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  • incentive bonus

    Dear colleagues, I was interviewed for private practice recently. Nonsurgical specialist. There is an incentive bonus: 10% of all monthly collections in excess of $30,000. How fair is it?

  • #2
    I would not even know how to evaluate the offer, if you are stuck seeing all the MA patients , it might be a pittance.

    You need a clear contractual way of evaluating income , with a a proper reimbursement structure , that is fair. Because , it won't seem fair when your 10% is a lot less than someone else's 10%

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    • #3
      There’s so much information missing here it’s impossible to evaluate. With that said, it seems completely fair. Or not fair at all. But maybe somewhere in between.

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      • #4
        Thank you for answers! Which questions should I ask regarding this incentive bonus?

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        • #5
          How is your pay structured to start? rvus, salary with incentive, percentage of collections

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          • #6
            It might help you get better answers if you tell us the speciality.

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            • #7
              Are you going to be an employee?
              what's the overhead like?
              Etc etc

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              • #8
                Originally posted by Random1 View Post
                How is your pay structured to start? rvus, salary with incentive, percentage of collections
                It is fixed salary with incentive.

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                • #9
                  Originally posted by childay View Post
                  Are you going to be an employee?
                  what's the overhead like?
                  Etc etc
                  I was told overhead about 33%

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                  • #10
                    Is your salary $240,000? Plus incentive? Because if so, and overhead is 33%, then yes you should start to bonus with collections over $360,000 ($30k a month). Because 30k a month is the point at which your collections have paid for your salary plus overhead.

                    Is 10% of collections fair? Probably not, so it depends on your negotiating position. i.e. whether you can get a better job elsewhere, how much you want to be in this location / at this employer.

                    Once you've covered your overhead and salary, the rest is nearly 100% profit. If my numbers above are correct (240k salary and 120k overhead), then ask where the other 90% goes after the 30k of monthly collections. If they tell you "to overhead/practice expenses/etc" they're lying and think you're stupid. If they tell you "to the owners/partners" then at least they're telling you the truth. Whether you want to accept that is your decision.

                    Ask what the average collections are for a new employees first 2 years. Ask what the collections are for everyone currently in the practice. If they won't share both of those numbers (they can anonymize them), then look elsewhere.

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                    • #11
                      10% sounds sucky to me. Just making up numbers but if even 50% overhead per dollar then they keep 40% and you only get 10%? And by the time you get to bonus the overhead should be covered and it does not cost much more to do more work. You should be getting the majority of it.

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                      • #12
                        Originally posted by abds View Post
                        Is your salary $240,000? Plus incentive? Because if so, and overhead is 33%, then yes you should start to bonus with collections over $360,000 ($30k a month). Because 30k a month is the point at which your collections have paid for your salary plus overhead.

                        Is 10% of collections fair? Probably not, so it depends on your negotiating position. i.e. whether you can get a better job elsewhere, how much you want to be in this location / at this employer.

                        Once you've covered your overhead and salary, the rest is nearly 100% profit. If my numbers above are correct (240k salary and 120k overhead), then ask where the other 90% goes after the 30k of monthly collections. If they tell you "to overhead/practice expenses/etc" they're lying and think you're stupid. If they tell you "to the owners/partners" then at least they're telling you the truth. Whether you want to accept that is your decision.

                        Ask what the average collections are for a new employees first 2 years. Ask what the collections are for everyone currently in the practice. If they won't share both of those numbers (they can anonymize them), then look elsewhere.
                        Some overhead is variable, some fixed. OP says nonsurgical so assuming not doing some office procedure with high overhead costs. If true then 10% sounds more like a disincentive than an incentive

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                        • #13
                          Originally posted by abds View Post
                          Is your salary $240,000? Plus incentive? Because if so, and overhead is 33%, then yes you should start to bonus with collections over $360,000 ($30k a month). Because 30k a month is the point at which your collections have paid for your salary plus overhead.

                          Is 10% of collections fair? Probably not, so it depends on your negotiating position. i.e. whether you can get a better job elsewhere, how much you want to be in this location / at this employer.

                          Once you've covered your overhead and salary, the rest is nearly 100% profit. If my numbers above are correct (240k salary and 120k overhead), then ask where the other 90% goes after the 30k of monthly collections. If they tell you "to overhead/practice expenses/etc" they're lying and think you're stupid. If they tell you "to the owners/partners" then at least they're telling you the truth. Whether you want to accept that is your decision.

                          Ask what the average collections are for a new employees first 2 years. Ask what the collections are for everyone currently in the practice. If they won't share both of those numbers (they can anonymize them), then look elsewhere.
                          Base salary is lower, about 210.

                          Comment


                          • #14
                            Originally posted by childay View Post

                            Some overhead is variable, some fixed. OP says nonsurgical so assuming not doing some office procedure with high overhead costs. If true then 10% sounds more like a disincentive than an incentive
                            Non surgical, although do peripheral nerve blocks, headache botox, spinal taps.

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                            • #15
                              Originally posted by shhelda View Post

                              Base salary is lower, about 210.
                              Even worse. The group will be profiting off your work even before the break-even point I mentioned. You need to ask them where your collections, beyond what pays your salary and overhead, go. Then decide if you want the job based on their answer.

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