Medical school and residency may provide physicians with a solid basis of knowledge and experience so they can being working in their field, but neither provides them with the details necessary to negotiate for an appropriate compensation package. Physician salaries are negotiated if the professionals know how to handle the situation.
Physician Salaries: How the Numbers are Determined
One of the biggest factors physicians need to keep in mind when negotiating their salaries is the marketplace. If the most experienced physicians in the area are earning $200,000 per year, then a less experienced physician should not ask for or expect to be paid $225,000. In the majority of negotiations, the marketplace is going to be a major factor. For example, the pay rate for Chicago internal medicine jobs and Seattle internal medicine jobs can vary by nearly 10%.
The method of earning calculation is also important. Physicians are usually paid in one of two ways. The first way is with a set salary. The second way is to receive a percentage of the revenue of a practice. Physicians working for a health maintenance organization or a medical facility are more likely to be paid with a set salary. This is where negotiations are the most important.
In some cases, physician salaries are intended to be boosted with bonuses which are usually based on the practice’s overall revenue. While these bonuses can add up, physicians must ask themselves whether the revenue levels which must be achieved are realistic. In many cases, they are not. Sometimes the availability of these bonuses will lower the actually salary.
Physician Salaries: Negotiations
A physician’s ability to negotiate a favorable compensation package also includes other factors. Experience, for example, is one of these factors. More experienced physicians, particularly those who have a background in specialty areas, are going to have more leverage in negotiations than a physician with only a couple of years of field experience under his or her belt.
Another factor is demand. Some medical facilities actively recruit physicians to join their staff because of a particular shortage or need in their area. In these cases, physician’s have even greater say in building a suitable compensation package. On the other hand, a physician coming to a medical facility or practice and asking for a position will have less power in the negotiations. For example, anesthesiologist salaries are quite competitive, even to the point of raising nurse anesthetist salaries above that of primary care physicians. Psychiatrist salaries, on the other hand, tend to lag that of other specialists.
Regardless of whether the physician is able to “play hard ball” or not, the key in negotiations is never settling for an amount less than what one is worth. However, that also requires one to be realistic about what their experience, education, and services are worth in the community. Unrealistic expectations may make it difficult to find a position and may cause dissatisfaction with the profession itself.