When evaluating a job offer, the focus is no longer on just salary, call schedule, and location.
In today's healthcare environment, physicians need to truly understand the opportunity being presented to them and approach it with business-savvy insights.
Whether you're joining a hospital, a large private group, or a small practice, these organizations are businesses, and you want to assess the stability and growth potential of your future employer so you can make a better-informed decision about a future with them.
Vetting Potential Employers
For a physician, the 'product' is your skill, and the 'market' is the healthcare system. You can start your market research when you find a website where you can find potential employers and start asking the right questions about financial stability, future opportunities, and potential growth.
Knowing where to get pertinent information and what questions to ask can change how you look at the job and the company offering it.
- Financial Health
What it is:
To gain a bigger picture of the company's fluidity, you want to have a look at the collection rates. This is the percentage of total money collected from the total amount billed based on insurance rates, Medicaid patients, or private non-insured patient rates.
This'll reflect the efficiency of the practice's billing and all-around financial health. A rate below 90% may signal potential problems.
Why it matters to you:
A low collection rate could be a signal of poor management, inefficient billing staff, or problems with payer contracts. These numbers will directly impact the ability to invest in new equipment, additional staff, and stunt growth for your career.
The question to ask:
"Can you share the practice's average net collection rate over the last 12 months?"
- Accounts Receivable (A/R) Days
What it is:
The payment terms tell you the number of days it takes a practice to be paid for services rendered. For instance, a government contract might have 30 days to pay, but private non-insured patients must pay up front. This can gauge what kind of cash flow goes through the practice.
Why it matters to you:
If a company has a cash flow issue or high accounts receivable, this could be an instability that could affect payroll, bonuses, and resources available to keep the practice up to standard.
The questions to ask:
"What is your percentage of A/R, and do your contracts pay their bills within 30 days? '
- Patient Encounter Volume & Payer Mix
What it is:
The average number of patients seen per provider per day (volume) and the percentage of patients with Medicare, Medicaid, and various commercial insurers (mix).
Why it matters to you:
Volume tells you about the practice's efficiency and potential workload expectations. Reimbursement rates can vary drastically, so a practice reliant on lower-reimbursement payers (e.g., Medicaid) must see a higher volume of patients to maintain revenue, which could impact your quality of life.
Question to ask:
"What is the average daily patient volume for a full-time provider here?" and "Could you describe the practice's general payer mix?"
- Operating Costs vs Revenue
What it is:
The practice's operating expenses and the incoming revenue will demonstrate how much of every dollar earned is spent just to keep the lights on.
According to the Medical Group Management Association (MGMA), the average operating cost for a practice can range from 64% to 74% of revenue:
- Labor → 50-60%
- Tech/IT → 2-3%
- Facility → 5-10%
- Billing → approx 5%
- Overhead expenses (e.g., marketing/ads, staff development, training, CE, depreciation of medical equipment, etc.) → approx. 2%
Why it matters to you:
This'll help you understand if the practice is struggling with overhead expenses or managing within the average range.
What to ask:
"How does the practice's operating expense ratio compare to MGMA benchmarks for our specialty and region?"
- Physician Productivity (RVUs or Collections)
What it is:
Relative Value Units (RVUs) are made up of three components:
- physician work
- practice expense
- malpractice costs
These are multiplied by a geographic adjustment factor and a monetary conversion factor to calculate the total dollar amount paid for a service.
Why it matters to you:
The way you are compensated will surely be tied to one of these components, so make sure you understand from day one.If this will remain non-negotiable, and if there will be a different formula used to calculate bonuses.
Question to ask:
"What is the productivity benchmark (in RVUs or collections) for a physician to reach their full earning potential?"
Conclusion
If you arm yourself with the above knowledge, you will be an active participant in your future and understand what companies bring what opportunities. You will be a well-informed candidate who thinks like a partner.
This will allow you to discuss the stability, growth, and efficiency of a place you intend to hang your hat.
By applying a data-driven approach to your job search, you take control of your career trajectory, ensuring the next step you take is not only clinically rewarding but also financially sound and built for long-term success.
%2520(1).png)
.png)
