IM salary offers conflicting with expected RVU/comp per RVU- why is this?

[sanj238]

Im getting offers for 250k based on production (obv not guaranteed but this is supposedly the average)- with average RVUs at 4500-4800 and comp per RVU at 45. But when I do the math this doesnt add up to 250.

What am I missing?

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[Raryn]

Im getting offers for 250k based on production (obv not guaranteed but this is supposedly the average)- with average RVUs at 4500-4800 and comp per RVU at 45. But when I do the math this doesnt add up to 250.

What am I missing?

250k might include bonuses.

That is, base pay might be 45/wRVU, with an $X bonus if you crack 5000 wRVUs.

Also, make sure to be careful talking wRVU vs RVU. The typical physician probably gets closer to 10k RVUs a year as opposed to around 4.5k wRVUs. You generally care about the wRVUs, because that's how you personally will be getting paid in most circumstances.

 

[sanj238]

250k might include bonuses.

That is, base pay might be 45/wRVU, with an $X bonus if you crack 5000 wRVUs.

Also, make sure to be careful talking wRVU vs RVU. The typical physician probably gets closer to 10k RVUs a year as opposed to around 4.5k wRVUs. You generally care about the wRVUs, because that's how you personally will be getting paid in most circumstances.

Yeah some of these jobs offer bonuses aside from production but many are production based. Im confused how they can claim this.

Furthermore one of the recruiters said his basis for the income is the assumption id be in the 60% which was a 'safe' estimate that he has noticed other residents make.

These statements are confusing. Why 60% and not 40% etc.

 

[CompensationExpert]

@sanj238 Compensation methodologies are complicated. If the offer you received states that you will get roughly $250,000 for production at 4500 or 4800 then there is likely some sort of base salary plus productivity component. Did they not outline those details in the offer? Not shocked!

One of the biggest problems recruiters have is that either they do not have authority to go over a certain number unless they get legal approval or they are basing offers off of the average production of other recent recruits. So to your example, an initial offer might be at the 60th percentile and that is based upon recent recruits producing at that percentile after a year or two. To me, I agree that there is confusion on how organizations can claim a salary if it's really productivity base. Further, you would be surprised at the lack of knowledge most organizations have as it relates to salaries which in my opinion ultimately hurts the physicians in the short and long term.

 

[sanj238]

@sanj238 Compensation methodologies are complicated. If the offer you received states that you will get roughly $250,000 for production at 4500 or 4800 then there is likely some sort of base salary plus productivity component. Did they not outline those details in the offer? Not shocked!

One of the biggest problems recruiters have is that either they do not have authority to go over a certain number unless they get legal approval or they are basing offers off of the average production of other recent recruits. So to your example, an initial offer might be at the 60th percentile and that is based upon recent recruits producing at that percentile after a year or two. To me, I agree that there is confusion on how organizations can claim a salary if it's really productivity base. Further, you would be surprised at the lack of knowledge most organizations have as it relates to salaries which in my opinion ultimately hurts the physicians in the short and long term.

Very informative- and it is inline with what I suspected. Anything I Should ask before interviews to get a better picture and not wait until the contract?
What are some pitfalls to look at?
What is your website about- I clicked on it but it looks like its not all up yet

 

[CompensationExpert]

@sanj238 Thanks for the response. Make sure the offer is documented for you in some sort of letter of intent. You should not have to wait on a contract. Often organizations tell you that "all of the details will be in the contract" and this just delays the decision process. Also, make sure the compensation and outline of benefits is clear. It should mimic the contract but you also should not have to wait for the contract. Just make sure you have the information to make a decision based upon data and the marketplace. The biggest problem in any negotiation and offer situation is that typically the organizations have the knowledge which creates a lopsided negotiation process.

The website is a membership website for physicians focused on compensation, career development, and the contracting process. I work one on one with a lot of physicians and there is just a lack of information, data, and guidance. I am developing this so physicians can have this information at their fingertips and access to resources, so they can manage their careers.

 

[sanj238]

So what do I do when Im being offered a base level for the first two years but am told at 3-5 years their docs make x based on average rvu production. How do I verify this. Obv this wont be set in contract because every doc is different.

Im told by the recruiter that say I do the 60% rvu which supposedly is what most of the docs are able to do (ie avg at their clinic) i can pull in x dollars. How do I ascertain the accuracy of this.

Thank you by the way!

 

[gutonc]

So what do I do when Im being offered a base level for the first two years but am told at 3-5 years their docs make x based on average rvu production. How do I verify this. Obv this wont be set in contract because every doc is different.

You ask to see the data. If they say "no" then you can safely assume they're FOS.

 

[IM2GI]

So what do I do when Im being offered a base level for the first two years but am told at 3-5 years their docs make x based on average rvu production. How do I verify this. Obv this wont be set in contract because every doc is different.

Im told by the recruiter that say I do the 60% rvu which supposedly is what most of the docs are able to do (ie avg at their clinic) i can pull in x dollars. How do I ascertain the accuracy of this.

Thank you by the way!

Why does the incentive structure change after 2 years? Is this some kind of private/partnership group?

 

[Raryn]

Why does the incentive structure change after 2 years? Is this some kind of private/partnership group?

Many contracts have a salary guarantee for a year or two and then switch to production. Gives you time to build up a practice without making $100k the first year.

 

[CompensationExpert]

@gutonc is absolutely right! @sanj238 you need to request some sort of verification. If the examples they are using are true, then you are basing your decision off of that. If they are not and you would get paid far less because their practices aren't busy wouldn't you think twice?

 

[IM2GI]

Many contracts have a salary guarantee for a year or two and then switch to production. Gives you time to build up a practice without making $100k the first year.

Ahh I thought this was a hospitalist gig, which is somewhat of a commodity

 

[sanj238]

Thanks!!

I

 

[EasyRider]

Many contracts have a salary guarantee for a year or two and then switch to production. Gives you time to build up a practice without making $100k the first year.

The problem is not everyone builds a practice. How many physicians have taken a class in business in med school or residency? Or take into account the market share of current IM providers AND mid-levels practicing independently in the same area. Bottom line is many doctors after 1 or 2 year guarantee make $100k or less a year based on production. Until they move to a new area. That is why doctors move after their first job.