When does a newly hired NP become profitable to a practice?
Q: A physician in solo practice is thinking of hiring me. I would be her first NP. She seems to be worried that hiring me will decrease her income, at least initially. If I am as productive as an average NP, how long will it be before I support my salary, benefits and overhead and also increase her income?
A: After hiring you, the physician's income will drop for about six months, because she will be paying your salary, benefits and overhead and you will not have a large enough patient load to cover your salary and benefits and profit
for her. But after six months, she should break even. After 12 months, she should have recouped the losses of the first six months, and during the second year of your employment, you should be making a profit for her. Should she hire a physician rather than an NP, she should expect to count on six to twelve months of losses, simply because physicians' salary and benefits usually are greater than NPs'. Nevertheless, physicians who hire new physician associates usually recoup their losses and are making a profit from the associate's work by the second year of employment.
Physicians most likely to hire NPs are those whose practices have grown such that they are seeing more patients than their preferred lifestyle can tolerate. A physician in this situation will exchange a short-term cut in profit for a less harried patient load. On the other hand, a physician who has a patient load he or she can handle easily will not want to forego income to take on an NP.
This tip is excerpted from The Green Sheet, a monthly newsletter on NP reimbursement and compensation from the Law Office of Carolyn Buppert. To receive The Green Sheet for the next 12 months, send your name, address and a check for $25 to The Green Sheet, Law Office of Carolyn Buppert, 1419 Forest Drive,Suite 205, Annapolis, MD 21403. A companion newsletter The Gold Sheet, keeps NPs up-to-date on quality issues, including malpractice avoidance and evaluation of clinical performance. The Gold Sheet is also $25/year.
Last updated: December 5, 1998
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