Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

Doctors beware: There’s a $400,000 target on your back

Tod Stillson, MD
Finance
June 16, 2021
147 Shares
Share
Tweet
Share

President Joe Biden recently signaled that a multi-trillion-dollar spending plan for our country should be paid for by the rich corporations and wealthy individual Americans who make over $400,000. Doctors fit the latter category and should tune in.

Beyond the government, the unique qualities of doctors make us a target for many who want to access our high income and our business revenue. Our passivity to these poachers places us at great risk because they recognize that we lack the time and proficiency to avoid them. Add our financial illiteracy to this, and you have a recipe for stakeholders reaching into our paycheck every pay period and inconspicuously taking their share from us.

Let’s take a look at the stakeholders who are targeting us.

Corporate America

Employers want you, and they’ll give you a lot of love to hook up with you. But in reality, they want your patients. Be prepared to separate their business interest in you from their personal interest.

Health care corporations recognize that physicians are unique employee-assets who can generate revenue with a relatively large return on investment. For example, a physician whose salary and benefits cost them $350,000 will lead to as much as $2-3 million dollars in downstream revenue. Through physician alignment, corporations gain market share and thus voluminous clinical care that converts into cash for the system.

Unlike other employees, only the physician (physician extenders are inefficient proxy’s) can gather health care’s most valuable asset, the patient. It is a matter of debate within modern health care about who controls patients more — doctors, insurers, health care corporations or the government.

But this much is true: All of the stakeholders recognize that by aligning themselves with you as a physician, they will gain access and control of the patient.

Entering the safe harbor of employment provides you a needed landing place in the battle for patient alliance, and this harbor allows you to focus on good clinical care while collecting a fair paycheck. But be aware that this passive position has its downside — the loss of professional autonomy, which is the backdrop for doctors’ current nearly 50% burnout rate.

The government

The U.S. government loves W-2 employees. When you signed that standard employment contract, you joined the legion of W-2 workers in our country. In essence, this tribe of individual taxpayers are easy targets for tax code changes due to a continuous narrowing of all tax strategies afforded to this group.

Now that the majority of physicians are employed, we are a target for both federal and state governments as they find new ways to spend money.

As a high-income W-2 earner, the Biden administration is coming after you. And sadly, you don’t have much recourse to do anything about it.

Your predictable paycheck from employment is a nice feature, but it creates a large tax exposure.

Unlike individuals, corporations, especially small businesses, are equipped with a significantly larger menu of options for reducing their tax liability. But leveraging this is only possible if you are a partner-owner in a medical group that is incorporated or if you have your individual professional corporation (PC).

This very issue is why I chose a progressive employment model called “employment lite,” which blends having my own personal corporation that contracts with my employer through a professional services agreement. My small business has provided me with many more opportunities to deploy tax strategies that help me retain more of my hard-earned income. When you are a large corporation W-2 employee, you miss out on this.

Patients

Unfortunately, patients often view us as takers rather than givers. In that context, they don’t hesitate to try to reach into our deep pockets through malpractice lawsuits.

The expectation from most patients is that all medical care will always result in an excellent outcome with no complications. Although this is the goal, it is not reality. Your high income makes you a target as reparation for an unexpected result.

Your annual malpractice premium is the regular reminder of this target on your back.

Financial industry

It’s no secret that many doctors are financially illiterate. This is partly due to the arduous process associated with becoming a doctor — a process that requires our full attention at the neglect of all others and one that is simultaneously cloaked by a period of lean living with little income.

The financial industry knows this dirty little secret and preys on our rapidly expanding financial needs, growing income, and continuous hyper-focus on our medical career. This bombardment intensifies with the movement from residency into attending physician life.

The truth is that many of us are aware of the need for life and disability insurance, investment direction and retirement products. But what we are less discerning about are the fees, commissions, and quality of the products that these salesmen, who pretend to be experts, push upon us.

Then there is the behavioral finance side of the equation that heavily influences our management of debt. We are forced to take on large educational debts that are doled out to us with ease due to our low-risk and large lifetime earning potential. But then, early in our career, lenders profile us in the same way and make doctor’s mansions and luxury cars easily accessible through loans that are just too tempting to surpass. Having spent well over a decade living like a pauper, we are ready to live like a doctor — those who offer you the education, housing and consumer loans know this about your behavioral tendencies. You are especially an easy target for an amortized loan payment that fits into your large monthly paycheck as an attending physician.

I encourage you to make some adjustments in your life to reduce your personal and professional risks associated with each of these stakeholders who target you.

Tod Stillson is a family physician and founder, of SimpliMD and can be reached at Dr. Incorporated. Follow him on Facebook and Twitter @DrInc9, on his regular YouTube and podcast episodes, a blog called The Truth, or join his Facebook community for doctors, Every Doctor Is A Business. Reach out to him for professional agency services at SimpliMD. He is the author of Doctor Incorporated: Stop the Insanity of Traditional Employment and Preserve Your Professional Autonomy. Book a free business coaching appointment with Dr. Stillson to discuss whether a professional micro-corporation would be helpful for you.

Image credit: Shutterstock.com

Prev

In memory of Bernard Lown [PODCAST]

June 15, 2021 Kevin 0
…
Next

The connection between mental health and what we eat

June 16, 2021 Kevin 0
…

Tagged as: Practice Management

Post navigation

< Previous Post
In memory of Bernard Lown [PODCAST]
Next Post >
The connection between mental health and what we eat

More by Tod Stillson, MD

  • It’s time for every doctor to start a professional micro-corporation

    Tod Stillson, MD
  • Revolutionizing physician work: Embracing location-independent careers and professional micro-corporations for autonomy and success

    Tod Stillson, MD
  • How to retain more of your hard-earned money

    Tod Stillson, MD

Related Posts

  • Beware of pseudoscience: The desperate need for physicians on social media

    Valerie A. Jones, MD
  • Why do doctors who hate being doctors still practice?

    Kristin Puhl, MD
  • Doctors: It’s time to unionize

    Thomas D. Guastavino, MD
  • When doctors are right

    Sophia Zilber
  • We’re doctors. We signed the book.

    Jonathan Peters, MD
  • Why doctors-in-training need better nutritional education

    Abeer Arain, MD, MPH

More in Finance

  • 1 in 5 doctors will become disabled. Are you prepared?

    Amarish Dave, DO
  • The pros and cons of whole life insurance for high-income earners

    Shane Tenny, CFP
  • Applying the differential diagnosis method to investing

    Amarish Dave, DO
  • Unlocking your full earning potential: a physician’s journey to a $70,000 salary boost

    Contract Diagnostics
  • For newer doctors, avoid lifestyle inflation

    Amarish Dave, DO
  • Want more investment control? A self-directed brokerage account may be right for you.

    Amarish Dave, DO
  • Most Popular

  • Past Week

    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • I’m a doctor, and I almost died during childbirth

      Bayo Curry-Winchell, MD | Physician
    • I’m tired of being a distracted doctor

      Shiv Rao, MD | Tech
    • Inside the grueling life of a surgery intern

      Randall S. Fong, MD | Physician
    • Ketamine for mental health conditions: What every primary care physician needs to know

      Carlene MacMillan, MD & L. Alison McInnes, MD | Meds
    • The power of business knowledge for medical professionals

      Curtis G. Graham, MD | Physician
  • Past 6 Months

    • Medical gaslighting: a growing challenge in today’s medical landscape

      Tami Burdick | Conditions
    • Balancing opioid medication in chronic pain

      L. Joseph Parker, MD | Conditions
    • I want to be a doctor who can provide care for women: What states must I rule out for my medical education?

      Nandini Erodula | Education
    • Mourning the silent epidemic: the physician suicide crisis and suggestions for change

      Amna Shabbir, MD | Physician
    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • 1 in 4 attempt suicide: the persecution of autistic physicians

      Patricia Celan, MD | Physician
  • Recent Posts

    • The power of business knowledge for medical professionals

      Curtis G. Graham, MD | Physician
    • Using the language of art to create work-life balance

      Sarah Samaan, MD | Physician
    • Levamisole is good for your dog, but bad for your cocaine

      Robert Killeen, MD | Meds
    • Physician autonomy and patient interactions in corporate health care

      Michele Luckenbaugh | Conditions
    • PSA screening: What you need to know [PODCAST]

      The Podcast by KevinMD | Podcast
    • Vague criteria can lead to misdiagnosis and prison

      L. Joseph Parker, MD | Conditions

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

View 5 Comments >

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

CME Spotlights

From MedPage Today

Latest News

  • Black Patients at Higher Risk for Physical Restraint in the ED
  • Compassion Is a Learnable Skill
  • When a Video Visit Leads to Real Connection
  • Smaller Lesions, Better Baseline Visual Acuity Bode Well for Submacular Hemorrhage
  • COVID Conspiracies Return; Norovirus on the Hiking Trail; 2nd Pig Heart Transplanted

Meeting Coverage

  • Loneliness Needs to Be Treated Like Any Other Health Condition, Researcher Suggests
  • Stopping Medical Misinformation Requires Early Detection
  • AI Has an Image Problem in Healthcare, Expert Says
  • Want Better Health Outcomes? Check Out What Other Countries Do
  • ERS Roundup: Cell Transplant Boosts Lung Function in COPD Patients
  • Most Popular

  • Past Week

    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • I’m a doctor, and I almost died during childbirth

      Bayo Curry-Winchell, MD | Physician
    • I’m tired of being a distracted doctor

      Shiv Rao, MD | Tech
    • Inside the grueling life of a surgery intern

      Randall S. Fong, MD | Physician
    • Ketamine for mental health conditions: What every primary care physician needs to know

      Carlene MacMillan, MD & L. Alison McInnes, MD | Meds
    • The power of business knowledge for medical professionals

      Curtis G. Graham, MD | Physician
  • Past 6 Months

    • Medical gaslighting: a growing challenge in today’s medical landscape

      Tami Burdick | Conditions
    • Balancing opioid medication in chronic pain

      L. Joseph Parker, MD | Conditions
    • I want to be a doctor who can provide care for women: What states must I rule out for my medical education?

      Nandini Erodula | Education
    • Mourning the silent epidemic: the physician suicide crisis and suggestions for change

      Amna Shabbir, MD | Physician
    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • 1 in 4 attempt suicide: the persecution of autistic physicians

      Patricia Celan, MD | Physician
  • Recent Posts

    • The power of business knowledge for medical professionals

      Curtis G. Graham, MD | Physician
    • Using the language of art to create work-life balance

      Sarah Samaan, MD | Physician
    • Levamisole is good for your dog, but bad for your cocaine

      Robert Killeen, MD | Meds
    • Physician autonomy and patient interactions in corporate health care

      Michele Luckenbaugh | Conditions
    • PSA screening: What you need to know [PODCAST]

      The Podcast by KevinMD | Podcast
    • Vague criteria can lead to misdiagnosis and prison

      L. Joseph Parker, MD | Conditions

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

Doctors beware: There’s a $400,000 target on your back
5 comments

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...