KA-CHING! That’s the Sound of Successful Compensation and Partnership Negotiation
Do you enjoy long lists of big numbers with dollar signs in front of them? How about digging into survey data? Do you like money?
If you answered yes to any of the above questions, then you’re in the right place!
As I continue discussing radiology job contracts, I’ll delve into two of the most crucial components of contract evaluation —compensation and partnership terms. In this post, I’ll seek to answer your burning questions like, how can I ensure I achieve fair compensation? Am I getting paid what I’m worth? What are good sources for average salary information? How hard is it really to negotiate partnership and buy-in terms? SPOILER ALERT: you don’t get paid what you’re worth, you get paid what you negotiate.
Compensation is a key element of every contract, and should be defined in amount (and whether the number offered is gross, or post deductions of income tax, social security/Medicare tax, health insurance, and retirement contributions) and how it is to be distributed (i.e., when the radiologist will get paid and in what increments). It should be clear as to whether the candidate will be an employee or an independent contractor. Multi-year contracts should stipulate the specifics of annual pay increases. Compensation can consist of salary alone or also include bonus, profit-sharing, or other forms of remuneration. The contract should explain the method of salary determination and adjustment. This may be a guaranteed amount, or a percentage of shareholder salary. It should also state by whom and how shareholder salary is determined.
In any type of practice, salary might be determined in part by work relative value units (RVUs).
If this is the case, the contract should specify whether certain activities that affect RVUs will be taken into account, such as commuting (circuit riding from one hospital to another), tumor board and other conference attendance, administrative work, technologist supervision, protocol management, and information technology inefficiencies. There are several other ways practices may measure work productivity, including patients seen (especially for interventional radiologists with a clinic schedule), hours worked, fees billed, fees collected, or profit for the entire practice. Academic RVUs, metrics for scholarly activity, are more commonly a component of a compensation plan in an academic setting.
FYI: A 2018 American Medical Group Association (AMGA) physician compensation & productivity survey revealed that diagnostic radiologists had average median work RVUs of 9,264 in 2018, compared with 9,212 in 2017 (an increase of 0.6%) .
Make sure to get a copy of the group’s written compensation plan. If quality metrics (e.g., patient surveys) are used to determine salary or bonuses, you should ask whether the measure is individualized to physicians, or is pooled so that the overall rank of the hospital or department determines an individual’s quality metrics. Bonuses may be paid when work RVUs exceed a benchmark number or for substantial administrative contributions. When RVUs are used in salary determination, you should understand how they are determined and there should be transparency among the group about the number of RVUs generated by the group.
Salary insights (and how to dig for the data)
It’s essential to know what current average salaries are for a like position in a similar geographic area (ideally, before beginning the interview process). This will put you in a position to recognize a reasonable salary offer and to negotiate for a fair compensation package using objective criteria.
Salary data is available from several sources, although some may charge a fee and have various access restrictions. The data used by most groups and institutions are from the AMGA, Medical Group Management Association (MGMA), and the Association of American Medical Colleges (AAMC) surveys. Salary information is generally reported separately for interventional radiology, neurointerventional radiology, non-interventional radiology, and nuclear medicine/radiology.
Colleagues and mentors can also be useful sources of information and fellow trainees are usually happy to share salary and other benefit information that they’ve acquired from their job search.
Here is a list of the aforementioned top sources for salary data, the type of insights each provide, and how you can access the survey reports:
The AMGA Medical Group Compensation and Productivity Survey (in its 32nd year in 2019) is considered the gold standard for benchmarking compensation and productivity in large, multispecialty medical groups and other organized health systems . It focuses on the individual compensation and productivity of experienced physicians and clinical staff, starting salaries of new residents and experienced new hires, as well as salaries for department chairs, nurse practitioners, and physician assistants. The 2018 survey included data from 270 medical groups representing more than 105,000 practicing clinicians and showed that diagnostic radiologists in the U.S. had a median compensation of $487,239, compared with $503,225 in 2017 (a decrease of 3.2%) .
How to get it: Provider organizations, non-provider organizations, and corporate entities can purchase the survey. AMGA members receive discounted pricing. Note for residents and fellows: Your radiology department business administrator may have access to salary survey information and be willing to share a few relevant numbers with you.
The MGMA provides annual compensation (total pay, bonus/incentives, retirement), productivity (work RVUs, total RVUs, professional collections and charges), and benefit metrics (hours worked per week/year and weeks vacation) for physician-owned, hospital-owned and academic practices for a variety of regions, practice sizes and provider experience levels .
How to get it: This information is available free of charge to contributors/members and for a fee to non-contributors.
FYI: For the fiscal year 2020, the weighted median salary for non-interventional radiology, using combined data from MGMA, AMGA, and McGladrey Pullen surveys was $489,126. The weighted median salaries were $566,115, $573,499, and $461,715 for interventional radiology, neurointerventional radiology, and nuclear medicine/radiology, respectively.
The AAMC provides an annual faculty salary report that provides updated compensation data from a survey of 150 accredited U.S. medical schools.
How to get it: Faculty and staff at member institutions may purchase the paper publication (one year of data) for $152 and one-year access to the online version (three years of data) for $40. For non-members, the costs are $578 and $1,125, respectively .
The Association of Administrators in Academic Radiology Departments (AAARAD) conducts annual Physician Salary & Productivity surveys.
How to get it: Access to AAARAD Surveys is available exclusively to AAARAD members in the Members Only section of their website .
Other sources of salary information are freely available online. Here are a few tasty insights gleaned on current compensation averages from additional sources:
Doximity’s 2019 survey showed that the average annual salary for radiologists was $429K, putting imaging specialists among the top ten medical specialties in the U.S. for compensation .
526 respondents to Aunt Minnie’s 2019 salary survey revealed the average radiologist base salary nationwide to be $394K .
The 2019 Medscape radiologist compensation report showed the average radiologist salary to be $419K (up from $401K in 2018) . The average salary for men was $431K and for women $375K, showing that men earned 15% more than women. Radiologists who were self-employed (owner solo, owner group, or partner) earned more than radiologists who were employed ($451K and $391, respectively).
A survey published by Salary.com showed the average radiologist salary in the United States to be $406,690 as of June 27, 2019, with a range between $353,590 and $470,490 .
The recruiting firm Merritt Hawkins’ 2019 Review of Physician and Advanced Practitioner Recruiting Incentives  included a survey of 3,131 permanent physician and advanced practitioner search assignments Merritt Hawkins conducted between April 2018 and March 2019. The report showed that radiology ranked number 6 out of the top ten most requested recruiting assignments by specialty, and average radiologist salary was $387,000 . The firm received 148 requests for radiology searches in 2018-2019, an increase of 12% from 2017-2018’s 132 search requests and up a dramatic 572% from 2013-2014’s 22 requests. The survey also showed that the average radiology signing bonus was $27,045, with a low of $10,000 and a high of $100,000. Full survey information can be obtained directly from the company online at no cost by providing name and contact information .
Groups that collect technical component vs. those that don’t
A survey of private practice radiologists who attended the 2018 Economics of Diagnostic Imaging conference (Larry Muroff, MD, FACR, personal communication) revealed starting salaries (without benefits) being offered to radiologists right out of fellowship training to be between $300K-$349K (59% of respondents). Average income, excluding benefits, for private practice groups that do not collect technical component was most commonly between $400K-$499K (33%) or $500K-$599K (33%), although the range was between $300K and $899K. In groups that did collect technical component, the average annual income was most commonly between $500K-$599K (40%), $400K-$499K (20%), $600K-$699 (20%), or $700K-$799 (20%). Benefits added about $100K to a shareholder’s compensation, and about $45K to the compensation for a new hire.
If viewing all that data in paragraph form gave you the cross-eyed-brain-ache, perhaps you may enjoy the (mercifully) short, simple tables below that corral all that average salary information.
|2018 or 2019 ($1,000)|
|EDI – just graduated||300-349 (59%)|
|EDI – no tech||400-499, 500-599 (33% each)|
|EDI – tech||500-599 (40%), 400-799|
MGMA, AMGA, and McGladrey Pullen Weighted Mean Salaries FY2020 ($)
And now we come to the wheeling-dealing-partnership-purchase-power part of this post!
Terms of partnership may be difficult to negotiate, especially if the existing partners have been invested in the system for years. They will not be anxious to change the system to give a new hire fewer years to partnership than what it took them. In addition, a substantial amount of money is at stake for each year negotiated away by the practice to make someone a partner. Likewise, a buy-in is an amount that is paid to the practice for the privilege of becoming a partner. Existing partners will not want a new hire to pay less than they did in buy-in costs. If a practice owns equipment or real estate it would potentially be unfair for the practice to just give away these assets. Only when it is very difficult to hire, and an excellent candidate comes along, will a practice be willing to negotiate partnership and buy-in terms.
The buy-in to a radiology practice funds and formalizes 3 privileges: a voice, a vote, and an income stream (salary, bonuses, and benefits) . The culture of most radiology practices dictates financial equality for all shareholders. At any given time, the buy-in and buy-out value of a pro rata share of a practice should be equivalent. The price of shares should be determined by the practice’s board of directors, and sales of shares should be restricted to the practice itself or to a practice member, at the direction and sole discretion of the board.
Buy-in and buy-out arrangements are common in private practice radiology but not in academic practice. In private practice, the most common buy-in and buy-out process is that the existing shareholders own all of the corporate shares and sales to new shareholders are accomplished by redistributing these shares. With every sale, there is a return of some capital to each existing shareholder. When a shareholder retires, this process is reversed and each shareholder is required to purchase a pro rata portion of the stock held by the retiring shareholder.
Alternatively, a corporation owns a large number of corporate shares, with the amount of shares owned by each shareholder constant, and the corporation sells or buys from individuals the indicated number of shares each time a transaction is required. This money is distributed as a bonus to the existing shareholders but not the new shareholders, so that they do not profit from their own buy-ins. A practice that has a large technical component may benefit from separating the professional and the technical buy-sell transactions. There are other buy-sell options that a group may use, some of which can be fairly complicated. A candidate contemplating joining a practice with any type of buy-sell process should consult a lawyer who can explain the arrangement and any potential pitfalls.
A survey of private practice radiologists who attended the 2018 Economics of Diagnostic Imaging (EDI) conference (Larry Muroff, MD, FACR, personal communication) revealed that in private practice groups with no technical component, the total buy-in to the practice was most commonly <$50K (58%) or $50K-$99K (33%). Buy-in to a practice with a technical component was most commonly $100K-$199K (40%), $300K-$399K (30%) or $400K-$499K (20%). Time from hire to partnership was most commonly 2 years (45%), 3 years (27%), or 1 year (14%). In the past 5 years, 27% of practices had fired a partner or associate, and 47% didn’t fire anyone but forced a partner or associate to resign. Problems groups encountered with new hires included decreased work ethic and little interest in building the practice.
If a potential group offers partnership, a candidate should inquire about the number of radiologists who became a partner in the last few years and verify this with the newest partner.
Whew, that was a lot of information to cover in one post. If you’ve made it this far, I sincerely congratulate you because obviously you must be very bright, ambitious, and diligent. Understandably, you may need a nap and some time to digest all this. But check back for the conclusion of this post series on negotiating a radiology job contract, where I will cover remaining elements such as benefits and work responsibilities. Remember, it’s not all about the money.
- Casey B. Are radiologists getting paid less for working harder? AuntMinnie.com. July 31, 2018. Available at: https://www.auntminnie.com/index.aspx?sec=mkt&sub=sala&pag=sea. Accessed July 5, 2019
- AMGA Medical Group Compensation and Productivity Survey. Available at: http://www.amga.org/wcm/PI/wcm/PI/SAT/physComp18_sat.aspx. Accessed July 5, 2019
- MGMA DataDive Provider Compensation Data. Available at: https://www.mgma.com/data/benchmarking-data/provider-compensation-data. Accessed July 5, 2019
- AAMC Store. Available at: https://store.aamc.org/. Accessed July 5, 2019
- The Association of Administrators in Academic Radiology Departments (AAARAD). Available at: https://aaarad.org/works/about/. Accessed July 5, 2019
- AuntMinne.com. March 29, 2019. Available at: https://www.auntminnie.com/index.aspx?sec=sup&sub=imc&pag=dis&ItemID=125060. Accessed July 5, 2019
- AuntMinnie.com. Aunt Minnie Salary Scan 2019. Available at: https://www.auntminnie.com/index.aspx?sec=mkt&sub=sala&pag=sea. Accessed July 5, 2019
- Kane L. Medscape radiologist compensation report 2019. April 29, 2019. Available at: https://www.medscape.com/slideshow/2019-compensation-radiologist-6011349. Accessed July 5, 2019
- Salary.com. Radiologist salary in the United States. Available at: https://www.salary.com/research/salary/alternate/radiologist-salary. Accessed July 5, 2019
- Merritt Hawkins 2019 Review of Physician and Advanced Practitioner Recruiting Incentives. July 8, 2019. Available at: https://www.merritthawkins.com/trends-and-insights/article/reports/2019-Review-of-Physician-and-Advanced-Practitioner-Recruiting-Incentives/. Accessed July 11, 2019
- Yee KM. AuntMinnie.com. Radiology ranks in top 10 for job searches. Available at: https://www.auntminnie.com/index.aspx?sec=prtf&sub=def&pag=dis&itemId=125967&printpage=true&fsec=sup&fsub=imc. Accessed July 11, 2019
- Muroff LR. Buy-sell options for radiology: what works and why. J Am Coll Radiol 2006; 3:918-923