/ /

  • linkedin
  • Increase Font
  • Sharebar

    Tips for handling the business side of medicine

    Michael L. Stark, JD, touches upon the three major phases in a physician’s career and how they should plan accordingly

     

    Stark: There is no question about it. Until then, physicians looked upon what they did as a profession. They could not do things from a tax-advantage point of view. They did not operate as a business. But once they incorporated and started operating as a business to save on taxes, they became a business. Sometimes that’s good, sometimes that’s bad, but it certainly changed how they practice.

    DR. NOREIKA: We have talked about the fact that there are three major division points in a physician’s career. There is inception (coming out of training and starting to practice), followed by the peak earning years, and then the exit or the wind up. What do doctors in their inception years most need to know?

    Worst places to practice in 2015

    Stark: When the Supreme Court issued its ruling in the 1960s, medical schools did not recognize that physicians needed to know how to operate a business. So for all practical purposes, physicians starting out then, and to a great degree still, were not ready to be in the business world. One thing that I felt they needed to learn right away was that whatever they did ‒ become an employee, a partner, shareholder, whatever ‒ it needed to be in writing. Many written agreements were not flushed out the way they should be. 

    Also, the most important part of the contract is not the terms going in, because things like salary and benefits are generally well thought out, but how you get out of the agreement. For example, if you have a contract to work in Akron, Ohio, but you decide you want to live in Jackson Hole, Wyoming, instead, what happens? Are there non-competition clauses if you are staying in the same area? If I can get a physician going into a contract to include those topics, then I am less uncomfortable about the rest of the contract.

    Younger doctors also need to think about disability insurance because they are more likely to become disabled than they are to die or get divorced. It is more of a risk than many people think.

    DR. NOREIKA: What advice do you have for physicians in their peak earning years, maybe age 40 to 55??

    Top med school regrets

    Stark: These physicians need to think about how to manage their assets. Their retirement plan or a 401(k) or profit-sharing plan is likely to be the biggest asset they have. Who will help them invest that money? Who will advise them in terms of tax decisions when they withdraw that money? Physicians need advisors for investments, accounting, taxes, and legal matters. All of these are important aspects of the productive years, because that is when you have to do the most planning.

    Dr. NOREIKA: We have seen physicians who have disposable incomes do some pretty crazy things with their investments. You tell a story of a local CPA who represented physicians that’s rather humorous but also has a moral to it.

    Next: "I have never seen an amicable divorse"

    New Call-to-action

    0 Comments

    You must be signed in to leave a comment. Registering is fast and free!

    All comments must follow the ModernMedicine Network community rules and terms of use, and will be moderated. ModernMedicine reserves the right to use the comments we receive, in whole or in part,in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

    • No comments available

    Poll

    View Results