It was just a generation ago that doctors assumed that they would enter the world of a small business when they began practicing medicine as attending physicians. Outside of academic medicine, self-employment through a small medical corporation was the path most would have chosen, while employment by a large corporation would have been rarely considered an option. Typically you either started your own PC or joined an existing one.
The US History
This idea that a doctor was a small business has been part of the DNA of most American doctors right from the beginning of our Republic. Ultimately, the progressive civic philosophy and legal rules that differentiated professions from businesses in Western Europe did not survive the trip to the American colonies. Instead, medical practitioners here were viewed through the eyes of business-law principles right from the beginning. They were allowed to charge and collect fees based on the services they provided and consideration for the person’s ability to pay. Thus from the onset, physicians in America did not fully follow the “public calling” principle and its associated honoria system. Rather, they followed the small business practices of the newly formed American capitalist system, which prioritized private ownership over government or institutional control.
It is valuable to remind ourselves of this latter point about prioritizing privatized ownership over government and institutional control. Our forefathers fought to eliminate the tyranny of the British monarchy and the associated large corporations who sought to control the lives of our founders who were establishing the new world.
As the Declaration of Independence states:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.“
Our forefathers were seeking emancipation from the suffocating control of the British because it was so negatively affecting their safety and well-being. This is worth remembering as we enter into our current state of socialized and corporatized medicine that is gutting the importance and value of the privatized small business. And in the process jeopardizes your safety and well-being while it thrusts many into burnout.
the Present
This historical journey affirms that your knowledge and expertise in providing medical services to people has always had a built-in monetized value, which in the United States has long been viewed as a small private business. For years, the value of your services has been self-determined and influenced by the free market forces that are interconnected to the location of the medical business.
This all changed with the arrival of private health insurance on the scene primarily after WWII. This was further accelerated by the federal government’s version of health insurance in 1965 when Medicare and Medicaid were signed into law. Their arrival signaled the loss of control of physicians subjectively choosing prices in conjunction with the free market defining the value of their services. Now as these parties were empowered, they began to determine the value of a physician’s professional service.
The Corporatization of medicine
Now, these 3rd parties have gained sufficient control over the economic playing field of medicine that they are systematically eliminating private medical practices and forcing doctors to abandon their business power in exchange for the secure paychecks of employment within their safe harbor.
The flood gates for employment have been widely opened up and most of you are joining the legion of doctors who are choosing the simplicity of employment.
Graduating physicians now are choosing between the options of becoming a hospital-employed physician, hospitalist, employed physician in a large multispecialty group, and joining the faculty at an academic institution. The idea of starting and operating your own medical corporation has essentially been erased as a viable option.
Oh, how the tables have completely turned within just a single generation!
Common Story For Employment
Let’s look at a typical doctor who has chosen the path of corporate employment.
Dr. Tony is happily employed as a physician for a hospital system that is located near his wife’s family. It’s his first job, and it provides him with a simple way to launch his career in medicine. With the sizeable fair market value paychecks, the signing bonus, and the loan forgiveness program, he can now begin paying off debts, buy a house, & own a car that is less than five years old. As a new attending physician, he now has the time and resources to live his preferred lifestyle in a location with a good quality of life and some predictable time away from medicine. In addition, he and his wife are now empowered to grow their family, knowing they can finally afford it.
He celebrates his arrival in this attending physician space and expects a certain level of professional and personal autonomy that is afforded to most physicians. Professionally he begins to integrate his style, interests, and identity within his chosen specialty. This individuation process is very satisfying due to the self-actualization elements associated with it. He is emerging from his generic specialty title and genuinely becoming an individual whose knowledge, expertise, and style are unique to him. He embraces his high income and robust lifestyle from his job and feels satisfied leaving the hassles of the business of medicine to his employer. Medical business seems complicated, risky, and time-consuming, so avoiding this in exchange for the simplicity of employment, particularly shift work employment, is a no-brainer. It’s a great life and finally being able to unlock his pent-up delayed gratification associated with training feels incredible!
Meeting Your Needs
Tony’s story is a snapshot of the path that most of you will take in the early years of your professional career. That is because prospective employers are aware that you have some immediate needs that they are more than happy to meet to entice you to join them.
First on your mind is the need to erase your large and burdensome student loans that now can average a mind-boggling $300,000+ per person.
Secondly, you have chosen to accept your business & financial illiteracy as a result of your singular focus on your medical training. It’s not that you don’t care about these areas, but you just haven’t had the time to explore them, nor were they built into medical education and professional training.
You intelligently react to these two pressure points by targeting employment positions that offer you a solution to these two menacing problems. Physician employers provide the needed answers with loan payback bonuses along with fair market value compensation packaged in a turnkey clinical job. This is especially appealing when compared to entering private practice with its associated high start-up costs or expensive buy-in processes with partnerships or group practices. Beyond that, you note private practices are vanishing from the landscape, so your reason it’s not wise to join or start private practice when they appear to be losing ground in the marketplace.
It’s no surprise that this all adds up to driving 90% or more of graduating residents to choose the safe harbor of employment. As a result, physician employees are now the majority job structure in the US, and this is growing annually.
The Downside
However, there is a downside to this trend. Your employer now becomes your boss, usurps your identity, requires conformity to their standard operating procedures & policies, and ultimately exerts control over your schedule and professional services. As time goes on, the associated loss of power and autonomy within your professional life can lead to a tipping point of job dissatisfaction and even burnout.
The corporatization of medicine is the systemic source of the current physician burnout crisis in medicine. As a member of our profession, you are blindly contributing to this by choosing to give up your small business powers in exchange for employment.
Breaking Free
To break free from this crazy cycle, you must be inspired to let the past inform your future. The secret sauce to resolving burnout is the formation and use of your power to incorporate. It will act like a powerful stronghold that will help preserve your professional autonomy, and will ultimately act like kryptonite to disable corporate control of your life.
Tune in next week to find out how can form your own small business, even while remaining employed by a large corporate employer. Many physicians are waking up to rediscover this special power, and are choosing to incorporate as a critical step to proactively managing their well-being.
