Physicians & The Accidental Billionaires

Accidental Billionaires?

Last week with my time on the island I had the opportunity to catch up on some reading.

Nothing too earth-shattering or intellectual, but I did make it through a couple of good books.

One book I had considered reading for a while now actually turned out to be rather good.  The book was The Accidental Billionaires: The Founding of Facebook by Ben Mezrich.  

For those of you who have been living in a cave the past few years, The Accidental Billionaires is a sort of fictionalized account of the rise of Facebook, and was recently turned into a popular movie called The Social Network.

I was hesitant to read the book simply because it has been criticized as too fictional.  Mark Zuckerberg-- the person most associated with the founding of Facebook and the current CEO of the company-- did not make himself available for interviews with the author.  Additionally, many of the individuals used as primary sources for the text have openly stated their animosity towards Zuckerberg and/or the company, Facebook.  These foes include Edaurdo Saverin-- a college friend of Zuckerberg and co-founder of Facebook-- and the Winklevoss twins, Cameron and Tyler, who are still in ongoing litigation with the company.

Th book reads like fiction-- Mezrich openly admits he had to use literary technique to bridge gaps in the historical accounts-- but it ends up being an interesting and quick read.  Suffice it to say that if you like the movie, you'll find the book interesting.

Personally, I enjoyed the read simply because while it is obviously one-sided, it does give you one person's (ie- Saverin's) account of the founding of the company and the whirlwind development of Facebook from dorm room daydream to corporate force.  For those who have been involved with any sort of start-up company, the themes of the book ring true:  the initial excitement, the overwhelming work, the near misses and mistakes, the infighting and jealousy, and the eventual victory.

I also enjoyed the characters of the book, many of whom are well-known entities in the world of Silicon Valley.  The anecdotes about "bad boy" Sean Parker, the brilliance of Peter Thiel, the competitive drive of the Winklevoss twins, and the descriptions of life as an undergrad at Harvard were all very intriguing.  

Anyway, if you have any interest in entrepreneurship, venture capital, technology, or start-up companies, then I believe you will find The Accidental Billionaires a fun read.  I enjoyed it and while some parts are somewhat sinister, and others downright bizarre, I think this fictionalized account of one person's view of the Facebook founding is entertaining and worth the short time investment necessary to breeze through its pages.

Here's to the Crazy Ones

I'm a Mac guy, but even if I wasn't I'd still like this ad.  It's an old Apple tv commercial and I find it very inspiring.  It's good to remember that some of the most dynamic individuals we've known were originally labeled "crazy." 

For all my physician friends who are willing to color outside the lines from time to time, well, here's to you.

Physicians & Evil Plans

Ahhhhhhh....

That's me relaxing in my favorite place in the world...Saint Simons Island, Georgia.

Just recently got back home and I am loving it.  

Most people have one of those places, a geographic location that just seems soothing.  For me, it's a little coastal island community of 15,000 people just off the coast of Georgia.  My mom grew up here.  My second daughter was born here.  My wife and I own a house here and when we are not otherwise occupied, this is where we reside.

It's my first morning back in town and already I feel better about the world.  I walked down to the ocean, called Larry over at St. Simons Outfitters about my new fishing rod, and am writing this while drinking a cup of hot chocolate in one of the two great local coffee shops on the island.  Life is good.

One of the best parts of living the island life is having some time to read an excellent book or two.  My most recent read was Hugh MacLeod's new book, Evil Plans: Having Fun on the Road to World Domination .  I have heard about Hugh for a while, and when my fellow Freelance MD writer, Dr. Mehul Sheth, mentioned him in a recent post I thought it was a good time to jump into Hugh's latest book.

For those of you who might not be familiar with Hugh's work, he is a blogger who writes at GapingVoid.com , an artist who began by drawing comics on the back of business cards, and is now a best-selling author who discusses things like creativity and how to escape the rat race we're all in.

In his latest book, Evil Plans, Hugh talks about the importance of developing an "evil plan" if you want to escape the system and begin living your life, begin being who you were meant to be.  Here's an excerpt from the book's intro...

Everybody needs an Evil Plan.  Everybody needs that crazy, out-there idea that allows them to actually start doing something they love, doing something that matters.  Everybody needs an Evil Plan that gets them the hell out of the rat race, away from lousy bosses, away from boring, dead-end jobs that they hate.  Life is short.

Every person who ever managed to do this, every person who managed to escape the cubicle farm and start doing something  interesting and meaningful, started off with their own Evil Plan.  And yeah, pretty much everyone around them-- friends, family, colleagues-- thought they were nuts.

So there it is.  Physicians need an Evil Plan.  You, specifically, need an Evil Plan.  If you're frustrated with your career.  If you want more meaning. If you have the relentless urge to create something bigger, then you need an Evil Plan and you really should read Hugh's book.

Here are some other quotes in Evil Plans that grabbed me:

• It's not that people don't want you to be successful-- they just don't want you to be successful in ways they aspire to be but cannot be themselves.
• It's better to practice a musical instrument for five minutes a day than to practice for two hours once a week.
• All artists are entrepreneurs, and all entrepreneurs are artists.  Though their tools and products may differ, both entrepreneurs and artists are in the same game-- the making and selling of work that is personally and emotionally important to them.
• The sacrifices are utterly, utterly enormous to be the best in the world at something-- or even really good at it. 

Hugh goes on to explain that while you're working in a career or job that doesn't seem right to you, begin formulating your own Evil Plan of escape.  Don't quit your day job, just begin formulating your Evil Plan and begin moving forward on it.

The beauty of living in this epoch of time is that while everything in health care seems to be going haywire right now, the internet gives us the ability to launch our Evil Plans with very little financial risk.  [Note: A blog is a good place to start. In our upcoming 2011 Medical Fusion Conference we're going to be teaching specifically about using the internet to launch your new career.  Topics such as monetizing your blog, using social networking tools, developing your own brand, etc...will all be discussed.] Had all these changes in medicine occurred a generation ago things would have been very bleak for those interested in escaping their careers.  The internet is the great equalizer, allowing Evil Plans to go forward and be adjusted/perfected with minimal expense.  

Of course, even with the internet (or especially with the internet), you still have to work at it.  Really, really work at it.

It will be excruciating.  It will be gut-wrenching. It will be breathtaking.

But when you make it, you'll be free.

So what are you waiting for?

Right now, today, begin developing your own Evil Plan.  Take that first step towards a more fulfilling destiny.  If you don't know where to begin, get a copy of Hugh's book and read it from cover to cover.  It won't take long-- it's a short book and an effortless read-- and it just might strike that spark that gets you moving forward. 

Physicians: Buy a Business?

In my last post I discussed the definition of a true asset and noted that businesses are a type of asset that can produce income for physicians.

Great, you say, but how do I develop or buy a business?

Well, there are numerous ways to purchase or develop a business, but one avenue that I doubt many physicians consider is the use of business brokers.

Business brokers are companies that help match business owners with potential business buyers.  Even if you're not currently interested in purchasing a business it is interesting to surf the website of a business broker since you can search for companies for sale by state, county, or even category of business.  Examples of online business brokers include Sunbelt and BizBuySell .

Of course, always do your research before you consider buying a business of any sort, but if you're looking for a place to start, a business broker can get you thinking about the possibilities.

Physician: What Are Your Assets?

With all the concern over the economy and the changes in health care, I thought it would be a good idea to write just a quick post about financial assets.

Most physicians do not understand the concept of financial assets and wonder why they feel like they are working harder and faster for less and less reward.  

Now, I want to be clear, I am not a financial expert or a wealth manager.  However, I have found a few principles that have really helped me personally, so I though I would pass them along to the readers of Freelance MD.

First, it needs to be said loudly and clearly that when a physician first graduates from his or her residency program, they have not "made it" in the financial sense.  Yes, graduating from residency is a great achievement and does signify the completion of a long, difficult training period.  It also usually is accompanied by a significant increase in salary and the ability to live better and spend more.

However, in the financial sense, a newly minted physician is in a horrible financial place.

Most physicians finish residency with significant debt, debt that is made worse due to the young physician's new salary, a salary that places the physician in a tax bracket that precludes the interest on student loans from being tax deductible.  

Next, most physicians have little financial training so they immediately "reward" themselves for all the years of focus and discipline with a "few" nice things.  I clearly remember many resident friends of mine who bought expensive luxury cars and nice homes immediately after graduation.  Since few residents have significant savings, these new physicians simply added to their significant student loans even more debt in the form of car loans and large mortgages.

The problem with all this is that the new physician is suddenly saddled with enormous overhead.  His or her lifestyle looks nice, but at the end of each month very little money goes to savings or retirement or investing in other financial assets that could help increase their overall net worth.  Even those physicians who are aggressive about paying down debt and funding retirement often do not rise as high as they could financially because they make the mistake of pouring their disposable income into items that they believe are assets but actually are liabilities.

Robert Kiyosaki, author of Rich Dad Poor Dad, has produced a couple of very short informational videos (around 2 minutes each) that summarize the issue of assets.  The true definition of an asset is something that makes you money.  While this seems obvious, it is often misunderstood.  For instance, many physicians consider their homes and their cars "assets."  Strictly speaking, these items are not assets since for the most part they take money out of your pocket.  

Here's a short video of Robert defining a true asset:

Make sense?

For an item to be a true asset it needs to produce cash for you.  

Physicians work very hard and make a good salary, but most take their disposable income and instead of using it to buy assets, they pour it into items that actually increase the outflow of money from their pockets.  If the physician hits a snag in his/her career-- illness, salary decrease, burnout-- they suddenly realize how fragile their financial world really is.  Without true assets putting money each month back into their pockets, these physicians realize they are simply highly-paid hourly workers who are forced to exchange time for money indefinitely if they are to survive.  This realization is a very depressing concept, and one that I believe significantly contributes to the frustration of many physicians today.

To break out of this cycle, a physician absolutely must understand the principle of investing in true assets with their disposable income so that they begin to slowly wean themselves off of the dependence of their physician salaries.  In the end, a wise physician will have lived frugally, paid down debt, placed money in retirement, and instead of buying "toys" with their disposable income, instead slowly built up a collection of assets that put money back into their pocket and made their physician salary superfluous.  Ideally, a physician will eventually reach a point where their living expenses are covered by the income from their assets and their salary as a physician becomes simply the "icing on the cake" so to speak.  Perfectly executed, this freedom from the time-money continuum allows a physician to see their careers as something they choose to do for whatever reason-- desire, interest, altruism, curiosity, etc...-- not something they are forced to do to continue surviving.  It truly is a life-empowering shift in perspective.

So what are some examples of assets?

Again, Robert Kiyosaki succinctly describes the three broad categories of assets in the following video:

I hope this all makes sense and you're beginning to get a vision about how you can begin breaking free from the time-money grind through the purchasing and development of true financial assets.  In future posts we'll go deeper into this subject, and  at our Medical Fusion Conference we'll also be explaining these concepts in more detail.

The Ethics of Concierge Medicine

I just finished reading Concierge Medicine: A New System to Get the Best Healthcare by Dr. Steven Knope.  

Steve spoke at our 2010 Medical Fusion Conference, but before that event we had never met.  I had seen his book and read excerpts and believed he would be a good person to plug into what we're doing with Medical Fusion, but I really didn't know much about Concierge Medicine and I didn't know any Concierge Medicine physicians personally.

For those who aren't familiar with the terminology, "Concierge Medicine" refers to the medical practice design where patients pay a retainer fee in exchange for exceptional access to their personal physicians.  Physicians agree to limit their practice size to a few hundred patients and give their patients their cell phones, pagers, email addresses, and often make house calls in addition to yearly executive physicals and preventative medicine counseling.  Concierge Medicine is sometimes called "Retainer Medicine" or "Direct Medicine."

Concierge Medicine has been growing over the last few years due to the frustrations associated with primary care-- for both patients and clinicians-- and the development of franchise models like MDVIP.  However, whenever Concierge Medicine is discussed, critics are quick to point out it's weaknesses and cast Concierge Medicine physicians as unethical extortionists.  As an example, in Steve's Concierge Medicine office in Tucson, Arizona, one of the newspaper clips hung on his wall is an article describing his medical practice, and a quote from a local academic physician describing Concierge Medicine as "medicine at its mercenary worst."

Interesting.

So is Concierge Medicine "mercenary" as its critics suggest or a new practice model that is saving primary-care medicine?  Let's look at some of the major issues regarding Concierge Medicine and go from there...

1. Is it ethical for a patient to pay extra money for extra time with their physician?

Most discussions on Concierge Medicine are framed by asking whether it is ethical for physicians to charge "exorbitant" fees in order for their patients to see them.  This is the political equivalent of those squirley political poll questions like, "Do you, as a voter, believe it would be good to have a tax-evading, draft-dodging, ignorant, narcissist as your next governor?"  When the voter answers "no," the polling company reports that voters overwhelmingly are against the candidacy of politician X.  The question frames the debate.

The problem when the discussion of Concierge Medicine begins this way is that physicians are automatically cast as villains.  The "greedy" doctors are simply too money-obsessed to take care of anyone not willing or able to pay these incredibly high fees.

Bu what if the debate is turned around?  What if it's not a "greedy doctor" who is demanding the fee?  What if it's a patient with multiple chronic medical conditions that cannot be solved in the typical 10 minute primary-care visit who is pushing for the change?  What if it's the patient requesting extra time with their physician and to ensure this extra time is willing to pay for the equivalent of 2-3 regular visits a month?

The fact is that Concierge Medicine is a market response to a very broken primary-care system in this country. Patients are driving this change as much as burned-out physicians.  These patients are frustrated and dissatisfied with the current model, and are making their health a priority by investing money and time into their patient-physician relationship.  Many of these patients have multiple medical issues and they need more time with their physician.  They also need someone to help them coordinate their medical care, and have found Concierge Medicine to be a reasonable way to help them improve the healthcare system for themselves.

What's fascinating about this aspect of the debate is that the resource these patients are requesting-- time with their physician-- is the very resource that so many ethicists, consulting groups, and administrators stress is so important to patient satisfaction scores, proper diagnostics, reduced malpractice risk, reduced unnecessary testing, and overall improved clinical medicine.  It's as if the patients read the research and simply got tired of waiting for the system to fix itself.  The patients that gravitate to a Concierge Medicine practice are simply willing to put their money where there mouth is and pay for the extra time they know they need with their physician.  The Concierge Medicine model is actually correcting one of-- if not the-- most glaring problem with modern medicine in the United States: a lack of significant time between patient and physician.

2.  Isn't it more ethical for a physician to stay in the system instead of "opting out" with Concierge Medicine?

This question assumes that the basic primary-care model in the United States is working and those who choose Concierge Medicine practices are messing it all up for everyone else.

The unfortunate truth is that primary-care medicine as it is currently practiced in the United States is not working, not for those who opt out and choose Concierge Medicine or for anyone else.  Those physicians and patients who have chosen Concierge Medicine aren't the cause of this problem, they're a response to the brokenness of the typical primary-care practice model.  In fact, Concierge Medicine could not exist in a market where individuals were getting exceptional healthcare through third-party payers and the standard primary-care system.  The fact that Concierge Medicine has gotten traction is evidence that there are plenty of physicians and patients (ie- willing payers) who are dissatisfied with the status quo.

Here's a very interesting twist to the debate about Concierge Medicine:  if an individual wishes to condemn Concierge Medicine as unethical, does that same individual then defend the current primary-care system where patients are pushed through clinics like cattle and physicians are beholden to third-party payers?  What is more ethical, a patient and physician agreeing on a set fee or a physician who is compromised by the cost-curtailing focus of a third-party payer?  Which physician is the better advocate for the patient?  

3.  Isn't Concierge Medicine only for the rich?

The answer to this question really boils down to your definition of "rich."  

Of course, there are individuals who have zero disposable income and are truly destitute.  Concierge Medicine does not address this very real need.  However, for most people, the issue is not that they lack the funds to afford a Concierge Medicine physician, it simply is that their priority system places greater emphasis on things like cigarettes, alcohol, entertainment, fashion, and luxury than health, and they spend their income in a manner consistent with their priorities.

This discussion reminds me of a letter to the editor that I recently read online written by Emergency Medicine resident Dr. Roger Starner Jones:

Dear Sirs:

During my last night’s shift in the ER, I had the pleasure of evaluating a patient with a shiny new gold tooth, multiple elaborate tattoos, a very expensive brand of tennis shoes and a new cellular telephone equipped with her favorite R&B; tune for a ring tone.

Glancing over the chart, one could not help noticing her payer status: Medicaid.

She smokes more than one costly pack of cigarettes every day and, somehow, still has money to buy beer. And our President expects me to pay for this woman’s health care?

Our nation’s health care crisis is not a shortage of quality hospitals, doctors or nurses. It is a crisis of culture – a culture in which it is perfectly acceptable to spend money on vices while refusing to take care of one’s self or, heaven forbid, purchase health insurance.

A culture that thinks I can do whatever I want to because someone else will always take care of me.

Regardless of what you think of Dr. Jones' letter, the point is that individuals make choices regarding the use of their disposable income, and many in our culture choose to place other priorities above healthcare.

Let's break this down...

MDVIP is the dominant franchise model for Concierge Medicine.  Patients who are members of these practices pay $1500 per year for the privilege of being members of this practice model.  Here's the math:

• $1500 per year = $125 per month
• $125 per month = $4.17 per day
• $4.17 per day = current price of a Starbucks expresso or a pack of cigarettes

So for what most people spend a day on such extraneous things as a cup of premiere coffee or an unhealthy indulgence like cigarettes, these same individuals could have their own personal Concierge Medicine physician.

Yes, there are individuals who cannot afford even this amount per month, and Concierge Medicine does not address this issue (although some are experimenting with a retainer-type practice coupled with indigent care and many Concierge Medicine physicians, including Dr. Knope, spend significant time providing free care to non-paying patients), but no practice model is perfect.  Concierge Medicine could improve access to healthcare of a significant number of working people, if they would only choose to buy into the model.

Additionally, if a patient opens a Health Savings Account that is coupled with a high-deductible insurance plan, pre-tax dollars can be set aside to use towards the costs of a Concierge Medicine physician, making the retainer costs much less expensive for the average consumer.  

In sum, Concierge Medicine is a growing trend that some consumers are using to maximize their healthcare experience.  It is not a system that solves every problem, but I believe it is ethical and it is a solution for some patients.  Instead of criticizing the patients and physicians involved with Concierge Medicine, we should work together to continue to find additional ways to solve the problems with the current healthcare system.  

In future posts we'll be looking more into Concierge Medicine and other non-traditional practice models and explaining how you can incorporate these models into your current practice.

The Disappearing Independent Physician

In a recent post I noted the trend among physicians to sell their practices to hospitals.

The recession coupled with the passage of the healthcare reform initiatives has pushed many physicians into simply throwing in the towel and walking away from the independent practice model.

This month in Smart Money is an article entitled Say Farewell to the Family Doctor.  It's an interesting read.

The articles continues the discussion about physicians becoming employees of hospitals and describes the impact this change is having on the physicians, patients, and the economics of medicine.  

I enjoyed the article, but the last paragraph really gripped me. Here it is:

Still, Mikell acknowledges, "doctors don't want follow-the-directions, cookbook medicine." And for many physicians, the idea of following new rules triggers a much larger unease at giving up their independence—a feeling of loss, both for the businesses they built and for their patients. Back in Bozeman, Blair Erb, the sole cardiologist in town, is a picture of resignation as he prepares to sign a contract with Deaconess. "I feel defeated," Erb says, looking around at the office furniture he and his wife, Liz, chose from a catalog years ago. The weathered ranchers and bundled-up women that come through his door mostly express disbelief when they hear that this frank-talking Tennessee native will sell his practice. His staffers say they're not looking forward to the questions the hospital's medical records system will soon prompt them to ask patients. (Do you wear a bike helmet regularly? Do you have a smoke detector?) "We'll try to retain as much professional independence as possible," Erb says, gazing at the hospital building, whose bulk he can see through his window. "But the fact of the matter is, we'll have a new master."

This paragraph was especially poignant to me since Dr. Erb is a former president of the Wilderness Medical Society and an author in our Expedition & Wilderness Medicine textbook.  

Regardless of one's stance on all the healthcare reform initiatives, it is difficult to watch this generation of physicians enter the twilight of their careers with frustration and disappointment. These men and women-- and their loyal patients-- deserve better, and our society will soon feel the impact of the loss when they and  their practices are gone.  

Update on Apr 15, 7:42 AM by Greg Bledsoe MD

Note:  I wanted the readers to be aware of a correction to this post.  The Dr. Blair Erb who is mentioned in the Smart Money article is the son of the Dr. Blair Erb who was the president of the Wilderness Medical Society and an author in our Expedition & Wilderness Medicine textbook.