Employed or Self-employed: Did You Make the Right Choice?

Leigh Page


October 12, 2016

In This Article

Patient Quotas and Productivity Targets

Patient quotas and productivity targets for employed physicians can definitely interfere with their ability to provide care.

Part of Dr Ramirez's pay was in relative value units. "I had to see more patients to get the bonus," he says. "You feel like a factory worker, having to see this high volume of patients." Because of that pressure, Ramirez says that he felt close to burnout.

In the Medscape survey, 4 in 10 employed physicians indicated they had quotas on the number of patients they must see, and 40% of those with a quota say that it is set too high. Employers' use of productivity-based bonuses is rising. The Medscape survey showed that the number of doctors on straight salary fell from 46% in 2014 to 38% in 2016.

Many physicians are not bothered by productivity targets. The Medscape survey found that only 44% of employed physicians who had productivity targets were satisfied with them. Futch says that some employers deliberately set targets very high because they already agreed to a high level of base pay. They don't think they can afford to pay doctors more than that, unless they reach a very high level of productivity.

Despite the growing interest in measuring productivity, this measurement may be on the way out. Although productivity is important in a fee-for-service system, Medicare and other payers talk about replacing fee-for-service with value-based payments, which measure outcomes. Many observers expect salaries to eventually reflect outcomes, not productivity.

How do Employed and Self-employed Physicians Compare?

Employed physicians are somewhat less satisfied with their work than self-employed physicians. Whereas 55% of employed physicians said they were satisfied with their work, 63% of self-employed physicians said so, according to the Medscape survey.

However, both groups were tied in their sense of accomplishment and career satisfaction in the survey. Each group polled at 81% on their sense of pride and accomplishment in their work. And whereas 73% of self-employed physicians said they were satisfied with their career as a physician, 72% of employed physicians felt that way too.

Significantly fewer physicians are switching between employment and self-employment than in the past. In the survey, rates of doctors moving from self-employed to employed status (27%) and from employed to self-employed status (13%) were roughly one half those in Medscape's 2014 survey (52% and 29% respectively).

It's easy to understand why physicians are more likely to switch to employment than the other way around. Whereas it's easy to enter employment, leaving it often means dealing with noncompete clauses in the employment contract that bar the physician from practicing in the area. And newly employed physicians often get an immediate payment in the form of a signing bonus; in contrast, setting up a practice means waiting a few months for income to start coming in. Meanwhile, the physician must spend a great deal of money setting up the practice.

Dr Ramirez opened his own practice in September 2014, and he recalls that that it was a very worrisome time. He didn't have to contend with a noncompete clause, but money was a big issue. "Initially I had zero income, and I was borrowing money to get the practice started," he says. "It was scary."

It was also a very demanding time. He had to contend with the details of setting up a practice, such as finding office space, hiring staff, and getting access to an electronic health record system.

However, once he was settled in and reimbursements started coming in, Dr Ramirez said to himself, "Man, I'm so glad I did this!" His patient volume isn't as high as when he was an employed physician needing to reach relative value unit targets, but "I'm busy enough," he says, and his patients are happier. As an employed physician, patients had to wait 6 months to see him, but now his office can book them 1 week out.

Dr Ramirez says he actually enjoys the administrative work of running a practice. "It helps reduce the tension of seeing patients one after another," he says. And getting involved in the billing means "I get to understand the problem of deductibles for patients," he says.

Indeed, the Medscape survey shows that those who switched from employed to self-employed status seem to be more satisfied than those who went the other way. Whereas 71% of physicians who switched to self-employed status were satisfied, just 40% of those who switched the other way were satisfied.


Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.
Post as: