One of the most fun parts of running The White Coat Investor is the opportunity to peer into the nitty-gritty details of the financial lives of other doctors. It's a little bit like practicing emergency medicine that way–a bit voyeuristic but often entertaining and always interesting.
One of the things I have noticed that no one ever seems to talk about is that intraspecialty pay variation is higher than interspecialty pay variation. Let me explain what I mean. Take a look at this salary survey from Medscape (and show it to your med students, apparently 3/4 of docs are never shown something like this in med school)
The casual viewer looks at this and says, “Cardiologists make twice as much as family practice docs. I want to be a cardiologist.” But once you've been in my shoes, you look at this and say “Wow, some family practitioners make more than the average cardiologist. I wonder how they do that?” Look at the variation here: the difference between a plastic surgeon and a pediatrician is $289K a year.
Now check out a specialty-specific salary survey, from my specialty of Emergency Medicine. This one is from 2015, so not quite up to date (thankfully 2019 numbers look better):
Look at the 10th percentile for employees — $213K. Now, look at the 90th percentile for partners — $510K. Difference? $297K. GREATER than the difference between the average pediatrician and the average plastic surgeon!
The ability to increase pay, and increase it substantially, solves a ton of financial problems that real doctors run into and email me about all the time. It's way easier to pay off your student loans or mortgage on twice the income. Even after-tax, it's much easier to become financially independent or have a dignified retirement or send your kids to the college of their choice when you can double your income. The bigger the hole you are in, the more interested you should be in this topic.
I trolled around in the WCI Facebook Group until I got a few nibbles. Then I reeled them in with some emailed questions. I considered doing this on the podcast, and maybe still will, but it was a bit tricky to get people willing to come on the podcast and give us the straight scoop without the anonymity I can provide in this blog post.
I have four docs from three specialties — family practice, pediatrics, and med-peds, all of whom are making 2X+ the average for their specialty. I asked them all the same questions and, with minor edits, I'm posting the answers they sent me. If you are a doc or other high income professional in what is supposed to be a poorly paid field and are making 2X+ the average, please post your tips in the comments section after the post and you can play along at home!
No, I haven't verified any of this and no, I cannot promise they will answer the additional questions about their lives that I'm sure you'll post in the comments section. But this I can tell you — these people exist in every specialty. If you want to have an income like theirs, I would suggest doing at least some of what they do that is different from what you are doing now.
#1 Pediatrician Making $430K
Our first volunteer is Mike, a pediatrician who made $430,000 (>2X the average above) in 2018. He averages eight to nine hours a day, four days a week, 50 weeks a year. Like many pediatricians, he works longer in Winter than in the Summer and takes q13 call plus 8 Saturday mornings a year. No inpatient work. He came out of residency in 2013 with $65K in student loans (actually paid them off the day before responding to my email).
Mike is a partner in a 10 doc partnership with 3 part-time MD employees and 4 NPs. 70 people total work in the practice, many part-time. 20-25% of patients are Medicaid (no cap), the rest private insurance. Mike does not do many procedures, mostly circumcisions and ear piercings which are all cash pay, but feels that really doesn't make a big difference in his income. He sees 25-35 patients a day.
What Have You Done to Increase Your Physician Income?
For me personally, I bought into the private practice. This allowed me to increase my income from an employed physician to a partner receiving partner salary and taking part in the profit sharing.
Our biggest expense is staff. We pay fair rates for our staff, but also demand that they work hard for their money. We do not have excess staff and think very hard before hiring another person or creating another job to be sure that the roles that are needed cannot be completed by another staff member. When we add another service we ensure that it will be revenue generating. We invested time and money into a new system for appointment reminders so that we are sending text and email reminders frequently to decrease our no-show rate by over 1% in the past year going from 4.5% to 3.5% (which is a huge amount of money). We bring patients back for rechecks frequently (I don’t think excessively or inappropriately though). The key is to keep our schedule full. If it is full, then we are doing well. During the summer if there isn’t as much sick, then we get creative and add more well visits.
Partners are paid solely based on their RVU’s so I am very incentivized to be busy, other partners are not as busy as me, so they don’t get paid as well. There are other partners that are more busy than me and make maybe $30-40K more per year.
#2 Pediatrician Making $450K
Our second volunteer wishes to remain anonymous, but is also a primary care pediatrician who makes $450,000 working 32 hours per week over 4 days and 47 weeks a year. He also takes call 4-5 times a month. He is 22 years out of residency and paid off his $40K in student loans over 3 years.
He owns his practice with 3 physician partners and has two doctor employees, two NP employees, and 35 others. He sees 50% Medicaid, 45% HMO/Private Insurance and 5% self-pay, but feels no control over that mix as they are the largest practice in the county. They attend high-risk deliveries at two hospitals and stabilize critically ill newborns prior to transfer, but their office procedure mix is pretty standard among pediatricians. He sees 25-30 patients per day.
Why Is Your Income Higher Than Average?
One main reason my income is higher than the average pediatrician in the region is because of the high risk deliveries we attend. We have a contract with the 2 hospitals that pay us (as independent contractors) in addition to our office reimbursement.
#3 Family Practice Doc Making $415K
He is on an RVU compensation model but thinks the payor mix is 60% private and 40% Medicare/Medicaid. He accepts all new patients into the group of patients he inherited from a prior doc. He averages 23 patients per day and does “more procedures than average. I perform a lot of derm procedures (biopsies, cyst and lipoma removals), cryotherapy, joint injections (subacromial, knees, trochanteric bursa, carpal tunnel, trigger point), ganglion cysts. I also perform vasectomies.”
What Have You Done to Increase Your Physician Income?
I have spent a lot of time learning my EMR (Epic) and how to make my day as efficient as possible. I use MModal to dictate. This has really helped with work after hours. I start at 7:30 each day and my last patient is at 4:30. I am out the door heading home with all my charts closed and paperwork completed by 5:15 pm. My partners and I have monthly meetings to discuss issues with our staff and how to become more efficient. From the front office staff, phone staff, and clinical staff, we identify gaps in care. Our goal is to have everyone practice at the top of their license. If a nurse is doing something an MA is capable of doing, we take that responsibility and give it to the MA. If a physician is doing something a RN is capable of doing, again, we take that off the doc and assign that to RNs. This helps keep us physicians busy seeing patients and doing procedures and not get bogged down in prior authorizations, FMLA/disability paperwork, phone calls and other things.
I think the main thing that has helped my income is developing the mindset that when I am at work, I have come to work. I love my job and love seeing patients, but if I'm spending time away from my family I am not there to waste time. I want to see patients. My template is 15 minutes for follow ups and 30 minutes for new patients and annual physicals/medicare wellness visits.
I realized early on that one of the most annoying and interrupting things in my day was when patients would show up late. I would still try to squeeze them into my schedule so I wouldn't miss out on the RVU and to avoid inconveniencing them. After a while I realized by working late patients into the schedule I was making all my other patients that day upset because I was then running behind. They were upset; I was upset. It was causing a lot of stress trying to please everyone. I then realized that if I set a ‘late policy' and held to it, patients would eventually get on board and realize the importance of being punctual. I set my policy at 10 minutes. If they arrive after 10 minutes, they have to reschedule. If they arrive before 10 minutes, I'll agree to see them but they have to be willing to wait until I have time. I see the patients who arrive on time first. Managing my schedule has been very important for me to increase my efficiency.
I think the other main factor is learning how to bill. I think a lot of PCP's underbill. I'm not sure if it's because they don't take the time to learn the difference between a level 3 vs 4 vs 5 or if they are just nervous that they will be audited so they bill everything a 3. My hospital does a voluntary audit every year and my audit passes every year. I know the difference between office visit levels and I document accordingly. There is no award for seeing a complex patient and then billing a level 3. If you do the work, get paid for it. It's not easy to manage 3-4 chronic medical problems and address 2-3 new complaints in 15 minutes. I think providers don't necessarily need to document more, they just need to document smarter.
Combining E&M visits with procedures makes a huge difference as well. A level 3 office visit for an established patient is 0.97 RVUs. A level 4 is 1.5 RVUs. A joint injection/biopsy/cryotherapy is about the same RVU as a level 3 visit but takes just an extra minute or two of my time. I have established protocols with my staff so when I want to do a procedure, I just tell them what I plan to do and then go in to see my next patient while they get everything set up as I've instructed. I can then just pop back in to do the procedure and wrap everything up. EMR's then make it convenient to add the appropriate procedure template to the office note which completes the documentation.
#4 Internist Makes Half a Million
“Dr. Solo” is a med-peds doc who made $500,000 in 2018 working 35-40 hours/week, 45 weeks/year. He is “always on call” with the solo practice he owns but never goes to the hospital. Call is about 3 after-hours calls per month. He is 12 years out of residency and still owes $50K of his original $150K 3.25% student loans.
He employs no APCs, and is down to 2 employees from the 4-5 he had before transitioning to a subscription-based practice. His patients are 85% private, 10% Medicare, and 5% Medicaid, but he hasn't actually taken insurance since 2011. The patients who stayed with his practice generally have PPO type plans and he is out of network on those. He does no procedures and sees 5-6 patients per day. No, there is no typo in the previous sentence.
I transitioned out of accepting insurance, acquired knowledge in integrative medicine and nutrition to develop a niche, changed to a membership-based practice, and cut overhead, i.e. from five employees down to two. I am passionate about spending the appropriate amount of time with each patient, enough time to allow me to best understand and treat not only their physical/medical problem(s) but the interdependent psycho-social and lifestyle choices (i.e. diet, exercise, sleep habits) – and I keep this tenet at the forefront of every decision to optimize the practice.
As you can see, it is entirely possible to go into a primary care specialty AND make a lot of money. The key is the same as with any business — those who own a well-run business make more money than those who own a poorly-run business and those who are employed. So rather than crying “woe is me, I can't get rich because I'm a pediatrician” or worse, not going into family practice because you think you can't make enough to pay back your student loans doing so, do what these docs did and create your own destiny.
What do you think? If you are in primary care, what have you done to increase your income? What are your tips for your peers to go from the 25th percentile to the 75th percentile for your specialty? Comment below!