Tips for Evaluating Orthopaedic Practice Opportunities

Tips for a Successful Job Search
Tips for a Successful Job Search
How to Evaluate Orthopaedic
How to Evaluate Orthopaedic
Practice Opportunities
Practice Opportunities
Ryan M. Dopirak, M.D.
Ryan M. Dopirak, M.D.
AAOS Annual Meeting
AAOS Annual Meeting
March 2017
March 2017
Disclosures
Disclosures
I have no potential conflicts with this presentation
I have no potential conflicts with this presentation
Introduction
Introduction
The average orthopaedist will make 2-3
The average orthopaedist will make 2-3
practice changes over the course of their
practice changes over the course of their
career
career
Up to 50% of orthopaedists will make a
Up to 50% of orthopaedists will make a
change within the first 2 years
change within the first 2 years
Introduction
Introduction
Changing jobs can result in a great deal
Changing jobs can result in a great deal
of stress and significant financial losses
of stress and significant financial losses
Lost income
Lost income
Moving expenses
Moving expenses
Malpractice tails
Malpractice tails
Repayment of signing bonuses
Repayment of signing bonuses
Purpose
Purpose
Teach residents/fellows how to critically
Teach residents/fellows how to critically
evaluate orthopaedic practice opportunities
evaluate orthopaedic practice opportunities
Learn more about what you are actually signing up
Learn more about what you are actually signing up
for (before you sign a contract)
for (before you sign a contract)
Decrease likelihood that you end up unhappy
Decrease likelihood that you end up unhappy
Nobody cares about your well-being or your
Nobody cares about your well-being or your
contract more than you do!!!
contract more than you do!!!
Format
Format
List of simple questions to ask each
List of simple questions to ask each
potential employer
potential employer
Why are they recruiting a new
Why are they recruiting a new
orthopaedic surgeon?
orthopaedic surgeon?
 
Why are they recruiting a new
Why are they recruiting a new
orthopaedic surgeon?
orthopaedic surgeon?
They must demonstrate they have a 
They must demonstrate they have a 
need
need
for your services
for your services
Impending retirement of partner
Impending retirement of partner
Desire to add new subspecialty area to
Desire to add new subspecialty area to
practice
practice
Need to accommodate increasing patient
Need to accommodate increasing patient
volumes (population growth)
volumes (population growth)
Why are they recruiting a new
Why are they recruiting a new
orthopaedic surgeon?
orthopaedic surgeon?
There are numerous groups who are
There are numerous groups who are
looking to hire for reasons that benefit the
looking to hire for reasons that benefit the
group more than the candidate
group more than the candidate
Trying to decompress call schedule
Trying to decompress call schedule
Trying to dilute overhead
Trying to dilute overhead
Your buy-in will be a buy-out for a senior partner
Your buy-in will be a buy-out for a senior partner
Attempt to increase group size to compete against
Attempt to increase group size to compete against
other groups in their market (“nuclear arms race”)
other groups in their market (“nuclear arms race”)
What is the practice setting?
What is the practice setting?
 
What is the practice setting?
What is the practice setting?
Single Specialty Orthopaedic Group
Single Specialty Orthopaedic Group
Multispecialty Group
Multispecialty Group
Academic / University-Based
Academic / University-Based
Hospital Employment
Hospital Employment
Single Specialty Group (SSG)
Single Specialty Group (SSG)
Advantages
Advantages
Autonomy
Autonomy
Ancillary opportunities
Ancillary opportunities
Usually “eat what you kill”
Usually “eat what you kill”
The classic “gold standard”
The classic “gold standard”
Disadvantages
Disadvantages
 
 
Referrals not guaranteed
Referrals not guaranteed
Modest guarantee
Modest guarantee
May require buy-in
May require buy-in
Multispecialty Group (MSG)
Multispecialty Group (MSG)
Advantages
Advantages
Automatic referral base
Automatic referral base
Competitive initial
Competitive initial
compensation package
compensation package
Disadvantages
Disadvantages
Average overhead is
Average overhead is
higher vs SSG
higher vs SSG
Specialists sometimes
Specialists sometimes
“subsidize” PCP’s
“subsidize” PCP’s
Academic Setting
Academic Setting
Advantages
Advantages
Prestige
Prestige
High volume of
High volume of
referrals
referrals
Opportunity to work
Opportunity to work
with residents/fellows
with residents/fellows
Disadvantages
Disadvantages
Lower income vs SSG
Lower income vs SSG
Level I Trauma Call
Level I Trauma Call
Hospital Employment
Hospital Employment
Advantages
Advantages
Competitive initial
Competitive initial
compensation package
compensation package
Guaranteed referrals
Guaranteed referrals
Less administrative
Less administrative
responsibilities, able to
responsibilities, able to
focus on your practice
focus on your practice
Disadvantages
Disadvantages
Limited autonomy
Limited autonomy
Less opportunity for
Less opportunity for
ancillaries vs SSG
ancillaries vs SSG
Hospital Employment
Hospital Employment
Hospital-employed physician model is becoming
Hospital-employed physician model is becoming
more common
more common
MHA 2015 Review of Physician Recruiting Incentives
MHA 2015 Review of Physician Recruiting Incentives
2004-  11% of searches were hospital-employed opportunities
2004-  11% of searches were hospital-employed opportunities
2014-  64% of searches were hospital-employed opportunities
2014-  64% of searches were hospital-employed opportunities
2016-  49% of searches were hospital-employed opportunities
2016-  49% of searches were hospital-employed opportunities
www.merritthawkins.com
www.merritthawkins.com
AAOS OPUS
AAOS OPUS
Percent of orthopaedists who are hospital-employed
Percent of orthopaedists who are hospital-employed
2012:  9%
2012:  9%
2014:  15%
2014:  15%
Hospital Employment
Hospital Employment
Physicians are looking for stability
Physicians are looking for stability
Less risk / uncertainty with hospital employment
Less risk / uncertainty with hospital employment
Competitive income / salary guarantee
Competitive income / salary guarantee
»
Increased leverage with insurers results in better contracts
Increased leverage with insurers results in better contracts
»
Built in primary care referral base = immediate volume
Built in primary care referral base = immediate volume
»
Hospital subsidizes physicians
Hospital subsidizes physicians
Less capital investment- EMR, facilities, marketing
Less capital investment- EMR, facilities, marketing
Some physicians are looking for a “golden parachute”
Some physicians are looking for a “golden parachute”
Who else is going to buy the 30 year old outdated office
Who else is going to buy the 30 year old outdated office
building when the older partners retire?
building when the older partners retire?
Hospital Employment
Hospital Employment
Hospitals want to align themselves with physicians
Hospitals want to align themselves with physicians
Ability to control referrals to specialists and ancillary services
Ability to control referrals to specialists and ancillary services
Enhanced leverage when negotiating contracts
Enhanced leverage when negotiating contracts
May result in higher reimbursement rates with major insurers
May result in higher reimbursement rates with major insurers
Greater success in selling narrow network plans to employers
Greater success in selling narrow network plans to employers
Hospitals are preparing for healthcare reform
Hospitals are preparing for healthcare reform
“ACO’s”
“ACO’s”
“Bundled payments”
“Bundled payments”
“Pay for performance”
“Pay for performance”
Implementing changes will be smoother if physician alignment exists
Implementing changes will be smoother if physician alignment exists
Hospital Employment
Hospital Employment
Hospital employment of orthopaedic surgeons
Hospital employment of orthopaedic surgeons
How can hospitals offer such high starting salaries?
How can hospitals offer such high starting salaries?
Annual revenue produced by an orthopaedic surgeon
Annual revenue produced by an orthopaedic surgeon
$2,750,000
$2,750,000
MHA 2016 Physician Revenue Survey
MHA 2016 Physician Revenue Survey
Revenue generated from referrals to MRI, PT, surgery
Revenue generated from referrals to MRI, PT, surgery
should offset any losses from income guarantee
should offset any losses from income guarantee
Hospital Employment
Hospital Employment
What are the potential risks of hospital employment?
What are the potential risks of hospital employment?
Loss of autonomy- you may potentially be taking orders from
Loss of autonomy- you may potentially be taking orders from
hospital administrators
hospital administrators
Very limited opportunity to invest in ancillaries due to regulations
Very limited opportunity to invest in ancillaries due to regulations
pertaining to employed physicians
pertaining to employed physicians
The “network” or “physician division” comes first ahead of any
The “network” or “physician division” comes first ahead of any
specialty group, including orthopaedics
specialty group, including orthopaedics
Hospital Employment
Hospital Employment
What are the potential risks of hospital employment?
What are the potential risks of hospital employment?
Highly compensated specialists- there is always some risk that
Highly compensated specialists- there is always some risk that
you will be asked to subsidize lower producing specialties
you will be asked to subsidize lower producing specialties
Compensation philosophy may potentially change if there is a
Compensation philosophy may potentially change if there is a
change in hospital leadership- the average tenure of a hospital
change in hospital leadership- the average tenure of a hospital
CEO is approximately 5 years
CEO is approximately 5 years
Although your initial contract may be favorable, this does not
Although your initial contract may be favorable, this does not
guarantee that renewal contracts will be identical to the first- if
guarantee that renewal contracts will be identical to the first- if
your production is not sufficient to cover your salary and
your production is not sufficient to cover your salary and
expenses, you may be asked to accept a salary reduction
expenses, you may be asked to accept a salary reduction
Which Practice Setting is Best?
Which Practice Setting is Best?
These are my personal opinions only!
These are my personal opinions only!
Small independent orthopaedic groups are at risk
Small independent orthopaedic groups are at risk
Large networks are getting larger and significant pressures exist to
Large networks are getting larger and significant pressures exist to
keep referrals in-network; where will your patients come from?
keep referrals in-network; where will your patients come from?
Pressure from insurance companies to contain costs may lead to lower
Pressure from insurance companies to contain costs may lead to lower
reimbursement to small groups due to lack of negotiating power
reimbursement to small groups due to lack of negotiating power
Ever-increasing regulatory burden from the government favors larger
Ever-increasing regulatory burden from the government favors larger
physician networks (EMR, outcomes reporting, etc)
physician networks (EMR, outcomes reporting, etc)
The trend is towards increasing size
The trend is towards increasing size
Large single specialty groups
Large single specialty groups
Large independent multispecialty groups
Large independent multispecialty groups
Large hospital-employed physician networks
Large hospital-employed physician networks
Current Orthopaedic Workforce
Current Orthopaedic Workforce
AAOS OPUS 2014
AAOS OPUS 2014
35% private orthopaedic group (SSG)
35% private orthopaedic group (SSG)
16% academic practice
16% academic practice
13%- salary from academic institution
13%- salary from academic institution
3%- salary from private practice
3%- salary from private practice
15% solo orthopaedic practice
15% solo orthopaedic practice
15% hospital-employed
15% hospital-employed
10% private multispecialty group
10% private multispecialty group
2% military
2% military
What is the surgeon density?
What is the surgeon density?
 
What is the surgeon density?
What is the surgeon density?
AAOS OPUS 2014
AAOS OPUS 2014
8.5 surgeons per 100,000 population
8.5 surgeons per 100,000 population
1 surgeon per 11,765 population
1 surgeon per 11,765 population
Also gives surgeon density by state
Also gives surgeon density by state
Highest density states:  WY, MT, NH, VT, SD
Highest density states:  WY, MT, NH, VT, SD
Lowest density states:  MI, WV, AR, TX, MS
Lowest density states:  MI, WV, AR, TX, MS
What is the surgeon density?
What is the surgeon density?
AAOS OPUS 2014
AAOS OPUS 2014
Use these statistics to gauge surgeon
Use these statistics to gauge surgeon
saturation in the market you are
saturation in the market you are
considering, BUT…
considering, BUT…
Don’t write off a highly saturated market if
Don’t write off a highly saturated market if
you bring a new skill or unique subspecialty
you bring a new skill or unique subspecialty
training to the market
training to the market
Success isn’t guaranteed in a low density
Success isn’t guaranteed in a low density
market, as groups in neighboring
market, as groups in neighboring
communities may draw from your area
communities may draw from your area
Will I be able to develop an elective
Will I be able to develop an elective
practice in my subspecialty area?
practice in my subspecialty area?
 
Will I be able to develop an elective
Will I be able to develop an elective
practice in my subspecialty area?
practice in my subspecialty area?
Over 90% of graduating residents pursue
Over 90% of graduating residents pursue
fellowship training*
fellowship training*
93% of surgeons under age 40 consider
93% of surgeons under age 40 consider
themselves either a specialist or a generalist
themselves either a specialist or a generalist
with a specialty interest (AAOS OPUS 2014)
with a specialty interest (AAOS OPUS 2014)
You need to decide how important
You need to decide how important
specialization is to you
specialization is to you
*AAOS data, published February 2006
*AAOS data, published February 2006
Will I be able to develop an elective
Will I be able to develop an elective
practice in my subspecialty area?
practice in my subspecialty area?
Do you want to develop a 100% subspecialty
Do you want to develop a 100% subspecialty
practice from the start?
practice from the start?
Are you willing to do a considerable amount
Are you willing to do a considerable amount
of general orthopaedics / trauma in order to
of general orthopaedics / trauma in order to
find a job in a competitive market?
find a job in a competitive market?
Will I be able to develop an elective
Will I be able to develop an elective
practice in my subspecialty area?
practice in my subspecialty area?
Determine if the community can support a busy
Determine if the community can support a busy
practice in your subspecialty area
practice in your subspecialty area
Look at the number of partners in the group with the
Look at the number of partners in the group with the
same practice focus as you
same practice focus as you
Also consider demographics of other groups in the
Also consider demographics of other groups in the
market- they will be competing for the same patients
market- they will be competing for the same patients
Will I be able to develop an elective
Will I be able to develop an elective
practice in my subspecialty area?
practice in my subspecialty area?
There should be a need for your specific area of
There should be a need for your specific area of
specialization, so that you will have the
specialization, so that you will have the
opportunity to develop a busy elective practice
opportunity to develop a busy elective practice
Certain subspecialty areas are very competitive,
Certain subspecialty areas are very competitive,
especially in larger metropolitan areas
especially in larger metropolitan areas
Location vs. Professional Satisfaction!!!
Location vs. Professional Satisfaction!!!
Is there a “restrictive covenant”?
Is there a “restrictive covenant”?
 
Is there a “restrictive covenant”?
Is there a “restrictive covenant”?
A “noncompete clause” states that if you leave the
A “noncompete clause” states that if you leave the
group, you agree not to practice in a certain
group, you agree not to practice in a certain
geographic area for a specified period of time
geographic area for a specified period of time
You must determine if the terms of this provision
You must determine if the terms of this provision
are acceptable to you
are acceptable to you
If you have community ties, you may wish to
If you have community ties, you may wish to
negotiate the terms of this clause
negotiate the terms of this clause
Is there a “recapture clause”?
Is there a “recapture clause”?
 
Is there a “recapture clause”?
Is there a “recapture clause”?
Some compensation packages include
Some compensation packages include
large income guarantees, signing
large income guarantees, signing
bonuses, and loan repayment
bonuses, and loan repayment
These are often contractually structured
These are often contractually structured
as “forgivable loans”- a percentage of
as “forgivable loans”- a percentage of
this amount is forgiven each year over a
this amount is forgiven each year over a
set number of years
set number of years
Is there a “recapture clause”?
Is there a “recapture clause”?
If you leave before fulfilling the contract,
If you leave before fulfilling the contract,
you may have to repay a portion of the
you may have to repay a portion of the
money
money
There is no such thing as a “free lunch”
There is no such thing as a “free lunch”
What is the caseload of each
What is the caseload of each
partner over the past few years?
partner over the past few years?
 
What is the caseload of each
What is the caseload of each
partner over the past few years?
partner over the past few years?
Income is directly related to surgical volume
Income is directly related to surgical volume
Compare volumes to national benchmarks
Compare volumes to national benchmarks
AAOS OPUS 2014
AAOS OPUS 2014
Average FT orthopaedist - 32 cases/month
Average FT orthopaedist - 32 cases/month
MGMA
MGMA
Provides total encounters and RVU’s
Provides total encounters and RVU’s
Has anyone left the group in
Has anyone left the group in
the past 10 years and why?
the past 10 years and why?
 
Has anyone left the group in
Has anyone left the group in
the past 10 years and why?
the past 10 years and why?
The group will point out its positive attributes
The group will point out its positive attributes
during the recruitment process
during the recruitment process
A high rate of turnover may indicate underlying
A high rate of turnover may indicate underlying
problems with the group and may be a red flag
problems with the group and may be a red flag
Contact the people who have left, as they may
Contact the people who have left, as they may
provide you with a different perspective on the
provide you with a different perspective on the
group
group
ER Call
ER Call
 
ER Call
ER Call
How often is call and is it divided equitably?
How often is call and is it divided equitably?
How many hospitals will you be covering?
How many hospitals will you be covering?
Is the hospital a “trauma center”
Is the hospital a “trauma center”
How often is ortho called in for emergencies?
How often is ortho called in for emergencies?
Are you compensated for ER call?
Are you compensated for ER call?
ER Call
ER Call
Advantages
Advantages
Increased caseload
Increased caseload
Increased income
Increased income
May be compensated
May be compensated
for call
for call
Disadvantages
Disadvantages
Disruptive of elective
Disruptive of elective
practice and personal life
practice and personal life
Increased liability
Increased liability
Poor payer mix- many
Poor payer mix- many
patients uninsured or
patients uninsured or
underinsured
underinsured
With increasing focus on
With increasing focus on
specialization, surgeons less
specialization, surgeons less
comfortable with trauma
comfortable with trauma
ER Call
ER Call
Trends in compensated call
Trends in compensated call
AAOS OPUS 2010 (no data in 2014 survey)
AAOS OPUS 2010 (no data in 2014 survey)
68% of orthopaedists take “trauma call”
68% of orthopaedists take “trauma call”
40.4% of those taking call are compensated
40.4% of those taking call are compensated
2014 MGMA daily rate for compensated call*
2014 MGMA daily rate for compensated call*
Mean / Median
Mean / Median
  
  
$1,016 / $1,000
$1,016 / $1,000
25
25
th
th
 percentile
 percentile
  
  
$800
$800
75
75
th
th
 percentile
 percentile
  
  
$1,050
$1,050
*n=167; small sample size in most call surveys
*n=167; small sample size in most call surveys
ER Call
ER Call
Factors in determining daily rate for
Factors in determining daily rate for
compensated call
compensated call
Trauma Center designation
Trauma Center designation
Volume of orthopaedic consults while on call
Volume of orthopaedic consults while on call
Payor mix of ER patients
Payor mix of ER patients
Number of orthopods taking call (supply and demand)
Number of orthopods taking call (supply and demand)
Call pay has to be at FMV rate
Call pay has to be at FMV rate
Financial Considerations
Financial Considerations
 
What is the income guarantee?
What is the income guarantee?
 
What is the income guarantee?
What is the income guarantee?
Step 1:  Clarify if it is a “gross” or “net”
Step 1:  Clarify if it is a “gross” or “net”
income guarantee
income guarantee
Gross income:  money is used to run your
Gross income:  money is used to run your
practice (overhead) and pay salary
practice (overhead) and pay salary
Net income:  actual income or salary
Net income:  actual income or salary
independent of overhead
independent of overhead
What is the income guarantee?
What is the income guarantee?
Step 2:  Compare data to national
Step 2:  Compare data to national
surveys for starting salaries
surveys for starting salaries
Merritt Hawkins 2016:  $521,000
Merritt Hawkins 2016:  $521,000
Average base salary or guaranteed income only,
Average base salary or guaranteed income only,
does not include production bonus or benefits
does not include production bonus or benefits
MGMA 2013:  $436,000
MGMA 2013:  $436,000
Median income for general ortho, 1-2 years in
Median income for general ortho, 1-2 years in
practice
practice
Not included in 2015 data set
Not included in 2015 data set
What is the income guarantee?
What is the income guarantee?
Step 3:  Identify stipulations attached to
Step 3:  Identify stipulations attached to
guarantee
guarantee
What happens if collections don’t cover
What happens if collections don’t cover
salary, benefits, and overhead???
salary, benefits, and overhead???
What is the income guarantee?
What is the income guarantee?
What happens if collections don’t cover
What happens if collections don’t cover
salary, benefits, and overhead???
salary, benefits, and overhead???
   
   
Hospital or group eats losses (least likely)
Hospital or group eats losses (least likely)
Deficit is “forgiven” over a period of years
Deficit is “forgiven” over a period of years
Future bonuses used to offset prior deficits
Future bonuses used to offset prior deficits
Salary reduction for subsequent years
Salary reduction for subsequent years
What is my projected peak income
What is my projected peak income
potential with this group?
potential with this group?
 
What is my projected peak income
What is my projected peak income
potential with this group?
potential with this group?
Your ultimate income potential is far more important
Your ultimate income potential is far more important
than your initial guarantee!
than your initial guarantee!
Awkward to ask “how much money do you make?”
Awkward to ask “how much money do you make?”
I would suggest asking “what is the approximate
I would suggest asking “what is the approximate
income range of the partners over the past few years?”
income range of the partners over the past few years?”
What is my projected peak income
What is my projected peak income
potential with this group?
potential with this group?
Familiarize yourself with income surveys
Familiarize yourself with income surveys
MGMA 2016:  $577,000 median income
MGMA 2016:  $577,000 median income
*
*
AAOS 2014:  $370,000 median income
AAOS 2014:  $370,000 median income
**
**
Why the difference???
Why the difference???
*General Orthopaedic Surgery
*General Orthopaedic Surgery
**Full time Orthopaedic Surgeons
**Full time Orthopaedic Surgeons
Income Trends
Income Trends
Minimal income difference between SSG vs MSG for
Minimal income difference between SSG vs MSG for
general ortho and most subspecialties
general ortho and most subspecialties
MGMA 2015 median general ortho MSG:  582K
MGMA 2015 median general ortho MSG:  582K
MGMA 2015 median general ortho SSG:   514K
MGMA 2015 median general ortho SSG:   514K
Data changes yearly; varies between subspecialties
Data changes yearly; varies between subspecialties
Don’t chase a number!
Don’t chase a number!
Academic settings often pay the least
Academic settings often pay the least
 
 
Income Trends
Income Trends
Specialists earn more than Generalists
Specialists earn more than Generalists
MGMA 2016 median income
MGMA 2016 median income
General: 
General: 
  
  
$577,000
$577,000
Foot & Ankle:
Foot & Ankle:
  
  
$567,000
$567,000
Hand:
Hand:
  
  
$618,000
$618,000
Peds:
Peds:
   
   
$536,000
$536,000
Shoulder & Elbow:
Shoulder & Elbow:
 
 
$541,000
$541,000
Spine:
Spine:
  
  
$777,000
$777,000
Sports:
Sports:
  
  
$597,000
$597,000
Total Joint:
Total Joint:
  
  
$652,000
$652,000
Trauma:
Trauma:
  
  
$578,000
$578,000
Income Trends
Income Trends
Specialists earn more than Generalists
Specialists earn more than Generalists
AAOS OPUS 2014 median income
AAOS OPUS 2014 median income
Generalist:  
Generalist:  
 
 
$300,000
$300,000
Specialist: 
Specialist: 
 
 
$400,000
$400,000
 
 
Income Trends
Income Trends
Higher incomes in Midwest compared to the coasts
Higher incomes in Midwest compared to the coasts
MGMA 2016 median income (general ortho)
MGMA 2016 median income (general ortho)
East:  
East:  
 
 
$495,000
$495,000
Midwest:
Midwest:
 
 
$665,000
$665,000
South:
South:
 
 
$550,000
$550,000
West:
West:
 
 
$588,000
$588,000
Higher incomes in smaller towns vs major cities
Higher incomes in smaller towns vs major cities
Supply and demand (surgeon density)
Supply and demand (surgeon density)
Insurance reimbursement
Insurance reimbursement
Income Trends
Income Trends
Income is only 1 of several factors to consider
Income is only 1 of several factors to consider
Manitowoc, Wisconsin- October 2006
Manitowoc, Wisconsin- October 2006
There is no such thing as a perfect job!
There is no such thing as a perfect job!
Am I eligible for a production
Am I eligible for a production
bonus in first 1-2 years?
bonus in first 1-2 years?
 
Am I eligible for a production
Am I eligible for a production
bonus in first 1-2 years?
bonus in first 1-2 years?
Some offers are straight salary to start-
Some offers are straight salary to start-
without any opportunity for bonus
without any opportunity for bonus
Senior partners may pass work on you
Senior partners may pass work on you
with no financial reward- they keep the
with no financial reward- they keep the
extra revenue you generate
extra revenue you generate
This may create an unpleasant work
This may create an unpleasant work
environment
environment
Am I eligible for a production
Am I eligible for a production
bonus in first 1-2 years?
bonus in first 1-2 years?
There should be some opportunity for
There should be some opportunity for
incentive if you generate enough revenue to
incentive if you generate enough revenue to
cover salary + overhead
cover salary + overhead
Don’t expect to “eat what you kill” at first-
Don’t expect to “eat what you kill” at first-
most groups keep at least a portion of your
most groups keep at least a portion of your
excess production until you achieve
excess production until you achieve
partnership
partnership
Am I eligible for a production
Am I eligible for a production
bonus in first 1-2 years?
bonus in first 1-2 years?
Differences in compensation models for new
Differences in compensation models for new
physicians vs “partners” typically only occurs
physicians vs “partners” typically only occurs
when the group is “owned” by the physicians
when the group is “owned” by the physicians
(SSG’s and physician-owned MSG’s)
(SSG’s and physician-owned MSG’s)
In most hospital-employed models, the
In most hospital-employed models, the
compensation structure is the same for new
compensation structure is the same for new
physicians as it is for established physicians
physicians as it is for established physicians
Base salary with opportunity for incentive
Base salary with opportunity for incentive
based on production
based on production
Are there other financial perks?
Are there other financial perks?
 
Are there other financial perks?
Are there other financial perks?
Signing bonus, student loan repayment,
Signing bonus, student loan repayment,
relocation expenses
relocation expenses
Remember that any money you receive is
Remember that any money you receive is
considered taxable income
considered taxable income
Look for the “recapture clause”- free
Look for the “recapture clause”- free
money is usually structured as a
money is usually structured as a
forgivable loan
forgivable loan
What is the group’s overhead?
What is the group’s overhead?
 
What is the group’s overhead?
What is the group’s overhead?
“Gross production” (total billings, charges)
“Gross production” (total billings, charges)
The amount a group bills insurance companies
The amount a group bills insurance companies
and individuals for medical services performed
and individuals for medical services performed
What is the group’s overhead?
What is the group’s overhead?
“Net production” (collections)
“Net production” (collections)
The amount a group collects after deductions
The amount a group collects after deductions
Example
Example
I perform CPT Codes 29827, 29626, 29823
I perform CPT Codes 29827, 29626, 29823
Charges total $10,000; Medicare pays $1,000
Charges total $10,000; Medicare pays $1,000
Collections:  $1,000
Collections:  $1,000
Deduction:  $9,000
Deduction:  $9,000
What is the group’s overhead?
What is the group’s overhead?
Collections pay MD’s salary + “overhead”
Collections pay MD’s salary + “overhead”
Overhead= cost of running business
Overhead= cost of running business
Collections – overhead = salary
Collections – overhead = salary
Overhead includes office space, furnishings,
Overhead includes office space, furnishings,
equipment, supplies, malpractice premiums,
equipment, supplies, malpractice premiums,
employees’ salaries and benefits, 
employees’ salaries and benefits, 
physician benefits*
physician benefits*
*MD’s contribution is often considered compensation,
*MD’s contribution is often considered compensation,
 whereas group’s contribution is considered overhead
 whereas group’s contribution is considered overhead
What is the group’s overhead?
What is the group’s overhead?
A group should be able to quantify its
A group should be able to quantify its
overhead as a percentage of collections
overhead as a percentage of collections
Compare to national surveys – MGMA
Compare to national surveys – MGMA
has the largest data set
has the largest data set
2016 median comp/collection ratio:  0.682
2016 median comp/collection ratio:  0.682
Physician compensation is 68.2% of collections
Physician compensation is 68.2% of collections
Overhead is 31.8%
Overhead is 31.8%
This data is for general ortho
This data is for general ortho
What is the group’s overhead?
What is the group’s overhead?
Difficult to define what constitutes a “good”
Difficult to define what constitutes a “good”
overhead percentage
overhead percentage
Overhead is dependent on cost of living,
Overhead is dependent on cost of living,
payer mix, number of satellite offices, use of
payer mix, number of satellite offices, use of
physician extenders
physician extenders
Look at the big picture!
Look at the big picture!
What are the terms of partnership?
What are the terms of partnership?
 
What are the terms of partnership?
What are the terms of partnership?
Partnership is typically offered to new
Partnership is typically offered to new
members after a specified period of time
members after a specified period of time
The criteria to achieve partnership must
The criteria to achieve partnership must
be explicitly stated in the employment
be explicitly stated in the employment
contract
contract
What are the terms of partnership?
What are the terms of partnership?
Many SSG’s and some MSG’s require a buy-in
Many SSG’s and some MSG’s require a buy-in
A large buy-in is reasonable if it provides you with
A large buy-in is reasonable if it provides you with
ownership in something of value (ASC, MRI, PT)
ownership in something of value (ASC, MRI, PT)
Beware of buying into “hard assets”, as they are
Beware of buying into “hard assets”, as they are
usually depreciated
usually depreciated
The days of buying into “goodwill” of the group
The days of buying into “goodwill” of the group
are over
are over
Are there opportunities for
Are there opportunities for
investment in ancillary services?
investment in ancillary services?
 
Are there opportunities for
Are there opportunities for
investment in ancillary services?
investment in ancillary services?
In order to offset decreasing
In order to offset decreasing
reimbursement and increasing overhead
reimbursement and increasing overhead
costs, many groups have invested in
costs, many groups have invested in
ancillary ventures
ancillary ventures
ASC
ASC
Imaging centers
Imaging centers
PT
PT
DME
DME
Are there opportunities for
Are there opportunities for
investment in ancillary services?
investment in ancillary services?
Clarify if the group offers ancillary
Clarify if the group offers ancillary
services and if there is an opportunity for
services and if there is an opportunity for
new partners to invest in these ancillaries
new partners to invest in these ancillaries
Greater opportunity for ancillary
Greater opportunity for ancillary
investments in SSGs and physician
investments in SSGs and physician
owned MSG; opportunities are limited
owned MSG; opportunities are limited
for hospital-employed physicians
for hospital-employed physicians
Dopirak’s Golden Rules
Dopirak’s Golden Rules
Top 5 Points for Being a Successful Negotiator
Top 5 Points for Being a Successful Negotiator
 
Dopirak’s Golden Rules
Dopirak’s Golden Rules
Top 5 Points for Being a Successful Negotiator
Top 5 Points for Being a Successful Negotiator
Understand supply and demand in the
Understand supply and demand in the
market you are considering
market you are considering
Surgeon density
Surgeon density
Saturation in your subspecialty area
Saturation in your subspecialty area
Primary and secondary service areas
Primary and secondary service areas
Dopirak’s Golden Rules
Dopirak’s Golden Rules
Top 5 Points for Being a Successful Negotiator
Top 5 Points for Being a Successful Negotiator
Know your strengths, especially as they
Know your strengths, especially as they
pertain to the market you are considering
pertain to the market you are considering
  
  
What do you bring to the group/community that is
What do you bring to the group/community that is
different or better?
different or better?
How can you enhance the group or increase
How can you enhance the group or increase
market share?
market share?
Dopirak’s Golden Rules
Dopirak’s Golden Rules
Top 5 Points for Being a Successful Negotiator
Top 5 Points for Being a Successful Negotiator
Know your market value
Know your market value
Come to the table knowing what a fair
Come to the table knowing what a fair
compensation package is for your subspecialty
compensation package is for your subspecialty
area in that market
area in that market
Familiarize yourself with income surveys
Familiarize yourself with income surveys
MGMA
MGMA
AAOS
AAOS
MHA
MHA
Dopirak’s Golden Rules
Dopirak’s Golden Rules
Top 5 Points for Being a Successful Negotiator
Top 5 Points for Being a Successful Negotiator
The best negotiators are always willing to
The best negotiators are always willing to
walk away from the table
walk away from the table
Before you enter negotiations, decide what you
Before you enter negotiations, decide what you
are willing to accept and what is your break point
are willing to accept and what is your break point
It is a buyer’s market- don’t settle!
It is a buyer’s market- don’t settle!
Don’t make any decisions that day!
Don’t make any decisions that day!
Dopirak’s Golden Rules
Dopirak’s Golden Rules
Top 5 Points for Being a Successful Negotiator
Top 5 Points for Being a Successful Negotiator
Just like Mikey and T
Just like Mikey and T
taught us…
taught us…
 
 
“Don’t call them back
“Don’t call them back
for at least 2 days”
for at least 2 days”
Dopirak’s Golden Rules
Dopirak’s Golden Rules
Top 5 Points for Being a Successful Negotiator
Top 5 Points for Being a Successful Negotiator
Don’t be a “Bull in a China Shop”
Don’t be a “Bull in a China Shop”
The first goal is to sell yourself to the employer,
The first goal is to sell yourself to the employer,
and everything else will fall into place
and everything else will fall into place
Don’t talk numbers on the first interview
Don’t talk numbers on the first interview
Don’t start making demands or negotiating
Don’t start making demands or negotiating
until you sense the group is “sold” on you!
until you sense the group is “sold” on you!
Last But Not Least!!!
Last But Not Least!!!
You can never have too much detail in a
You can never have too much detail in a
contract.  It is the only thing that will
contract.  It is the only thing that will
protect you when things fall apart
protect you when things fall apart
You must use an experienced contract
You must use an experienced contract
attorney- it is the best investment you will
attorney- it is the best investment you will
ever make!!!
ever make!!!
Thank You
Thank You
rdopirak@msn.com
rdopirak@msn.com
References
References
AAOS Orthopaedic Practice in the US 2014
AAOS Orthopaedic Practice in the US 2014
Evaluating Orthopaedic Practice Opportunities.
Evaluating Orthopaedic Practice Opportunities.
Dopirak RM.  Available online at the AAOS PMC
Dopirak RM.  Available online at the AAOS PMC
Evaluating Practice Opportunities.  Part I.  Dopirak
Evaluating Practice Opportunities.  Part I.  Dopirak
RM.  AAOS Bulletin 2006;54(1):19-20.
RM.  AAOS Bulletin 2006;54(1):19-20.
Evaluating Practice Opportunities.  Part II.
Evaluating Practice Opportunities.  Part II.
Dopirak RM.  AAOS Bulletin 2006;54(2):12-13.
Dopirak RM.  AAOS Bulletin 2006;54(2):12-13.
References
References
MGMA Medical Directorship and On-Call
MGMA Medical Directorship and On-Call
Compensation Survey:  2014 Report Based on 2013 Data
Compensation Survey:  2014 Report Based on 2013 Data
MGMA Physician Compensation and Production
MGMA Physician Compensation and Production
Survey:  2016 Report Based on 2015 Data
Survey:  2016 Report Based on 2015 Data
Merritt Hawkins and Associates 2016 Review of
Merritt Hawkins and Associates 2016 Review of
Physician and Advanced Practitioner Recruiting
Physician and Advanced Practitioner Recruiting
Incentives
Incentives
Merritt Hawkins and Associates 2016 Physician
Merritt Hawkins and Associates 2016 Physician
Inpatient/Outpatient Revenue Survey
Inpatient/Outpatient Revenue Survey
Slide Note
Embed
Share

Learn key considerations for evaluating orthopaedic practice opportunities to ensure a successful job search. Understand why practices are recruiting, assess your fit within the group, and ask critical questions before signing a contract to avoid potential pitfalls. Make informed decisions to enhance your career satisfaction and well-being.


Uploaded on Sep 11, 2024 | 0 Views


Download Presentation

Please find below an Image/Link to download the presentation.

The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.

E N D

Presentation Transcript


  1. Tips for a Successful Job Search How to Evaluate Orthopaedic Practice Opportunities Ryan M. Dopirak, M.D. AAOS Annual Meeting March 2017

  2. Disclosures I have no potential conflicts with this presentation

  3. Introduction The average orthopaedist will make 2-3 practice changes over the course of their career Up to 50% of orthopaedists will make a change within the first 2 years

  4. Introduction Changing jobs can result in a great deal of stress and significant financial losses Lost income Moving expenses Malpractice tails Repayment of signing bonuses

  5. Purpose Teach residents/fellows how to critically evaluate orthopaedic practice opportunities Learn more about what you are actually signing up for (before you sign a contract) Decrease likelihood that you end up unhappy Nobody cares about your well-being or your contract more than you do!!!

  6. Format List of simple questions to ask each potential employer

  7. Why are they recruiting a new orthopaedic surgeon?

  8. Why are they recruiting a new orthopaedic surgeon? They must demonstrate they have a need for your services Impending retirement of partner Desire to add new subspecialty area to practice Need to accommodate increasing patient volumes (population growth)

  9. Why are they recruiting a new orthopaedic surgeon? There are numerous groups who are looking to hire for reasons that benefit the group more than the candidate Trying to decompress call schedule Trying to dilute overhead Your buy-in will be a buy-out for a senior partner Attempt to increase group size to compete against other groups in their market ( nuclear arms race )

  10. What is the practice setting?

  11. What is the practice setting? Single Specialty Orthopaedic Group Multispecialty Group Academic / University-Based Hospital Employment

  12. Single Specialty Group (SSG) Advantages Disadvantages Autonomy Ancillary opportunities Usually eat what you kill The classic gold standard Referrals not guaranteed Modest guarantee May require buy-in

  13. Multispecialty Group (MSG) Disadvantages Advantages Average overhead is higher vs SSG Specialists sometimes subsidize PCP s Automatic referral base Competitive initial compensation package

  14. Academic Setting Advantages Disadvantages Prestige High volume of referrals Opportunity to work with residents/fellows Lower income vs SSG Level I Trauma Call

  15. Hospital Employment Advantages Disadvantages Competitive initial compensation package Guaranteed referrals Less administrative responsibilities, able to focus on your practice Limited autonomy Less opportunity for ancillaries vs SSG

  16. Hospital Employment Hospital-employed physician model is becoming more common MHA 2015 Review of Physician Recruiting Incentives 2004- 11% of searches were hospital-employed opportunities 2014- 64% of searches were hospital-employed opportunities 2016- 49% of searches were hospital-employed opportunities www.merritthawkins.com AAOS OPUS Percent of orthopaedists who are hospital-employed 2012: 9% 2014: 15%

  17. Hospital Employment Physicians are looking for stability Less risk / uncertainty with hospital employment Competitive income / salary guarantee Increased leverage with insurers results in better contracts Built in primary care referral base = immediate volume Hospital subsidizes physicians Less capital investment- EMR, facilities, marketing Some physicians are looking for a golden parachute Who else is going to buy the 30 year old outdated office building when the older partners retire?

  18. Hospital Employment Hospitals want to align themselves with physicians Ability to control referrals to specialists and ancillary services Enhanced leverage when negotiating contracts May result in higher reimbursement rates with major insurers Greater success in selling narrow network plans to employers Hospitals are preparing for healthcare reform ACO s Bundled payments Pay for performance Implementing changes will be smoother if physician alignment exists

  19. Hospital Employment Hospital employment of orthopaedic surgeons How can hospitals offer such high starting salaries? Annual revenue produced by an orthopaedic surgeon $2,750,000 MHA 2016 Physician Revenue Survey Revenue generated from referrals to MRI, PT, surgery should offset any losses from income guarantee

  20. Hospital Employment What are the potential risks of hospital employment? Loss of autonomy- you may potentially be taking orders from hospital administrators Very limited opportunity to invest in ancillaries due to regulations pertaining to employed physicians The network or physician division comes first ahead of any specialty group, including orthopaedics

  21. Hospital Employment What are the potential risks of hospital employment? Highly compensated specialists- there is always some risk that you will be asked to subsidize lower producing specialties Compensation philosophy may potentially change if there is a change in hospital leadership- the average tenure of a hospital CEO is approximately 5 years Although your initial contract may be favorable, this does not guarantee that renewal contracts will be identical to the first- if your production is not sufficient to cover your salary and expenses, you may be asked to accept a salary reduction

  22. Which Practice Setting is Best? These are my personal opinions only! Small independent orthopaedic groups are at risk Large networks are getting larger and significant pressures exist to keep referrals in-network; where will your patients come from? Pressure from insurance companies to contain costs may lead to lower reimbursement to small groups due to lack of negotiating power Ever-increasing regulatory burden from the government favors larger physician networks (EMR, outcomes reporting, etc) The trend is towards increasing size Large single specialty groups Large independent multispecialty groups Large hospital-employed physician networks

  23. Current Orthopaedic Workforce AAOS OPUS 2014 35% private orthopaedic group (SSG) 16% academic practice 13%- salary from academic institution 3%- salary from private practice 15% solo orthopaedic practice 15% hospital-employed 10% private multispecialty group 2% military

  24. What is the surgeon density?

  25. What is the surgeon density? AAOS OPUS 2014 8.5 surgeons per 100,000 population 1 surgeon per 11,765 population Also gives surgeon density by state Highest density states: WY, MT, NH, VT, SD Lowest density states: MI, WV, AR, TX, MS

  26. What is the surgeon density? AAOS OPUS 2014 Use these statistics to gauge surgeon saturation in the market you are considering, BUT Don t write off a highly saturated market if you bring a new skill or unique subspecialty training to the market Success isn t guaranteed in a low density market, as groups in neighboring communities may draw from your area

  27. Will I be able to develop an elective practice in my subspecialty area?

  28. Will I be able to develop an elective practice in my subspecialty area? Over 90% of graduating residents pursue fellowship training* 93% of surgeons under age 40 consider themselves either a specialist or a generalist with a specialty interest (AAOS OPUS 2014) You need to decide how important specialization is to you *AAOS data, published February 2006

  29. Will I be able to develop an elective practice in my subspecialty area? Do you want to develop a 100% subspecialty practice from the start? Are you willing to do a considerable amount of general orthopaedics / trauma in order to find a job in a competitive market?

  30. Will I be able to develop an elective practice in my subspecialty area? Determine if the community can support a busy practice in your subspecialty area Look at the number of partners in the group with the same practice focus as you Also consider demographics of other groups in the market- they will be competing for the same patients

  31. Will I be able to develop an elective practice in my subspecialty area? There should be a need for your specific area of specialization, so that you will have the opportunity to develop a busy elective practice Certain subspecialty areas are very competitive, especially in larger metropolitan areas Location vs. Professional Satisfaction!!!

  32. Is there a restrictive covenant?

  33. Is there a restrictive covenant? A noncompete clause states that if you leave the group, you agree not to practice in a certain geographic area for a specified period of time You must determine if the terms of this provision are acceptable to you If you have community ties, you may wish to negotiate the terms of this clause

  34. Is there a recapture clause?

  35. Is there a recapture clause? Some compensation packages include large income guarantees, signing bonuses, and loan repayment These are often contractually structured as forgivable loans - a percentage of this amount is forgiven each year over a set number of years

  36. Is there a recapture clause? If you leave before fulfilling the contract, you may have to repay a portion of the money There is no such thing as a free lunch

  37. What is the caseload of each partner over the past few years?

  38. What is the caseload of each partner over the past few years? Income is directly related to surgical volume Compare volumes to national benchmarks AAOS OPUS 2014 Average FT orthopaedist - 32 cases/month MGMA Provides total encounters and RVU s

  39. Has anyone left the group in the past 10 years and why?

  40. Has anyone left the group in the past 10 years and why? The group will point out its positive attributes during the recruitment process A high rate of turnover may indicate underlying problems with the group and may be a red flag Contact the people who have left, as they may provide you with a different perspective on the group

  41. ER Call

  42. ER Call How often is call and is it divided equitably? How many hospitals will you be covering? Is the hospital a trauma center How often is ortho called in for emergencies? Are you compensated for ER call?

  43. ER Call Disadvantages Advantages Disruptive of elective practice and personal life Increased liability Poor payer mix- many patients uninsured or underinsured With increasing focus on specialization, surgeons less comfortable with trauma Increased caseload Increased income May be compensated for call

  44. ER Call Trends in compensated call AAOS OPUS 2010 (no data in 2014 survey) 68% of orthopaedists take trauma call 40.4% of those taking call are compensated 2014 MGMA daily rate for compensated call* Mean / Median 25thpercentile 75thpercentile $1,016 / $1,000 $800 $1,050 *n=167; small sample size in most call surveys

  45. ER Call Factors in determining daily rate for compensated call Trauma Center designation Volume of orthopaedic consults while on call Payor mix of ER patients Number of orthopods taking call (supply and demand) Call pay has to be at FMV rate

  46. Financial Considerations

  47. What is the income guarantee?

  48. What is the income guarantee? Step 1: Clarify if it is a gross or net income guarantee Gross income: money is used to run your practice (overhead) and pay salary Net income: actual income or salary independent of overhead

  49. What is the income guarantee? Step 2: Compare data to national surveys for starting salaries Merritt Hawkins 2016: $521,000 Average base salary or guaranteed income only, does not include production bonus or benefits MGMA 2013: $436,000 Median income for general ortho, 1-2 years in practice Not included in 2015 data set

  50. What is the income guarantee? Step 3: Identify stipulations attached to guarantee What happens if collections don t cover salary, benefits, and overhead???

More Related Content

giItT1WQy@!-/#giItT1WQy@!-/#giItT1WQy@!-/#