Should I Stay or Should I Go?

January 1, 2007

For my geographical area (Northern California), what should I expect to earn on an hourly basis as a well-respected family-practice physician? When I recently requested a raise where I currently practice, the practice’s owner said she could not afford it because of overhead costs. I am considering leaving to start my own “cash-only” practice.

Question: For my geographical area (Northern California), what should I expect to earn on an hourly basis as a well-respected family-practice physician? When I recently requested a raise where I currently practice, the practice’s owner said she could not afford it because of overhead costs. I am considering leaving to start my own “cash-only” practice.

Answer: According to data from the Medical Group Management Association (MGMA), family physicians nationwide earn an annual median compensation of $152,000 without OB and $154,000 with OB. This is slightly lower in the West: $148,000.

It’s difficult to translate that directly into an hourly wage because hours worked vary so much, but take a look at your income tax statement from last year to see how you compare.

Many practices are straining under increasing overhead costs. You might want to ask whether you can get involved in the management and financial review of your current practice - or at least have access to the practice’s data and offer what suggestions you can. Explain that you aren’t expecting to be a partner but that since this is your livelihood too, you’d like to help. If you can find ways to drop any overhead expenses or boost productivity, you may well earn yourself a raise. Doing this would also be useful if you do decide to head out and open your own practice. At the very least, you’ll know if your boss is being honest with you.

I’d also start playing with the math on the cash-only practice question. How many patients would you need to see, at what rate, and how would you charge for your services (monthly? fee for service?) to earn what you make now? Remember to account for your own newly acquired overhead costs as a business owner (marketing, staff, equipment, software, etc.).

The grass may be greener on the other side of the fence, but you need to take a close look to know for sure.