Physician Income?

By Mehul Sheth DO

When giving talks on personal finance to medical students and residents I see that 'look' in the eyes of my audience.

It’s a look that says “you can make it sound easy, but that’s because you’ve written articles and given talks about it.”  This is despite my introduction specifically mentioning that I was naive about money and investing prior to starting medical school.  I was incredibly fortunate to grow up in a family that followed the tradition of supporting kids in their education, allowing me to focus on my academics.  I did have a number of jobs growing up, including working three part time jobs in college at once, but no one except me relied on that income-unlike now, when my wife and three kids depend on my job to pay off our bills.  I was naïve enough about money that I believed the prevailing thought during medical school to not worry about the hundreds of thousands of dollars of debt we were accumulating-we were going to be doctors after all!

This laissez faire attitude gave way to anger.  During medical school and residency I couldn’t help but look around at those treating us so nicely with some distrust.  Why is a financial advisor so excited to buy me lunch?  Why are physician recruiters so interested in helping me find the right job?  Why are banks willing to give me a 100% loan based on an employment contract and not actual pay as most of America now has to?  The answers to these questions were what made me so mad-that physicians are easy to take advantage of.  I have a number of friends in the world of finance and when I talked to them they told me what I already suspected-docs are easy targets.  We have that rare combination of high-end, steady income and low interest or knowledge on matters of money.  Because of this there are a lot of folks who would like to help make our lives easier by taking a slice of our income.  A great parallel is the band TLC from the 90's.  Despite being quite succesful, they filed for bankruptcy, partly based on the fact that there were too many people taking too many pieces of that pie.

So I decided to see if personal finance was really that difficult to figure out.  The financial advisors had come in talking about 401(k)’s and Roth IRA’s and tax implications, making it sound daunting enough that I didn’t even want to look into it.  What I learned was incredibly surprising-with a little bit of interest and about 1 hour a month you can learn everything you need to know about personal finance.  I was lucky enough to start during residency and with that little bit of time commitment I have handled all my personal finances without the help of an accountant, financial advisor, or tax-man.

The key is that when you are in residency you don’t have much money coming in.  Which also means that there’s not much to do-setting up a Roth IRA is about it.  I used those years to learn about the Roth and filing my own taxes-much easier than you think.  As my family expanded and my investments diversified, I spent about 2 hours a month on average keeping up with all of it.  I now manage our daily finances, 4 retirement accounts, 2 investment properties, 3 kids college funds, a full time job and a number of consulting jobs with income-all without outside help.  And the beauty is that you can also.

Where I started is more and more surprising as I get more into personal finance-Suze Orman!  As a relatively more sophisticated investor now, I find some of her advice appalling, but she was the perfect fit as I was getting my feet wet.  I used her book-Suze Orman’s Financial Guidebook-to walk me through some of the basics of personal finance. It was incredibly simple and with those small pieces of success my confidence built.  There are hundreds of great authors on finance-Robert Kiyosaki, Benjamin Graham come to mind-but Suze does an amazing job of giving black and white answers when you are just starting out.

If you find that there are too many cooks in the kitchen, then pick up Suze Orman’s Workbook and take back some of that control.

About: Mehul Sheth DO is a physician executive with Allscripts and career coach. His expertise is at the intersection of medicine, technology and social media, having used Twitter, Facebook, and LinkedIn to effectively engage with a wide variety of nonclinical jobs and opportunities. Dr. Sheth is accessable via his LinkedIn profile and his blog at http://techpedsdoc.wordpress.com

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The Essence Of A Physician Leader

Evolving view of physician leadership: Breaking the mold.

Prevailing models of leadership have prevented organizations from developing a broad range of leaders who can work together to create strong leadership teams.  Conventional models are now giving way to a different approach to leadership.  Physicians looking for non-clinical roles may have a competitive advantage, given their backgrounds and the evolving view of leadership in industry.   

In the past, conventional wisdom suggested there was one best way to be a leader.  Neophytes were taught that leaders were born with the skills they needed—and further development was not necessary.  The privileged few led by telling others what to do, and their subordinates were expected to follow.  These leaders tended to be autonomous and often made decisions and took action independent of others.  Like the fictional character, the “Lone Ranger,” this type of leader became an enduring icon of American culture.     

Today, a new model of leadership is emerging.  The trend suggests there is more than one way to demonstrate leadership.  A diverse set of leadership styles is essential for the success of an organization.  Leadership involves skills and abilities that can be learned—and all leaders—regardless of their level and experience—can strengthen and improve their skills. Moreover, the best leaders are also team players.  They operate systemically, much like a team captain.

Conventional Model                  Emerging Model

One best way                           Leadership pathways

Static                                        Developmental

Born                                          Made

Individual                                  Systemic

Lone Ranger                             Team Captain

What Physician Leaders Really Do

Many have expounded on the difference between management and leadership.  Simply put, management is about coping with complexity; leadership is about dealing with change.  Leadership complements management; it doesn’t replace it.  Physicians seeking leadership positions in industry will need to understand the difference—and build on their clinical experience. 

The Difference between Management & Leadership

Companies manage complexity by planning and budgeting—and setting goals for the future.  By contrast, leading an organization to change begins with setting a direction, developing a vision and strategy for the future.   Setting the direction of change is fundamental to leadership.    

Management develops the capacity to achieve its plan by organizing and staffing, creating an organizational structure and delegating responsibility.  Leadership is about aligning people around the change vision. 

Management ensures its plan is achieved by controlling people, monitoring results, and problem solving.  But in leadership, achieving a vision is about motivating and inspiring people—keeping them moving in the right direction.

Despite leadership’s growing importance, the on-the-job experiences of most people undermine their ability to lead.  One way to develop leadership is to create challenging opportunities for yourself or your staff members.  A key to developing a new skill is finding a way to practice, which you can do through a special assignment to broaden your exposure.  More importantly, some say that creating a culture of leadership is the ultimate act of leadership.  Physicians in industry may be uniquely suited to drive this change in culture and mindset. 

Management                                     Leadership                  

Planning and budgeting                    Setting direction

Organizing and staffing                     Aligning people

Controlling and problem solving        Motivating and inspiring people

Produces predictability and order         Produces change

Healthcare Integration: Waiting For A Dr. Martin Luther King

Healthcare integration requires today what racial integration required on the 60's: strong leadership.

In one of our physician leadership training modules, we show the video of the 1963 civil rights march on the nation's capitol with the key note speech of Dr. Martin Luther King. It is easily accessible on youtube (search for "MLK's I have a dream").

The video has an incredible personal meaning for me. I remember watching the speech with my dad (he actually took the day off from work!) on our black and white RCA with its never quite focused rabbit ears, looking for faces in the crowd of friends whose parents allowed them to attend. Washington DC at that time was still very much a southern town and my overly protective parents were not willing to risk sending the center of their universe forth to do battle with the rednecks threatening to violently shut down the march.

Most physicians in our listening audience, however, while aware of the speech, have not actually seen or listened to it. (It is always a sobering task to ask for a show of hands from the physicians participants of those who weren't even born in 1963!) Their reaction, while not attached to personal memories of the speech, is no less profound. We then deconstruct the speech focusing on the qualities and traits of leadership. 

Racial integration in the 60's was recognized by the majority of Americans as the only way to fulfill the American principle of equality so eloquently stated in its Declaration of Independence. Integration's implementation, however, had a set of obstacles thought by most too difficult to "overcome". The separate but equal culture of American society had been in place for a hundred years. Federal versus states rights had a set of rigid borders resulting from verbal battle of our founding fathers and an intensely violent civil war. Racism was reinforced by legal statutes and conservative interpretation of Biblical scripture....

Fortunately we had a leader and he, as all great leaders, had a "dream"and the leadership skills needed for its fulfillment.

Healthcare integration is the only way to preserve the unique way healthcare is practiced in the United States in our present (and future) economic, demographic and political environment. ACO's and bundling of payments tied to outcomes and disease management are here to stay. Like the 60's and racial integration, we see the inevitability, but are focused on the obstacles too difficult to "overcome". Physicians are wed to autonomy and distrust group decisions, our reimbursement programs are perverse, our information technology is inadequate, patient care is complex and fragmented, regulatory statutes are difficult to change, ......

The time for racial integration was the 60's, the time for healthcare integration is now. The missing ingredient is a cadre of physician leaders with a "dream" and the leadership skills needed for its implementation.

Adding A Nutriceutical Pharmacy To A Medical Practice: Part 2

Part 1 of this article briefly discussed the concept of adding a nutriceutical pharmacy to a medical practice.

Besides helping the health of your patients, it is not unusual for a physician with a moderate size practice to be able to increase yearly profits by $100,000-$200,000 by adding an efficiently run nutriceutical pharmacy.

Here are questions I typically receive from physicians about nutriceutical pharmacies along with my answers:

Q-“I was taught that taking vitamins and minerals just give you expensive urine. Can’t we get all the nutrients we need from food?”

A-Every nerve, muscle, bone, organ, gland, cell and all bodily fluids in the human body are entirely formed from nutrients. Every metabolic pathway (i.e. citric acid cycle, urea cycle, Phase I and 2 liver detoxification, etc.) is formed from nutrients and dependent upon nutrient co-factors to keep functioning. All tissues need a continual supply of high quality nutrients to function because many nutrients are used up and are not recycled. Mitochondria require a constant supply of thiamin, riboflavin, niacin, pantothenic acid, pyridoxal-5-phosphate, alpha lipoic acid, and coenzyme Q10 in order to convert a one molecule of acetyl CoA into 38 units of ATP.

The Standard American Diet (SAD!) is junk food laden and horribly deficient in the nutrients that help our bodies function optimally. In fact these junk foods actually increase the need for specific nutritional supplements like chromium, vanadium and certain B vitamins.  Because of poor farming practices many fruits and vegetables contain only half the nutrients they contained in the 1950s.

Q-“I’m considering this but are their really any good studies about the efficacy of nutritional therapies?”

A-Yes. There is now a very large body of well-designed studies showing the efficacy of specific nutrients for specific health problems. In fact, these studies are much less biased than the ‘junk science’ that many pharmaceutical pay for to sell their products.

Q-“Isn’t selling nutrients out of my own office a ‘conflict of interest’?”

A-That is your individual choice but consider this: Pharmaceutical companies pay for their own studies and will often suppress findings that show ineffectiveness and even dangers of their drugs. That is a major conflict of interest!

So is providing your patients with professional grade, much needed Vitamin D3 and you making a profit instead of the health food store a conflict of interest for you? Especially when you can provide them with a more absorbable form with certificates of analysis proving the product actually contains the dosage claimed and is free from toxicity?

Q-“ I’m not sure my state board will allow me to dispense and sell nutrients out of my own office.”

A-Often their is no specific published ruling about this so many physicians just choose to do what’s best for their patients. If your board specifically prohibits you from selling nutrients from your office, form a coalition of like-minded physicians and keep bringing your board research to establish you are providing your patients scientifically researched nutritional therapy.

About: Dr. Dean Raffelock is a nationally known expert in integrative health care and consults for physicians nation-wide at Raffelock and Associates. You may contact him at dr.dean.raffelock@gmail.com

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Physician Investing: The Most Important Factor For Your Portfolio Value

Even with all of the new drugs, technology, and procedures in medicine today, there are certain things beyond your control.

For example, if we get myocardial infarction patients to the cath lab within 30 minutes, there will still be a certain percentage with a poor outcome. It’s something we have to accept.

But when it comes to investing, physicians don’t accept the fact that most things are beyond your control. Let’s say you have a choice of doing one of two things with your investments:

Choice A: Focus on things you can control.

Choice B: Focus on things you cannot control.

Which one would you choose? Obviously it’s choice A. The problem is that physicians who manage their own investments and financial advisors who manage investments for physicians overwhelmingly focus on Choice B.

By that I mean focusing too much on investment returns -- unfortunately, no one has control over that. Sure you can reduce risk by diversifying, but no one knows what investment returns are going to be today, tomorrow, next week, next month, or next year. And certainly not over the next 30 years.

Herein lies a great paradox of investing. While investing is aimed at generating a rate of return on a portfolio in order to increase the value of that portfolio, it’s actually far less important than the one thing that has the greatest impact on the value of your portfolio.

That one thing? The dollar amount of your annual savings. Most physicians and financial advisors gloss over this.

Let’s take an example. At the beginning of your investing career, you start with a portfolio value of exactly zero. Assume that you save $50,000 every year. (If you are making $300,000 or more every year and you are not saving at least $50,000, you’re doing something terribly wrong.)

After one year you have a $50,000 portfolio. If the market drops 20%, you’ve lost $10,000 leaving you with $40,000. But the next year you add another $50,000 so your portfolio is now $90,000. If your portfolio increases by 20% in the first year, you would have $60,000 and then after adding another $50,000 you end up with $110,000. The point is that no matter whether your portfolio has positive or negative returns, the value of the portfolio depends much more on the amount you pump into it -- your annual savings.

Even midway through your career the math still makes the savings rate rank high. For example if you have a $500,000 portfolio and the market drops 20%, you’re left with $400,000, but the next $50,000 you save brings you back up to $450,000. You’ve recovered half the loss with your next contribution.

It’s not until your portfolio reaches far higher values that investment returns take over. At $1 million, a 20% loss brings you down to $800,000 so pumping in $50,000 only brings you back up to $850,000. At $2 million, you’ve lost $400,000 leaving you with $1.6 million, so the next $50,000 of new money doesn’t have as much of an effect on your portfolio value. On the flip side even a 10% gain at those portfolio values increases your portfolio by an amount greater than what you put into it annually.

But here’s the irony. To get to those higher portfolio values (when investment returns take over) you have to build up to that level from smaller portfolio values. And since your annual savings dominate your portfolio values when your portfolio value is small, ultimately your savings is the most important determinant of the value of your investment portfolio in your investing lifetime.

How To Get The Most Out Of Attending A Medical Conference

Making The Most Of Your Time & Money

Last week I attended the American Medical Group Association (AMGA) Annual Conference, “Learning from the Best” at the Gaylord National Resort in Washington, D.C.   This was my first AMGA conference and the first conference I’ve been able to attend for several years. 

There hasn’t been time for a conference in awhile but suddenly, this year I’m attending three of them. I’ll be a mentor or a speaker at the other two conferences I’m planning to attend this fall. These are the SEAK Non-Clinical Careers for Physicians Conference and the Medical Group Management Association (MGMA) Conference where I’ll speak about physician career strategies and avoiding/healing physician burnout.

Conferences are a great way to build your network and see what companies are doing and what opportunities may exist for you.  They are also a good way to find out more about an industry you want to break into and gain experience in. For this reason, when working with physicians to help them find opportunities to enhance their revenue or find non-clinical opportunities, I often recommend attending a conference.

Here are two recent examples of successful outcomes that resulted from attending a conference:

1. Allscripts is a company many doctors ask me about and getting hired by this company has eluded many very well qualified doctors. I believe personal connections can help physicians get directly in front of decision makers. At the AMGA conference, I visited the Allscripts booth where I introduced myself and asked about physician opportunities. That led to an introduction to another physician, a D.O. (like myself) who works with the company and actually designed a technology that is used at the company. He knows of multiple opportunities available for physicians and wants me to follow up with him so we can find a good fit (or two). 

2. A surgeon who’s been working with me attended the Healthcare Information and Management Systems Society (HIMSS) conference on my recommendation. He took time out of his clinical practice and traveled without his family to a strange city where he spent several days in a hotel as he attended the conference. That’s a pretty big investment.  I got a call from him two weeks after he got back. He wanted advice pursuing three very promising leads in consulting and IT work. He’d even created an opportunity in his own community for this work, based on some of the things he saw and learned about at the HIMSS conference.

Attending a conference can be expensive after you pay the conference fee, travel to the geographic location (often far away from you), stay in a hotel and eat while you are there. That means attending a conference requires a plan so you can get the most out of the time and money you spend. Here are some tips I’ve found to be helpful for the physicians I work with to help them make the most out of a conference.

1. Remember it’s going to appear overwhelming.  There will be lots of people you’ve never seen all gathered in one place. It might seem like everyone knows everyone else but in reality, most people don’t know more than two or three other people at the conference. Many are there alone. Introduce yourself to someone. You will be pleasantly surprised that it’s not as hard as it seems to strike up a conversation with a stranger. After all, you already share one thing in common – you’re at the same conference. 

2. Bring business cards – but collect more.  You may have already thought about your own business cards but remember, most people misplace one or two (or more) of the cards they get.  You don’t want to be waiting for the call or e-mail that never comes from someone you really hit it off with and hope to work with in the future.  Be sure to collect the cards and write notes to yourself on the back of each one, reminding you why you enjoyed talking to that individual and what you hope to gain when you follow up.

3. Follow up within a week of the conference.  Going to a conference and networking are useless without follow-up. You may have had the best conversation in the world with someone but without further conversations, you aren’t going to actually move that opportunity forward and work with someone. On this same note, don’t worry if you don’t feel like you made the best impression on someone you met.  The real connection will come with the follow-up. But the follow-up is up to you.

4. Spend some time in the vendor area. It’s a good idea to consider spending at least a quarter of your time here. This is where you will discover companies you didn’t know existed that might be interested in hiring a physician either directly or as a consultant. Ask about this and get contact names/information for people within the company. This will help you avoid the “HR trap” of cold calling a company.

5. Approach the speakers and get their contact information. These are experts in their field and if they are speaking at a conference, they are probably interested in helping someone in the area they know about and understand.  Not only will they be good individuals to ask questions about the industry, they are likely well connected and may be able to provide an introduction or two for you to others in the field.

Good luck! Feel free to comment on what’s worked (or hasn’t worked) for you when you’ve attended a conference. 

Trust Your Inner Voice

You'll Know Why Eventually!

We just finished our ACPE Annual Meeting last week.  As I watched some of our best physician faculty members teach what they're passionate about, I thought about how they got to this point of their career.  At one point, they were at the same intersection that many readers of this website can understand.  Here are some people and their journeys that might convince you that your inner voice deserves your attention.

John Kenagy is a surgeon who fell out of a tree years ago, fracturing some cervical vertebrae.  During his convalescence, he thought about the inefficiencies and frustration in his daily routine as a surgeon, and as a patient.  It led him to a decision to get a Masters at Harvard.  Once that decision was made, he found himself intrigued by Toyota's manufacturing process, which is legendary for producing a product with few defects compared to their competitors.  I met John a decade ago, when I was also fascinated by Toyota.  At the time, we had to contend with our physician colleagues who thought our intellectual diversions from medicine were useless.  Wrong!  Though we might wonder ourselves why something fascinates us, it is always worthwhile to pursue that fascination.  It led John to work with Clay Christensen, the business thinker who's written books on the concept of disruptive innovation.  John has also made a major contribution to health care leadership with his new book Designed to Adapt, which summarizes his experiences and thinking about transforming health care.  He's taken Toyota's Lean concepts and applied them to health care.

Alan Kaplan, the CMO of the Iowa Health System, and Immediate Past President of ACPE, is a very dynamic and engaging speaker.  I asked him how he got so good at extemporaneous remarks and connecting with his audience.  Improv.  When he worked in the Chicago area, he joined an Improv group to learn how to connect with an audience.  Was that just another restless doc daring to have fun?  No relationship to health care?  That would be the conventional "wisdom".  Maybe that's an oxymoron.  The secret to Improv, Alan (and another faculty member who's really good) says, is to think "Yes.....and?.....".  That keeps a conversation going.  That little tip has been really helpful to me when I'm in the inevitable trap of having at least one physician in a group who wants to shut down a conversation with the entire audience by making comments that will stop the conversation.  One of my goals this year is to find someone in my hometown of Albuquerque who can teach me more about Improv.

Grace Terrell, CEO of a large physician group in North Carolina, is an insightful thinker, speaker, and powerful writer.  She's combined her passion for writing, strategic thinking, and compassion for people in her role as CEO.  She just finished her three year tenure on our board.  She made a connection with a first time attendee, a young physician grappling with her career interests.  The connection that provided the bond: English literature.  That's something both had in common, in addition to being physicians.

Barbara Linney, our career counselor, leader of our CPE program at ACPE, and wife of a physician, typically  counsels physicians individually.  She says that a common issue is boredom.  Most physicians are high achievers, have perfectionistic tendencies, and work really, really hard.  At some point, doing excellent work becomes well......boring!  These physicians tell her, "Everyone tells me I should just shut up about it.  You're a physician, you're supposed to be happy."  Some find that new challenge they seek in leadership and management.  Others want to explore concepts of engineering applied to health care.  Sometimes you must indulge your passion for music, the arts, stonemasonry, or quilting as you wrestle with your career boredom, until you figure out where you're heading.  It's all OK, whether it takes a month, or a decade to figure it out.   

Finally, take a tip from my oldest son, a commercial pilot.  He came home from a fourteen and a half hour day working at our shop (old truck restoration), and said, "I am really tired - but NOT fatigued."  A big difference, and a good difference.  Fatigue is what pilots, physicians, air traffic controllers, and others with stressful jobs experience when the brain and body are overloaded from stress.  His comment resonated with comments I heard at the Annual Meeting: we often don't realize how little time we have to think, because we are often fatigued.  Take time - non-fatigue time - to talk with your family and friends about what you're mulling over.  Don't allow the "shut up, be happy" dialogue to enter the conversation.  Just ask for support or indulgence in what may be a whim.  But it just might be really important!