Page 18 - Delaware Medical Journal - December 2017
P. 18
Four Bases to Cover
in Your Compensation
Arrangement
Your employment contract will spell out your base salary, bonus opportunities, loan repayment and
Bruce Armon
“A nickel ain’t worth a dime anymore.” –Yogi Berra
No physician wants to be or believe they are not being paid as competitively as their peers in the same geographic region with comparable experience and job responsibilities. Independent salary statistics, such as those from the Medical Group Management Association (mgma.com) or the Association of American Medical Colleges (aamc.org), can help you get a
BONUSES
Most physician bonuses are based upon some element of productivity. Productivity is often measured in cash. How much a physician personally produces will dictate the bonus threshold. An employer may state that a bonus can be achieved based on some multiple of your base salary, e.g. one and a half, two, or three times. Some employers use wRVUs as
the bonus threshold to avoid the variances from the payer’s reimbursements. Understanding reasonable
Yogi Berra was a great catcher for the New
York Yankees. He was an 18-time all-star, a
three-time MVP, won ten World Series, and
was elected to the Major League Baseball
Hall of Fame. He was the ultimate winner in a “ team sport. Most physicians, too, are valuable
players on their teams. And for physicians, the
“When you come to a fork in the road, take it.” –Yogi Berra
wRVU thresholds (how many wRVUs
you must produce to earn the bonus) is essential to making sure the bonus is not illusory and out of reach. An employer may do a combination of your productivity versus overhead to determine if a bonus
is earned. It is important in this scenario
to understand how overhead is calculated. Is each physician responsible for the same
well done is through their employment contracts.
If you have a great year, there are upside opportunities that can be included in your contract to reward those successes. And just like a major league baseball player who has a guaranteed contract, a physician with a multiyear deal may have protections in an “off” year as well. The four bases (baseball pun intended) of a physician’s compensation arrangement are base salary, bonuses, loan repayment (particularly for more
BASE SALARY
For most physicians, the base salary — the amount you’re paid a n n u a l l y o v e r t h e c o n t r a c t t e r m — w i l l b e t h e p r e d o m i n a n t source of income communicated in the employment contract. Before signing a contract with a base salary included, make sure you understand how the salary was determined. Is there
“You better cut the pizza in four pieces because I’m not hungry enough to eat six.” –Yogi Berra
basis bonus, it is important to understand whether trailing collections for payments received after termination or expiration of your employment agreement are included as part of the bonus calculation.
LOAN REPAYMENT
An employer willing to pay some or all of your loans can be a
w o n d e r f u l p e r k , b u t y o u m u s t u n d e r s t a n “d the conditions for payment. Some
employers require you to be employed
and in good standing at the end of each contract year before the loan amount is
paid. Others may provide loan repayment
on a monthly basis. An employer may
“cap” the amount of the loan to be paid
over the life of the contract. Or, there may be other conditions, such as a certain amount of productivity or attending a certain percentage of committee meetings.
“It ain’t over till it’s over.” –Yogi Berra
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Del Med J | December 2017 | Vol. 89 | No. 12
