A couple of months ago I read the following article.
Physician Compensation Survey Reveals “Disappointing” Income Levels – Career satisfaction decreases while overhead costs increase.
BALTIMORE, Md. — July 13, 2006 — The average take home pay of physicians surveyed across all primary-care specialties is roughly $150,000 a year, and more than half of these doctors say they are “disappointed” with their income relative to their work efforts, according to the first annual Merritt Hawkins/Physicians Practice Physician Compensation Survey.
Doctors are not only forced to pay operating expenses out-of-pocket — including overhead costs like staff salaries, benefits, telecommunications, and rent/lease costs. They’re also forced to pay strict attention to the amount of patients they’re bringing in to counterbalance the weight of practice expenses.
Most doctors surveyed expect overhead costs to get worse over the next five years. Twenty-two percent “are doubtful” of their ability to sustain operating expenses, while seven percent “will not be able” to within this timeframe. Today, overhead costs for a small minority of physicians actually exceed their income — these doctors are losing money each year.
Among the survey results:
- Nearly 30 percent of physicians surveyed report they are already “too busy.”
- More than 61 percent of internists surveyed are disappointed with their incomes, compared with 53 percent of pediatricians, and 49 percent of family physicians.
- Signs of a primary-care shortage abound; 26 percent of physicians report receiving recruitment calls four to six times a month.
- Only 37.6 percent of those surveyed would again choose primary care if they could start over, and 28.6 percent indicate they would not choose to go into medicine at all.
- Of the specialties surveyed, pediatricians claim the highest levels of career satisfaction. More than 28 percent are “very satisfied” with their careers, compared with 18.7 percent of internists, and 24.9 percent of family practitioners. Pediatricians feel this way even though they earn the lowest pay, and are in the least demand.
For complete survey results and analysis, visit www.Physicianpractice.com to access the July/August 2006 cover story, “What’s in Your Wallet?”
Now there are some physicians – and I would bet the majority – who translate this news into grim news. I hear more and more physicians constantly complaining about the change of the healthcare industry environment. And yes – it is not as easy as it used to be to make lots of money as a physicians. The world is changing constantly and so is the healthcare industry.
But I see so many physicians standing here, throwing their hands over the head and keep complaining. And this is all they do,
What I have also been seeing is this:
– Physicians like to put themselves in a victim role. Many of them are crying, “I am already too busy”, “healthcare is a disappointing industry”, “we don’t get the respect we deserve.” etc. etc. I don’t say that this is all wrong but rather than putting themselves in this victim role maybe it is finally time to wake up and look at the physicians’ effectiveness and see where they need to upgrade their skills. And no, I don’t talk about clinical skills but rather self-management skills, interpersonal skills, and business knowledge.
– Physicians are striving to constantly improve and stay up-to-date with their clinical skills. But that is not the primary factor that makes a physician successful. Nowadays it is also required from a physician to watch their p/l statement, to constantly review practice expenses, and to fine-tune the business of the practice. Even though a physician might have a very good and reliable practice manager, a physician still has to understand the business concepts and the financial well-being of the practice.
– A successful business / practice is not only determined by the revenue it brings in each year but by the expenses it minimizes. When was the last time you or your practice manager talked with a representative of your telephone service provider to see if you could reduce your expenses? Does your merchant account provider charge you the appropriate fees? Are you getting the most bang for your buck with the health insurance benefits?
It is not the task of a physician to regularly check these rates, but the practice manager or administrative assistant need to have this on their to-do list. Besides, there are companies out there such as Jeffry Finkel with Overhead Reduction Services who analyses your expenses for free and finds you the best deals. How much better can it get?
– One of the biggest expenses that any business has is employees with their salaries and benefits. Did you know that the replacement of an employee costs 1-1 ½ salaries of the leaving employee? Many physicians don’t recognize that their constant turnover is damaging their financial health. Many physicians take their hard working employees for granted. Instead, physicians need to invest in their employees in order to maximize their performance. Teamwork and performance are mainly determined by leadership and rather than only blaming a performance breakdown on the employees, a physician has to take responsibility for it as well.
– A medical practice is a business. Many physicians want to run it like in the 50’s. All a physician provides is medical care and he / she get paid for this very well. If you have this kind of belief, medicine won’t advance you much. Instead, as a physician in the 21st century, you need to have an entrepreneurial mindset. What additional income streams could you integrate in your practice? What kind of complementary services could you offer in your practice? Become creative and offer services / products that your patients need. At the end, you will be making money while enjoying a nice vacation. That’s why they call it passive income stream.
– If you are a physician who doesn’t want to make these changes in your practice, then maybe my last tip might benefit you. If your income decreases, you don’t want to make changes in your business procedures or performance, then adjust your lifestyle. Too many physicians live on the edge of financial bankruptcy. Many live a lifestyle that they hardly can afford. So if you are not willing to make long-term strategic changes in your practice, then simplify your lifestyle and start having a life.
Please share your comments, I am looking forward to reading them.
Iris Grimm
www.BalancedPhysician.com