Career moves: Think twice about academia

The differences between university-based and private practice have blurred. Productivity incentives, anyone?

By Gail Garfinkel Weiss
Senior Editor

To some physicians, academia has long represented a haven from the business hassles of private practice. "There's much less paperwork and I don't have to worry about having enough money in my checking account to pay salaries and bills at the end of the week," says Alan Roberts, an internist who closed his solo practice after 30 years and is now an associate professor at the Medical College of Georgia in Augusta.

What Roberts and many of his fellow academic physicians can no longer exult about, however, is their freedom from pressure to generate revenue.

"In recent years, to close budget gaps caused by cuts in government and private insurance funding, academic health care systems are moving toward a model in which staff physicians are being paid in accordance with the receipts they generate," says orthopedic surgeon Stephen Conti, who teaches at the University of Pittsburgh Medical Center. "But in academia, you can't see as many patients as you can in private practice because you're expected to teach and do research, plus you have no control over your overhead—which tends to be quite high—or your collections."

Here's what consultants and physicians in academic practice have to say about the shifting terrain.

Seeing patients, teaching residents, doing research, and . . .

"If I don't bring in a certain amount, I'll be asked to increase my productivity or take a drop in pay," says Roberts. "The Medical College of Georgia provides salary support for non-clinical duties, but I still need to produce. For example, I've been asked to chair the college's ethics committee, but my boss has expressed concern about the likely drop in my practice income and the fact that this new responsibility will take me away from my billable routine."

Roberts is more fortunate than most in that he's paid for his nonclinical duties. Conti only gets a small reimbursement for teaching. "Most academic programs I know of have a small chairman's discretionary bonus that's given at the end of the year to people who have done a lot of research and teaching," he says. "But that money is drying up. And in any event it doesn't compensate you for anywhere near the amount of time and effort you put in."

Michael Wiley of Healthcare Management and Consulting Services in Bay Shore, NY, agrees. "A doctor considering an academic position should ensure that the hours and compensation for these tasks are specified in an employment agreement," he says. "If not, you might be told to put other activities on the back burner until you've spent 35 hours a week treating patients."

Ditto for committee assignments, meetings, and other responsibilities. Pediatric surgeon Susan Adelman, who sold her private practice to the University of Michigan Medical Center in 1994, had to close the practice last year because it didn't break even. Adelman had accepted an AMA trusteeship in 1998 and took as many as 70 days off a year to attend to AMA duties. "The university was unwilling to subsidize a practice located in a heavy Medicaid area," she says, "and it wouldn't subsidize my activities at the highest level of American medicine."

Look before you sign on the dotted line

The news isn't all bad, though. Perhaps because it's increasingly keyed to production, academic pay is rising. "Academic medical centers are revising physician compensation systems to reward productivity. Also, some medical centers have increased salaries to be more competitive with the private sector," says Daniel P. Stech, director of survey operations for the Medical Group Management Association.

The MGMA, which tracks physician earnings, noted that compensation for academic physicians increased slightly more than compensation for physicians in the private sector from 1999 to 2001. Even so, the typical primary care doctor in private practice earns about $21,000 more than his academic counterpart.

Pay would probably be higher if collection efforts were stepped up. "Institutional billing departments are notorious for collecting less than a well-run private practice," says Wiley. So if you're considering an academic job where a significant portion of your income is based on receipts you generate, you need to research the facility's collection ratio history, he adds. "A good collection ratio is about 60 percent. To find out what a university typically collects on each dollar billed, simply ask the doctors who work there. You'll probably get an earful."

Beware, too, of contract clauses that will affect your earnings. A West Coast FP returned to private practice after a four-year stint as director of a medical school's outpatient clinics. "My contract stipulated that my pay would be based on a fixed percentage of clinic profits," he says. "At year-end, when I submitted a statement indicating that my department was in the black, the dean told me that he had placed the anatomy and physiology departments within my jurisdiction, and therefore the outpatient clinics were losing money."

Before you sign an employment contract with a university, Wiley advises, "show it to an attorney or consultant who specializes in working with physicians."

University vs private sector: a comparison

So what's the upside? "I love the student and resident interaction," says family practitioner Jeffrey A. Suzewits, who left a three-doctor group in 1998 to work at the Southern Illinois University School of Medicine in Springfield. Likewise, Alan Roberts of the Medical College of Georgia says, "Adding teaching to my clinical practice has rounded out my professional life admirably; I wouldn't trade it for more money in a private practice setting."

Consultant Michael Wiley points out other benefits of academic practice: fewer on-call responsibilities than in private practice, more time off, better benefits—health insurance, 401(k) plans, paid holidays, paid sick time—and more chances to "shut off work and forget about it."

And despite the fact that one of the historic benefits of academia—the freedom from productivity requirements—is eroding, university practice can offer more creative outlets. For instance, when FP Gail Dudley became division chair of primary care at the Edward Via Virginia School of Osteopathic Medicine in Blacksburg, "I was able to set up the program from scratch," she says. "What an incredible opportunity!"

Other ways the two practice types stack up against each other:

Patient care. "The case mix is usually more complicated and therefore more intellectually challenging in academia," says Wiley. But because you don't see the same patients on a regular basis, there's little continuity of care. According to Suzewits, "It's a trade-off. I'm less likely to see the same patients on a regular basis, but as a supervisor of residents I deal with a wide range of interesting cases."

Conti agrees that the complexity of cases is greater in academia, but notes that the reimbursement for such cases is proportionally lower for the amount of work they require. "If your salary is keyed to productivity and all you see are labor-intensive, time-consuming cases," he says, "you will make far less money than your private practice counterparts who are seeing less complex, well-reimbursed cases."

Primary care/specialist relationships. Alan Roberts laments "a real lack of communication between physicians in academia, as compared with private practice." For example, a cardiologist gave one of Roberts' patients a pneumococcal vaccine—without first checking with Roberts.

"She had already had two rounds of vaccine, and the reaction rate with a third is quite high," Roberts says. "If this happened in private practice, that cardiologist would never get another referral from me. At an academic medical center, he wasn't concerned about referrals because he knew he'd get his paycheck regardless."

Malpractice. "In academic environments, you know that you're going to be covered, because most universities are self-insured," says Hobart Collins, a principal with the MGMA's Health Care Consulting Group.

Partnership opportunities. "I don't know of any academic institution that says, 'Work with us for three or four years and you will be a partial owner,' " says Wiley. "If ownership and management input are important to you, academia isn't the place to be."

Accounts receivable. In academia, the expression "you can't take it with you" applies. "Private practitioners get to take a hefty percentage of their accounts receivable when they leave. Not so in academia," says orthopedist Steve Conti. "It's not yours; it's the university's. A well-established orthopedic surgeon in academia can easily leave $400,000 to $500,000 in accounts receivable when he moves to a nonuniversity setting."

Another moving-on problem, Conti notes, is that most academic settings have restrictive covenants that are far more onerous than those in private practice. "When it's time to go to the private sector you often have to leave the area," he says.

"The bottom line," says Suzewits, "is that academia has its advantages—I can go to a conference without having to worry about coverage, as I did when I was with a three-physician group—but the advantages aren't as sharply drawn as they were in the past. You're not able to focus purely on academics. Like the doctor in the community, you're being pressured to do more patient care."

 

Gail Weiss. Career moves: Think twice about academia. Medical Economics Sep. 5, 2003;80:55.