1. Getting Paid: Salary, Contract, or FFS
Which is best for you?
January 11, 2011

2. Caveats I work Fee For Service for the last 2 years
I was Salaried prior
I have worked in the United States prior to Canada
Teaching Hospital
Large HMO
Military
I value my independence

3. Outline Look at relative merits of each system
Look at relative downside for each system
Drill down on numbers for each option
Look at costs for each option

4. Merits of Salaried Job
Reduced Headache (the administrative stuff is just handled)
Built in safety net (base salary and hard to get fired)
Built in benefits (life, health, dental, disability, CME)
Vacation days
CME days
Sick Days
You show up and work

5. Benefits of Contract Get a bit more independence
Can negotiate away certain duties
Still get Clinical Work Incentive
Get paid by the hour (show up and work)
Might be able to be route money through corporation
Government still provides support/staff / tool

6. Fee for service Cannot be fired Most independence
Might make more money
More flexibility with work styles
Potential tax sheltering of income (and income splitting)

7. Downsides to Salaried People who pay your bills mind your business
Government assigns work / expectations
Harder to earn extra money
Taxes are rough
Can only work so much before you are forced to fee for service

8. Contract Sword of Damocles...are you secretly an employee?
Not as many benefits as the Salaried folks
Contract might not get renewed
Hours might be limited
Must cover you own benefits

9. Fee for Service If patients do not come, you go hungry
Overhead costs (this can be big)
The buck stops with you.....you are in charge....and responsible
What happens if you get sick? Injured?

10. What do you get for Salary?
Base pay this year
$142, 317 (first 26 weeks)
$146,826 (second 26 weeks)
$151,334 (end of first year or CFPC certification)
Clinical Work Incentive
22% of all billing over $75K (until Oct 2012)
24% of all billing over $125K and at least 3000 encounters

11. What do you get for Salary?
Vacation days- 20 days the first year (earned as you go)
CME days- 10 days (and $5000) each year
Incentives for rural work
$5000 a year plus $165/hr for ER work OR
$20K for hospitals without an ER

12. What do you get for Contract?
Base $142,317 + $15000/1725= $91.19/hour starting
Step II is $93.81 hour
Step III is $97.61 hour
Clinical Work Incentive
22% of all billing over $75K (until Oct 2012)
24% of all billing over $125K and at least 3000 encounters

13. What do you get for Contract?
Incentives for rural work
$5000 a year plus $165/hr for ER work OR
$20K for hospitals without an ER

14. What do you get for FFS? My numbers for the last year
$263, for patients seen
Total patients visits 6935/year
Vacation 19 days
CME 5 days
Holidays not worked 4 days
Meetings 7.5 days

15. My Costs Rent monthly $4759 (includes an LPN) $57,108 annually
Payroll Tax for me an my employee $42, annually
CME costs $1, this year
Billing Costs $ this year
Life / ADD / Health $1, annually
Property insurance $ annually
Total costs $103, or so......

16. Caveats to my Costs etc
I worked as the Medical Director West Prince one day each week (so I only saw patients 4 days a week)
$30, yearly in 24 payments
I get additional payments for other services
House Doctor for O’Leary ($150 or $ daily)
House Doctor for Nursing Home ($300 per patient per year)

17. The numbers if you please
Salaried
Contract
FFS
Base
151,334
168377
263518
Bonus
or cost
41,473
-103,992
Total
192,807
209850
159,596

18. But don’t forget the tax.....
On that salaried income: $73,194 (net $119,607)
On the contract income: $81,268 (net $128,582)
May actually owe more as the Clinical Work Incentive will not have all the taxes taken out like you salary will
The contract worker will still have to pay for CME and such

19. Bottom Line? Think about how you like to work.......
Will it stress you out thinking about how many patients you need to see today? How you can maximize the return on each visit?
Do you hate it when people tell you where to be and what to do?
Are you willing to take the chance on the CRA and their interpretation of the employer-employee relationship?
How good are you at doing the billing? Here is something to help..
Read the Master Agreement……the whole thing, more than once.

20. Questions?
If you have any questions in the future, do not hesitate to contact me