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-JAG-

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  1. My earlier comment was unclear. I (mistakingly) referred to a yearly income using a full time hourly wage. This may paint a clearer (or at least more representative) picture: We assume that the standard model of 50 minutes of face-to-face interaction followed by 10 minutes of note taking holds true. Our social worker sees 5 patients a day for a total weekly workload of 25 hours. For this delegated service, you would bill 150$/hour and the patient would bare no expense, which limits no-shows and increases the “supply” of new patients. Yearly billings come out to around 170k. The social worker makes 100k per year, which comes out to a full time hourly wage equivalent of around 50$/hour. Since overhead increases would be negligible if done in an existing family medicine practice, the physician could theoretically pocket 70k per year. Not a princely sum, but enough to work on student debt repayment, retirement or any other financial goal a little bit faster.
  2. My reply to ellorie touched on this, but I maintain that the amount that psychologists and social workers bill is in no way representative of their true income. 50$/hr is about 100k/yr. That’s about what most psychologists make (https://www.jobbank.gc.ca/wagereport/occupation/2223) and more than what most social workers make. If they could really bill 200/hr and keep overhead reasonable (say 25%, as is possible for a physician), they would make more than some doctors with significantly less schooling and a much less stressful job, which I doubt is true. If it were, we would see a lot more competition to become a psychologist or social worker.
  3. I think that that’s a tad misleading. I’m not an expert on how much clinical psychologists make, but it was always my understanding that they have high overhead and don’t bill anything close to 40/hrs per week. The average clinical psychologist makes around 100k according to most job sites, which comes out to 50$/hr. The government’s trend analysis of psychologists’ wages seems to corroborate this. (https://www.jobbank.gc.ca/wagereport/occupation/2223) If private practice psychs could really bill 250 an hour, work 40 hours a week and keep overhead at 25%, they would make close to 400k/yr for a job with few emergencies, no call and much less schooling than physicians. No one would want to go to med school if psychologists pulled in that kind of money. If they actually do, I think many here would reconsider their career paths.
  4. After going through each province’s respective fee schedule, I have found that PEI is the only province that explicitly permits physicians to bill for visits that they delegate to a member of their staff. The most attractive service that is eligible for this seems to be PEI’s counselling (akin to GP psychotherapy) code, which currently pays 182$ per hour, rising to about 200$ per hour in 2023. (code 2501 for those interested) If delegated, the physician may bill 75% of the original amount, so currently 137$ per hour rising to nearly 150$ per hour. Seeing as one could hire a psychologist at around 60$ per hour or a clinical therapist at 40-50$ per hour, couldn’t this be a great way for a family physician to increase their income? I’m not sure that the province would look favourably at an incoming family physician storming Brackley Beach on an LCVP filled with 10 psychotherapists, ready to bill 1500$ an hour, but could hiring a single one be a good way to make some extra income?
  5. The 427k gross billings assumes 30% overhead. Even working in someone else's clinic you can go lower than that. In response to your points. a) you can practice good medicine seeing 60 patients a day just as you can practice bad medicine seeing 15. That being said, a lot of achieving high patient volumes comes from cutting out chit-chat, limiting your patients to one issue per visit, charging for forms and not refilling Rx by phone. b) very few family physicians work this much c) the benefits of rural medicine are often overstated on this forum. People act like going rural will mean making tons of cash and having a great lifestyle. In reality, going rural usually gets you a 20-30 bonus, which is nothing special. In some provinces you get practically nothing unless you're really isolated. The money comes from high volume office work, lower overhead and ER work done in rural places, but all of these can be done in the city. 300k is very possible. Here's some examples that don't include any of the above. Pain clinic anywhere is very lucrative and has huge waiting lists even in major cities. Patient population sucks but the money is there. Even in the worst paid province, Alberta, its over 200 an hour, which easily gets you to your goal provided you keep overhead low (cheap rent, not having more than one medical assistant, etc.) In other provinces sky's the limit. In Alberta, family doctors who become generalists in mental health make around 200/hr. for counselling/psych management. Also gets you to your goals with a great lifestyle. In Quebec, a basic visit is 43$. Add to that CSST and add ons like STI counselling, reassessments etc. and you can easily get to 50-55$ per patient. Let's call it 50$. If you see 35 patients a day, which is quite reasonable, you'll bill 1750$. Add another 60$ for your prise en charge bonus (seeing patients registered to you) That comes out to a bit over 1800$ a day. Let's say you take 1.5 months off per year, that gives you nearly 400k in annual billings. You also get capitation payments for having vulnerable patients, which can easily add another 20k/yr. Assuming 25% overhead you've again hit your goal with 15k to spare.
  6. By epidurals do you mean steroid injections? That is a big money maker (in some provinces, as long as you're FFS and not hourly pain clinic like Alberta). You may be right for nerve blocks, but I always saw that they were quite à la mode. (Femoral blocks seem to be pretty prevalent but I'm not a pain medicine expert so don't quote me on that.) Nonetheless because pain patient rosters are so small (1000 patients will keep you busy year round) there's quite a bit of room for variation from clinic to clinic and doctor to doctor.
  7. FM overhead is not 45%. Plenty of clinics (and by this I mean for profit enterprises that make money by skimming more of your billings that what overhead actually costs) charge 30% even in expensive cities. If you're willing to go to the suburbs/work in an older building/forgo a medical assistant/shop around a little bit you can easily get to 25% outside of downtown Toronto/Vancouver. Same for endocrinology and rheum. In my province, Endo expenses are very similar to FM with some additional equipment for thyroid biopsies. Rheum is basically the same as FM. Urology here also has low overhead because they do all their cystoscopies and other costly procedures in the hospital. Most hospitals have a group that leases an office space and has some secretaries to do elective stuff, but very little equipment. Lots of gloves though... but 10-15 overhead is possible. IN regards to this table, it probably has a very small sample size which is skewing the numbers. Assuming endo/rheum really had 50% overhead, they would all just do GIM work instead or go to a salaried position in the US.
  8. I'm sure all the Managing Directors and PE partner only have bachelors. I have family in Private Equity in the States. Are you aware that almost all PE shops are 2 years and out. 3 years in IB, then 2 in PE and then you're asked to leave. You're not going to become a kindergarten teacher, you get an MBA. Now I conveniently forgot to mention that some generous firms pay for your tuition, but most don't. This is the error you would have pointed out if you knew about finance.
  9. Well in my middle of the road province the average specialist including all the part timers, private based and academic based physicians make over 500k before our very generous 1.45x bonus for going to a small town, so I'll have to agree with you.
  10. If by private you mean outside RAMQ, then the answer is no. If you're not charging Medicare, you can do whatever you want (especially with Chaoulli vs Quebec) If you mean private offices that provide insured services, the answer is more complicated. The billing cap for most specialties is different, but is usually between 5-600k. For anything done in a private office (cabinet) only 65 cents of every dollar goes towards this cap. That being said, some specialties, like psych, also have a hard billing cap IN ADDITION to these restrictions. Whichever you hit first applies. For example: the soft plafonnement for psych is around 550k. Take a psychiatrist billing 750k working exclusively in a private office. Because of the 65 cents rule, only 488k will go towards the cap. HOWEVER, psych also has a HARD billing cap of around 700k. Because they hit this one first, that 50k will only amount to 20k after associated penalties. This isn't that bad. The real killers are the plafonnements on certain procedures and practice settings. If you're a cardiologist or internal medicine physician, you have a very low hard billing cap for anything done in a private office. For IM it's 350k, for cards it's a bit over 500k. For the restrictions on procedures, anesthesia is hit very hard. There is a very low limit on nerve blocks. Any quick diagnostic tests that make a lot of $$$ are also restricted. Munsell tests for ophtho, audiometry for ENT, you get the picture. This is the opposite of Ontario's method, where you can bill as many of those as you want, but you have strict conditions to be able to do so (for an audiometry you need special training or an audiologist). Quebec just limits how many you can do. Usually these things are about 500-1000 per year. Quebec also severely limits how much certain specialties can bill for rounding, especially rounding on weekends, as well as how many follow-ups you can do. This can be a big problem if you're efficient. (side-note: the RAMQ also flags you if you see more than 81 patients a day, there's no hard cap like in BC but if you see more than 81 they'll either call your patients to make sure you actually saw them and/or have a chat with you on wether your style of practice is best for patient care) If you want to escape plafonnement, either do FM or Radiology. For rads, MRI doesn't count, facility fees don't count, and only 30 cents of the rest goes towards the cap if you're in a private office. (side-note: I will never understand why QC radiologists refused to cover CT and MRI in private offices, especially in light of Chaoulli vs Quebec protecting private MRI and CT, as well as the public reports on how much the few facilities that were granted the permission to do so in Ontario made)
  11. Is everyone forgetting the cost of an MBA for banking? That's 100k tuition (UofT) (4x what med school costs in Quebec, 2x in the prairie provinces) and 2 years (the same as FM residency) lost. If you go to an M7 program in the States (as many Canadians do, especially if they want to be competitive for elite PE firms, it's over 200k, not even counting lost income.
  12. In 2015, over 500 doctors in Ontario billed OHIP more than 1 million dollars. Let’s compare that to some other professionals 1. Lawyers. Here’s a study of self employed lawyers’ incomes from 2012. [https://www.thestar.com/news/canada/2012/03/30/the_verdict_lawyer_well_paid_at_8_million.html] Only 8 self employed lawyers in the entire country made over seven figures. Sure, that ignores employed lawyers such as partners in large law firms, but hitting a million a year there isn’t a guarantee either. While profits per partner aren’t an exact portrait of salaries, it’s still pretty telling that of Canada’s seven largest law firms, only one, Osler, reported profits per partner above 1 million dollars, and even then, its really only those at the top of the partner hierarchy with significant equity in the firm that make those numbers. Big names like Blake’s and McCarthy don’t make the cut. If you’re a junior partner on Bay St. (meaning even though you’ve been with your firm for over a decade likely), you won’t be given any equity and will be pulling in mid-tier family doctors money. Here’s a 2007 report commissioned by Canada’s judges on compensation for lawyers in the private sector. [http://www.quadcom.gc.ca/archives/2007/Media/Pdf/2007/Resources/CommentsNavigant Report.pdf] It exclusively considered private sector lawyers with over 10 years experience who worked for law firms, meaning that the lower earning in house counsels were excluded from the data. In Canada, the 75th percentile fell between 350 and 400k/yr. While it’s impossible to confirm this, one would think that this group would exclusively be composed of equity partners. In Toronto, the number was 550k, the highest in Canada. A seven figure salary was had only at the 93rd percentile (in Toronto) and remember, this is a pretty restrictive study. If we considered government lawyers, in house counsels, lawyers working in non profits and lawyers with under 10 years of experience, the numbers would be much worse, just as all the part time family physicians and low billing paediatricians, neurologists and psychiatrists bring down the Ontario numbers for physicians. To demonstrate my point, the jobs bank lists a 90th percentile salary for all lawyers in Toronto of 400k. 2. Accountants. Seven figures is reserved for the top of the Big 4 or extremely successful private practices. A senior manager at the Big 4 in accounting usually doesn’t clear 130k and many work specialist physician hours while living in some of the most expensive cities in Canada all the while having little prospects of making partner. If you do, you can expect to make 3-400k for a while before usually topping out at 700k, but I have no data to back this up. 3. For banking, you have to be a managing director at a large investment bank. If it’s not investment banking (or sales and trading if you’re a superstar) forget about it. Just getting an analyst offer at one of these places is just as hard as getting into medical school, and after finishing top of your class in finance or economics at a prestigious university, you’ll be lucky enough to spend 80 hours per week making pitch books, changing fonts on PowerPoint and making models in Excel. You make quite a bit for only a bachelors, around 150k your fist year with bonus, but the vast majority of bankers will never make it past VP/Executive Director, where the salary + bonus is usually 350-750k. That’s because to become a Managing Director, you not only need great technical skills, but great sales ability. If the firm doesn’t think you’re going to be a rainmaker for them and be bringing in tons of new clients, they aren’t going to promote you. Even if you are good, the guy above you could simply never retire and leave you stuck as a VP/ED for a decade. I know it’s not banking, but private equity usually recruits the best of the best from investment banking (which already recruits the best of the best from finance and economics programs at prestigious universities) and have similar (if not higher salaries). The Heidrick and Struggles compensation report outlines salaries for PE jobs in the US. [https://www.heidrick.com/Knowledge-Center/Publication/North-American-Private-Equity-Investment-Professional-Compensation-Survey-2019] The short of it is that unless you’re a partner, you’re not hitting seven figures, and making partner in PE is easier said then done. It’s demonstrating that you’re an expert in your field and being able to quarterback deals that involve managing hundreds of people and billions of dollars. For consultants, I don’t have any data, but trust me when I say that you have to be a senior partner at McKinsey, Bain or BCG to be there. There are two problems with of these paths. Firstly, they require a great deal of dedication over your whole career and proving that you are the best in the business to your superiors for at least a decade. Secondly, they require great technical skills, great people skills, great sales skills, great negotiation and conflit resolution skills and a whole lot of luck. You’ll have a much easier time hitting a million a year in medicine. Just gun for cards, rads, derm or ophtho, and if you end up in family med, internal or psych, just do pain clinic. Even if the restrictions actually go through in Ontario, there’s always Sask., Manitoba and Quebec that pay well for nerve blocks. Lastly, I wanted to say that even if the top billing doctors likely have substantial overhead, they probably have equally large sources of private income. The two top billing family doctors in Ontario both do aesthetic medicine, Botox for chronic migraines (not covered by OHIP) and one is the medical director of a large cannabis company. The second highest billing radiologists also used to hold a license to operate private MRI’s and CT’s in the public system, that he sold for a few million dollars. Reports from the auditor of Ontario on his company, Oxford Advanced Imaging, showed that he was making at least a few million a year from that as well. The second highest billing ophthalmologist in Ontario over the last 10 years, Dr. Anjema, provides many uninsured services at his clinic, AEI, just look up his website. I would wager that probably every ophthalmologist on the list is also charging for bogus and unnecessary eye drops and diagnostic tests for cataract patients. Where I’m from (Quebec) public clinics sometimes charge as much as 1000$ for these and pressure the patient into getting these tests even if they are not medically necessary.
  13. TL:DR: Why do primary care clinics in the US have overheads in the 50-60% range while Canadian ones pay less that half that. Do malpractice insurance premiums and billing agents really make up the difference? Some back of the napkin math below: Let’s start by citing some commonly thrown around percentages. The CMA states that family physicians in Canada pay, on average, 27% overhead. The large GMF’s here in Montreal all charge around that rate, usually between 23 and 31% from what I’ve personally seen. While I can’t confirm it, I’ve also heard from a few family physicians that even at nicer clinics in more expensive cities like the GTA and Vancouver, overhead is closer to 35%. Fair enough. While I couldn’t find any hard data for the states, 50-60% seems to be used as a general estimate. Why? Let’s crush the numbers. I’ll ignore currency value differences for this comparison. I’ll also use a solo practice for the American example, despite its inefficiencies . A clinic has to pay rent for the space it occupies. I couldn’t find a specific breakdown for medical office space. So let’s use general numbers for simplicity’s sake. Office space in Midtown Toronto rents for an average of $24.49 CAD/sq ft per Statista. Class B office space in Downtown Dallas rents for an almost identical $25.00 USD/ sq ft. I found similar numbers for other major cities such as Boston and Atlanta. Let’s call this one a dead heat. Assuming a single physician can operate in a generous 1500 sq ft space, they would pay a yearly rent of 38k. Now, onto staff. A physician’s office needs a secretary. They make on average, 39k USD per year in the States according to the Bureau of Labor Statistics (Medical secretaries make less, but let’s ignore that) and around 40k CAD per year in Canada according to the trend analysis on the governments job bank. You would probably need to higher a medical assistant as well. These run 30k a year in the US according to the American Association of Medical Assistants for certified personnel. I’m Canada the average medical assistant makes more usually, but for the sake of this comparison let’s call it even. Next up are supplies. Vaccines, EKG machine, computers, EMR, etc. There’s too many costs here to breakdown, but I don’t think that these items cost significantly more in the US that in Canada. Up until now, we’ve established that costs in the US and Canada are practically identical. Now come the two game changers : malpractice insurance and billing expenses, or are they? CMPA charges a family physician roughly 5k a year in Ontario for a general practice without any ER or OB work. In other provinces this is lower, and sometimes partially reimbursed. Malpractice insurance prices vary in the US but seem to be very dependent on state. In a less lawsuit happy part of the country like Texas or Minnesota it seems like many doctors are paying 5-10k a year but this can easily rise to three times that number in more litigious states like Illinois and Florida. That being said, who wants to live in Illinois or Florida... Let’s put malpractice insurance premiums at a generous 15k/yr. Last up is the question of billing, which is much more complex in the US than in Canada. Let’s assume that the Canadian physician has no expenses related to billing and that their American counterpart has to hire a full time billing agent at 50k USD/yr. as well as pay for a license to use billing software at 100$/mo. Related to billing are collections. Unlike in Canada, where if you bill OHIP for example you are guaranteed payment if you actually provided the service, American insurers aren’t as easy to work with. That being said, I routinely see collection rates of over 90% being thrown around, and certain programs, such as the rural health clinic program, reimburse physicians for a portion of bad debts (65%). Lastly, I would assume that, as a family physician, you’re probably going to be more successful getting an uninsured patient to pay 100$ for a visit than a hospital would getting that same patient to cover a six figure bill for emergency surgery. Lastly, over 91% of Americans have health insurance so you won’t be seeing hordes of uninsured people unable to pay for your services anyways. So all in all, the American physician has an extra 60kish worth of recurring yearly costs over the Canadian, yet they seem to able to bill substantially more for their services (American codes are much more complex than Canadian ones but it seems like even Medicare pays 80$ per patient gross billings, but average salaries for EMPLOYED family physicians are about the same as for Canadian self employed doctors after currency conversion) Why is American overhead so high? Am I missing anything huge? Are billings that go unpaid included in overhead and driving numbers up? Do American doctors see fewer patients. Since your patients are lying to see you, either out of pocket, through their insurance or usually both, do they feel more entitled to your time and therefore drag down the number of patients you can see per day? Even so, ignoring the huge potential for hiring mid levels to work and bill under you, I have a had time believing American family doctors can’t personally see 3-4 patients per hour.
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