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How (Some, Canadian) Doctors Earn Money

For the last few weeks, I’ve been talking about how we save and spend money. On this Money Monday though, I thought it would be interesting to explain how I actually earn money.

Lots of people have questions or unclear ideas about how their doctor earns money. Since medicine is actually quite geographical, and I live and work in BC, I’ll just talk about my experience. There are a few different models for family doctors in BC, but many who work in general practice (ie not focused on delivering babies, youth clinics etc) are paid based on a system called “fee for service”. This means that whenever I see a patient, I send a bill to the government for a certain amount of money. This amount is based on the age of my patient (which is meant to be reflective of complexity) or on any procedures I do (like inserting an IUD or removing a skin lesion).

Some patients are surprised when a doctor doesn’t have time to deal with multiple issues at the same time. Often, this is because it is mentally very taxing to switch gears quickly for the same patient, but I have to admit that this is also somewhat related to billing. Whether we talk about one thing or a list of five things, I submit the same fee code (remember, based on age). This means that I can only bill a maximum amount per patient, and that I need to see a certain number of patients per day to meet my obligations- and that’s the next part.

from my early days of residency, when Jan came to the hospital to drop off dinner!

I can’t spend an hour with a patient because of the things I have to pay for before I actually earn money. If you’ve ever seen your doctor’s earnings (in BC you can look this up, in a file called the MSP Blue Book), it might seem like a lot. However, it’s a bit of a misleading number. From this, your doctor has to pay their overhead costs- rent, supplies, staffing, internet, everything that goes into running a clinic. Then, of course, they also have to pay taxes. Since your physician is effectively self-employed, they also need to pay their life/disability/malpractice insurance fees, set aside money for vacation time, save for retirement, and plan for health care costs. They may also need to repay significant student debt. Whatever is left (after income taxes!) is actually their take-home pay.

Aside from my fee-for-service work, I also do a few hours per week of teaching for undergraduate and post-graduate trainees, which I bill an hourly rate for. Occasionally, I speak at conferences or educational sessions for GPs in practice, usually about sports medicine topics, since I spent a year getting extra training in that field.

In practice (no pun intended!) there are some unique aspects to my job. One is the ability to modify my income- emotional/mental toll notwithstanding, I can work as much as I want to increase my income (or, take a lot of time off if I’m ok with not earning). It also means I can never really work remotely, which has definitely made me jealous the odd time J has worked from home for the morning! I also never really appreciated that I’d have this factor to consider in structuring my day or week- I thought I would just help and somehow get paid, but it’s not totally true.

A really interesting outcome of all this is that billing has made me almost hyper aware of how much money I earn in an hour or day, which can sometimes be helpful for making decisions. When I’m looking at a sweater or pair of boots, I actually have a really good idea of how many hours I need to work to pay for them!

I hope that clears things up! Are you curious about how other professionals make money? I wish it was something I understood better before I got started. Is there anything that surprised you about earning in your industry? I’d love to hear!

4 Comments

  • Christine
    December 16, 2019 at 2:48 pm

    This is SUCH an interesting read. I had no idea how doctors charge in BC – you’re an entrepreneur! Similar to you, inquiring clients will often look at my wedding photography packages and think the amount I am charging is insane. However, like you said, after overhead cots like equipment, staff, travel fees, software, the four hours of editing that are required for one hour of shooting… plus income tax.. you get your take home amount. I’ve on some occasions broken this amount down for clients who think my hourly rate is too high, but when they see my actual take home hourly amount it’s suddenly not so impressive, haha!

    Reply
    • Alyssa Heuninck
      December 16, 2019 at 4:01 pm

      Yes exactly! I have had (thankfully only 1 or 2) people tell me to my face that I’m overpaid, and rapidly done the mental math of whether it’s worth it to explain it all or just shrug and carry on!
      In many ways I think this contributes to our shortage of family doctors, but that is perhaps another post :- )

      Reply
  • Kristina
    December 17, 2019 at 12:51 pm

    This was a great post. I always wonder about this. Question: do doctors in the hospitals (specialists mostly) have similar overhead fees? Thanks for sharing!

    Reply
    • Alyssa Heuninck
      December 17, 2019 at 1:06 pm

      That’s a great question! It really depends, but most docs who work in hospital (perhaps except anesthesia or ER) also need to see patients in clinic (to see patients in follow-up, for non-urgent consultations, etc) and so they do have some overhead fees. Take for example a general surgeon, who might operate 2-3 days per week and work in the clinic 2-3 days per week. They can usually share that clinic space because they don’t need it 100% of the time, but they do need the space (and staff!) to run it. Other overhead costs like insurance etc would also still apply.

      Reply

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