General NP question, please

sunray12 · Nov 25, 2008

There’s a difference between being employed by a private practice/private practice group and owning your own private practice.

If you are employed by a private practice you’d be paid a salary such as the 80K you mention and perhaps benefits. Overhead and salaries would not be your concern. If you own your own practice then you’d have to bring in enough business to pay for your overhead and salaries, etc., and then you’d pay yourself from whatever is left.

ANPFNPGNP · Nov 30, 2008

After graduating and getting my masters in NP how long do new grads usually train for before they "go solo" in a private practice as NP's? Is there a required amount of time or does it all depend? Do they get their training as new grads in a hospital setting or doctor's office or does it not really matter?
Now the financial aspects of this awesome career dose not matter to me at all because I truly want to help people (sounds corny, I know) however I am curious because when I look up the salary for NP's it comes up to around mid 80k's in Houston, TX. Do you think that there are bigger salaries than this if one goes the private practice route? The reason I ask is not because it's important to me, its just that I figured that a NP with his or her own private practice has a lot of other expenses to take care of including employees salary, overhead, office space rental, malpractice insurance, and so on, I just don't see how 80k yearly is enough to handle it all.
As always any help, advice, or extra information is greatly appreciated. Thank you so much for reading this far down! I really appreciate it!:nuke:
Thanks.

You have to remember that your employer is billing and collecting far more than your salary, so he/she can pay expenses and make a profit off of your work. I have a friend who billed well over $700,000 in one year for a dermatologist and this doc had THREE midlevels billing that much! The poor midlevels were paid exactly 10% of that amount. Needless to say, none of them are happy and they're looking for jobs elsewhere.

I live in Texas and I've thought about opening an urgent care clinic. However, I've spent a great deal of time discussing the pros and cons of this with a few physicians and I'm not so enthusiastic about this any more. One of the docs told me that he wished that he had remained an independent contractor...working for other people, even though he has a very successful, thriving practice. Before, he didn't have an overhead plus when he was off work, he was truly off work. Now, he has a staff that has to be paid even during the slow season. He even had an office manager who bilked him out of thousands of dollars...he said it is so hard to find good employees that you can trust! After listening to all of this, I'm really starting to appreciate my job as an independent contractor. Even if I made more money as a business owner, would it be worth the headache?

core0 · Dec 1, 2008

You have to remember that your employer is billing and collecting far more than your salary, so he/she can pay expenses and make a profit off of your work. I have a friend who billed well over $700,000 in one year for a dermatologist and this doc had THREE midlevels billing that much! The poor midlevels were paid exactly 10% of that amount. Needless to say, none of them are happy and they're looking for jobs elsewhere.
I live in Texas and I've thought about opening an urgent care clinic. However, I've spent a great deal of time discussing the pros and cons of this with a few physicians and I'm not so enthusiastic about this any more. One of the docs told me that he wished that he had remained an independent contractor...working for other people, even though he has a very successful, thriving practice. Before, he didn't have an overhead plus when he was off work, he was truly off work. Now, he has a staff that has to be paid even during the slow season. He even had an office manager who bilked him out of thousands of dollars...he said it is so hard to find good employees that you can trust! After listening to all of this, I'm really starting to appreciate my job as an independent contractor. Even if I made more money as a business owner, would it be worth the headache?

There is a huge difference between billing and collections. Usually collections are some percentage of billing. It may be as low as 10%, however in most practices its around 25-30% depending on the payor mix and demographics. On top of that you have to look at overhead for the employee. If you figure that benefits are 25% of salary and overhead is about equal to salary plus benefits then the true cost is probably around $200k vs. Collections around $250k. So in that case the low salary for Derm may be justified. The real problem is that the billing (and presumably the collections) is far too low. For PAs collections average around $400-500k with incentive based salaries frequently above $150k.

To answer the OPs question, the third highest average salary in advance for NP was practice owner (after NICU and EM). This was $90k. However, the difficulties of opening your own practice should not be underestimated. The number of PA owned practices is around 2% the same as NPs. However, at least for PAs the average experience is more than 12 years with a significant percentage over 20 years.

David Carpenter, PA-C