How Doctors Can Double Their Income

As a physician, you're trading time for money.

Most physicians are no doubt very adept when it comes time to academics and being “book smart”. We all had to get great MCAT scores and high grades to get into medical school. However when it comes down to financial planning or building wealth, it’s not overstating the case that our preparation was a bit lacking. Medical school didn’t prepare me very well for finances,entrepreneurship, let alone running my own practice.

As physicians, when it comes down to it, we are exchanging time for money. The amount of money a physician can make is generally in proportion to how much patients we see or procedures we do. This is no different then the majority of the population who earn wages for a living.

The unfortunate aspect is that for us to double income, we generally have to see double the amount of patients. And as reimbursement continues to dwindle, we are now having to see more and more patients to get the same amount of income, in comparison to five to ten years ago.

So what are our options? For physicians who want to maintain their current nest egg, they need to start building passive or residual income to work for them. Indeed, many physicians have resorted to passive income (in the form of investing, real estates, buying bonds, etc), or started “side careers” or investments (In fact, many of my ER doc friends have run anything from owning their own tavern, to daytrading, even starting your own winery! There’s a reason why Business Pitch section of the AMA news, a series that highlights physician side careers,  seems to be one of the most popular columns.

One great way to build residual income, is entering the domain of online health consulting and medical publishing.  No matter what you decided to do, building residual income to work for you will be more imperative for physicians in the near future. Starting early is the key.

Comments

[Arlen D Meyers, MD, MBA]

Thanks for this, MIke. Allow me to suggest another way of thinking...work smarter, not harder. The question in how do you scale a business or medical practice ? Think about creating ways to leverage your time and expertise, like the use of physician extenders, electronic care, or different reimbursement models (like anesthesiologists supervising CRNA's).

[Alan N. M.D.]

The problem with clinical medicine is that it is no longer subject to standard laws of economics. Except for niche areas such as plastic surgery and concierge practices, the consumers (patients) are no longer the payers. Reimbursement is determined by the government and insurance companies with little if any room for negotiation. In order to satisfy the increasing demand for care, the payers have to reduce reimbursement to the physicians.

As reimbursements are not keeping pace with inflation and increased costs of running a practice, it has become virtually impossible even to maintain income, much less increase it. With the current climate, the answer to financial success is generally going to be outside of clinical practice.

We didn’t become physicians by being stupid. Almost anyone of us has more talent and potential than 95% of the general population. We just need to be willing to use it.

[Greg Bledsoe MD]

Very good points, Arlen and Alan N. MD. The reason we began our Medical Fusion Conference was to help physicians learn how to expand their careers into niche and non-clinical areas. It's time physicians begin taking back control of their careers.

[Michelle Mudge-Riley]

Diversifying yourself through some of the options Mike listed is a good way to not only increase your income, but also give you an opportunity to build your resume if you want to eventually transition full time into a non-clinical career.

If you're a practicing physician, don't forget about money you might be leaving on the table with undercoding. I know another physician who educates physicians on correct documentation practices and has seen a 15:1 return on investment in the practices he's educated.