It’s surreal to say that I completed five years of practice in October 2025, and I am grateful to have broken seven figures in annual income on this journey. I finished interventional pain fellowship after anesthesiology residency, and I accepted my only job offer at a multi-speciality physician-owned practice in the Midwest in October 2020. Unfortunately, 2020 was a terrible year to graduate from anything, let alone fellowship.
I had originally accepted a job offer with a local anesthesiology group that was contracted to provide both anesthesia and pain management services at a large hospital system. I was expecting a much-needed $20,000 “signing” bonus that would be paid when signing the contract, but I got a JD on the street when I realized that the bonus was only paid upon starting the position. And they never let me start due to COVID. My contract was terminated in late April of my fellowship year, about four months after signing, and I was left scrambling for any other position I could find.
At this point, I was more worried about being employed than succeeding financially.
I had several runner-up positions in the Midwest and Northeast that also made me offers before signing, but due to the various unknowns of the COVID lockdown, those doors simultaneously closed as well. In May, after an interview process that lasted six weeks with ample caginess and an employer that appropriately questioned the need to fill the position at all, I finally received a 100% interventional pain position with my current employer with a base salary that was 50% higher than my prior contract.
Volume Forgives Much
After starting in October 2020, I entered practice, averaging approximately 6-7 procedures per day, with a majority clinic allocation due to the need to see new patients and expand my referral base. I was extremely reluctant to take vacation time despite my healthy base salary guarantee, because I was worried that if I didn’t pull my weight, my contract would be terminated before I could pay off my student loans.
My primary referral base is a panel of approximately 55 PCPs, employed by the same entity as myself, with other referrals harvested from local hospital neurosurgery departments, outpatient orthopedics, and external PCPs, whose patients have historically had good clinical experiences with me. Many patients at this point also present to me as word-of-mouth referrals from family and friends. I pay an approximate 9% management fee off top-line revenue to my employer as a member of a multispecialty practice, which provides access to my primary referral base as well as an administration that negotiates reimbursement rates, oversees our ancillary revenue streams, manages day-to-day practice logistics, provides legal/compliance oversight, and assists with supplies/equipment purchasing.
Approximately 80% of my revenue is procedural, and the rest is clinic-based. At my base salary, it took me approximately 12 months to break even (monthly collections – (50% practice overhead + base salary/benefits expense)) = $0 (i.e., no longer losing money). After the break-even point, I started receiving quarterly adjustments or a “bonus,” which is essentially just the surplus from the above equation as my monthly collections increased.
Over the past five years, and taking into account this year’s projections, I achieved W-2 income growth of 37% (relative to my base the first full year of practice in 2021), 27%, 22%, 23%, and 18%, year over year. All in all, in five years of practice, my average annual W-2 income comes in at just around $1 million per year. Also during this five-year span, the average weight-adjusted Medicare reimbursement for my procedural mix has decreased by approximately 11%, and the E/M clinic codes have increased by 4%. In terms of our private payor contracts, we have seen a weight-adjusted decrease of approximately 3%, with our largest market share private payor decreasing 6%-7% during that time—that loss being partially recouped by increases from our smaller private payors, where we tend to have more negotiating power.
To put that into context from a workload standpoint: at current revenue, I average approximately 25 procedures per day, and I will have taken only seven weeks of vacation in five years (I’ve been a partner for three years, so this is by choice).
Based on the above information, there are a handful of conclusions we can make off the bat. It’s safe to say that had Medicare and private payor reimbursements even stayed stagnant from 2020 to now, I would be making significantly more money than I do at current volumes. There is also no guarantee that private payor contracts will increase to offset Medicare decreases, and even as a larger entity encompassing some 150 providers, the balance of negotiating leverage remains in flux.
Even if I were happy making only my base salary, when the value of your work decreases annually, you need to incrementally increase patient volumes when taking into account practice cost increases, just to cover that base. The volume train has left the station, whether you like it or not, and that is the origin of the volume component of physician burnout and the “physician squeeze.” Every annual average physician salary report is misleading when failing to acknowledge reimbursement and work value, and the fact that the Medicare conversion factor was nominally 11.5% higher (not counting inflation) in 2020 when I started practice compared to today is evidence enough.
The vast majority of physicians seeing palpable income growth in nearly every practice setting simply work harder and/or longer. I’m also not here to discredit the importance of work-life balance and taking vacation time, but at face value, taking vacation in a high-volume and high-revenue private practice creates a palpable income void. Unless you’re a founding partner at a practice with significant ownership/ancillary interest, a subspecialty surgeon with brand recognition at a large hospital system, or are a high-demand cash-only practice with pricing power, you’re going to have to toil and sacrifice on work-life balance to break seven figures when making a living accepting insurance.
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Profitability Trumps All
The only factor that matters more in practice than volume is profitability. When taking into account my practice overhead, management fee, and effective household federal/state income tax rate, I have to generate $3.30 in revenue to bring home $1 in after-tax net pay (we currently save approximately 75 cents of every dollar we make). Since my wife is also a seven-figure income physician, our tax burden is high, but a decrease in income would only result in a 57-cent-on-the-dollar loss in take-home pay due to that same burden.
With that being said, there is significantly more incentive to cut costs and maintain a lean practice than there is to see more patients in a given day, irrespective of payor mix. In addition to a substantial patient volume increase in five years of practice, there have been numerous initiatives taken by my partner and me to optimize profitability. These changes include:
- Hiring three radiation technologists instead of an extra CMA to maximize fluoroscopy time (our second-most precious commodity after our staff).
- Cross-training radiation technologists to help with task messaging and procedural scheduling.
- Transitioning from pre-made procedural kits to a la carte needles/syringes/catheters to optimize supply usage and decrease waste.
- Incorporating the usage of less expensive preservative contrast and steroid when clinically appropriate.
- Knowing the ins and outs of prior authorization guidelines for each procedure and payor; we only offer same-day injections to payors that practically guarantee payment.
- Transitioning all radiofrequency ablation and spinal cord stimulation trial business in office to optimize professional fee reimbursement (while also decreasing facility/anesthesia expense to the patient).
- Drawing up our own medications and eliminating the need for scribe services through efficient dictation/macro template usage.
The change from pre-made sterilized procedural kits to individual component purchasing saved approximately $100,000 per year in supply expense alone. That’s a quick $50,000 raise without seeing any additional patients. It’s immensely important to do a periodic top-down overhead analysis and track YTD overhead if you're going to optimize take-home pay in a decreasing reimbursement landscape, especially when volumes have already been maximized.
A helpful aspect of this analysis for me is separating the concept of practice revenue from take-home pay. The majority of the time, an administrator's primary response to your desire to increase income will be to work more or bring on another partner to help distribute overhead. Neither of those pathways is more efficient or safer than taking a more active role in your practice dynamics, assessing needs and deficiencies, prioritizing staff development and flexibility, and making your core team as efficient as possible to decrease cost.
Between 2024 and 2025, my revenue is projected to increase 18%, and most of that has come from increasing fluoroscopy availability and the ability to offer same-day procedures to patients even on clinic days. I am also harvesting nearly all of this additional revenue as take-home pay after the management fee, since our overhead is essentially flat YTD. The margins on revenue earned increase exponentially at the top end of revenue—it costs an incrementally small amount of money in staffing and supplies to harvest that profit because those resources are already present. That’s when volume works wonders. My ancillary revenue share and investment in our practice’s real estate company make up a negligible contribution to my year-end compensation, and since most of my pay consists of my own collections, profitability is key.
Job Satisfaction and Work Value
Once you reach peak or near-peak clinical volumes, you eventually come to the conclusion that there is only so much patient care you can deliver in a given workday. Even if there was an opportunity to do more, the desire just isn't there. The next frontier, which is a luxury for many practices since a necessary prerequisite is ample clinical volume, involves optimizing work value and job satisfaction.
Earlier this year, I stopped accepting new external Medicaid patients and a couple of Medicare Advantage plans. I already have patients in both of these cohorts in my practice, and so, this decision was more prior authorization-based than it was financial. I had been wasting so much time during lunch and in between patients attempting to justify clinical care to insurance companies on behalf of patients when the treatments in question were routinely covered by most other payors. Taking time away from actual patient care for these mostly fruitless battles not only affected my ability to provide good care, but it also eroded work morale. Shedding this aspect of my practice has undoubtedly optimized my job satisfaction and overall frustration level. This change has also decreased wait times for my private payor and Medicare patients, who sometimes have to wait many weeks for follow-up appointments and treatment.
I also optimize time value by attempting to offer same-day procedures for insurances that will allow it when I have the necessary staffing, as long as it is clinically appropriate to do so and the safety profile (fasting, anticoagulation, infection risk, etc.) checks out. This saves the patient a second copay and a trip back to my office, which my elderly patients who need rides appreciate the most. I have also stopped doing a few high-risk surgeries/procedures that can cause a fair amount of angst in the midst of a potential complication, and I am more than happy to refer to other local colleagues who are willing to accommodate these cases.
Risk mitigation is often overlooked in clinical practice, but if your practice is largely in stasis, maintaining your revenue via lower risk/easier procedural work also contributes to work-value optimization—especially if, like me, you don’t care to be challenged at work.
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For a profitable practice like ours, there is little incentive to bring on a partner that may not be willing to make the same sacrifices we did to grow our practice. We risk diluting our take-home pay when the revenue doesn’t proportionately increase to offset staffing, supplies, and rent cost increases to accommodate that provider, despite a more favorable overhead split. And to me, this is the worrisome contradiction: the simple realization that a “growth at all costs” mentality perhaps doesn’t work anymore and that the only factor truly guaranteed when you expand is cost.
When people realize that there is a ceiling to what can be accomplished with private payor reimbursement negotiations, even if you do grow in size, and that Medicare—which makes up 50% or more of most practices’ payor mix—decreases reimbursement unilaterally year after year in even nominal (let alone inflation-adjusted) terms, physicians who already have profitable practices with a strong referral base may simply want to protect what they have. Hospitals will also lessen their risk profile in hiring as they experience Medicaid cuts, and a higher proportion of emergency/inpatient care goes unpaid or gets paid below cost.
Despite our hibernation mentality and minimal marketing dollars spent, our volumes have never been higher, partly because our competition has suffered more than we have. One single speciality pain practice sold to private equity and, due to profitability pressures and reversion to poor patient care with new management, has bled a large portion of patients and experienced a revolving door of providers who left after the base salary guarantees ended. The anesthesiology group that originally hired me with a $20,000 signing bonus that never paid out had its contract terminated by the hospital, leaving a large group of providers in disarray.
At baseline, the vast majority of rural hospitals can’t incentivize physicians enough to do satellite clinics and keep procedural revenue in-house, and so those patients travel hours to practices like mine, where I ultimately capture that revenue. Add to these troubles the push toward site-neutral payment, as recently passed by CMS, which recalibrates practice expense RVU reimbursement away from ASCs/hospital outpatient departments and toward private practice offices in pursuit of lower cost care and disincentivizing buyouts/consolidation.
My humble prediction is that healthcare consolidation will continue regardless, not because of investment dollars spent but because poorly managed, less financially aware practices and hospitals will simply die off. Until inflation-adjusted Medicare reimbursement increases come to fruition or large healthcare systems/community medical groups offer coverage policies directly to consumers and employers, more and more entities will adopt a contraction mentality in this climate, driving down upfront base salaries and transferring more downstream compensation risk to the incoming provider. Ancillary revenue sharing will be offered at a steep premium if at all; equity ownership will become more tiered, opaque, and less meaningful; and, most importantly, physician turnover will become much more prevalent.
The obvious counterargument is that if you don’t pay physicians competitively in the midst of a shortage, they won’t accept your job offer. My counter to the counterargument is that I’m not sure anyone really cares. I have seen numerous physicians from high-revenue specialties not achieving profitability at the time of partnership buy-in because their base salaries and total compensation packages were too high. Add to that the high overhead of the modern medical practice due to rent, bloated staff, tariffs affecting supplies/vendor pricing, local competition, 6-8 weeks of vacation, and caps on the daily schedule, and there’s a decent chance your take-home pay as a partner may be less than your employee base.
Medicine is becoming more corporate every year, and employers are getting comfortable leaving positions unfilled if the numbers don't make sense. Private practices can’t survive on Medicare/Medicaid just like hospitals can’t survive on inpatient admissions, and that is the reason why the vast majority of healthcare dollars are spent attempting to capture a single patient population: reasonably healthy, high turnover, outpatient procedural patients with private insurance. Patients who need to be seen outside of this cohort have been dealt out of the hand.
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Despite these struggles, practicing medicine is still a financially rewarding profession with reasonable job security. Don’t let any bitter attendings, colleagues, or partners tell you otherwise. And I’m not talking about Porsches and Rolexes. I’m talking about a reliable conduit toward jumping income brackets and breaking generational cycles of financial insecurity so you can live life on your terms and take care of your family.
My parents raised two boys in a one-bedroom apartment. I slept on the living room sofa until I was 27, commuting through medical school and intern year to save on rent, and my parents helped pay for college on a $45,000 household income as best they could. My father was laid off over the phone during COVID after 32 years of service while recovering from a knee replacement. I paid off their credit card debt and car. I give them monthly spending money, and I pay for their health insurance so they never have to work again.
By 33, we were millionaires, and by 34, we were multi-millionaires, all while enjoying every luxury within reach of ordinary high-net-worth individuals and paying off student loans. It’s not as glamorous as getting equity in a tech company or being a portfolio manager at a hedge fund, but W-2 sweat is a knife that still cuts. I understand that we are likely income outliers, even among physicians. I also acknowledge that investing in a medical education undoubtedly warrants more debate today in light of higher admission costs, newly capped borrowing limits, the prospects of taking higher interest non-forbearance private loans to fill that gap, limited repayment options, and the grim outlook for PSLF in a country on the verge of perpetual fiscal deficits and federal cuts. But show me a profession with a direct-person-facing facing enduring skillset, relative immunity to cyclical and sometimes arbitrary corporate layoffs, the opportunity to own/share/operate a business, stable job demand even in non-metro areas, and a multi-six-figure starting salary where it's also cheap to go to school.
Despite the debt woes, practicing medicine for most graduates isn’t shabby, and even if you make a fraction of our income, a runway toward financial independence, albeit longer, is still readily achievable. What’s more impressive is the disparity of physician pay between physicians themselves. Taking advantage of geographical arbitrage and cost-of-living differences is a tremendously effective wealth-building strategy. The Bankrate cost-of-living calculator tells me that our current household income in our metro translates to an analogous $7 million per year in Manhattan or $5 million per year in San Francisco in required income to achieve comparable savings and purchasing power, and that doesn’t factor in the additional 10% state/city income tax in those metros compared to my state. Living like a resident, as WCI would recommend, certainly helps you save and pay down debt, but don’t let your quest for frugality impede your ability to strategically increase income and intermittently indulge as financial goals are accomplished.
Lastly, I encourage you to embrace your aspirations and never be ashamed to talk about money. I am forever grateful to this blog and Dr. Jim Dahle for starting that conversation for me in 2016. The moment you take out an interest-bearing loan to fund your education is the moment you’re allowed to want to make money.
I never had a longstanding passion to be a physician as my wife did. In my hometown apartment complex, I watched all my childhood friends move away as their parents got promoted, traveled, bought homes, built small businesses, and fulfilled their dreams. Bitter and frustrated that I was left behind, I leveraged my intelligence to unapologetically pursue a path toward upward mobility because I wanted to live well. I practice with integrity, efficiency, and competence just like my wife, and I like to think that we both put our best feet forward every day.
I take my job one year at a time, and when reimbursements decrease, workloads increase, and costs increase, I rework the numbers and establish a new baseline with as little expectation as possible. My childhood and the unexpected difficulty I encountered while trying to land my first job have created a scarcity mindset and a general distrust toward all employers that I can’t get past, and so I’ll continue to make what I can while I can.
The aspect of wealth we’ve accumulated thus far that makes us happiest, more than any of our possessions, is being that much less reliant on our jobs with each passing year of savings. Medicine has always been a grind, and as much as we like to emphasize the unjustness and frustrations of practicing today, the future in my lens looks the same. Productive physicians will get paid regardless of practice setting, large private practices and hospital systems will dominate market share, legacy physicians who can’t grind will quit, and employed physicians will achieve work-life balance at the expense of the ever-further moving incentive wRVU goal post.
It’s business as usual.
What do you think? Is it harder to keep your same level of income with revenue and/or reimbursement decreasing? What else can you do in your job to maintain the lifestyle you want?