Myth of the Medical Millionaire

blog_followersMy last blog post received a great deal of reaction.  I had at least 35 people registering at my blog site to subscribe to future posts.  I also had local medical community reaction to my thoughts on the meeting discussed in that post.

Several of the older docs who had started out in private practice, and were continuing to fight the fight, thought my comments were common sense.  Like a lot of service professionals, doctors in private practice “eat what they kill”.

They have to be productive to meet the payroll and pay the bills before they get their pay.  They are more realistic about money, business, and finances.

A subset of the doctors who have been practicing for some time did tell me that they thought that it was easier for me in that I “had always been entrepreneurial.”  These docs remind of Eeyore from the Winnie the Pooh stories, always complaining about their lot in life.

brokeThey lament not getting paid enough, although they generally do not act on fairly simple suggestions to enhance their income by working smarter.  They also do not seem to have much left over from their paychecks to save or invest, despite their income being much higher than their average patient.

Their comments about me having it easy because I have always been entrepreneurial is sort of like when my overweight patients would dismiss my recommendations about weight loss because “you don’t know what I’m going through, doc.  You don’t have a weight problem!”.  The person who does the recommending gets blamed because they have been successful; because they have walked the talk.  Like the recalcitrant obesity patient, some doctors will not listen to financial recommendations.

I have had several doctors I have known personally and professionally who have not set aside sufficient funds away in their 401K funds in order to fund their current lifestyle expenses.  These docs are unfortunately going to turn around someday (when they’re in their 60s) and finally figure out that they cannot afford to retire because that nest egg is not there.

cash_cageThen, I predict with a high degree of certainty, they will complain about their lot in life again and talk poor mouth about their situation.  All of this is predictable. It is not rocket science. It just takes a long-term perspective and some discipline.

What astounds me is that these individuals obviously had to think long term and have discipline for at least a portion of their lives in order to become doctors.  Somehow, once the medical degree was obtained and the residency finished, these individuals thought the finish line had been crossed and they had it made.

Psychologically, I think that many of the doctors who reach this point after residency feel that they deserve some payback.  Justifiably, they want a house, they want cars, they want a family, and they have student loans frequently to pay back.

They can do all those things and still have money to invest and save if they approach it the right way.  Maybe they didn’t receive the right advice at the right time.  Maybe they are just tired of delayed gratification.

Whatever the reason is, they are strangling themselves by their financial inertia.  They will also get no mercy from the general public who feel that doctors make lots of money and should have lots of money left over when they retire.

happy_retirementSo, basically, what I am saying is that the general public impression that all doctors are millionaires is a myth.  However, all doctors should be, by mid to late career, multimillionaires and they MUST be multimillionaires to afford a successful and comfortable retirement.

That mindset is the reason for the ultimate delayed gratification.  As a well-known financial guru says, you have to spend some years living like nobody else so later you can live like nobody else.

invest_wiselySo much for philosophy for now.  I will intermittently weave in financial philosophy into my comments, but I also hope to outline my programs in future posts:

  • How I enhanced revenue
  • How I set up savings mechanisms
  • How I invested wisely
  • How I invested for the future

Let me know what you think, and if these comments strike a chord with what you see indoor medical community.

Becoming a Millionaire: A Vital Goal

doctors_meetingI attended a meeting last night that emphasized to me why it is not only a nice goal to become a medical millionaire, but why it is a vital goal.

Some background first: I attended a meeting of family practitioners in my local area to share with them data collected from insurance companies, and to help them to use the data to improve their practices and patient care.  Insurance companies offered extra payments to the doctors and practices to reinforce this behavior if these doctors reached certain benchmarks.

I have been the medical director of a local physician hospital organization, or PHO, for the past 20 years.  This PHO was formed back when the advent of HMOs came into this area and exerted their financial power to reduce the amount they were paying for medical care.

I have learned over the years to be somewhat cynical about the field of health insurance.  Health insurance companies are basically financial and for-profit institutions whose main purpose is to collect premiums from patients and employers, and pay out as little as possible.

If you look at health insurance that way, it explains a lot of their behavior.  I have nothing against profit or capitalism, but let’s at least be up-front about the economic model with which we are dealing, and not pretend that they are altruistic entities.

board_meetingBeing a group of hard working and dedicated doctors, the data on these doctors in this PHO were actually quite good in terms of multiple quality parameters such as rates of mammograms, pap smears, and colonoscopies.  We had discussions about office and PHO procedures that could help out and improve the rates of these necessary procedures.

All was well and good, until the very end when several members “let their hair down.”  It was then that frustrations boiled to the surface on several fronts.

big_billOne doctor railed against the high price points of many tests performed in the local hospital, such as MRIs and colonoscopies, compared to other locations in our state.  Many local patients who either have no insurance or high-deductible insurances were finding it hard to pay for necessary tests, and expressing their frustrations to their point people in the health care system, namely their PCP.

Another doctor talked about the disrespect he felt from others within the medical community, including hospitalists and specialists.  He complained about having to deal with unreturned phone calls and medical community members being unreceptive to information about his common patients that the PCP had from years of working closely with them.

Then the discussion turned to money, of course.  Specialists, including hospitalists in our area, earn 2-3 times the income of the primary care providers, while it is the PCPs who are under the most scrutiny from the insurance companies, hospitals and other rating agencies in terms of quality.

frustrated_doctorOne independent PCP, who is a 2-person practice, talked tearfully about how hard is to remain independent in a practice when the economic landscape is tilted away from the doctors who are doing the vital primary care work.  After all, everyone agrees that this work is the bedrock of health care.

Part of the reason I got involved in the local physician-hospital organization is to have some control over the economic process of medical care.  I saw the train coming down the tracks in terms of the power significantly shifting away from the doctors to the health insurance industry.

Yes, I was still the one on the line seeing the patients, prescribing the medications and the testing, and paying the employees, rent, & other expenses.  However, someone else was wresting away more of the control on my ability to have the income flow to pay those expenses and, eventually, my own income.

An older doctor, who was on the board of our PHO until he retired several years ago, said a very succinct comment on this situation that I still remember to this day.  He said, “The golden rule of business is not do unto others as they would do unto you, as it says in the Bible. Rather, it is he who has the gold who makes the rules.”

A doctor putting money in his pocketKnowing how to negotiate with these financial entities that were controlling the income flow was vital to my financial future.  I always realized that I had to have multiple ways to make income so that a pinch in one aspect of the flow would not strangle my income and life.

In later blog posts, I will go into more detail about how I accomplished that feat.  However, my most important accomplishment was the mental leap and the realization that I did not want to be controlled by a system that was skewed against me.

All these ideas were flowing through my mind as I was listening to these family practitioners lament their plight and venting their sense of powerlessness.  I always wanted to be in the position of having the entities that wanted my work need me more than I needed them.

Another older M.D. mentor of mine from the early days of my practice once counseled me to “structure your practice (business) such that even if the hospital were to implode, you could still make a living.”  You can certainly substitute insurance company or Medicare for the hospital in that counsel.

overworkedUnfortunately, I also realized that many of the hard-working doctors were not just railing at the injustice of this current reimbursement system, but also feeling like they are on a treadmill over which they have no control.  They still need to work in this system despite its unfairness because they have massive financial obligations including student loans, mortgages, and future college expenses for their children that require them to continue on this treadmill.

I don’t want this blog post to be a complete bummer.  I do think that there is hope.

In fact, I feel that I have managed to thread the needle by approaching the medical/financial system with a business perspective and handling personal finances as if I were a corporation.  This mindset has allowed me to build and manage multiple multimillion-dollar medical enterprises while also amassing large retirement funds, investment portfolios, and real estate holdings.

I wish I could have piped into the PCP discussion with that message of hope.  However, it was not an appropriate message for that particular meeting.

But for this blog, I still attest that there IS hope, and there are multiple ways to navigate the ever-changing medical and economic environment and still come out a winner at the end.  Stay tuned!

Why Start A Blog?

computer_guyWhy start a blog? Why start a blog with this particular name, “Medical Millionaire”?

Over the course of several blog entries, I will try to answer those questions as well as going into some of my personal history that has gotten me to this point in time.

Over the course of the past 30+ years, I have practiced in a small town in rural Maine.  However, despite that modest beginning as a solo practitioner, I expanded over time to a multi-million dollar, group internal medicine practice with multiple lucrative ancillary services.

How I accomplished that and why I felt compelled eventually to accomplish that will be the subject matter of this blog.

in_the_moneyWhile I agree in general that physicians receive a much higher income than the average population, I do feel that the concept of “the rich doctor” is a misnomer.  Over the course of my career, I have met many highly-compensated physicians who were by no means rich in terms of net worth, and many who cannot tolerate missing a paycheck.

I certainly would not expect any sympathy from the general public for the fate of these doctors. In many ways, I agree that their fate is their own fault and clearly preventable.

kindly_doctorI plan on using this blog to initially outline my medical, business and financial history. I also plan to outline how I accomplished what I did, and use this as a guide for other physicians.

I am not writing this blog to impress anyone, but rather to impress upon them the relatively simple and reproducible aspects of my success. Basically, my attitude is that if I can do it in a small world town in Maine, any physician can accomplish the same anywhere in the United States, and perhaps the world.

I do realize that starting off a blog, I will be primarily writing to myself.  However, I hope to build an audience who will benefit from this information over time. Continue to read and follow this blog, and we will discover many things together.