to be a specialist with your own practice

Pre-Med & Medical School Careers in Medicine
41

<p>Okay.</p>

<p>1.) Gross REVENUE means the literal number of dollars that your patients pay you. For this to be a million dollars is quite reasonable FOR AN INTERVENTIONAL CARDIOLOGIST.</p>

<p>2.) Net INCOME means the number of dollars that pass into the doctor's hands. For this to be $400K is quite reasonable in the specialty above, although frankly it's still on the high side.</p>

<p>Where do the $600K go?
A.) Renting your building.
B.) Buying equipment
C.) Paying employees</p>

<p>3.) POST-TAX INCOME is that $400K after you've paid your taxes. I suspect this will work out to about $220K, although I could do a more formal estimate if you really demanded it. Payroll taxes are 13.6%, Federal income taxes are around 32%, State Income tax in my home state is 10%. That doesn't include any property taxes (can be very high), sales taxes, estate taxes, capital gains taxes, etc.</p>

<p>4.) Now, you take your post-tax income and you subtract your malpractice insurance. The average physician pays about $20K in malpractice premiums, but I suspect that higher paying incomes (like cardiology) pay more.</p>

<p>5.) All told, you're left with (roughly) $200K or so.</p>

<p>6.) Yes, some doctors have INCOME of over a million dollars. This is surprisingly high for a plastic surgeon and astonishingly high for anybody else. However, sometimes doctors own businesses on the side -- much like engineers, professors, lawyers sometimes own businesses on the side. Sometimes these businesses can make quite a bit of money.</p>

42

<p>Your entire sense of the working world is warped. This is the exact reason why i took a year off after college to learn to manage my finances. First, income taxes are significant. You have both state and federal income taxes. Don't be surprised if those taxes take out 40% or more of your paycheck. Even if you make $25,000 working at McDonald's you're still going to be losing 25%. Secondly, your overhead includes more than just malpractice insurance. It includes everything from your PA's to your electricity bill to the paper you use to print off your prescriptions. You can't just start up a business with no support staff, partners, and equipment.</p>

<p>And please stop with these 400k, 900k figures. Seriously. Stop. Let's talk 150,000-250,000. You're not going to be opening up a private practice right after residency. At most, you may join an existing practice and make somewhere in that range. If you want advice dealing with finances, paying back your med school loans, etc. then fine. You need to get to a level where a 150k income is an acceptable income for you. Geez.</p>

43

<p>bluedevil; I deduct my malpractice (less then 3k!) from my PRE-tax income.</p>

44

<p>Well yeah I see, but from the looks of it, your better of working in a public hospital rather than owning your practice, because you don't have to deal with malpractice insurance, or taxes; THUS YOU WOULD MAKE MORE.. Do you guys agree? If you work at a public hospital, your salary would be higher??? right</p>

45

<p>Why on earth wouldn't you have to deal with taxes or malpractice?!</p>

46

<p>okay i knw!! but look at least your not losing 800k!!!! and you DONT PAY TAXES EVERY MONTH!!! your not writing a 100k check every month!!! geez...and yeah i agree with you that you still have to pay malpractice, but its a lot cheaper since your working in a hospital.. here maybe you should consider looking at this.</p>

<p><a href="http://www.allied-physicians.com/salary_surveys/physician-salaries.htm%5B/url%5D"&gt;http://www.allied-physicians.com/salary_surveys/physician-salaries.htm&lt;/a&gt;&lt;/p>

<ul>
<li>Make sure you read " ALL EXPENSES HAVE BEEN DEDUCTED" * WHICH INCLUDE MALPRACTICE AND TAX.. * Remember these are not exact figures, since they may vary upon each state</li>
</ul>

<p>How to read this survey: 1-2 yrs represents the first yr.. it means you have 1-2 years of experience.. >3 represents the second numerical figure, which means more than 3 years of experience and the max is the max; i am guess around 10+ yrs...</p>

<p>SPECIALTY Years 1-2 >3 Max<br>
Allergy/ Immunology $158,000 $221,000 $487,000<br>
Ambulatory $80,000 $112,000 $152,000
Anesthesiology:Pediatrics $ 283,000 $311,000 $378,000
Anesthesiology: General $207,000 $275,000 $448,000<br>
Anesthesiology: Pain Management $315,000 $370,000 $651,000<br>
Cardiology: Invasive $258,000 $395,000 $647,000<br>
Cardiology: Interventional $290,000 $468,000 $811,000<br>
Cardiology: Noninvasive $268,000 $403,000 $599,000<br>
Critical Care $187,000 $215,000 $320,000<br>
Dermatology $ 195,000 $308,000 $452,000<br>
Emergency Medicine $192,000 $216,000 $295,000<br>
Endocrinology $171,000 $187,000 $260,000<br>
FP (with OB) $182,000 $204,000 $241,000<br>
FP (w/o OB) $161,000 $135,000 $239,000<br>
FP - Sports Medicine $ 152,000 $208,000 $363,000
FP - Urgent Care $ 128,000 $198,000 $299,000
Gastroenterology $265,000 $349,000 $590,000<br>
Hematology/Oncology $181,348 $245,000 $685,000<br>
Infectious Disease $154,000 $178,000 $271,000<br>
Internal Medicine $154,000 $176,000 $238,000<br>
IM (Hospitalist) $161,000 $172,000 $245,000<br>
Medicine/Pediatrics $139,000 $168,000 $271,000
Medical Oncology $198,000
$257,000 $455,000
Neonatal Medicine $286,000 $310,000 $381,000<br>
Nephrology $191,000 $269,000 $447,000<br>
Neurology $180,000 $228,000 $345,000<br>
Obstetrics/Gynecology $211,000 $261,000 $417,000<br>
Gynecology $159,000 $213,000 $358,000<br>
Maternal/Fetal Medicine $286,000 $322,000 $610,000<br>
Occupational Medicine $139,000 $185,000 $290,000<br>
Ophthalmology $138,000 $314,000 $511,000<br>
Ophthalmology Retina $280,000 $469,000 $716,000<br>
Orthopedic Surgery $256,000 $342,000 $670,000<br>
ORS - Foot & Ankle $228,000 $392,000 $791,000<br>
ORS - Hand & Upper Extremities $288,000 $459,000 $770,000<br>
ORS - Hip & Joint Replacement $330,000 $491,000 $715,000<br>
ORS - Spine Surgery $398,000 $670,000 $1,352,000<br>
ORS - Sports Medicine $266,000 $479,000 $762,000<br>
Otorhinolaryngology $194,000 $311,000 $516,000<br>
Pathology $169,000 $321,000 $610,000<br>
Pediatrics $135,000 $175,000 $271,000<br>
Pediatrics - Cardiology $145,000 $282,000 $607,000<br>
Pediatrics - Critical Care $196,000 $259,000 $398,000
Pediatrics - Hematology/Oncology $182,000 $217,000 $251,000<br>
Pediatrics - Neurology $175,000 $189,000 $362,000<br>
Physiatry $169,000 $244,000 $313,000<br>
Podiatry $128,000 $168,000 $292,000<br>
Psychiatry $149,000 $169,000 $238,000<br>
Psychiatry - Child and Adolescent $158,000 $189,000 $265,000<br>
Pulmonary Medicine + Critical Care $215,000 $288,000 $417,000<br>
Radiation Oncology $241,000 $385,000 $787,000<br>
Radiology $201,000 $354,000 $911,000<br>
Rheumatology $179,000 $229,000 $378,000<br>
Surgery - General $226,000 $291,000 $520,000<br>
Surgery - Cardiovascular $336,000 $515,000 $811,000<br>
Surgery - Neurological $354,000 $541,000 $936,000<br>
Surgery - Plastic $237,000 $412,000 $820,000<br>
Surgery - Vascular $270,000 $329,000 $525,000<br>
Urology $261,000 $358,000 $619,000 </p>

<p>** Guys just follow the link, I know its hard to read the survey!! The link has a better format since copy past suks!! </p>

<p>Now tell me, who is better off, in terms of salary, a private practice specialist or a specialist that works at a hospitAL?????</p>

47

<p>The expenses most certainly do NOT include writeoffs for income taxes, and probably don't include malpractice premiums. The expenses they refer to are things like paying employees, rent, etc. -- business operating expenses.</p>

<p>If you are a direct employee, malpractice premiums are "paid for" by your employer, which (of course) just means he's paying you that much less money in the first place.</p>

<p>Look. If you are a physician, you pay malpractice insurance. Period.</p>

<p>If you earn income, you pay income taxes. Period.</p>

<p>I don't know where you get this idea that these can be avoided by working in academic or government-run centers. You can't run away from the laws of economics.</p>

<p>As a side note:
1.) Who cares how OFTEN you pay taxes? The important question is how much you pay.
2.) If anything, direct employees pay taxes more often -- it gets deducted every time they receive a paycheck.</p>

48

<p>It is pretty complicated; there are a number of variables that make it difficult to say where you make the most money. I think for most specialties, private practice doesn't make sense( there are several exceptions). For those of us who try anyway, it's often because it allows the freedom to practice medicne the way you think it should be practiced, which is NOT usually the way you make the most money.</p>

49

<p>bluedevilmike, tell me, who is better off, in terms of salary, a private practice specialist or a specialist that works at a hospitAL????? aND EXPLAIN YOUR REASONING</p>

50

<p>It is pretty complicated; there are a number of variables that make it difficult to say where you make the most money.</p>

51

<p>I'm just shocked that you don't seem to understand that you can't run away from taxes or malpractice by avoiding private practice, and that you persist in misunderstanding very basic terminology like income and expenses.</p>

52

<p>dUDE what are you talking abt, this is my first time learning abt this subject... Though, now i do understand.</p>

53

<p>bluedevil; did you really just type the same exact words I was typing or was that some kind of software glitch?</p>

<p>FWIW; Southeagle is maybe what...15 years old? I can't even remember being 15 years old...At 13 or so, I remember reading "Dibs in Search of Self" and being fascinated with the brain/mind. I know I wasn't thinking about how much money I was going to make. My earliest thoughts about practicing medicine ( or so I'm told), were fantasies of practicing barefoot in Africa.</p>

54

<p>But i don't understand how a specialist could ever make more than $1,000,000 as an " OVERHEAD" ( AFTER paying malpractice insurance along with state and federal..etc taxes). I mean like you said, an Interventional Cardiologist with his own practice has a $1,000,000 gross income, correct? After paying for malpractice, taxes, employers, etc.....his check, WHAT HE RECIEVES TO SPEND happens to be around 220k like you said..So how in thw world can any one specialist make more than a million when you know nearly 3/4 of your income goes off to expenses( malpractice, taxes, paying employees, utility, rent. etc...)??? Answer this question bluedevil???</p>

55

<p>SR: I was trying to convey very strongly that I agree with you. Sorry if that was confusing.</p>

<hr>

<p>SE: That's my point. I don't think hardly any physicians make a million in spending power, although it might be theoretically possible among super-elite plastic surgeons.</p>

<p>And "overhead" means the exact opposite of how you just used it. Revenue minus overhead (employees, rent, equipment) is income. Income minus taxes and malpractice is what I refer to as "spending power", although that's not an official term.</p>

<p>The term "take-home pay" is ambiguous. It could refer to either Income or Spending Power.</p>

<p>When I said above that some physicians -- it's rare, but some -- make a million in INCOME, that specifically referred to pre-tax income. Taxes would cut that in half.</p>

56

<p>oh...that was weird...sometimes it takes a while for an edit in my post to "take" and i thought something weird happened.</p>

57

<p>dude the "EXACT OPPOSTIE".. lol.. so what does it really mean? It's not similar to your gross is it?..</p>

58

<p>Does everone say "dude" that much in Georgia? I don't think I hear it that much even here in California!</p>

59

<p>Just to make this more concrete:</p>

<p>A patient sees a doctor.</p>

<p>1.) The doctor charges him $150. These are charges.
2.) The insurance company pays the doctor $100. This is revenue. The remaining $50 disappear.
3.) The doctor pays the rent for his office, pays his employees, and buys equipment. The total (for one patient) is $60. This is overhead, also known as business expenses.
4.) The doctor gets to put $40 in his pocket. This is income.
5.) The doctor pays $5 to his malpractice insurance company. This is his malpractice premium.
6.) The doctor pays $20 to the government. These are taxes.
7.) The doctor is left with $15. This is his spending power.</p>

<hr>

<p>The following terms are ambiguous in the context of this discussion and we should avoid using them on this thread:
Take home pay could mean either income or spending power.
Net income could mean either income or spending power.
Expenses could mean business expenses or taxes plus malpractice.</p>

<hr>

<p>You will notice that in this scenario, the doctor must accumulate $10 worth of charges in order to have $1 of spending power. I suspect this is quite normal.</p>

<hr>

<p>As previously mentioned, I suspect that some -- very few, but some -- physicians (mostly surgeons) have income of $1M. I cannot imagine anybody besides super-elite plastic surgeons having $1M annually in spending power.</p>

60

<p>Oh BDM, you are a very patient man!</p>