Many doctors have delusional financial thoughts, including the belief that medicine is a safe career that will always provide a decent income. Hopefully, you realize the truth.
Many doctors have delusional financial thoughts. Hopefully you’re not one of them.
One of those thoughts is that medicine is a safe career and they’ll always have decent income.
A decade or more ago that idea may have some basis in reality. Not anymore.
Just last month here’s what happened to 3 of my friends, colleagues, and clients:
1. A cardiologist was recruited a few years ago to a hospital system and offered $600,000 in annual salary. The group—like many medical practices—has a number of physician assistants.
One day the cardiologist and one of the PAs got into an argument on a patient-related issue, and the PA complained to the head of the group (who is not a physician). The result? The group fired the physician. That’s right, the group sided with the PA.
(In case you haven’t read it yet, I wrote in a blog post the reason why PAs and nurse practitioners deserve more pay than physicians.)
2. A democratic emergency medicine group—whereby the physicians in the group own the contract and not some corporate behemoth—was replaced by a large contract management group. The democratic group had owned the contract for 20 years and each physician was making close to $500,000 in annual income.
What was their pay after the takeover? About $350,000. That’s right, a 30% paycut—all going to support someone else’s office job. You work and someone else reaps the profits.
3. An internal medicine physician who currently works for a corporation as a salaried worker was told he’ll have to see about 20% more patients per day in exchange for a pay raise of 2.5%. The guy is making a $200,000 annual salary right now with the volume of patients he sees. Now he’ll be making $205,000 but his workload just increased significantly more.
The corporation calls that a pay raise. I’ll call it out as it is—this doctor just got royally screwed.
You might object and say these examples are just anecdotal tales and this doesn’t happen to most doctors.
But think about this: With all the changes in medicine that have yet to come and take full effect—Obamacare, electronic medical records, ICD-10, patient satisfaction-related compensation structures, continued consolidation of medical practices by corporations—I suspect these occurrences will become more frequent.
I could be wrong, but if I were a betting man, I would do whatever it takes to get my finances whipped into shape as fast as I could. Build up your personal financial fortress as high as it can go.
So here’s the decision you have to make:
1. Do you want to continue on your current path, pretending everything’s going to be just dandy and hope the financial rug doesn’t get suddenly pulled from underneath you?
2. Or do you want to be proactive and carve your own path to make work optional in case the forces that will descend over the next decade pound you even more than what I described above?
I hope you’re with me and choose the latter option.