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From clinician to contractor: how doctors can maximize the benefits of a side gig


Adopting the attitude of a business owner is crucial to getting the most from outside work

Sylvie Stacy ©Sylvie Stacy

Sylvie Stacy ©Sylvie Stacy

It's common for physicians and other clinicians to engage in side gigs as secondary sources of income, whether they be consulting engagements, moonlighting, or another type of part-time position. However, the take-home pay from a side gig is just one of several financial considerations for this type of role.

In the U.S., doctors are increasingly employed by large health systems and other corporate entitles. As highly trained and skilled professionals, we need to ensure that we are compensated fairly for our expertise and services—even for work that we're doing "on the side."

Here are some tips to help make your side gigs worthwhile.

Expect diverse compensation for diverse work: Many professionals mistakenly calculate their side gig earnings based on their full-time hourly rate, derived from dividing their annual salary by 2,080 — the standard full-time work hours in a year. For instance, a doctor with a $300,000 annual salary might expect to earn about $145 per hour for side work. This approach is shortsighted.

A fair hourly rate for a side gig should factor in not only time spent, but the value of your expertise, licensure, and certifications. Similarly, a fair monthly stipend or consulting fee should take into consideration more than just the expected number of hours that you'll spend actively working over the course of the engagement.

The consulting/side work performed by medical professionals varies significantly in responsibilities, requirements, and risk. Your medical license may be critical for one type of role (such as with direct patient care) but unnecessary for another (such as medical editing). Similarly, your work experience, certifications, and other qualifications are of varying significance depending on your responsibilities and the task you’ve been hired for.

Compensation also differs by employment type. Doctors working as 1099 contractors on the side, unlike their W-2 counterparts, should expect higher rates to offset the lack of employer-covered expenses and benefits. This includes being responsible for their own Social Security and Medicare taxes, and costs typically covered by employers like CME and licensing fees.

Going back to the example above, $145 per hour might be reasonable for a part-time W-2 position; however, independent contracting or roles demanding specialized skills could justify significantly higher rates, reflecting the additional financial responsibilities and the specialized value provided.

Treat your professional services as a business: Many medical professionals engage in independent contracting across both clinical and nonclinical roles. But whether operating as a sole proprietor or through an LLC, you're effectively running a small business.

Coming from traditional full-time employment, you may need to shift your perspective. Stop thinking of yourself as working for an employer. You now provide professional services to a client. Adopting a business mindset can improve the chances for the financial success of your work in seveal ways.

Setting your rates: Move away from the idea of accepting whatever hourly rate is offered. Instead, think about charging a specific rate for your services.

This is a common approach among locum tenens physicians who work as 1099 contractors through staffing agencies. Experienced locum docs are champions at negotiating their rates, often by highlighting the value of the professional service they are providing to a client in need. They don't hesitate to walk away if the client isn't willing to pay reasonably for their services.

Managing business expenses: As a business, you will have various expenses that are tax-deductible. For clinical side gigs, this includes expenses that help you provide medical services, such as medical licensing fees, supplies, reference materials, and malpractice insurance premiums. For nonclinical work, these often include office equipment, software, and travel expenses.

Identifying which of your out-of-pocket costs are business expenses is important for tax management, and it's easier if you approach these expenses (and your income) separately from your personal finances.

Marketing: Large businesses allocate substantial resources to marketing and advertising. As an independent contractor, you should also invest in marketing your services.

This investment of time and money is part of conducting business. It could involve developing a website, dedicating time to seeking new opportunities, or committing to speaking engagements to establish your expertise. Marketing will help to gain new clients as well as secure repeat business.

Growth and expansion: As you become successful in your contract work, eventually you will have more opportunities than you can handle. You can turn down work in this situation, or you can expand your capacity by hiring others to help you. This can be done by bringing on sub-contractors or hiring employees, if your business structure allows for it. A business mindset makes it easier to transition into an expanded role and take on additional professionals or assistants.

Broaden your view of compensation beyond the paycheck: Compensation extends beyond a salary to include benefits that contribute to your overall earnings and job satisfaction. These range from different types of bonuses—such as performance-based, profit-sharing, retention, and year-end—to equity compensation and stock options, along with common benefits like health insurance, life insurance, disability insurance, and retirement plans. The aggregate value of PTO, CME reimbursements, and company-offered memberships or discounts can substantially increase your compensation package.

Non-salary benefits make up about one-third of the total compensation for a full-time employee in the U.S. In independent contractor and most part-time roles, standard benefits are not offered, which means you are ultimately compensated less for your time compared to a full-time employee with a comprehensive benefits package. As mentioned earlier, independent contractors also bear the full responsibility for Social Security and Medicare taxes.

You also need to consider professional expenses that an employer or client covers. Recognize that the value of some benefits, like medical licensure fees and educational resources, goes beyond a single job’s scope. For example, a state medical license belongs to you, not the organization you are working for (even if they paid for it). You can use that license to do other work on the side, as long as it doesn't conflict with your employment contract.

While harder to quantify, intangible benefits also make up a portion of your overall compensation. Job satisfaction, alignment with company culture, and opportunities for skill development and professional growth all contribute to your overall well-being, both inside and outside the workplace. These factors impact your stress levels and your risk of burnout. Money is important, but don’t lose sight of the other contributors to your work satisfaction and personal happiness.

There are many opportunities for health care professionals to use our degrees and skills outside of regular, full-time jobs. These opportunities span beyond traditional health care settings. Our expertise is highly sought after across sectors and in multiple industries. A side gig can not only be a source of additional income, but a way to diversify your experience and help reach your professional goals.

Sylvie Stacy, MD, MPH is a preventive medicine and addiction medicine specialist and author of 50 Nonclinical Careers for Physicians and 50 Unconventional Clinical Careers for Physicians.

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