Unlock the power of physician compensation data in contract negotiations [PODCAST]

Listen and followApple PodcastsSpotifyYouTubeMore apps · Browse all episodes

In this episode, we’re joined by Kyle Claussen, a physician contract attorney. Are you a physician who’s unsure of what your salary and benefits should be? You’re not alone. In a society where compensation information is often kept private, it can be difficult to know what you’re worth. But having access to accurate and up-to-date compensation data is crucial when negotiating your employment contract.

We will discuss the importance of knowing your market value and the best sources to access physician compensation data. MGMA is widely regarded as the gold standard in physician compensation reports, but it’s not the only option available. Kyle will also talk about other data sources that offer additional levels of separation and verification and how having access to high-quality data can give you the leverage you need in negotiations.

So, join us as we dive into the world of physician compensation and contract negotiations. Learn how to make a strong case for a raise and negotiate a fair compensation package for your specialty and location. It’s time to take control of your career and get what you deserve.

Kyle Claussen is a physician contract attorney.

He shares his story and discusses his KevinMD article, “Negotiating a raise with the right compensation data.”

The Podcast by KevinMD is brought to you by the Nuance Dragon Ambient eXperience.

With a growing physician shortage, increasing burnout, and declining patient satisfaction, a dramatic change is needed to make health care more efficient and effective and bring back the joy of practicing medicine. AI-driven ambient clinical intelligence promises to help by revolutionizing patient and provider experiences with clinical documentation that writes itself.

The Nuance Dragon Ambient eXperience, or DAX for short, is a voice-enabled, ambient clinical intelligence solution that automatically captures patient encounters securely and accurately at the point of care. Physicians who use DAX have reported a 50 percent decrease in documentation time and a 70 percent reduction in feelings of burnout, and 83 percent of patients say their physician is more personable and conversational.

Rediscover the joy of medicine with clinical documentation that writes itself, all within the EHR.

VISIT SPONSOR → https://nuance.com/daxinaction

SUBSCRIBE TO THE PODCAST → https://kevinmd.com/podcast

RATE AND REVIEW → https://kevinmd.com/rate

FOLLOW ON INSTAGRAM → https://www.instagram.com/kevinphomd

FOLLOW ON TIKTOK → https://www.tiktok.com/@kevinphomd

GET CME FOR THIS EPISODE → https://earnc.me/KEtXzk

Powered by CMEfy.

Transcript

Kevin Pho: Hi, and welcome to the show. Rate and review at KevinMD.com/rate. Subscribe at KevinMD.com/podcast. Today on the show we have Kyle Claussen. He’s a physician contract attorney. His KevinMD article is titled “Negotiating a raise with the right compensation data.” Kyle, welcome to the show.

Kyle Claussen: Appreciate you having me.

Kevin Pho: So we’ll get into the article in a little bit. First off, briefly share your story and journey to where you are today.

Kyle Claussen: Sure. Well, I am the CEO of Resolve, and a physician contract attorney. We’ve been doing that for over a decade now, and it’s kind of a unique setting. I’m married to a physician, and Resolve was founded by a physician with the idea of empowering physicians, especially young physicians as they leave training. There’s not a lot of training in the business of medicine, and it’s really become a passion of mine. Over the last decade we’ve certainly seen a lot of different things and helped a lot of different folks with their contracts and with navigating that process. So it’s a really rewarding career for me to be in, and I’m happy to sit here and chat with you on some things that hopefully your listeners will pick up on.

Kevin Pho: And as you know, young physicians and physicians in training don’t really have a lot of training when it comes to the business side of medicine, negotiating contracts, and things like that. So tell us some misperceptions or myths about the physician contract process that you’d like to clear up.

Kyle Claussen: Sure. Yeah, I think the biggest myth is that things are non-negotiable. With more and more physicians now, 75-plus percent of them, being employed, the health systems certainly would like to have the same contract for everyone, but we just don’t see that being the reality. Folks that have been out in practice and have moved a few times are probably a little more familiar with how that works, but I think it’s important to understand, especially as you’re coming out of training, that you do have leverage and that you are extremely valuable. Nothing in the health system happens without physicians. So once you understand that, and know the supply-and-demand component to it, they really should be in a very good spot as they leave training, which is sometimes unknown to them as they’re coming out.

Kevin Pho: All right, so let’s talk about your KevinMD article, titled “Negotiating a raise with the right compensation data.” Now, how did this particular article come together?

Kyle Claussen: The thought behind this is that there are a lot of different data sources out there, and a lot of physician contracts will actually reference some of the surveys. There are compliance issues; there’s Stark that your employer will talk about. So if you’re unfamiliar with MGMA, SullivanCotter, AMGA, the various acronyms out there that benchmark, you’re doing yourself a disservice. That’s certainly one of the major components you should be looking at when you’re talking about comp: understanding what your employer is going to use, and making sure you can then verify that data and understand where it’s coming from.

But it’s not the only source of information. None of these things are perfect; no data set is perfect. So we also think it’s extremely helpful to have access to what your colleagues may be earning and what their contracts have looked like, which is one of the things we are extremely passionate about at Resolve: providing that data and that expertise to you. And then probably your best data point is just having another job offer. It’s a live snapshot into the market. You know exactly what the competitor, or another institution across town, is going to pay at that specific time.

So the idea was to tell them that when you negotiate, it’s not a one-stop shop. You should definitely look at the surveys, you should definitely look at your peers’ information, and you should definitely have other offers if you can. If you do all three of those things, you’re going to be much more empowered and much more educated about what’s fair and what’s not fair, because you don’t want to go into a negotiation in bad faith either. You want to make requests that you can substantiate. So hopefully that’s something we can dig into here and walk them through.

Kevin Pho: So you mentioned various data sources, MGMA, SullivanCotter. Why do different hospitals and practices use different sets of data? Why isn’t there just one set of data? What are some of the pros and cons of the different data sets?

Kyle Claussen: Yeah, well, there are different organizations submitting to each of these. Some are more private practice; some are more hospitals and health systems. Because of that, we see a lot of employers now using some type of blended rate. They’ll try to blend two or three to find out what a salary should look like, and what a conversion factor on a work RVU should look like.

Again, data is only as good as what’s being input into the system. Some of the reasons we don’t feel you should lean 100 percent on those are, first of all, that they’re not being submitted by physicians; they’re being submitted by organizations. And some of the surveys won’t provide their data to individual physicians, which I think is a problem in and of itself. So having some transparency into that is really important, and making sure you can get your hands on as much of that information as possible is important. We don’t think there’s a right or wrong survey to use. We think you should have as much information as possible when you’re negotiating.

Kevin Pho: So you mentioned that a lot of this survey data isn’t in the hands of physicians. So let’s say a physician is looking at prospective jobs. What are some steps they could take in terms of getting that data?

Kyle Claussen: Yeah, well, if you use a service like Resolve, we’re going to provide you with a lot of that access. If you’re in training, you can also go to your residency program director; they may have access to a survey. You can certainly look online. Not that those are compliant, there are licensing issues there, but you may be able to find and source some of that through forums and things of that nature. You can also reach out directly and try to purchase it, but usually that’s cost-prohibitive. It’s going to be much more efficient for you to utilize a consultant or an attorney that has access to that data for you as part of that process.

Kevin Pho: So just give us a sense: If a physician were interested in purchasing that data, what kind of numbers are we talking about?

Kyle Claussen: Yeah, I think you’re looking at somewhere between $5,000 and $15,000. It’s a fairly large number, and so you can certainly find it in more cost-effective ways.

Kevin Pho: Sure. So when a physician is looking at a job and it advertises X amount of dollars, what are the components that go into compensation? What should a physician look out for other than just a simple dollar value?

Kyle Claussen: Yeah, we think base compensation is obviously really important, and most contracts you’re going to come into play with have that. Most are also going to have some type of production component to them, meaning that based on the work RVU level you hit, or based on a collection number that comes in, they’re going to pay you a percentage of collections, and/or a conversion factor, a dollar amount per work RVU. We feel you should be evaluating the total comp based on what you can potentially produce, rather than just looking at one of those buckets at a time.

Other things certainly have value, though, aside from just what you’re being paid. Tail coverage, for example, has an absolute value to it. If they’re not going to provide tail coverage when you leave, oftentimes that’s valued as much as or more than a signing bonus. For some specialties, like OB/GYN, that can be a six-figure number on tail. So all of those things have value points: obviously retirement contributions, and if they have health insurance, how good that is comes into play.

So again, we think that as you take a look at your comp and your benefits, evaluating the whole picture is really important, aside from the question of whether this is a good fit for you geographically. How are the colleagues there? Does it have the type of role that you want? Is there advancement for you if you’re in academics? All those things have value as well.

Kevin Pho: What about currently employed physicians? Can they use compensation data to negotiate an increase in their current pay?

Kyle Claussen: Absolutely. Yeah, and we know, and you all know, that reimbursements change year over year. CMS comes out with a new fee schedule every year, and unfortunately it seems to push downward on physicians generally. But all of the data sets also renew annually, so MGMA and all the others will show you new values. If the data drops, if all of a sudden your specialty is earning less, we often see employers coming to you saying, “Hey, we can no longer pay at this level. Here’s your amendment on comp; reimbursements have fallen.” However, the inverse of that almost never happens. If it goes up, they don’t come to you saying, “Hey, here’s your raise.”

And so you need to constantly be monitoring the market, constantly be paying attention to that data and understanding what it is at this point in time. That’s another one of the reasons to have your eye on the market and understand what other positions are paying at this point in time, because even the MGMA and other data is a year old. They’re submitting it; 2020 data is the 2021 survey, that type of thing.

So you can absolutely renegotiate at any time. If you’re currently employed, it is helpful to have your own data: Have your production numbers, understand what you’ve done, and understand the value you brought to the organization. You can often make great arguments for yourself that you wouldn’t have as a new hire, and so you need to utilize all that together.

Kevin Pho: So short of hiring an attorney like yourself, or a company, what are some ways that physicians can advocate for themselves when it comes specifically to pay, in terms of preparing for negotiation? Is there anything they can do, or do you just recommend that they hire an attorney and let the attorneys take care of it?

Kyle Claussen: Yeah, I don’t think the attorneys have to be the voice of the negotiation. I think it depends on your relationship and personality, and what you’re comfortable doing in a conversation. They would always prefer to talk to the physician, and if you’re comfortable having that, I think it’s absolutely within your power to do so, as long as you have the ammunition behind you. You have to know what you’re going to talk about. If they give you a dollar value, you have to know where that falls on the scales. So if you’ve educated yourself up front, if you’ve obtained all the data, you’re ready. You’ve got your fallback positions in place: “If they don’t give me this, I’m going to ask for this instead.” You certainly can have that conversation; you don’t necessarily need an attorney to do that.

That being said, I often do think it is helpful to have a third party to come back to, because you never have to commit to something. If I’m in a negotiation, I can say, “Well, I need to go check with my client. I need to go check with Dr. So-and-so.” Whereas if you’re there on the spot, they’re going to want an answer, and sometimes it’s uncomfortable for physicians to sit and have those discussions, too.

Kevin Pho: So tell us some of the biggest mistakes you’ve seen when it comes to physicians negotiating as it relates to the compensation piece.

Kyle Claussen: Yeah, I think the biggest mistake is not understanding production numbers: seeing potentially a high base salary, or something that was higher than they anticipated, and not understanding that it comes with a threshold that may be out of line. So let’s say you get an above-market offer, maybe a 60th or 70th percentile base offer, but the production level is set to the 90th percentile. If there’s that volume, if it is a really busy practice, you’re really going to be in a position where you’re costing yourself more by taking that high guarantee than you would have if you had just set both at the 50th. So understanding that math and the logic that’s going into the comp model is probably really the biggest mistake that we see people make in the compensation piece.

Kevin Pho: And you said that everything’s negotiable. So when it comes to compensation in general, what have you seen in terms of that type of flexibility, and are there different settings that would make compensation more or less flexible?

Kyle Claussen: I mean, if you go back to just basic economics, supply and demand matters, and so there are certain geographies where you’re going to have more leverage and less leverage. I always pick on San Diego because people love to live in San Diego. If you’re going to go to San Diego, you’re probably not going to make as much as if you live in the middle of Iowa. So understanding that component before you go in is useful.

But we see people move not only on base. We see them move on production thresholds and production multipliers. We see them move on signing bonuses and relocation allowances. Occasionally, if you’re in training, there are residency stipends available, where they can actually pay you while you complete training. So there’s really not an area that you can’t push on. I just think you need to understand all of the potential payback provisions if you are going to take some of these incentives, some of these unique things that come up. They may be tied to two, three, or four years of service, that type of thing, and so you need to understand that.

Kevin Pho: What about academics versus private practice versus hospital-employed?

Kyle Claussen: Yeah, health systems and hospital-employed physicians generally have the deepest pockets, so the guarantees are usually going to be the largest from them. Private practice would be on the opposite end of that: usually lower guarantees, but more upside. There’s more autonomy there, there’s potential ownership, and there are potential ancillary revenues that may come into play. So I think understanding the value that ownership in a private practice can give you long-term is really the question you need to be asking yourself, if that’s the type of position you want to be in. And then, two, how long does it take me to get there, so that I can adequately value that as part of the discussion?

And then academics is really an interesting one, because academics has moved and shifted a little bit, and for a lot of physicians it starts to look more like a hospital-employed setting. They’re not actually in a teaching role; they’re not actually doing a lot of research. There are academic components to salary surveys, and academics usually reimburses at lower rates because of the teaching and the other components there. But if that’s not your role, we see a lot of academic facilities actually move closer to the non-academic survey numbers, the higher reimbursements, because it’s treated basically like a hospital-employed setting.

Kevin Pho: We’re talking to Kyle Claussen. He’s a physician contract attorney. His KevinMD article is titled “Negotiating a raise with the right compensation data.” So, Kyle, you work for Resolve, which is a national firm. When looking for an attorney or a contract attorney, what are the pros and cons of going with someone like you, a national firm, versus someone local?

Kyle Claussen: Yeah, I think two things. One, you want to make sure whoever you’re going to work with has experience, meaning it’s not something they do two, three, four, or even 10 times a year. You want them doing hundreds of these, so they understand not only what’s important for you in that location but also what the national norms are. It’s nice to know locally what an institution may or may not do, but it’s also just as important to know what your options are outside of that locale.

So one of the things we think is most important about Resolve is that we can interject and provide you with data from multiple specialties if you need that. If you’re in cardiology and you want to know which of the subspecialties are making more, that’s helpful. But also, geographically, what has this specific employer done in the past? What has a large system done in other locations? HCA, for example: What do they do in different regions? All of those things matter when you’re negotiating a contract and negotiating with an administrator who might cover different geographies.

Kevin Pho: And my final question, Kyle: Tell us some of the take-home messages you want to leave with the KevinMD audience.

Kyle Claussen: Yeah, I think my biggest take-home message is this: There’s a lot of discussion right now around transparency, whether it’s pay transparency, with job postings starting to come out posting salaries and things like that, or whether it’s just getting access to the data. The thing I want all physicians to do is know what your value is, and understand that whether you hire somebody to help you or not, you need to be armed with the ammunition you need to know if you’re being treated fairly. Health care has turned into very big business, and you’re a major, major component of that. So I think you need to be empowered, educate yourself, and ask and negotiate for what you want.

Kevin Pho: Kyle, thank you so much for sharing your time and insight, and thanks again for being on the show.

Kyle Claussen: Yeah, you bet. It’s my pleasure.

Listen and followApple PodcastsSpotifyYouTubeMore apps · Browse all episodes