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Evaluate compensation model (AMC). Is this normal?

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  • Evaluate compensation model (AMC). Is this normal?

    As title suggests, current cardiologist on RVU based compensation model. The numbers and RVUs may vary by non invasive, interventional, EP, but the model does not.

    Base salary guaranteed for 2-3 years, after this if you don’t hit 50th percentile you have risk of getting base pay cut substantially (35%). If you hit RVU targets at 50th percentile or greater you get the bonuses described below and in the attachments.

    some specifics:
    - If you hit 50th percentile wRVUs, you get an all or none bonus.
    - wRVUs earned between 50-75 and 75 above percentiles are paid at a prorated amount.
    - the math works out so that the more you earn beyond 50th percentile, the lower your $/RVU becomes. Does anyone have similar experience with an RVU mode of diminishing returns the more productive one is?
    - the highest $/RVU is achieved at 50th percentile. The $/RVU drops off substantially the more one works above this line.

    compensation
    base: $325k
    50th percentile all or none bonus: $50k
    75th percentile: $50k (prorated if fall in between 50-75)
    90th percentile: $50k (prorated if fall in between 75-90)
    91st and above: prorated $/RVU amount that is same for 75-90th percentile)

  • #2
    Maybe I’m not understanding it but that is ridiculously low even if you hit those bonuses

    if youre IC or EP this is where your pay should be imo based on how your RVU numbers rank..

    50% production: 600-700k (total package)
    75% production: 750-900k
    90% production: 850k-1.2m

    My general cards estimates would be 500k, 600k, 700k

    obviously a ton of factors that go into thi but a 90% rvu generator HAS to be 700k plus imo.. otherwise take a Cush salary gig for 400-500k, do q12 call, hit 7000k rvu and focus on lifestyle



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    • #3
      The model where the more productive you are the less you earn per rvu is obscene. Our model (multi specialty group, including cardiology) is that the $/rvu goes UP after you reach certain benchmarks. The goal is to incentivize productivity.

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      • #4
        Figured as much. Thanks for the feedback

        thoughts on how to rally and get fellow colleagues aligned and bring up to management?

        numbers I listed were for non invasive. this is also in a major metropolitan city that I don’t wish to name but it’s got a high standard of living and taxes.

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        • #5
          if admin isn't game for wholesale raises and they're not likely to be then changes would probably have to result in some winners and some losers, and if the goal is to flip the incentives then folks that are not as productive are going to be losers

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          • #6
            Yea under such scenarios (metro city, hospital employed) you often don’t have any leverage unless you had complete buy-in from all your partners (even then you probably still don’t).. plus your grouhas probably already selected out the guys who are rvu/production guys from the get go based on such a bad contract and have current docs that want a lifestyle gig in a cool city.

            Obviously those are a lot of assumptions but the other way to look at it is to try and make your life as good as possible by making the job as easy as possible and bargaining for more support (APPs, hospitalist) ect and doing the bare minimum.

            I definitely wouldn’t be chasing RVUs in such a contact and that’s not always a bad thing.

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            • #7
              Originally posted by cards4life View Post
              Figured as much. Thanks for the feedback

              thoughts on how to rally and get fellow colleagues aligned and bring up to management?

              numbers I listed were for non invasive. this is also in a major metropolitan city that I don’t wish to name but it’s got a high standard of living and taxes.
              Bout the only thing to do is get the MGMA data lsheet.
              Simply point out that it was very wise choosing the MGMA RVU’s for the metrics for the basis of compensation. Then highlight the compensation data as well.
              Clearly someone made a mistake.
              Handout the “revised RVU Salary Calculation”
              that has been corrected to agree with the MGMA data. Time to have a discussion.
              Fellow colleagues and/or management.
              Using data is perfectly acceptable.
              •The RVU’s are fine, but the result (compensation) is different. Please explain the differences is the question.
              Your colleagues may join you and management may entertain discussions. Aligning to benchmarks is a legitimate discussion.

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              • #8
                Mine is a straight no nonsense wRVU system. Base is x wrvu, if I go 0.1 over I get 0.1 more, all the way to whatever I make. Even that is ridiculous as it should be tiered as you go up to incentivize productivity. I always remind myself of this as you get into higher tax brackets and your personal return starts to go down, free time gets more enticing.

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                • #9
                  It is a strange model for sure. Basically a Progressive tax on RVUs. If no changes made, best place to sit is at 50th percentile akin to the middle class of RVUs.

                  Divert extra time to augment salary with side hustles and develop alternative revenue streams.

                  Comment


                  • #10
                    Is this an academic job where you are expected to devote much of your time to teaching and research? If so, then they may not encourage high clinical productivity and may reward academic accomplishments instead.

                    Some places don't want people chasing higher pay to the exclusion of other things an academic person is supposed to be doing.

                    A single physician is unlikely to get them to change the model. It depends on the local market. What would someone make in private practice in the same area? How difficult is it to hire people into this academic job? If they have plenty of candidates eager to fill slots under this deal, then you may have no leverage at all. If they are struggling to keep staffed, then you could press them.

                    If the job does not suit your goals, then get another job.

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                    • #11
                      So there's no other factor into the compensation? Value metrics/Ultilization metrics: dx of visits per procedure or order? or other modes beyond RVU?

                      Quite strange if only RVU otherwise.

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                      • #12
                        I have reviewed and built countless compensation models for health care organizations over the past 10 years. Your model is not best practice. The model is very favorable to your employer and doesn't appear to be structured in a way that aligns compensation and production. The base salary is below the 25th percentile MGMA data for Cardiology: Noninvasive, and the first bonus triggered by median wRVU production doesn't cover the gap in pay between the 25th percentile and Median compensation. While employers generally resist re-negotiating individual agreements during an existing contract term, it is easier to make change occur before an upcoming contract renewal.
                        Jon Morris, JD, MBA - Founder/Principal
                        www.mdcompadvisor.com

                        Comment


                        • #13
                          Originally posted by afan View Post
                          Is this an academic job where you are expected to devote much of your time to teaching and research? If so, then they may not encourage high clinical productivity and may reward academic accomplishments instead.

                          Some places don't want people chasing higher pay to the exclusion of other things an academic person is supposed to be doing.

                          A single physician is unlikely to get them to change the model. It depends on the local market. What would someone make in private practice in the same area? How difficult is it to hire people into this academic job? If they have plenty of candidates eager to fill slots under this deal, then you may have no leverage at all. If they are struggling to keep staffed, then you could press them.

                          If the job does not suit your goals, then get another job.
                          - Academic yes. But "academic". Basically you are encouraged to be academic, but really you publish once per year to continue w/ academic advancement and in all essence you are a community practicing doc.

                          - They push the RVUs to the max and it is the only target that the employer cares about hitting

                          - One physician won't be able to make a difference. Big pool of graduating fellows to replenish anyone who leaves. Turnover has been a big issue and raised at dept wide meetings but is waved off as "people moved for family reasons"

                          - Gathering data across other subspecialities and internal medicine/hospitalist. Everyone has this progressive RVU tax.

                          - While $ to $ is lower than private practice, there are many benefits related perks, i.e. multiple tax-deferred retirement accounts, a pension, and a DCP that can be mega-backdoor Roth'ed up with post-tax contributions up to $54,000 annually

                          - Employer wants to be like a Kaiser, but is not anywhere close to it.

                          - If I could find a better gig that helped build up my non-clinical interests in Cardiology w/ a fairer pay structure, I'd leave. Not that simple to up and leave a geographically urban and highly favorable location that I need to stay in for family reasons. I think the system can be improved and be made more fair, but groundswell support from front-line physician employees like me are necessary to generate change

                          - Thank you everyone for your feedback.

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                          • #14
                            traditional Kaiser type defined benefit pension potentially worth 25% of comp, so does that explain some of the variance?

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                            • #15
                              “groundswell support from front-line physician employees like me are necessary to generate change.”

                              for sure. But they’ll know who the “trouble maker” is and you’ll have a target on your back. You’ll be considered a “money guy” who has misplaced priorities and many of your fellow docs with scamper once word gets to the superiors. I can’t tell you how many times my partners go completely silent in similar meetings. Smart on them but super annoying.

                              good luck though. Still a lot of things more important than extra cash- living at a cool place and not taking nurse calls or admits at night is a nice consolation

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