Calculating
Physician Productivity
Discovery Resource
E-28
1
Exercise
Calculating Physician Productivity
Overview
It’s common for physicians to be oered a starting salary for one year (practicing physicians) or two years
(residents coming out of training) with the opportunity to earn additional income based on productivity and/
or quality performance bonuses. After a one- or two-year guaranteed salary, it’s typical to graduate to 100%
productivity. Physicians who do not have a game plan to build a practice to sustain their income may earn less
on productivity than their guaranteed salary. When this happens, physicians often feel unappreciated and look
elsewhere only to start the cycle over. The following exercises will help you gain a clear understanding of the
techniques for taking control of your compensation by breaking down the number of RVU’s and patient visits
per year, per day, and per hour for you to achieve your desired income.
Learning Objectives
Discover how to maintain or increase your income by leveraging your productivity formula.
Learn how to achieve your nancial goals and/or sustain your income after your guarantee expires.
As a newly hired physician, you receive a
two-year guaranteed salary of $200,000
per year. For the purposes of this exercise,
assume that:
Compensation per work RVU = $45
248 working days in a year
(includes 7 days o for holidays)
4 weeks of vacation (20 days)
1 week of CME (5 days)
Work week = 4.5 days
36 patient contact hours per week
1.2 average work RVUs generated per visit
How many patients do you need to see to
maintain an income of $200,000 starting
the third year?
RVUs per year
RVUs per day
RVUs per hour
Patients per day
Patients per 8-hour day
EXERCISE #1
Situation Question
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2
Exercise
You want to earn $275,000 with work RVU
incentives. Assumptions remain the same
as in Exercise #1.
You receive two oers from local hospitals.
Oer A:
$35,000 signing bonus
• $275,000 guaranteed salary in years 1
and 2
$100,000 guaranteed salary plus $30/
work RVU in years 3-5
Oer B:
No signing bonus
$225,000 guaranteed salary in years 1-3
$50,000 guaranteed salary plus $55/work
RVU in years 4 and 5
How many patients do you need to see to
achieve your income objective?
RVUs per year
RVUs per day
RVUs per hour
Patients per hour
Patients per 8-hour day
If you anticipate producing an average of
4,500 work RVUs per year, which oer is
the best onenancially?
EXERCISE #2
EXERCISE #3
Situation
Situation
Question
Question
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3
Answer Key
Answers Calculations
RVU’s Per Year 4,444 Divide $200,000 by $45 per work
RVU’s Per Day 20 Step 1: Estimate days worked per year
248 work days in a year
(20) days of vacation
(5) days of CME
= 223 days worked
Step 2: Divide 4,444 RVUs per year by 223 days worked
RVU’s Per Hour 2.75 Step 1: Calculate average patient contact hours per day. Divide 36 patient
contact hours per week by 4.5 working days
= 8 patient contact hours per day
Step 2: Divide 20 RVUs per day by 8 patient contact hours per day
Patients Per Hour 2.30 Divide 2.75 RVUs per hour by 1.2 RVU’s per
patient average
Patients per 8-hour day 18.4 2.3 patients per hour times 8 hours
Answers Calculations
RVU’s Per Year 6,111 Divide $275,000 by $45 work RVU
RVU’S Per Day 28 Step 1: Estimate days you must work for 1 year
248 work days in a year
(20) days of vacation
(5) days of CME
= 223 days worked in a year
Step 2: Divide 6,111 RVUs per year by 223 days actually worked
RVU’s Per Hour 3.5 Step 1: Calculate average patient contact hours per day
Divide 36 patient contact hours per week by 4.5 working days
= 8 Patient Contact hours per day
Step 2: Divide 28 RVUs per day by 8 patient contact hours per day
Patients Per Hour 2.9 Divide 3.5 RVU’s per hour by 1.2 RVU’s per patient average
Patients per 8-hour Day 23,2 2.9 patients per hour times 8 hours
Answer Calculations
•Oer A = $1,290,000 total Oer A
$258,000 per year Year 1 - $310,000 ($35,000 Bonus+$275,000 Guar. Salary)
Year 2 - $275,000 ($275,000 Guar. Salary)
Oer B = $1,270,000 total Years 3-5 - $235,000 ($30 x 4,500 = $135,000
$254,000 per year + 100,000 Base)
Oer B
Years 1-3 - $225,000 (Guar. Salary)
Years 4-5 - $297,500 ($55 x 4,500 = $247,500
+ $50,000 Base)
EXERCISE #1EXERCISE #2EXERCISE #3
Discover Resource E-28