Choosing To Work For Yourself Rather Than A Factory Owner

This is the final post in a three-part series on our role as workers in the healthcare factories of America. The first two posts were:

You Weren’t Designed To Be Healthcare Factory Workers

You Were Meant For More Than Healthcare Factor Work

We will conclude this series with my passionate exhortation for you to choose to work for yourself instead of being an employee in a factory.

Classifying Your Work As A Doctor

When you accept your worker classification as an “employee” to a large corporation, it puts you in a position where your professional status can slowly be eroded. Essentially, they gain control over you.

In contrast, establishing a micro-corporation and becoming self-employed is the most crucial step to maintaining your professional autonomy. It allows you to maintain control over your professional life and empowers you to define the type of worker you prefer to be: either an employee or a non-employee.

When it comes to your work as a doctor, there are multiple ways to view and organize it.

• Length of work: Permanent (i.e.: long-term) job or Non-Permanent (i.e.: short-term) Job

• Your worker classification: Employee or Non-employee (i.e.: self-employed, contractor, etc..)

• Contractual Structure: Business to Individual (direct care models), Business to Business (old style private practice, contractor work, PC-employment lite, etc…), and Individual to Business (traditional employment)

• Physician Labor From Corporate View: Employee vs Contracted-Temporary Labor

For a number of business reasons, factory owners will want you to be permanent(long-term) employees.

For a number of professional and business reasons, you should want to be a non-employee micro-business whose work could be either long-term or short-term. This will allow for maximum flexibility in your work and professional life and is consistent with the evolving view of work for Gen-Z and Millenial physicians—who prefer to job stack as illustrated below:

The Changing Reality Of Physician Labor

In the modern world, the concept of permanent labor is changing. Workers no longer seek to simply find a job and stay with it until retirement. Instead, they are actively seeking ways to enhance their career paths and pursue personal growth. They are embracing agility and adaptability, recognizing the importance of continuous learning and development. This is also true for physicians who are merging into the marketplace.

You can do this through a combination of long-term and short-term contracts or by starting your own micro-business. For physician workers, it’s all about having the flexibility and freedom to pursue your dream life and seize the opportunities that your professional status has to offer.

In line with this new physician-worker mindset, medical corporations are increasingly inclined to hire independent contractors or remote workers for their labor, rather than relying solely on permanent staff, whom they refer to as employees. This is especially true for jobs that require specialized skills or tasks that can be easily outsourced. Add in the layer of location-independent work, and you can see why the telehealth industry is experiencing rapid expansion, creating a plethora of job opportunities for you in this niche.

Moreover, employers have also become more open to offering a percentage of full-time equivalent (FTE) positions as an alternative to traditional full-time employment. This not only provides individuals with flexibility but also opens the door for them to potentially become long-term independent contractors rather than employees.

Long-Term and Short-term Non-Permanent Professional Labor Is Rising

You possess a unique superpower – the ability to function as a micro-business. In this evolving labor landscape with high demand for your professional services, you need to adapt and manage your medical career in a different way.

You have the power to embrace the modern view that all labor is non-permanent, while also reflecting your preference for flexibility, work-life balance, and quality of life as fully functional independent contractors.

There is a growing realization that designating your work as permanent professional labor is truly an oxymoron. While some may still be okay with being identified as an employee, others prefer to be called long-term independent contractors.

The concept of long-term independent contractors is a relatively new idea that deserves recognition and legitimacy as a distinct job category. It should be seen as separate from both traditional employment and short-term independent contractors.

Long-term independent contracting truly adds an important third category for workers and embraces the evolving cultural views of the labor force & this includes doctors

It is highly probable that newer generations of doctors will choose to embrace all three categories and shape their medical careers around a self-directed combination of employment, long-term independent contracting jobs, and short-term independent contracting jobs. The total workload will be self-determined and will support individuals in achieving their holistic personal and professional goals.

How To Earn The Right To Help Choose Your Worker Classification

Properly organizing yourself from the beginning of your career is crucial for several reasons. The most important reason is that once you become an employee, transitioning from being an independent contractor with the same employer later on becomes significantly more challenging.

Take These Steps To Preserve Your Autonomy

As you prepare to enter the marketplace, I enthusiastically encourage you to get ready for this exciting moment by following these steps to take control of your professional life and determine exactly how you want to interface with any job option. Doing it as an individual taxpayer (W-2) is easiest but has the most negative downstream consequences. Doing it as a micro-corporation (1099 contractor) requires some extra steps, but will lead to your best life as a doctor.

I highly recommend starting here to embark on your journey towards self-employment as a contractor through your own micro-corporation:

1. Create a micro-professional corporation that can be utilized for your professional services in both long-term and short-term jobs—whether it be for a primary job or side jobs.

2. Identify multiple sources of income for yourself. For most doctors, this will include a primary job along with additional side work. The monetary value of these side jobs is less important. What truly matters is having multiple income streams. This is not only beneficial financially, but it also solidifies your contractor status as you offer your professional services to multiple sources through your business. There are three general categories of income that can and will be created:

   1. Active Income-The income associated with your professional status as a physician typically requires your physical presence to generate revenue.

   2. Passive Income-Income generated from sources outside of your professional status may or may not require your physical presence to manage.

   3. Retained Income-My personal favorite is the approach that requires no extra time or work. It’s all about working smarter, not harder. In fact, a micro-corporation can typically unlock 10-15% of retained income for the average doctor.

3. Once these two ingredients are in place, you have fulfilled what I would consider the minimum necessary characteristics for a company to recognize you as a contractor when they onboard you for work.

   It is crucial to note that by establishing your status as both an individual taxpayer and a micro-corporation, you now have the flexibility to be referred to as either an employee or an independent contractor by both yourself and any employer. This power is critical as you enter the marketplace.

4. Next, if this were your primary job, I would highly recommend expressing your desire for a long-term relationship, if that is indeed what you’re seeking. However, it is important to discuss with your employer whether the job could be classified as permanent or non-permanent.—Your desire would be to be labeled as a “long-term non-permanent laborer.” Don’t be afraid of this designation, as virtually every physician contract is valid for only 90 days, regardless of whether it is permanent or not.

5. It is important to note that, although they may refer to you as an employee, the contract they are offering you is legally a 90-day renewable contract that can last anywhere from 1 to 3 years. The terms of this type of professional agreement are ultimately more aligned with non-permanent labor.

6. You & the employer can classify non-permanent labor as either an employee or a contractor.

   1. At this point, if you prefer to be an employee, you can walk through that door. However, please be aware that once you accept this classification, it may be challenging to be reclassified within the same company in the future.

   2. If you prefer working as a long-term independent contractor, you can present your evidence and confidently walk through that door. However, please be aware that you always have the option to later convert to an employee with the same corporation.

7. There are several other characteristics that will clearly demonstrate to a corporation that you are a contractor. Check out this 11-point key graphic covering things:

Start Your Micro-Corporation & Consider Employment Lite

For several compelling reasons, I firmly believe that every one of you should establish your own micro-corporation right from the start of your career. Then you will have the opportunity to maintain control over how you want to utilize, or not utilize, a business structure in any job situation.

If your primary job is to provide professional services for the patients of a large corporate employer, it would be wise to consider receiving your earnings as an independent contractor (1099) rather than as an employee (W-2). Before you jump to the assumption that this means you’ll be going into private practice, let me introduce you to the hidden yet most rewarding form of employment available to doctors. It’s called “employment lite,” and it’s a fusion of employment and independent contractor work through a professional services agreement. Think of it as long-term independent contractor work.

This arrangement offers numerous benefits and one of the most compelling reasons to consider it is the significant impact it can have on reducing your effective tax rate as well as preserving your professional autonomy.

Here’s a graphic of what it looks like:

Prepare For The Future

Don’t wait to start your micro-corporation, because the hard truth is that once a large employer hires and designates you as an employee instead of a long-term independent contractor, it will become very difficult to change your designation back to an independent contractor. Over the years, while coaching physicians, I have repeatedly witnessed this scenario play out. No matter how much you may desire to change your job title, your current employer will often be hesitant to allow you to transition to the status of a long-term independent contractor.

Force The Decision

I firmly believe that opting to be called a long-term independent contractor will offer you the predictability and security you desire, while also providing the flexibility and quality of life you need.

I can personally attest to this because I made the transition from being a traditional employee to a long-term independent contractor at the same job with the same corporation about 10 years ago. Let me tell you, it was the best decision I ever made, beyond the decision to marry my dear wife. My best-selling book walks you through that journey.

Be Ready For The Opportunity(s)

To be recognized as an independent contractor in the marketplace, it is essential that you prepare yourself to make the best possible choices. This involves organizing your work and being prepared to take the path that suits you best.

The question of whether you are a contractor will come up repeatedly throughout your career, especially when it comes to side jobs. That’s why it’s valuable to start a micro-corporation for your professional services early on because you will inevitably need it.

In my opinion, during the latter half of your residency is ideal You can not only use it for moonlighting but also position yourself to secure your first attending physician job.

Action Steps

The latest generation of doctors has become convinced that traditional employment is in their best interest. Corporate employers are also making strong efforts to persuade you that it is the best option, especially with the attractive financial incentives they offer at the beginning of your career.

But it’s time for doctors to wake up from their passive slumber about their professional lives.

Here are 4 action steps for you.

1. Become a member of SimpliMD.com and join a community of physicians who are on the journey of becoming micro-business competent. Our newly revamped website will provide you with a wide range of free and paid resources Membership unlocks $2500 in savings at the site.

2. Purchase a copy of my best-selling book “Doctor Incorporated: Stop The Insanity of Traditional Employment and Preserve Your Professional Autonomy” and read about my personal journey to a micro-corporation.

3. Join my live webinar scheduled for September 29th at 7:30 pm CST called “Are You Ready To Take Control of Your Future?” where I will be speaking to residents and fellows in the Dallas-Fort Worth area.

4. Reach out to me to schedule a FREE 45-minute business consultation to discuss your professional life.

We must take back control of our profession by establishing a micro-corporation and leveraging it in the marketplace. This will empower us and liberate us from the grasp of corporations that seek to manipulate and dominate us!