

Good luck!

[doclude]

blowhard wrote:

Having been in an academic practice for 5 years prior to leaving for private practice, I will tell you that the only substantial raise (more than 10%) I was offered was when I told them I was leaving…

Click to expand...

agree with that--you don't have to be aggressive about it. you can say, "i really appreciate the job here, this where i like to be, i appreciate the mentorship, but feel that it is hard to raise a family/blah blah expense. what can we do to help the situation? can we discuss milestones that I can achieve to make it so that I can earn XXX amount of money"

[Ivy]

Sorry to hear you and your department are getting screwed.  Unfortunately, it's not all that uncommon.

First step of looking into surrounding area salaries is good.  I would also find the MGMA salaries for your area and the country.  The more data you have, the better.  Administrators tend to only believe numbers.  They'll even believe numbers that are wrong if it's in their favor.  

My experience, administrations don't believe people will actual quit.  My last practice had to lose several of our most productive physicians (including the president of the group) and fall short of necessary coverage before the administrators acknowledged there might be a problem.  I even had a sit-down with one  of the hospital CEOs before I left explaining, in detail, what the problems were.  He didn't listen and was fired less than a year after I left.

Ultimately, your biggest bargaining chip is walking.  Look around at other places you may want to work and/or live. No location or practice is perfect, but some are WAY better than others.  Only you can decide what's the best for you and your family.

Worse case scenario, they follow through and cut your salary/benefits.  Is it still worth staying?

Good luck.  Hope we get to hear the outcome.

[WealthyDoc]

I'm sorry to hear of your troubles.  You are not alone though.  It is happening in a lot of academic centers.  That is part of the reason why I left academia.  I miss the research, teaching, intellectual stimulation, etc but it is becoming less financially viable over time.  State and Federal budgets have been cut.  The academic centers mostly expect you to now cover your own overhead.  This would be fine except the overhead is crazy-high, there are often taxes (e.g. Dean's tax), and the clinics are not set up for productive efficiency.

Having said all that, if you are determined to stay: yes it is negotiable.  Use the proven methods of effective negotiation, such as from Getting to Yes.  Focus on the problem, not the people; explore all options; consider their interests; use objective criteria.  For the last point find out what survey they are using.  Get your own data from AMGA, MGMA, S&C etc.  Your medical library may have them.

Best of luck!

 

 

[Grizzle]

The two options in academics:  Lower your workload until you feel your salary is fair or leave for another place where you can get a fair salary for your workload.  I chose the latter.  I give more national talks now than I ever did as an assistant prof.  You can take the slowdown path, open a side-gig and get some 1099 income and associated tax benefits, see your kids grow up--not bad.

I love teaching (won the residents' best attg award my second year in practice), but I won't go back until I FIRE.  3 years out from the academy, and I can't remember why I loved it so much in the first place.  New problems on this side of the fence to be sure, but overall much happier now.

Good news is that my departure made it easier for my buddies to get a raise, so that was good.  While worth an ask, I wouldn't expect any meaningful raise in the best of scenarios, and now that they are doing across-the-board cuts, I think it has a 0% chance.

Good Luck.  Keep us posted.  I think hearing of winning strategies in job negotiations is at least as valuable as winning strategies in investing.

[bjbanjo]

I assume you're in the ER.  Point out that that not only do you generate $ for the hospital from your professional services, but from generating business in all the myriad ancillary services (lab, x-ray, surgery, PT. in-patients etc). Probably more than any other specialty.  If this is taken in consideration, you make a lot of $ for your hospital.  And since you're the specialty most likely to interface w/ the public, a good department can generate donations far and above any other department. Just make sure you have good PR before you use this argument.

[pedsmd]

I work in an academic environment. (Most peds subspecialists do). In peds the profit margins are razor thin given that most patients have Medicaid. Here we don't get raises unless we taken on more duties. (some people take on more roles and do not get raises!) If the poster is a peds subspecialist "going private practice" may not be an option. Granted there are peds subpecialists in the south and west who are in private groups. Here's my thoughts (some are similar to what is said above):

1. Make your contributions clear, both clinical in terms of RVU productivity which seems for better or worse to be the benchmark and in terms of your administrative and research contributions. I feel that these days Physicians are viewed as a just another group of workers to be managed so you really ned to set yourself apart to make yourself an asset to the organization.

2. Know the salary rates for your area. If you make 250k and everyone else who does what you do makes 200k you don't have much bargaining power. However, if you're underpaid and there are openings you're in a position of strength.

3. See if there's a way you can possibly protect your base but take more of a hit on the productivity piece (since that matters more for 403b, etc)

4. See the pulse of the dept. If others start to leave the department administration will want to stop the hemorrhage and you maybe able to get a better deal.

Good luck!