Becoming a partner in a physician practice or dental group is a dream come true and comes as the result of goals setting, sacrifice and an investment of time and self. It can also be a cauldron of financial complexity.
Be prepared. Although partnership can give you a voice in how the medical group is run, job security, and additional income, it comes with complications. Partners assume the risk in the practice, but those who are entrepreneurial and productive can realize success, even in a smaller partnership. There is no silver bullet or one size fits all approach, but here are the major landmines to be mindful of:
1. The Buy In: Some groups have you buy in with dollars, other have you buy in with time served. The difference between what you earn and what you’re paid goes toward your equity share in the group. That might include part of a building, some medical equipment, goodwill, and a share of the accounts receivable. Negotiate your partnership contract. Have built in compensation increases for reaching revenue goals or cost-saving benchmarks, as well as increases to keep pace with inflation, etc.
2. The Additional Expenses: A step up the ladder comes at a price – now you will be responsible for the personal expenses that the practice paid on your behalf prior to partnership including health insurance, malpractice insurance, Social Security and Medicare taxes. Set up an HSA to pay medical bills and contribute to it as a retirement vehicle, it is triple tax free. You won’t have withholding, so consider making quarterly estimated tax payments. You may get paid on a K-1.
3. Shared Business Costs: Be aware that as a partner, you will now share in costs of running the practice whether administrative, operational, or related to insurance, taxes and financial fees, etc. Some of the practice expenses will be variable and some fixed, some will fluctuate based on how many patients you see and how much revenue is generated. This also means your income will variable.
4. Financial Complexity: The more you make, the more you pay in taxes. Tax minimization strategies still exist and there are business structuring options available – tax reform legislation now provides a deduction of up to 20% for pass-through entities on qualified business income.
5. Retirement options: Often there are additional retirement savings options and investment plans available to partners, now is the time to consider contributing up to the annual limit. Whether early retirement is on your mind or not, you need to plan now to exit the practice later. Estate planning alone will not protect your family, but Business Exit Planning will protect your financial future.
Contact Us: Making partner is a significant life event! It is a great time to review your financial situation. Make a budget, look at your insurance, plan your investments, and put together an asset protection plan as well as an estate plan. As mentioned in the article It is also a good time to have a review of business structure and tax situation with your Fuoco Group CPA. Congratulations! Becoming a partner can bring financial complexity, but your TFG professionals are here to help you reap the rewards.
Dealing with physician burnout – why is it so prevalent for so many practitioners in medicine in this new millennium?
Being a physician is a demanding job with serious responsibilities. Add to that the fact that patients are often chronically ill, sometimes treatment doesn’t work, and occasionally patients die — that is a heavy burden to bear in addition to a daily workload, rounds, running your practice. But what exactly is burnout, how prevalent is it, and why should the medical community be concerned?
Studies define burnout as “a syndrome consisting of emotional exhaustion, depersonalization, and a diminished sense of personal accomplishment, which is primarily driven by workplace stressors.” Recent research shows nearly half of practicing physicians in the U.S. experience burnout at some point, with those at the front line of care reporting the highest rates.
Leading drivers of burnout include excessive workload, imbalance between job demands and skills, a lack of job control, and prolonged work stress. Not all of the reasons for burnout are work-related. A physician may have significant issues regarding his or her own health or their personal life. Generally, the three symptoms of physician burnout are exhaustion, cynicism and doubt. Exhaustion isn’t just physical, but can be mental, emotional, even spiritual. Cynicism, or depersonalization, is sometimes dubbed “compassion fatigue.” And doubt, of course, is wondering why you bother.
Burnout in physicians has been linked with lower work satisfaction, disrupted personal relationships, substance misuse, depression, and suicide. Burnout can result in an increase in medical errors, reduced quality of patient care, and lower patient satisfaction. Burnout is responsible for reduced productivity, high job turnover, and early retirement.
Kevin MD reports that more than 51% of physicians attribute burnout to excessive administrative burdens and bureaucratic duties, among other things like long hours, a constantly shifting health care system, and dealing with a built-in level of failure.
A recent article in Medical Economics suggests that simple tweaks in day-to-day tasks, workflow shortcuts, and running your practice more efficiently can ease stress and create a more positive experience for both physicians and patients. There’s a bit more to it than that.
First, as a physician you have to admit that you have normal human needs, will occasionally display vulnerability, are not a machine, and have the right to say “NO” when workload becomes impossible. There should be no shame or stigma about needing help, never wait till you are overwhelmed, exhausted, and stressed, before reaching out for assistance. Don’t blame yourself or let cultural norms, chaotic office conditions and a broken hospital system lead to your burnout!
Second, remember depression and burnout aren’t necessarily the same thing — but they often overlap. Take steps to avoid burnout and, if you feel yourself slipping over into depression, get help.
Third, the solution entails more than getting some sleep, meditating, exercising regularly, learning to say no, and better time management skills. The ultimate answer might be fixing the broken health care system. Studies show that burnout is a problem of the whole health care organization, rather than individuals. It requires structural changes and an organizational approach like changes in schedule and reductions in the intensity of workload, improved teamwork and leadership, communication skills training, changes in work evaluation, enhanced job control, and increasing the physician level of participation in decision making.
With all of that in mind, here are Fuoco’s five to thrive, self-healing strategies to stave off burnout:
1. Sometimes you just have to say “no.” It’s impossible to say yes to everything. Before answering, always ask yourself: Will it lead to more balance in my life or create unwanted imbalance? Will it take away from time with my family and friends? Will it enhance my career? What aspect of being a physician do you enjoy the most and feel you’re best at? Try to focus on that and say yes to more of what you enjoy doing.
2. Accept that you have limitations just like everyone else. Physicians can’t always help or save every patient. It’s impossible to predict or anticipate every possible medical outcome. Sometimes you won’t get to finish every item on your to-do list because you are juggling so many balls (or patients) at once. Develop coping techniques that work for you so you can accept it, and move on.
3. Develop a strong support system. Whether it’s a spouse, friend, colleague, or trusted business advisor, everybody needs someone who will listen. Work on building a team, and better communication and collaboration whether at the office, or in the hospital (even at home).
4. Slow it down. The business plan might call for spending 15 minutes with a patient and moving on, but don’t stress about being so efficient. Slowing down, and taking a few extra minutes out of your schedule when needed to listen, will benefit not only the patient, but you too.
5. Learn to be flexible. Adapting to change is tough and it seems the practice of medicine is changing dramatically every day. Balance is hard to achieve, and stress as well as busy schedules are part of any career. Maybe “survival of the fittest” means most able to adapt to change. Being open and receptive to new ideas and ways of doing things is a positive way to work and live.
Some helpful resources for our physician clients in New York and Florida include:
New York Resources from the Medical Society of the State of New York Committee for Physician Health: http://www.mssny.org/cph/
As you work for the health of your patients, the professionals at Fuoco Group work for our physicians’ financial health. If you are worrying about cash flow, internal controls, staff and equipment issues, perhaps the prescription is customized accounting and financial services from a CPA firm well versed in physician medical practices. Our “New Financial Dialogue” includes a 360 degree business advisory program designed to take the burden off you and your physician partners because worrying about costs, reimbursement, margins, operations and finances shouldn’t be keeping you awake at night!
Contact us today – offices in New York, Long Island, and South Florida.