IFM | Family physician compensation: Myths, models and using the AAFP Career Benchmark Dashboard

Welcome to Inside Family Medicine, where you hear from leaders and peers in your specialty while learning about new tools and resources. I'm Cheri Tabel, a member of team AAFP, and I'll be your host today as we explore physician compensation. Today, we are joined by longtime AAFP member Dr. Norman Chenven, the founding CEO of Austin Regional Clinic, also known as ARC.

Following a two-year stint in the US Indian Health Service on the Navajo reservation, Dr. Chenven first established his practice in 1980. Today, it serves nearly one-fifth of the population of Austin and Central Texas. ARC is a 450-clinician, physician-owned-and-governed multispecialty group built on a primary care platform.

Next to me here is Tracey Allen-Erhart, AAFP's Director of Career and Practice, and she pioneered the development of the first Career Benchmark Dashboard for family medicine, which we'll be discussing today.

Welcome, Dr. Chenven and Tracey.

Hello. Thank you for having me.

We're here to talk about money, specifically myths and facts around income and family medicine and the resources family physicians can use to assess offers and make career plans.

But Dr. Chenven, I'm going to ask you to answer the question we ask of all our family physician guests on the podcast.

Why did you choose family medicine?

So when I was in medical school and doing my clinical rotations I enjoyed internal medicine and family medicine the most, and it was a toss-up for me. I loved solving the clinical problems that you get to solve in the intense internal medicine training program, but I also liked doing small procedures.

I loved the small procedures, the knits and dits and the sewing and so on. So family practice really appealed to me. I ultimately decided to do a family practice post-graduate training and then went into the Indian Health Service. I was on the Navajo Reservation, Tuba City, Arizona, and it was just a wonderful experience.

It was a mini multi-specialty group. There were 14 of us taking care of 40,000 Navajo and Hopi Indians, so it was amazingly busy but amazingly fun. And family practice prepared me to do that broad scope.

Thank you so much for sharing that. We're going to jump right in to compensation structure, and my first question for you today is what goes into a family physician's overall compensation structure, and how do you decipher how much you'll actually make in a job when you're looking at a contract?

That sounds like a simple question, but it's really a complex question. I think the first thing is where are you practicing and first thing is literally geography. If you're on the West Coast, you're going to make more money, but you're going to spend more. If you're in a rural area, you're going to make more money because there's a need to attract physicians to those areas.

I think that the form of practice that you're in, and there's such a broad opportunity for family practice. You can do emergency medicine, hospitalist. You can do traditional outpatient care and, or full hospital and outpatient care. So it really depends on that choice to set the parameters.

In our setting in Austin, how much a physician's going to make is determined by that physician's desire to make money or not, how many hours they're going to work. We have a substantial number of physicians who work part-time for family reasons and for other reasons, and you're going to make less than that.

If you work full-time in our setting and you are focused on your coding, on doing your value-based care, on patient satisfaction. So we have productivity components as well as performance components, which is satisfaction and coding and patient and the value-based care health quality measures. All of that goes together.

In our organization, I said it was a complex question. In our organization, there's a threefold difference from family practitioners making the least and the family practitioners making the most, and the range is between 150,000 and almost 600,000. You can do what you need to do or what you want to do in our setting.

I think there are other settings where there are salaries plus bonuses. I don't think there are many settings where it's purely salary unless it is a setting where the physician is needed. It might be a rural setting where you just have to be there twenty-four/seven, and you may not be highly productive because there's not that much demand, but you need to be there when you need to be there.

So I think there's huge range there. And as I said, it's a complex question. It's what practice do you want to do? What's going to make you happy that matters?

Thinking of those different settings, it's a good segue into the Career Benchmark Dashboard, Tracey. We know from the latest update on the dashboard that the average family physician compensation package is around $297,000.

What factors are most likely to determine how much a family physician earns? I think Dr. Chenven covered a lot of it. If you go into the Career Benchmark Dashboard, if you visit it, you can see both position profiles we've created so that you can see at a glance some different factors, like if you're employed versus being a practice owner, if you're doing direct primary care, or maybe you're a residency program director.

You can see some clear differences nationally on the national numbers. But Dr. Chenven mentioned looking at geography. The dashboard allows you to go in and filter by state, and you can see some big differences between, say, North Dakota and Alabama and New York. You put in some different states, and you can see some big changes.

But also, if you look at the roles, and then as you dig into that data, that there are a significant number of physicians who have a base salary, but then a lot still are on a productivity model, like he mentioned, and there's also bonuses for quality metrics, ACOs, things like that. So there's a lot that can influence compensation, and it really is about the decisions you make when you're selecting your position.

I was wondering, I do see differences between practice owners versus employed physicians and their compensation. Dr. Chenven, can you talk a little bit about what people who are considering starting their own practice or buying into a practice could expect different from being purely employed?

So again a more complex question than it seems on the surface.

Let's start from the basics. If you start up a practice, you're going to need capital. You're going to need advisors. You're not going to make very much money at the front end. It's just there's too much investment of time and energy in building that practice. If you are buying into an existing practice, a private practice, then it's who knows what.

It depends on the physician you're working with there, whose practice you're buying into, and I think it's really very important to get good advice in that process. I've seen all sorts of arrangements, good, bad, and indifferent, where someone has bought into a practice. If you join a larger, more established practice, of which, every city has practices similar to ours, then you have an opportunity to begin at a salary because you're not going to have the demand at first.

You should have a guaranteed salary for the first year or two, and then the opportunity to buy into the practice. In our practice a physician over a 10-year period can become a full shareholder equal to anybody who's been with the group, including myself, for many years. So there are different arrangements.

I think, again, starting a practice, buying into a practice, joining a group that's independent, a physician group you probably want a good advisor to make sure you understand the features that are involved in that choice. Now, there's more complexity going on in terms of lots and lots of private equity and practices that are a little more unstable.

We've seen some of these private equity where the physicians owned has been paid a substantial amount to begin the practice, been paid a salary or whatever, but then three years later, the equity owners decide to either sell or close the practice, and so you're-- you don't control your world, and that's-- that, I think, is of concern.

We've seen a lot of that, a lot of disruption in people's careers from what's going on in private equity right now. Working for a hospital system is a little bit different. Hospital systems are very stable. They need primary care, or they want primary care, and sometimes they need to cover rural areas and so on.

So again you have to choose what you want in life, where you want to be and really understand the dynamics of the practice you're joining. And I think even-- probably even more important is speak to somebody who is already in that practice to get a sense of what it's like. How are you treated?

Or, who is your supervisor? Are there a set of cultural expectations of how doctors behave and how you'll be treated if you have a problem and so on? I think it's, it's tragic when someone goes through all the training of becoming a physician and then is treated as just an employee, not as a professional, and there's a lot of that right now out there.

So it's really good to ask before you leap.

Going to pivot, thinking about our student and resident members, and talk about myths. In your career, Dr. Chenven, what myths have you encountered about family physician pay, and what did you learn that was actually true?

I guess I haven't been in the market so long that I have no idea what the current myths are. I don't have a good feel for that. I think there is an issue with that being a family practitioner you're feeling you're on the bottom of the totem pole, and reimbursement is less than many other specialties, and that, that is true. And often the work reward relative to being a family practitioner feels like it's less.

If you're a rheumatologist, you can make more money than a family practitioner and probably work fewer hours, but you have to go through a rheumatology residency and you have to enjoy being a rheumatologist as opposed to a primary care doctor.

The next couple of questions I'll address to both of you.

What do you think every resident and new physician in the specialty should know about family physician compensation? And I'll start with you, Dr. Chenven.

I think it's more about reward for me for your career. You're not going to become a billionaire being a family practitioner. You want to have a work-life balance as a family practitioner, and in doing that, there, there is an upper limit to what you're going to be able to earn.

I think that being a family practitioner is an extremely rewarding way to spend your life, your career, but you do have upper limits on what you can earn. There are alternative situations, direct care and concierge care, which we haven't mentioned so far, where that's a whole different type of practice, but it requires a certain kind of personality who's got the charisma to have patients pay a subscription to be in that practice.

And you have to have a reputation. You have to be available 24/7 for a concierge practice, though frankly, typically the patients who join concierge practices are not very demanding. They're very high-functioning and know how to take care of themselves very well.

Same to you, Tracey. What's the one thing resident and new physicians should know about family physician compensation?

I think that I've heard often that, especially since we launched the Career Benchmark Dashboard, that it may be higher than you expect. When we first launched the dashboard two years ago with the very first one, there was a poll that one of the family medicine interest groups did of students, and almost every student said, "Oh, this compensation's higher than I thought family doctors make."

So I think that family doctors are well compensated, even though when you see the Medscape charts that they put out, we're near the bottom. But there is fair compensation that allows for family doctors to repay their student loans and have a good, stable financial situation. I also think, though, that I would want residents and new physicians to really think about their options and what's important to them and get informed about what the compensation is out there in their community and in the geographic area they're looking at to make sure they're getting paid what they're worth.

Yeah. And there, there is a lot of demand for primary care right now, and there is a shortage. There's a really substantial shortage of primary care physicians. So there's a job out there. This is not a dead-end career. It's a great career, and I think that determining what you want to get out of it and how hard you want to work at it will determine where you end up as far as compensation and satisfaction are concerned.

That's a good lead-in to our final question today, Dr. Chenven. What should family physicians be doing to make sure they don't undersell themselves when it comes to income? So it really is having the knowledge of the community that you want to work in, because that's really your first choice. Where do I want to be? And then I think you want to understand what's out there, and you want to talk to physicians in the community, get introductions or on an informal basis.

Visit with some physicians on an informal basis and find out what they know about the community. At that point, you know what is possible, and then when you're looking for a job, then you're going and speaking to people and saying, this is what I believe is appropriate for what I'm going to offer you."

And also you have to sell yourself. You have to say, "I'm going to work hard. I'm going to take good care of patients. Patients like me and will come to me." And hopefully that's true, and if it is, you'll be successful.

Tracey? Same question to you.

So very much like Dr. Chenven said, you've got to know where you want to be.

But I think also you’ve got to think about what you really want to do. Dr. Meas shared a blog post with us that's on American Academy of Family Physicians about his experience of knowing that, as he describes himself, he's a bleeding heart, and he wanted to serve a population in need, and FQHC was probably the way he wanted to go. And there's this belief that you're going to take a lot less money to serve that population and work at FQHC.

And he had the impulse, like the first offer really wasn't good enough, but part of him just wanted to accept it. And I think taking your time to understand what is a fair compensation and really understand the good employer. What do you need out of an employer to make it a good situation for you?

And getting advice. There are services, like some of the services we can point you to at the AAFP or working directly with a healthcare attorney to really look at the contract you're being offered and making sure it's the right one for you and gives you the compensation you need. Yeah. And remember, FQHC is just another employer.

They have to have competitive salaries, and they should have competitive salaries. And it shouldn't be that difficult to get in touch with some of the existing physicians to understand how an employer works, how an FQHC works, how the physicians are treated, what the schedules are like.

These are all really very important. This is all about your life and whether you're satisfied when you wake up in the morning and, brush your teeth. Is this going to be a good day or a bad day? Yeah. The AAFP has a resource called Five Signs of a Good Employer. I would encourage you, it's a pretty simple resource, but it's a good read to think about what is it that, that you're looking for and questions you could be asking as you're exploring if that practice is right for you.

Great advice. Thank you both so much for joining us to talk about physician compensation and the myths and facts around income and family medicine. To our listeners, if you'd like to learn more about this topic, we have links in the show notes below. If you enjoyed today's episode, let us know by dropping a line to aafpnews@aafp.org, and be sure to share the episode with your followers on social media and tag the AAFP.