Hi everyone. Dr. Inc. here bringing you the truth about employed physicians. I want to thank you today for your hard work and dedication. As I’m writing this, it’s a holiday weekend here in this country, and what I know about doctors is there are thousands of you as physicians who are going to work on this holiday weekend and doing your job, just like you always have, in a dedicated way to take care of patients all over the country who are in need of you today. It’s an amazing thing what you do as a doctor.
I’m thankful that I get to do this myself, and I’m thankful that there are scores of you who are providing care for patients when frankly, you might not even want to (you’d probably rather be doing something else with your family or going to the beach or to the mountains or whatever it may be). But you’ve chosen this path, you’ve chosen this career, and you’ve signed up to do the work that you’re doing on days like this when many Americans are off. Thank you. Thank you for all that hard work. Thank you for that dedication.Â
Today’s truth is that predictable paychecks make doctors happy.
One of the things that I’ve really enjoyed in my career is collecting that regular paycheck that is really quite substantial and large. I’ve always found that to be a sweet feeling getting that paycheck. Of course, nowadays I don’t receive a paycheck, I just receive a direct deposit to my account. So the feeling of that paper being in my hand or looking at it has really sort of gone away, however, those monthly bank deposits also result in a wonderful feeling.
Of course, this is not the reason that we do what we do as doctors. I really see it as being downstream of the beautiful thing that we get out of taking care of patients and doing what we do to provide care to people every day.
But when it comes to getting that predictable and sweet paycheck, there are some assumptions that come along with it. The greatest of these is you’re getting paid at a fair market value. You’re also getting to practice in the community of your choice and preference. There are a few things that come along with that paycheck and the responsibilities that come with being an employee, but isn’t it sweet to have some confidence to know that you’re getting paid fairly and that you’re getting to choose where you want to live, and you’re getting to choose to do what you want to do?Â
You know, it is the easy button for us as employed doctors, because quite frankly, we’re getting paid a guaranteed rate that allows us to know (when it comes to our own personal budget) that we’re going to have money in the bank every month. We’re going to know precisely what that amount is and we’re going to know what we want to do with that money.
Some of you found out in the past six months though, that as much as you thought you had a guaranteed contract and income when COVID came and your health care employers began to bleed a little bit and began to feel the pressures of the financial shortfalls, for many of you they began to short your checks, or they began to change your contract or they wanted to renegotiate how much you’re being paid. Many of you felt that was an injustice. Many of you felt that was wrong. Many of you felt pretty bitter towards your employer.Â
I’m not sure where you are in that or how that landed for you, but it certainly is a memorable event for each one of us. At the end of the day, most of us love receiving a guaranteed paycheck with a guaranteed rate as an employed physician. Many of us also enjoy the pre-packaged benefits that come with being employed. From our health insurance to our dental insurance, to our life insurance, to malpractice insurance, and all the way up to retirement programs, these are all pre-packaged in a nice HR product line that really provides some predictability to how we go about living our lives and our family’s lives and provides some of the substance that we have become used to as physicians.Â
Although many of you as physicians may not realize this, the majority of physician employer retirement programs will really cause you to fall short of the range that you have come to learn to live out when it comes to your retirement. So I encourage you to take a look, do a little bit of the math, and see where you’re at with that. Maybe talk to your financial planner or financial advisor, or whoever works with you in regards to these things, just to make sure that you’re meeting the goals that you have for your financial future when it comes to retirement because again, most physician employers retirement programs will cause you to fall short. There are a number of good things about those programs, but again, you need to save a little bit more.Â
I also love the fact that we get to forego practice management when it comes to being employed in positions. I have an office manager in my practice and she’s the one that manages all of those days today headaches that arise from having 25 employees and all the nuances that come with every Monday through Friday work week, the weekends, the sick days, the kids who are sick, and all the myriad of elements that come with employing people in today’s healthcare economy. I’m really thankful that I don’t have to deal with those issues. I’ve found that in my 25 years of practice I don’t mind being a leader and I don’t mind exerting my clinical influence in my own practice and own office, but I also don’t mind letting somebody else have the responsibility of managing all of the people that are there. I do enjoy the simplicity of simply practicing medicine and taking care of patients, and receiving a good income that comes from that. As long as I provide quality and safe care and meet the productivity requirements that my organization has set for me, I can simply enjoy those patients and enjoy practicing medicine and doing it in a quality way.Â
And I think many of you feel the same way. That’s one of the great things that you do enjoy about being an employed doctor. You also probably enjoy the good life that comes from being a high-income earner and all the money that results from it. I find it a rich blessing to be an employed doctor in today’s world really provides massive opportunities for me to just enjoy patients and enjoy practicing medicine and do what I was made to do and do it in a way that provides a very good living for me and my family.Â
I hope that many of you have found that the predictability of that paycheck and the predictability of all the benefits that come with being an employed doctor are true for you as well. And I invite you to give me your insight and your feedback on what it is that’s made you choose to be an employed doctor, and what you would like or don’t like about the paycheck, the benefits, the management, the guaranteed rates, how your contracts are arranged–there are so many nuances to it that are worthy conversations that we’ll have as continue to unpack these truths.
One thing is for certain, the majority of us are happy that we have a predictable paycheck.
Hi, everyone, this is Dr. Incorporated helping doctors maximize their personal and professional satisfaction. I want to thank you for everything you’ve done today. When you look around your home, I hope you see a wife, children, friends, companions, roommates, extended sources of relationships that you’re making happy that you are influencing for the better; that you are making a difference in their lives not just because of what you do for them medically, because of who you are. And because of the security and the provisions that you provide in their world because really, your life and your income and really what you do as a person. You are highly valued. And I know you don’t always hear that from your employer, I know you don’t always hear that from your patients. And I know, you may not even hear that from your family members. But I want you to know, today you are highly valued.
This brings me to today’s truth. Today’s truth is that you must prove your worth to your employer. You must prove your worth to your employer. This is a subject that took me a little while to get my mind wrapped around as a physician with 25 years of employment experience. I’ve always been driven by really an internal monitor that I knew that I was doing my best, I knew that I was making patients better and making them happy and satisfied with my care. And I knew that I was practicing good medicine efficiently and productively. And for many years, I felt like I could just sort of ignore all the stuff going on around me in terms of what my employer expected from me. Because, frankly, I wasn’t too concerned about it, I knew I was a good doctor. And I knew that being a good doctor the outcomes would be good in regards to my patients. But as time has gone on over the years, one of the things that have begun to eat away at me is just a sense that I have to prove my worth every month.
I don’t know about you, but we have these practice council meetings that are monthly in our office and have quarterly business meetings for our physician employment group. And each one of those meetings, we go over the myriad of numbers that have to do with our productivity and the economic forces that flow out of us and through us when it comes to the care of patients. We review our patient satisfaction scores, our safety and quality scores, and a host of other things that are scorecards that sometimes influence how much we’re paid. But sometimes they’re just sort of a scorecard or report card that gives us feedback about how we’re doing. And one of the great challenges of those meetings for me is, first of all, because I’m in primary care, our practice sites are often basically losing money. And it’s been a source of confusion to me for many years. Because I keep thinking to myself, how can I be working so hard and seeing so many patients, taking care of so many people, yet this practice is losing money?
As most of you have realized by now it’s because, as an employed doctor, you have given up the huge amount of downstream income that would have been contained in your office but has now been allocated to other sites within your healthcare employers organization. So your practice is set up quite honestly to most of the time, lose money.
It’s not about how much money you are making. It’s about how much money you’re losing.
Every organization wants to mitigate the amount of money that each one of its physician groups is losing in the outpatient environment. But that’s made up for the downstream revenue, because at the end of the day, most of those employers have chosen you as an employee, a physician employee in particular, because of the downstream revenue that you create for their organization. Not within the office, but outside of the office.
It’s amazing to me that the average physician generates about $2.5 million in downstream revenue per year, which is exactly why so many healthcare employers are working hard to employ more and more doctors because they realize that their downstream revenue is something worthy of capturing. That’s why they like you, quite honestly. I know for me in my practice, because I’m a traditional family doctor who does obstetrics, through surgeries, including c sections, and so forth, I provide about $5 million in income in my downstream to my organization. And you can bet your bottom dollar that they kind of like me, because of that. I do garner some respect within the organization. Because of that, I don’t get off the hook in terms of my accountability and my need to prove my worth to them every month, but yet, they are aware of what I produce and how much I provide to them.
I hope you’re aware of the downstream revenue that you provide for your organization. If they’re not providing those to you, those monthly reports or quarterly reports, I encourage you to reach out to your administrator and ask them for one of those reports that provide how much downstream revenue you’re providing for your employer.
I also know that many employers encourage accountability when it comes to corporate citizenship. Corporate citizenship can look like a lot of things when it comes to your loyalty to the organization, whether it’s diminishing the leakage of referrals that you’re making to doctors and organizations outside of your employer, or perhaps it has to do with how many times you’re volunteering to serve on committees, or perhaps how many times you’re speaking in a community environment or the number of medical students and residents that you’re hosting with you. There are just several things that are involved in corporate citizenship, that many organizations value, but they frankly hold you accountable and make you prove your worth by proving that you are a worthy corporate citizen.
I can tell you that I again found this a little bit strange because I enjoy doing things to help people and I enjoy doing everything I can to improve the quality and benefit of my community and help those who are interested in going and healthcare. But I never thought of it as sort of a ledger, that I kept track of, that put notches on my belt when I did that. But for each one of you, you probably know very well that some employ you who are watching over those elements for you. Then there’s the quality work element.
I know that I am doing good quality work with my patients. And the frustrating part of that process is I can know that I’m doing good quality work, that patients can know I’m doing good quality work, and even my staff that are working with me to support and transcribe my notes can know I’m doing good, quality work. But if it’s not in a mindful location on the patient’s EMR, or the insurance or third party is not able to gather that information of what I’ve done or not done in terms of my medical decision making and communication, then they act like I never did it. Which is so frustrating when it comes to quality of care. I know for many of you doctors, this is one of those things, just a thorn in your side. I know it is for me because I am very aware of my quality of care and I believe is as good as anybody else in the country. Yet, I get these reports back within the organization that just kind of makes me feel like I’ve forgotten to do things, whether it be the diabetic whose foot exam wasn’t done, although it was done – it just wasn’t documented in the right place to prove that it was done, or whether it be the patient who needed a mammogram and I ordered it when they left the office but the patient failed to show up to get the mammogram and I get dinged in a report because the patient didn’t follow through with what I recommended.
There are all these elements of quality of care that we’re measured by as physicians that quite honestly are so beyond our control and so frustrating at times, yet I know as employed physicians, you are constantly having people beat you down when it comes to this stuff. You have to prove your worth to those employers when it comes to the quality of care that you provide. And then, of course, there’s the whole EMR proficiency thing, which is just absolutely absurd that we are asked to waste our time populating EMR records with minimal data when we could be using our time so much more efficiently. That’s why I’m a big fan of team care, our scribed model of care for physicians because I think it’s only wise to have physicians use their brains and their resources to really provide patient care and to make medical decisions, to do the right things medically for the patient and let others help you with that documentation process. So that it is placed in the right place, in the right location, and documented in the right way.
I think there is a lot of good about EMRs, but man, there’s a whole lot of bad. And if there’s one huge physician dissatisfier that continues to come up year after a year, it’s the EMR and we all know that. Unfortunately, we have to prove our worth to our organizations and they expect us to be proficient with the EMR population and note-taking. They don’t care if we have to get our notes done at lunchtime, before the office or after the office or at nighttime, or on the weekends. They just know it needs to be done and they expect it to come.
If I’ve heard one administrator say it to me once, I’ve heard it 1,000 times- “Well, that’s just one more click. That’s just one more click here. One more click there.” And what they don’t realize is that those “one-more-clicks” taken are compounded by the scores of hundreds and thousands, really equate to another 10, 15, 20, even 30 minutes of extra time in my day, that lead to me getting home later for supper that leads to physician burnout and physician exhaustion and physician dissatisfaction. But this is the world that we live in. We have to prove our worth to our employers, that we can be proficient with EMRs, and get all the work done that they expect us to prove that we can make the money they need us to make.
So, employed doctors, I know there’s a lot of good about what we have going on. And there are many qualities to that, that that come along with that predictable paycheck that we love. These are a few of the things that are a little bit behind the scenes that we all know of. I invite you as followers on this journey with me to chime in. What are some of your frustrations or challenges or unique things that you’ve learned from having to prove your worth to your employer?
Your net worth as a physician should show up on your personal dashboard somewhere.
It should not be the most important indicator of your well-being because the quality of life, meaning in work, and work-home integration is more important. But too many physicians ignore net worth calculations until too late in the game.
To many of us, it just seems uncomfortable to track this, because it’s not the reason we went into medicine.
I was one of those people. Beyond simply enjoying my role as a rural family doctor, my first goal was to get out of debt.
Back in 2005 with all of my debt paid off, I placed a 2nd mortgage on my paid-off home and invested in a series of “angel investments” with the hope to create some passive income out of those leveraged funds. The results were mixed, and I wished I had never taken this step. I should have had my eyes on the Net Worth dashboard.
The Net Worth view would have led me to avoid more debt, and it would have led me to save money by placing it in more secure market-based retirement funds. But since my employer-based retirement funds were maxed out, I thought it would be wise to invest in something that would lead to more future passive income. Angel investments seemed wise because I was not dependent on the income, so slow growth was ok with me.
Passive income-creating projects are good for both income and growth if chosen wisely. But, they should be organized around their impact on net worth, short and long term, My mistake was that I had no idea what my net worth was at that time. The other mistake was that these investments offered no expected return, just speculated growth. Speculation is not an effective way to grow net worth.
15 years later, I have learned a lot from those mistakes. Had I been organized as a PC then (I was not), I would have simply grown my net worth through diversified retirement options afforded through my PC. My financial decisions as an employed physician were hampered by the blind spots that were built into that type of contract.
The good news is that I have arrived at a state of no debt for the 2nd time and this time it’s associated with Financial Independence. Digging out of debt takes behavioral determination. But the secret sauce of Financial Independence for a physician is using your own PC to grow your net worth.
Here is the most common playbook that many of us follow, after becoming an attending physician, and ignoring net worth.
We sign up to be a healthcare employee and start collecting a nice paycheck
We reason that we are earning plenty of money so we don’t need to think about personal finance and money management any longer. We can enjoy the the resources that flow into our bank account regularly, and focus on being a great doctor.
We choose to live the good life, make sure we have maxed out our corporate retirement planning benefits, and use what is left over to pay down our debts while living the American Doctor Dream. We often become consumers rather savers.
From the start, we put our head in the sand, because who wants to be reminded of our negative net worth due to those student loans? We tell our self, tracking net worth will make more sense when the loans are paid off. Of course by then, we have often acquired more debt, so the same logic is applied. The can is kicked down the road again.
I did this, and many of you are in the same boat.
But what you don’t know is what you don’t know.
But it’s not a complicated equation, and it should be an important vital sign for assessing your financial health.
There are many variables that affect your net worth:
Your Debt(s)
Your Income
Your Taxes
Your Benefits
Your Savings Rate
What most employed physicians don’t know is that your maxed-out employer retirement programs will only meet about 25% of your projected retirement needs.
You gain control over 5 of the 5 variables by organizing yourself as a PC. You now thoughtfully manage your income, taxes, and benefits through your PC. And with the larger retained income in a PC, you can pay down your debt faster, and save more with retirement planning. A PC is like finding the golden egg.
This brings us to another number you need to place on your dashboard, the desired annual retirement income number.
You can simply follow the multiply by 25 and 4% rules for retirement. Until the more recent years, I never even considered any of these numbers, because I had no intention of early retirement. Therefore, they seemed insignificant. I was wrong.
Most physicians have the potential for a net worth of 8-10 million dollars during their careers. Yet sadly, 25% of physicians in their 60s have a net worth less than 1 million dollars, forcing them to work into their 70s in order to catch up, if they ever do. I have seen this in my own rural county.
Standard employment contracts result in giving away millions of dollars during your career.
By tracking your net worth, and seeking to actively manage the variables that influence it, you will find that forming your own PC provides you with all of the needed tools.
The fact is that you are a business, and you waive your right to organize yourself as a PC by engaging in a standard contract with your employer. In this arrangement, you are giving up far more than you realize, including multiplying the time it would take for you to reach your desired net worth destination.
