Something that I see written about frequently–and will likely write more about myself–is saving your money. As attendings, we doctors are paid pretty darned well, and ought to be able to live within our means, while also saving for retirement. However, some of the numbers offered as reasonable physician income are far higher than what an average primary care physician or internist can reasonably be expected to earn.
While it is reasonable to find savings to put away by spending less, another strategy is to make more. Working hard at your job, or negotiating better terms on a contract, are important factors to earning more. What I’d like to write about today is knowing where your money is coming from. That can help you make smarter choices about where you want to put your effort, possibly helping you get paid for work you are already doing.
I am certain I will not be listing every way an Internist/PCP can earn money practicing medicine, but here are a number of ways I have experienced or read about. I hope this may be helpful to others, especially to residents who may be looking at positions and contracts in the coming months.
Revenue based income
This is also known as “eat what you kill.” This is to say, if you see patients and send a bill, you or your office will eventually get a check. Your salary will be based on the income from those checks.
Therefore, your income will be based on a number of factors: how many patients you see, how accurately you bill for your services, the insurance coverage your patients have, your office’s efficiency in sending bills and managing collections (making sure you get paid).
Of course, there may be overhead to cover: how much you pay for rent for the office, utilities, an answering service, staff payroll, insurance, etc. (That’s not counting losses from staff embezzlement, which happens more often than you might think.)
Whether you are a practice owner or employee, all of these factors will play a role in how much you take home.
Overall, though, the incentive is to work more: see more patients and bill for your work.
Here, working smarter is really making sure you bill properly. This isn’t something that is taught well in residency; hopefully you may have access to a billing expert who can teach you how to bill correctly, if you work for a large organization. If not, at least now there are some resources to teach yourself.
RVU based income
An RVU (relative value unit) is a way of assigning a value to your time and effort. For example, a level 4 office visit with an established patient gets a work RVU assigned to it: for 2018, it is 1.5 work RVUs. What insurance pays you for this visit can vary tremendously, so if you get paid based on what is collected, you might very reasonably prefer to see patients whose insurance pays more.
This is a problem for practices (or health systems) who need or want to provide care to all, as Medicare (and especially Medicaid) have a reputation for not paying well. Thus, RVU-based income is usually something offered to employed physicians, as it can smooth out some of the differences in reimbursement while taking insurances of various quality.
In this case, billing appropriately for your work and seeing more patients can be the best way to grow your income.
Learning which type of work earns you more RVUs can also help you focus your efforts; you may decide to do more hospital work, or to incorporate more procedures into your office work, to boost your RVU totals.
Time-based income
Very seldom will someone pay you to sit in an office, twiddling your thumbs. However, practices or health systems have to offer reasonable access to health care or else they will fail. Keeping an office open from 1pm-2pm on Tuesdays and Thursdays usually won’t pay the bills.
You may be able to charge more, or earn more, for working less desirable hours (weekends, nights). I especially see this in job listings for nocturnists (hospitalists who work mainly the night shift). Personally, I’m such a morning person, you couldn’t pay me enough to work nights anymore; but for someone starting out with lots of loans and fewer obligations at home, this could be an excellent choice for several years. Taking extra call could also be a way to earn more, depending on your practice situation.
Another aspect of being paid for availability might be if your contract calls for you to be in clinic for a certain number of hours each week. You need to know how these are counted: that sick patient you see at the last minute may get you more credit scheduled at the end of clinic rather than as a double-booking.
Population-based income (panels)
This is your basic HMO set-up: you get a set amount of money per patient to manage their health. If everyone is healthy and needs little care, you get ahead; if your patients use a lot of resources (going to the ER, getting lots of tests, are prescribed many expensive drugs), you fall behind.
Under this model, you do not really have an incentive to bring people in to the office for a visit for minor problems. You can manage minor problems by phone or e-mail, leaving more time free to see people you are worried about, or who aren’t improving as expected.
You may find it’s more efficient to block time out for your “telephone medicine,” or to advocate for an RN or PA to manage these issues, while you see more complex patients in the office.
Bonuses for “Quality”
I assume that all doctors want to take good care of their patients.
However, various government agencies and insurance companies think that by offering incentives we will practice better medicine. A number of them have penalties and/or bonuses for physicians or practices based on hitting quality targets.
This is where knowing how you get paid (and how much) can really come into play.
For example, I strongly encourage my patients to get their seasonal flu vaccine. When I am really excited, I trot out the story of my friend who missed his flu vaccine, and ended up in the ICU for 40 days because of swine flu.
I don’t really care if my patients get their vaccine at the office, or with their local pharmacy, as long as they get it.
However, our practice is graded on how many of our patients get vaccinated each year, and that grade has a large impact on payments and bonuses. So every fall, I spend about a minute reviewing their vaccination status, and clicking through a few screens to document the flu vaccine they had at CVS or Rite Aid. This keeps me from nagging them to get their flu vaccine if they come back during the winter.
Documenting a higher vaccination rate also raises my (or my practice’s) quality score and can have real financial consequences.
Conclusion
This was longer than I expected, and yet not nearly as detailed as I had planned. For those who read to the end, thank you for your attention. I hope this is helpful, especially for those looking at new positions. Please let me know if I missed a major payment method for clinical work, or if something isn’t clear.