Physicians are not traditionally motivated by money. Though people go into medicine for different reasons, many people, including myself, see it as a vocation, as a calling. As health care delivery becomes increasingly complex, this perspective could be a reason physicians need more focus on the complexities of different compensation models.

A medical career is a fulfilling one. However, we as physicians would all be remiss to avoid the topic of compensation, and to not at least be familiar with how we will be paid at the next step.

Unlike earlier physicians who came before us who prioritized stability and worked long hours, current and recent trainees are motivated more by flexibility, balancing freedom of time and of lifestyle. With that in mind, as we approach the end of our years of training, it is important to have some general understanding of the compensation structures that exist. These are largely based on the model that one chooses to practice within.

Academics

In academics, one will typically have a base salary and a predetermined amount that will be incentivized pay. The base salary is paid in part by the affiliated university, in part by the health care corporation and in part by the division. The base salary is often determined by comparable academic positions across the country and may or may not consider your geographic area. Due to this, purchasing power can vary greatly depending on which area of the country one practices in.

The incentivized pay component is a predetermined proportion of salary that is based on the amount a provider bills. This may be approximately 10-20% in the field of cardiology. These relative value units (RVUs) are a measure of value used in the U.S. Medicare reimbursement formula and are in part based on geographic area. For example, an echo read in any practice setting will provide the same number of RVUs, however in academics one may be paid differently per RVU than at an integrated health care system. In general, the benefits of academic practice are robust: fellows and advanced practice providers that shoulder a large portion of the clinical work, a built-in network of specialists and ample opportunities for collaborative research. However, while teaching and research are certainly rewarding for many cardiologists, these are not billable activities and therefore can be seen as a negative by some.

Integrated Health Care System

In large integrated healthcare consortiums, salary is commonly comprised of a base and an incentivized pay component as described above. Instead of abase salary being paid by a university, however, it is paid by the health care system. Integrated physicians shoulder a large number of clinical duties without the support of to trainees. There may not be advanced practice providers. Sometimes referrals have to be made to outside specialists depending on the size of the health care system. In general, larger base salaries are offered by integrated health care systems, and similarly RVUs are paid at different rates than at other providers. As in academics, a certain percentage of salary is based on incentivized pay. Whether that is 10%, 20%, or 30% depends on the specific situation, but from a macro perspective, it may be the difference in motivating an individual physician to read that extra echo or stress test beyond their required amount.

Independent Private Practice

Private practice can be described as "eat what you kill." One does straight billing, and compensation depends on the specific payor and payor mix, as well as what pre-negotiated rates are with payors. When in independent private practice, the overhead costs and general expenses need to be balanced with revenue generated, like when running a regular business. In recent years, cardiologists have trended away from independent private practice and more toward being employees at health care systems.

Concierge

A concierge practice relies on funding from investors to secure the appropriate equipment necessary to run. It relies on out-of-pocket payments from patients for revenue. As a physician, one negotiates a contract on a regular basis; generally annually. The compensation structure can vary significantly, and can include salary, stock options or incentivized pay.

As more Millennials and Gen Z physicians move into the workforce, the medical profession will change.  Compensation structure as a doctor is tied to practice model, and the practice model that one chooses will depend on individual priorities. That could be money, freedom from administrative duties, or work-life balance. There are different ways to be compensated in medicine, and there are increasingly more doctors who are starting "side gigs." Like anything, each decision requires some give and take. It's up to us to be honest with ourselves, know our worth and ultimately to know what we are getting into.