How The Historical Origins of doctors as a Small business can provide a Path for Burnout Prevention
The modern PC
Every doctor has the power to incorporate themself, yet for several reasons, most of you will choose not to do this. In my experience, the most common reason for this choice is that you fear the complexity and challenges of running a small medical business in the ultra-competitive world of medicine dominated by large corporations. In your mind, owning a PC is equivalent to starting a private practice, and thus it signals that you are ready and willing to compete with the big boys. However, this is in reality an old concept of incorporation, and it’s time for each of you to move on past this with an innovative modern view.
You are part of an exclusive group of professionals who can form a PC, and the road to earning the right to form your medical professional corporation is both costly and difficult. It turns out that this small business power is one of the most valuable assets associated with acquiring your medical degree, license, board certification, and professional skills. It unlocks multiple channels to efficiently add income to your household while at the same time preserving your autonomy.
As more of you choose traditional employment, you must understand that your deal illustrated above, ultimately forces you to proxy your small business power to your employer in exchange for a predictable paycheck and benefits. In turn, this leads you to forgo forming a PC due to your belief that PCs have little utility for the employed doctor. It turns out this is a myth, both about your primary professional services as well as your side jobs. Starting a PC at the beginning of your professional life is one of the most important steps you could ever make to secure your control over this powerful earned asset. In time, you will come to realize that it is foolish to work so hard to earn this valuable asset that you so easily give up as an employed attending physician.
The newer modern version of a PC allows you to envelope yourself with this small business power without having to manage anyone in it but yourself. That is because every doctor is a business.
Every Doctor Is A Business
The modern PC for doctors is a highly individualized small business that is not a brick-and-mortar retail front for medical care(private practice) but rather is a virtual container for all of your earned professional assets and powers. Your PC is uniquely yours and it is unlike any other in the world due to the way it is constructed to fit around your personal and professional skills and interests. This uniqueness is in contrast to the commoditized view that your employer has of you. They see you as an interchangeable business widget that they own. This impersonal and productivity-based construction of your medical life will eventually erode your identity, purpose, and autonomy as a medical professional. That is in traditional employment, your employer fully controls your professional life.
However it truth is that it doesn’t have to be an all-or-nothing business relationship, and that is the power of the employment lite model that is a much better model of employment because it allows you to hold onto more of your autonomy through your PC.
Like a Professional Athlete
In many regards, you are a lot like a professional athlete. You are both an individual and a small business that generates downstream income for larger corporations who want to use both your professional services as well as your influence. This is why you are seeing progressive changes in the athletic and entertainment marketplace that are allowing individuals to monetize the power of their name, image, or likeness (NIL). Previously these non-fungible assets were exploited for the profits of big corporations. However, now they are being controlled and monetized by the individuals who should be able to control their rights over them. The athlete’s professional services (athletic skills) are within the contractual control of the college or professional team, but the individual athlete is now able to maintain autonomous control over their ability to monetize their name, image, or likeness (their influence as a personal brand). At the end of the day, they are holding onto their autonomy to be an influencer outside of their professional services contractual relationship with the organization that employs them.
Doctors need to learn from this paradigm shift and embrace it themself.
Just because you enter into an employment agreement with a large corporate employer for your professional services does not mean that you have given up all of your professional autonomy and business power to that employer. Yielding complete control of your professional life to your employer is the most common mistake that modern employed doctors make. And it all begins by undervaluing the importance of incorporating yourself at the beginning of your career due to your mindset that it won’t be needed as an employee. Ultimately turning over complete control of your professional life to a single employer is one of the major causes of burnout for doctors because it leads to the loss of control of your professional life.
We all need to follow the lead of young athletes and hire an agent as well as form a corporation to preserve our business power. These two steps will help you preserve your control over your life while you contract out your professional services to large corporations that want to maximize their financial performance by hiring you.
The most important step you will make to preserve your professional autonomy in this equation is to incorporate yourself.
The Problem: Losing your Power and autonomy
The current corporatization of healthcare has led doctors to abandon their small business power and its associated autonomy as part of their migration to employment. However, we are now beginning to more clearly see that the consequence of this traditional employment model is the loss of control over your professional and personal autonomy. Now you become a cog in the soul-less machinery of the big corporations who treat you and your patients as pawns on a chess board. A chess board whose end mission is to make money as healthcare employers ignore the guiding light of altruism that was standardized by Hippocrates. The balance of business and the ethical care of all regardless of their ability to pay pivots and becomes a financially-centric business operation. You know the corporate mantra, “no margin, no mission”. In all of this chess board movement, both patients and doctors lose individual autonomy and become losers that are controlled by the corporations that own both of them. For doctors, the result is a greater than 50% burnout rate fueled by the moral injury associated with our loss of professional autonomy.
We have a big problem.
In essence, we have reached the point that we can’t live without employment, but we can’t live with it.
Systemically something has to change.
We can’t keep walking through the door of what Albert Einstein described as insanity: Doing the same thing over again and expecting different results.
Using this definition, you are all a little insane if you choose traditional employment and believe you won’t be touched by burnout.
the Systemic Solution
The solution can be found in our historical origins. We must go back to the beginning, but not so far back that we are forced to go off the grid, so to speak. Although I do recognize that this is what some of you are choosing to do through your direct primary care, personalized care, concierge care, and direct patient pay models that cut out all 3rd parties from the business exchange.
Every physician in America should look back to our historical roots and our forefathers for answers to our current broken state.
From the beginning, their philosophy was that doctors were small businesses within the newly formed American capitalist system, and thus they prioritized private ownership over government or institutional control.
Let me restate this last part because it was fundamental those to the founding of the country, especially for people like Thomas Jefferson and James Madison:
The Founding Fathers prioritized private ownership over government or institutional control
The solution for helping you to regain your professional autonomy is to form your individualized modern PC and then use this to navigate through the complex web of the business of medicine that is increasingly controlled by the government and large corporations. Your private ownership of your professional services and medical knowledge will breathe life into your world and help support your well-being through your preserved autonomy.
The beauty of your modern micro-PC is that you can organize and use it as the sole owner-operator. This means you get to avoid many of the complex management issues associated with running a traditional retail medical store-front business. The only employee you will be responsible to manage is yourself. You can also efficiently and easily outsource the business operations such as taxes and payroll to others if you want, or you can choose to do it yourself. The decisions about who, what, and where of your professional services that are contracted out to other entities are fully under your control, and this even includes having the ability to use it within a large corporate employer’s safe harbor through an employment-lite contract.
After you form your PC, then you can use it to provide medical services in virtually any job context that you desire, and these options include:
- Traditional Employment–This represents the majority model and forces you to proxy complete control of your small business power to your employer in exchange for a predictable paycheck and the avoidance of managing the business of medicine. This provides you access to your employer’s safe harbor and frees you of the regulatory burdens, management responsibilities, and competitive challenges associated with private practice.
- Clinical Side Hustles–What most of you don’t realize is that your employer cannot stop you, nor prevent you, from forming a PC and using it for your professional side hustles. As stated earlier, you have earned the right to incorporate yourself you alone get to decide whether to activate this power. Given the abundance of side hustles available to doctors, even if you are traditionally employed, forming your PC and funneling your side hustles through it, provides a path for you to re-establish your professional autonomy while also receiving your side income in a more tax-advantaged manner.
- Employment Lite-In my opinion, this is the best blend of employment and PCs because it allows you to control your professional life both within the safe harbor of your employer and outside of their harbor. This is what I do and it truly is the best of both worlds.
- Locums-You can use your PC for short-term contracting of your professional services to any entity in any location. Although this has traditionally been the domain of older doctors looking to downshift their workload, many younger doctors are choosing this path due to the lifestyle and autonomy that it provides.
- Direct Medical Care Models–You can use your PC to start a medical practice that directly contracts with patients for medical care without any 3rd party involvement. This is the old-school model where you determine the marketplace value of your services directly to patients. It’s a free market model that has worked nicely for centuries and is more true to our founding father’s vision of avoiding control by the government or institutions.
- Private Practice-You can either start a solo private practice PC or use your PC to contract as an employee of an existing private practice, group, or partnership. Here you will compete with large corporations for patients, business contracts, and the like. This is still an option for many types of specialists who often use partnership-based corporate structures. What most doctors don’t realize is that you can enter into these group practice arrangements enveloped as a PC, rather than as an individual. The tax advantages of this type of structure are enormous.
- Telemedicine-COVID-19 acted like an accelerant to usher in virtual medicine to everyone around the country. It is a great option for many, especially if you prefer an “Uber Model” of practicing medicine, where you tap in and tap out to work at your discretion. In this model, you will benefit from forming your PC as well.
Preserving Your Professional Autonomy
What your PC does for you is it preserves your professional autonomy through the envelope of your highly individualized small business.
The over-arching positive feature of operating a small business is that it provides you autonomy or control over your professional and personal life. This is why so many professionals like lawyers, engineers, and accountants do choose to incorporate because it allows them to keep control over their lives. I believe the built-in individuality of this structure is extremely congruent with the psyche of most doctors who want to control their destiny and not be told what to do in a pre-defined manner. This distinction is one of the fundamental differences the IRS uses to determine if you are an employee or a contractor. Employees are told what to do and how to do it. Contractors use their knowledge and expertise to determine on a case-by-case basis the best course of action, ie, the art of medicine. What this means to you in both a private medical practice or as an independent medical contractor is that you get to experience all the following benefits of running your small business PC:
- Do what you love. You can maintain the control to actively shape the scope of your practice and your preferred patient profile, which in turn keeps you in your sweet spot professionally while providing medical care.
- Set your schedule. You determine your accessibility to your patients. This allows you to set the cadence of your work and scale the economic translation of your work volume and time commitment associated with your medical care.
- You are the boss. As the owner, you can set the rules, answer to yourself, and get to make all the decisions.
- You confidently form your reputation. Your time and effort to help individualized services forge your identity and become a brand with loyal followers in your community.
- You can be creative rather than follow a pre-determined script. You can focus on patient-centered processes that result in the best outcomes rather than large corporations’ rigid and cumbersome workflows.
- You can multiply your income channels. You can maximize your active, passive, and retained income opportunities, including tapping into tax advantages baked into small business entities.
- You can involve your family. Employing family members in your corporation can open up additional income streams in your household.
Many of these benefits are lost when you choose to become traditionally employed, and 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 control and autonomy within your professional life can lead to a tipping point of job dissatisfaction and even burnout.
In my next post, I will discuss how modern PCs are different from private practice and review why every doctor should view themselves as a business.
