I am middle career, partner (=minimal profit sharing, bought some equity) at medium-sized private practice in MCOL/HCOL. I am on eat-what-you-kill model. Based on this chart, I am >90%-tile in both compensation and collections, although maybe more like >90%-tile comp, >99%-tile coll. When I look at this 2016 MGMA data, my compensation/collections ratio seems low. I am historically taking home ~40% of gross collections. This dataset says comp/coll ratios for 25%-tile/median/75%-tile for All Practice Types is 0.664/0.832/0.950. Seems very high, way higher than my 40%.
I have anecdotally heard 50% of collections is a decent takehome. But why are these MGMA ratios skewed so high? I can imagine scenarios where owners write off a lot of expenses so maybe their adjusted “collections” becomes very close to what they end up taking home. But they are high even in Hospital Owned practices, where I assume docs don’t have ability to write off much as W2. Also the Hospital Owned 75%-tile has a ratio of 1.135, which doesn’t make sense either. I only have this one picture I grabbed from a meeting years ago so no further explanations on the data. Maybe it means NET collections but then that doesn’t quite make sense for them to present data on NET collections since expenses vary so widely between practices, thus I would suspect anywhere they say “collections,” they are referring to GROSS. I have not seen any newer MGMA data that presents these ratios; if anyone has, please send. I have seen some that include wRVU collections but I’ve never worked on an RVU basis so don’t completely know how to interpret the data to get comp/coll ratios like this.
I am considering renegotiating and asking for 50-60% of gross collections based on this data but need to understand more. Are any employed (non-owners) really getting >60% of gross collections? If I go ask for 50-60% because I saw data that said median is taking home 70-90% of collections, I think I will get laughed out of the room. What would be the best way to negotiate this change pragmatically from a data standpoint (I have additional leverage tools to use but would like to present hard data that cannot be argued with).
(Mods: Please delete if not allowed and I will post in phys forum. But thought it would be useful for all).
I have anecdotally heard 50% of collections is a decent takehome. But why are these MGMA ratios skewed so high? I can imagine scenarios where owners write off a lot of expenses so maybe their adjusted “collections” becomes very close to what they end up taking home. But they are high even in Hospital Owned practices, where I assume docs don’t have ability to write off much as W2. Also the Hospital Owned 75%-tile has a ratio of 1.135, which doesn’t make sense either. I only have this one picture I grabbed from a meeting years ago so no further explanations on the data. Maybe it means NET collections but then that doesn’t quite make sense for them to present data on NET collections since expenses vary so widely between practices, thus I would suspect anywhere they say “collections,” they are referring to GROSS. I have not seen any newer MGMA data that presents these ratios; if anyone has, please send. I have seen some that include wRVU collections but I’ve never worked on an RVU basis so don’t completely know how to interpret the data to get comp/coll ratios like this.
I am considering renegotiating and asking for 50-60% of gross collections based on this data but need to understand more. Are any employed (non-owners) really getting >60% of gross collections? If I go ask for 50-60% because I saw data that said median is taking home 70-90% of collections, I think I will get laughed out of the room. What would be the best way to negotiate this change pragmatically from a data standpoint (I have additional leverage tools to use but would like to present hard data that cannot be argued with).
(Mods: Please delete if not allowed and I will post in phys forum. But thought it would be useful for all).
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