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  • First Job Out of Residency

    Hi All:

    I am trying to finalize my first job post residency (dermatology). I have narrowed my scope to two very different but (from my limited experience) great options.

    Option 1 is a small private practice opportunity with 2 year partnership track in a great city. % collections tiered starting around 40% topping out at 44% in year 1. Salary is in the mid 300s. It is a great mix of general, surgical, and cosmetic dermatology. There are midlevel providers and a size-able aesthetics center. Additionally, there's great infrastructure already in place on the business side of things. It is definitely a place I can see myself going to for the "longterm," but I do have that fear of the unknown if partnership didn't materialize or was far more expensive than what I wanted to invest.

    Option 2 is a hospital based practice in a small city which is very underserved for dermatology. It is an RVU structure that reimburses above the 75% per the mgma data and a base of over 550+productions above that (most physicians are meeting there benchmarks around month 6-7 and far surpassing their set bases). The bonus is also size-able and would immediately alter my quality of living; and the benefits are phenomenal. They've offered nontraditional scheduling (ie one week on then one week off or 3 day work weeks) to allow for lots of travel time as well. The population would definitely support a diverse general and surgical experience, but less cosmetics. I don't think this would be a longterm career move because I would prefer to be some place more urban, but I can see obvious immediate career and financial advantages to doing this for a few years while I build experience and substantially more savings.

    Any thoughts? I hear frequently that many people switch jobs early in their career, but I can also see the value in trying to go some place and build a stable practice right away as well.

  • #2
    Do you have a spouse? If so, what do they think?

    How small is a small city to you? What would you expect the partners to be making in option 1?

    It really depends what means the most to you. If you're single and social then you may feel like your social life may suffer in the smaller city. If you have a family then you may find the money and family life is best in the smaller city. Chasing the money and investing early and often can certainly open up your future options, but again, it depends what is most important to you.

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    • #3
      Assuming you have other reasonable options (and it seems like you do) - I would never advise someone to go live in a place they don't really want to live.

      Comment


      • #4
        Recent derm grad here. I just started my first job a few weeks ago and love it so far. I work for private equity in two locations, one being rural. 1 hr drive 2 times per week. Massive 150k signing bonus for 3 year commitment, plus excellent incentive structure. Not married, no kids, so the drive was doable for me. Seems like option 2 could be SIGNIFICANTLY more short term money for you. I am guessing this is pretty rural opportunity who desperately needs a dermatologist. If you are single with no dependents/geographically flexible, my gut tells me to go with option 2. I am going to share my thoughts and questions below.

        1) Do you have student loans? What is your net worth? I think this should factor heavily in your decision.

        2) Are you geographically flexible? Going rural won't upset the significant other/displace kids?

        3) I would suggest you get each practice to show you hard evidence that you can actually produce enough revenue to support a 550+ base salary as a general dermatologist. Working 3 day weeks/every other week, I cannot imagine getting past 550k+ salary. It's possible, depends on how many patients you are seeing each day you work, payer mix and reimbursement rates. When I say hard evidence, I'm talking about them showing you reimbursement rates and kept appointments.

        4) How long is the commitment at option 2? Usually these "can't miss" job listings require a 5-7 year commitment. 2-3 year contract is typical from my understanding for derm.

        5) I have always been against the "long term" value...as you have no idea how things will change in 1-5 years. Maybe that practice goes under, maybe they sell to private equity. I value the money that can get right now in the immediate future.

        6) Thinking of option 2...if you can in fact make 550-650 for 3 years and have a decent savings rate...you can literally do whatever you want after that.

        7) If you haven't seen the written contract yet, I would take them both to the end and get them to send you the full contract. I negotiated for 12 months and got significant improvements in my contract after it was sent.

        Comment


        • #5
          Originally posted by CordMcNally View Post
          Do you have a spouse? If so, what do they think?

          How small is a small city to you? What would you expect the partners to be making in option 1?

          It really depends what means the most to you. If you're single and social then you may feel like your social life may suffer in the smaller city. If you have a family then you may find the money and family life is best in the smaller city. Chasing the money and investing early and often can certainly open up your future options, but again, it depends what is most important to you.
          The smaller city is a metro of 150,000. Single - so was thinking I could use the opportunity to do extensive traveling on my long weekends.

          For option 1, since it is my first jump into the world of employment my expectations of their take home is less known to me. The practice is fully booked out with all providers for at least 3 weeks with all of them seeing approximately 40 patients per day plus the income streams of the aesthetic center and midlevels. I imagine it would be great as a partner but it also makes me concerned about the buy in cost when it comes time for valuation.

          Comment


          • #6
            Originally posted by dermnation View Post

            The smaller city is a metro of 150,000. Single - so was thinking I could use the opportunity to do extensive traveling on my long weekends.

            For option 1, since it is my first jump into the world of employment my expectations of their take home is less known to me. The practice is fully booked out with all providers for at least 3 weeks with all of them seeing approximately 40 patients per day plus the income streams of the aesthetic center and midlevels. I imagine it would be great as a partner but it also makes me concerned about the buy in cost when it comes time for valuation.
            Being booked out 3 weeks isn't super impressive. The job I signed, the providers were booked out 4 months. Would ask a ton of questions to make sure there is demand...you don't want an empty schedule = no revenue

            Comment


            • #7
              Not derm - but if you don’t have to work for a hospital don’t work for a hospital is my mantra.

              Comment


              • #8
                Originally posted by ddoc79 View Post
                Recent derm grad here. I just started my first job a few weeks ago and love it so far. I work for private equity in two locations, one being rural. 1 hr drive 2 times per week. Massive 150k signing bonus for 3 year commitment, plus excellent incentive structure. Not married, no kids, so the drive was doable for me. Seems like option 2 could be SIGNIFICANTLY more short term money for you. I am guessing this is pretty rural opportunity who desperately needs a dermatologist. If you are single with no dependents/geographically flexible, my gut tells me to go with option 2. I am going to share my thoughts and questions below.

                1) Do you have student loans? What is your net worth? I think this should factor heavily in your decision.

                2) Are you geographically flexible? Going rural won't upset the significant other/displace kids?

                3) I would suggest you get each practice to show you hard evidence that you can actually produce enough revenue to support a 550+ base salary as a general dermatologist. Working 3 day weeks/every other week, I cannot imagine getting past 550k+ salary. It's possible, depends on how many patients you are seeing each day you work, payer mix and reimbursement rates. When I say hard evidence, I'm talking about them showing you reimbursement rates and kept appointments.

                4) How long is the commitment at option 2? Usually these "can't miss" job listings require a 5-7 year commitment. 2-3 year contract is typical from my understanding for derm.

                5) I have always been against the "long term" value...as you have no idea how things will change in 1-5 years. Maybe that practice goes under, maybe they sell to private equity. I value the money that can get right now in the immediate future.

                6) Thinking of option 2...if you can in fact make 550-650 for 3 years and have a decent savings rate...you can literally do whatever you want after that.

                7) If you haven't seen the written contract yet, I would take them both to the end and get them to send you the full contract. I negotiated for 12 months and got significant improvements in my contract after it was sent.
                1) loans are under 100K so this would be an awesome chance for me to save big early and let compounding interest do its work
                2)super flexible geographically because I am single - was thinking about doing lots of travel and potentially making a city further away home base and then commute some weeks as well so that my social life would be a little more intact
                3) its an RVU hospital based job so collections is not an issue here and i am very familiar with the organization - they are highly underserved with high show rate. Doing out the math with the RVU multiplier and my desired patient volume I can easily attain the number they bench marked
                4) contract is two but bonus is structured over a longer period so i wouldnt plan to take any bonus longer than the termed contract to insure i dont get caught up in a headache should i leave
                5 and 6 i completely agree with both - thats how my brain works as well
                7) plan to do that this week

                Comment


                • #9
                  Originally posted by Sundance View Post
                  Not derm - but if you don’t have to work for a hospital don’t work for a hospital is my mantra.
                  If my other option was to work for PE then I think I'd pick the hospital.

                  Comment


                  • #10
                    Is it normal to not know the buy-in at partnership? That doesnt seem reasonable. To me, buy-in money + "likely" partnership income would be necessary before making the decision

                    Comment


                    • #11
                      Lol, a city of 150k sounds pretty decent for me. Given that you are single and just starting out, #2 sounds awfully attractive. Re-your comment “…the value in trying to go some place and build a stable practice right away as well”, w/b nice, I suppose, but might want to assume you won’t stay with your first job for the long-term so you are open-minded about your options rather than zoning in on sticking with a position to make it work.

                      And don’t knock social life in smaller cities until you’ve tried it 😎 - people still manage to meet up and find plenty to do, no matter what the size of the city. A lot of it depends on you and your willingness to put yourself out there and get involved. There are definite advantages to being a bigger fish and all that.
                      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                      • #12
                        I city of 150 can be pretty variable depending on the metro mix. Like, you could be looking at Athens, which is an hour from Atlanta (but even Atlanta is an hour from Atlanta). Or basically any town on the east coast might be an hour away from a larger city. If it's out west, you might be pretty remote and it would be hard to get places/meet people.

                        Those dynamics also affect the single population. If it's smaller, more remote town, it's not unheard of that people might not have left a 60 mile radius and married their high school sweetheart.

                        But... some people like smaller towns because of conveniences like traffic. Cost of living is usually favorable.

                        From a strictly job standpoint-- I'd go with job 1. I'd ask about people who didn't make partner and why. In a specialty like derm, don't look at year 1 money, because you can make substantially more in practice ownership. Being an employee of a large hospital corporation has perks during black swan pandemics, but that may have been the only time it had an advantage over practice ownership.

                        Comment


                        • #13
                          It’s tough to fully evaluate option 1 without partner income and buy in costs. This information should not be hidden if you are seriously considering employment with them. How many associates did not make partner for instance? Personally I think you need to figure out if you want a romantic partner, family, how likely is that to happen in this smaller city to your satisfaction etc. before choosing to go after the money at this point in your life. But option 2 does not sound bad if everything else is ok with this choice.

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                          • #14
                            its your first job out of training. take the guaranteed salary. don't underestimate how much money you will need between now and when you even get your first paycheck. I had a 3 month gap between fellowship and my first job and then had to wait another 30 days for my check to arrive. When you make collections you'll be waiting even longer.

                            In the first 2 months of my new job I probably saw 5 patients a week at the most. I still got paid full salary. Had I had a job without a guaranteed salary I would have starved.

                            Take the guaranteed salary then re-evaluate when you have more savings and more experience.

                            Comment


                            • #15
                              “Any thoughts? I hear frequently that many people switch jobs early in their career, but I can also see the value in trying to go some place and build a stable practice right away as well.”

                              1)First, as previously mentioned you really need to nail down that partnership track.
                              2) You do realize it is much more difficult to search for the second job than the first. It’s advantageous to not have to change for a variety of reasons. Some work related and some personal. Financially, you haven’t addressed non competes and malpractice tail coverage let alone COL and taxes. Don’t take the potential for job change lightly. Figure out the exit strategy for both jobs.
                              3) The closer you come to the desired landing strip, the better. Comp, job, location. Only you can decide the personal preferences. You might end up extremely content in a 100k area. Or not.
                              Three 3 years is a long time if the job doesn’t work out.

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