My clients ask about compensation more than any other topic, primarily because it is so directly related to job satisfaction. Of course, job satisfaction is impacted by a number of factors (e.g., duties, patient population, co-workers, benefits, practice location, and the level of respect you receive). Consider the following three most common compensation structures in your future employment negotiations:

1. Straight salary

Most clinicians receive a straight base salary. The advantages of this set-up are that you know what to expect each paycheck, and your income is guaranteed regardless of how profitable the practice or hospital is. The disadvantages are that you are not incentivized to work harder, stay later, perform more procedures, or generate more income for the practice because it will never impact your take-home income.

Some clinicians choose to negotiate an hourly rate over a straight salary. If you do this, realize you will have no guarantee of a minimum number of hours unless this is stipulated in your contract. Also, make sure to iron out how nonclinical hours (i.e., time spent calling patients back, reviewing labs, or charting) are compensated.


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2. Base plus bonus

By far, this is the most popular compensation structure for physician assistants and nurse practitioners. This structure features a guaranteed base salary and a bonus based on such factors as collections, charges, the group’s profit, patient satisfaction, or a combination of these. Beware of bonus structures that are left up to someone else’s discretion. The majority of the time you won’t feel fairly compensated.

The most common scenario is to receive a base salary and a percentage of your collections over a certain threshold. The threshold is typically set at your total costs to the practice. This includes your direct costs (i.e., income, your malpractice policy, support staff, benefits). Unless you are going to be invited to own part of the practice, you should not be asked to shoulder costs that do not change regardless of your employment (i.e., rent, utilities, or general overhead).

The advantage of the base plus bonus structure is that you have a set guaranteed income but are still compensated for working harder. The disadvantage of this plan is that your income generation is often dependent on a quality billing staff that’s proficient in collecting reimbursement for your services.

3. Straight Percentage

This is the newest compensation trend especially among seasoned, experienced PAs and NPs. While it would be nice to receive a share of charges, the reality is that even the best billing department only collects a percentage of what providers charge. So if you do receive a percentage of charges, it’s going to be a smaller percentage then someone who receives a percentage of collections. It also may be easier to convince your employer to give you a percentage of collections, which is based off of money already sent to the practice or hospital from patients or insurance companies. Again, the advantage here is that you’re compensated for working harder. The disadvantage is that this structure doesn’t account for non-income-generating work (e.g., supervising, training, or hiring other staff or serving on a hospital committee). It also means that if the practice hits hard times, you’re going to take home a smaller paycheck.

These are just a few of the many compensation scenarios. What’s right for you is based on a combination of practice setting, your experience, and employer comfort.

Ms. Jacobson practices dermatology in Lancaster, Pa. She is also the owner of Strategic Medical Consulting, LLC and PAprofession.com.