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Compensation concerns

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Good Morning,


I'd like some advice about approaching my SP with regard to my compensation arrangement. Here is the relevant background to the issue:


I am 2+ years out of PA school and work in rural Pennsylvania in family medicine. Bear in mind that my home state now has the distinction of paying the lowest yearly salary to PAs in general ($80,600 according to the 2011 Advance survey, which admittedly has a low response rate). Additionally, as you know, family medicine is a low paying specialty, despite the fact that I need to know something about almost everything that walks through the clinic door.


I took this position originally on a part time basis (9-12 hours per week) in March, while I was helping to care for my terminally ill mother. I am also licensed in another healthcare profession and work about 10 hours per week in that capacity. The setting at the time I negotiated my terms was a two physician practice, and my role was to work exclusively with one physician to help with his overload while the second physician was not in the office. My original compensation "package" was $40 per hour, plus paid malpractice and a CME allowance of $475 annually. My SP also invested in a new tablet for me (we utilize an EHR) and has bought additional office equipment to accommodate my preferences (for example, the lighted speculum system I prefer for women's health). My SP is an excellent physician - very bright and current in his knowledge, and with a patient base that adores him. He reads daily and passes knowledge on to me; he is clearly invested in my learning and professional development. More importantly, he respects the limits of my comfort as a relatively new provider and never asks me to practice outside of this. I cannot imagine a better collaborating physician.


After 4 months of this arrangement, the second physician departed somewhat precipitously for a new position in a different state. My SP agreed to take on any of the patients that chose to stay with the practice, and my mother passed away two weeks prior to the departure of the second physician. This opened up time for me to increase my hours and to accommodate the increased patient load. We are nearly overwhelmed with demand, and some patients are quite high acuity, with multiple comorbidities and of advanced age. I now work approximately 25 hours per week in this setting, and continue with 10-15 hours per week in my second profession. My productivity in terms of patients seen is low (10-14 patients per 6.5 hour shift) because of the transitioning of patients from one practice to the other, and because all are new patients to me and to my SP. However, as you will see below, I am basing my question on billing and not patients per day.


Recently, I began to wonder about my value to this practice and the equity of my reimbursement rate. The billing person showed me how to use the EHR to generate reports on my monthly billing, and I am struggling to find a way to deal with what I have learned. Essentially, here are the facts: In my 9 months of part-time to 3/4 time employment, the practice has billed over $103,000 for my services. My net earnings in that period of time has been just over $20,000. Without doing more complex math, you can see that this is about one fifth of what I have generated. Granted I am working from billing records as opposed to collection records, but I wonder if it should it be my concern if the practice fails to collect what it is due.


I in no way think my SP is aware of these data. He has no clue what he makes, or what I generate for the practice. By the way, he has never employed any mid-level provider before (and in fact was vocal about never wanting one). I know the standard professional line, which was clearly taught to us in our professional development courses in PA school, is as follows: "A PA should generate 2 - 3 times his or her salary to justify his or her role in the practice." Is this actually written somewhere and endorsed by any of our professional leadership?


I value the relationship I have developed with my SP, and with my entire staff, and I want to proceed with professionalism and mutual respect for the complexities involved. I understand that my SP has just lost a business partner and that cash flow may be an issue; there are also financial strains with regard to ownership of the building, etc. However, I am working 25 hours in patient care, as well as at least an additional 12-15 hours weekly on documentation, and I can barely make ends meet. To my predecessors who have bravely managed these tricky waters before me, can you offer any negotiating advice? I do not want to generate resentment or bad will, but I also do not want to disadvantage myself or any of my PA colleagues by accepting an inequitable agreement and promoting a skewed belief of a PA's worth.

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If you think you have a good relationship with him, I'd put together the numbers and say "Do you think this is fair compensation?" If you have been given authorized access to run HIS billing numbers and receivables, or your actual receivables, I would do all of those too, but not open with them.


So basically, you just pose a two part question 1) Do you think this is fair, and 2) if no, what would you like to do about it?


Of course, always have your CV and references lined up before you make such noises, and if there's no chance you would ever leave even if he turned you down for a raise, I wouldn't even bring it up. Sole proprietors have 100% control, and there's no one to appeal to if they're irrational or petty about compensation.

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Billed #'s are worthless and far overstate what you are generating!


look around the EMR - there is likely a report on what you actually bring into the practice


As he just lost a partner, and you are likely looking for more $$ and committment approach him with a request to sit down and talk about it - bring up the positives, ignore the negatives, sell yourself like a used car sales person, ask for him to make it worth while to stay around as you really like it and can see yourself there. ASK FOR PRODUCTIVITY pay or bonus based on gross receipts (don't go off profit unless you are an owner as profit is able to be manipulated)


I would say something like this


Great working with you and I am so thankful for all the help and guidence you have provided over the past year.......


expound on the positives



then move into the $$$ talk - in that you would like to open the discussion to a more equitable compensation package - and personal responsibilty for your income (read productivity) Suggest a base salary of about 70-80k per year with full bennies (health, med mal, retirement, $2500 cme.....) and then anything in receipts over 200% of your pay you would get 33-50% of each quarter (don't do yearly as this is way to long)




how this might work out.... (for a quarter)

Salary $20k

Billings $70k(that is about the most you can get unless you are a machine)

Collections $50k


he gets $20k for overhead leaving $10k extra - if you get 50% of this you get 5k


in the end you get $100k/yr

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I'm also from a state with low salaries. But your SP does not have to pay you the state average. I think it is totally reasonable to ask for the national average. Get the AAPA report (now 2 years old; I think there is a new one coming out soon) and present your argument. I actually created excerpts of the report to show my employer. In the end the offered me nat'l average even without me showing it to them--but I was prepared!! BTW nat'l average is closer to 90K, especially with some experience, like you.

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and remember AVERAGE means just that


I learned early on to NEVER compare myself to the average - this is the very floor that I will work for - amazing that it actually makes you more valuable in their eyes to day "hey look I am doing great work here, I am a great PA that is bring in $x and bringing great service to you patients, as well I am helping you out with all the ___________ overhead and costs of running a practice. I am not asking for Doc compensation (BTW this is $150-$200k/year at the min for IM) but instead just looking to be fairly compensated for what I bring to the practice.


Let them chew on that (And it is harder to loose a 75-90% PA then just an AVERAGE PA) and maybe you can settle on something above average.


Remember two rules


1) if you set your goal on average that the best you will ever get

2) never bid yourself down - make someone else bid you down....

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