Resident Economics

What You Need to Know About 24-Month Benefit Limitations

2007-08-13T08:14:00.000-07:00

Some disabilities are diagnosed based on limited or objective medical evidence, regardless of whether they are physical or psychiatric in nature. For example, with lupus, a physical autoimmune disease, diagnoses can be elusive and symptoms vary greatly. While there are established criteria for diagnosing lupus, many patients may have it while still not meeting the full criteria. Clinical depression, bipolar disorder, anxiety disorders, and post-traumatic stress disorder, which can all be complex and/or nebulous when it comes to diagnosis, are examples of psychiatric disorders.

Because the diagnosis of some disabilities is based on limited or objective medical evidence, many insurance companies limit benefits for these types of claims to 24 months. This means that a policyholder diagnosed with depression would receive benefits for a maximum of two years.

While it varies by state, many insurance companies already have a 24-month benefit limitation or are moving towards one. Be sure to review a policy’s coverage of psychiatric disabilities before purchasing it or ask an expert. Contact Doctor Disability at 866-899-7318 to get personalized information regarding available options.

Knowing What Your Board Exam Requires

2007-05-15T10:37:00.000-07:00

Many of the residents that I speak with tell me about the stress of board examinations and the difficulty of preparing for them while working such long hours. The fact that the requirements for board exams and certification vary by specialty can make the entire process confusing. Internet message boards for residents are littered with posts about books, diagnostic exams, review courses, and changes in exam locations. Knowing exactly what you are preparing for and how to prepare for it can alleviate some of that stress.

It is paramount to be aware of how board certification for your specialty is structured. For example, the American Board of Internal Medicine has information on becoming board certified in 17 different subspecialties. You can learn about the requirements for certification and find out about the exam itself—content, location, and registration deadlines and fees. The American Board of Pediatrics offers information about 20 subspecialties as well as general pediatrics certification.

The American Board of Medical Specialties lists contact information and websites for all 24 of its member boards. Each website has all the information you need about the board exam for your specialty. Even if you think you already know exactly what you are preparing for, it’s not a bad idea to double check.

General Insurance Tips: When to Buy

2007-04-12T19:41:00.000-07:00

Personal insurance (health, life, and disability) policy rates are based on a number of factors. Two of the primary ones are age and health of the insured at the time of policy purchase. Many health problems are difficult, if not impossible to predict, but there are some that insurance companies try to anticipate.

For example, because 6 to 13 percent of women experience some form of postpartum depression after having a child and may have an increased suicide risk, life insurance rates may be higher right after childbirth. A woman shopping for a policy during pregnancy may also find higher rates and might have difficulty finding any policy once she is in her third trimester. The best solution in this example is to purchase a life insurance policy before becoming pregnant.

When it comes to investing in most types of insurance policies, the general rule is the sooner the better. Through the non-profit trade association MIB, the medical information that you submit to one insurance company can be shared with other companies in an effort to prevent fraud. While the MIB is actually a good thing for consumers (less fraud means lower insurance rates), its existence means that you should not delay the purchase of your next insurance policy. Going back to the postpartum depression example, even a woman who has been successfully treated can still have higher insurance rates. Buying a policy now eliminates the chance of increased rates down the road due to unforeseeable diseases, disabilities, or accidents.

If life were predictable, you wouldn’t need any insurance. Since you can’t predict what’s coming, take advantage of what you can control. To obtain the lowest possible rates, keep your eyes open for the trends that insurance companies follow.

Tax Deductions for Your Practice

2007-03-12T19:50:00.000-07:00

Though you have had a couple of months to prepare and file the tax return for your practice, the majority of individuals don’t end up filing their professional taxes until March or April. If you have your own practice, there are many deductions to be aware of, some of which specifically apply to physicians more so than others.

Medical Economics highlights some of the deductions that may be available to you. The article covers property depreciation, travel, entertainment, and vehicle expenses, and casualty and theft losses (section B is for business property).

Some deductions that could be of particular interest to physician are write-offs for new equipment purchases or practice-related expenses such as membership and professional society dues. Insurance premiums, including malpractice or business overhead expense insurance, can also be deducted. The aforementioned Medical Economics article offers basic advice on how to claim these deductions. All you need is Schedule C, and in some cases, Schedule A.

While it covers a lot more than just deductions, the IRS website has a section on forms and instructions for filing and paying business taxes that is also a useful resource.

Whether you file your own taxes or seek advice from a tax professional, take some time to investigate the possible deductions that can save you money this year and in the future. After all, you can’t expect the IRS to let you know about which deductions you missed out on.

Using Office Layout and Aesthetics to Your Advantage

2007-02-07T20:13:00.000-08:00

Whether you are planning your office for a new practice or just need to spruce up your existing office, don’t underestimate the importance of office layout and aesthetics. A medical office is different from other offices and should be treated accordingly.

Be sure to consider possible layouts when evaluating potential office sites. Architect Richard Haines suggests clustering exam rooms to cut down on the time you spend walking and increase productivity. Besides considering which layout will be most effective for you, imagine what your office layout will convey to your patients. Streamlined floor plans make sense for a physician and prevent patient confusion. If your patients are sick or in pain, the last thing they need is stress from trying to find their way out of your office labyrinth.

Waiting room layout is also significant. This Medical Economics article offers a formula for waiting room size and offers tips about where a receptionist desk should be. Don’t forget to check local building, safety, and accessibility codes for physician waiting areas.

The cosmetic appearance of your office can affect how your patients perceive you. Decisions regarding lighting, seating, window placement, and wall covering can set the tone for patient visits. Hiring a designer is not for everyone, but it can’t hurt to at least weigh the cost versus the benefits. Architects and interior designers that specialize in physician offices often yield impressive results.

When considering the practicality of a layout or evaluating decorating options, always be aware of factors such as privacy and comfort. You should also be mindful of your patient demographic, which can vary greatly by specialty.

As a resident, if you plan to open your own practice, you are in a better position to control many of the aforementioned factors than a physician that already has an established office. Carefully planning your office now will pay dividends down the road.

Do Physicians Need Agents?

2007-01-28T19:14:00.000-08:00

Negotiating and signing your first physician contract can be a time-consuming process filled with many unknowns. In light of the complexities of a contract and the relatively high income that is at stake, many physicians are turning to agents to job hunt, and more importantly, negotiate their contracts.

Whether this growing trend is fiscally successful for physicians is arguable and depends upon several factors. Up front, it will cost you; some agents charge an hourly fee, while others may take a percentage of your first year salary. On the other hand, having an expert that fully understands your fair earning potential could net you a much larger salary than you might be able to negotiate. Physician agents also have experience and knowledge regarding non-compete clauses, bonuses, and fringe benefits. In addition to their expertise and the possible financial benefits, an agent will surely save you time.

There are other questions to consider before deciding whether hiring an agent is best for you, such as how your prospective employer will feel about working with an agent or even how you go about finding an agent. Synerge is a physician representation agency that addresses several general FAQ about agents. Physicianjobs.org also has a section on physician agents and liaisons.

Exactly how much an agent might improve your overall employment package will vary based on your specialty, prospective employer, and location, among other factors. Determining the advantages of hiring an agent is somewhat of an inexact science, but then again, so is negotiating your first contact on your own.

The Emergence of the Health Coverage Coalition for the Uninsured

2007-01-19T08:21:00.000-08:00

The lack of affordable health insurance and the number of Americans that live without it is undeniably a problem. In 2006, insurance premiums for an employer-sponsored health plan for a family of four averaged $11,500. Those prices have resulted in, at last count by the Census Bureau, 46.6 million uninsured Americans, or 15.9 percent of the population. Many of those uninsured Americans are children. Those figures don’t look like they will be improving anytime soon. In 2007, children’s health insurance programs in 17 states face a budget shortfall of $800 to $950 million, which could affect over 500,000 low income children.

On Thursday, however, a historic coalition of national organizations announced a proposal to confront those problems by expanding health coverage to the uninsured. The coalition, known as the Health Coverage Coalition for the Uninsured (HCCU), is made up of 16 organizations, ranging from the U.S. Chamber of Commerce to Johnson & Johnson to the Catholic Health Association. The groups have met 15 times over the past two years, but have not been in the public eye until yesterday.

The HCCU unveiled its plan to help reduce the number of America’s uninsured through tax breaks and by expanding existing programs. While the first phase of the plan is focused on enrolling eligible children in Medicaid and the State Children’s Health Insurance Program, the second phase would allow states to expand Medicaid to low-income adults.

The HCCU did not offer concrete ideas for paying for their plan, but seems content to “provide a roadmap” and let Congress take action from there. There is still skepticism about how Congress will react, though the new Democratic majority seems open to change in healthcare legislation. In addition, the diversity and influence of each individual organization behind the HCCU can only benefit its proposal.

The Essentials of a Resident's Disability Insurance Policy

2007-01-15T08:11:00.000-08:00

Several months ago, this blog addressed the wisdom and foresight of having disability insurance as a medical resident. Just as important as having disability insurance is understanding which policy is best for you. This blog will help you sift through financial and insurance jargon and determine what you actually need in a policy.

There are three features that any policy a resident is considering must have:

• Own Occupation Coverage – Considering a physician’s earning power, this is especially important. An own occupation policy considers the insured totally disabled even if he or she can work in another occupation. For example, if a surgeon making over $200,000 per year is disabled and can no longer perform surgery, but can still work as a professor (with a considerably smaller income), an own occupation policy will help compensate for that loss of income. Plans that are not own occupation specific may only cover total disability and not pay benefits if the policyholder is partially disabled or can do other work. Social Security Disability Insurance (SSDI) only covers total disability and the inability “to adjust to other work” because of medical conditions.

• Future Increase Option (FIO) Rider – This benefit allows the insured to increase coverage at later dates without providing further evidence of medical insurability. An FIO Rider gives you the flexibility to add coverage even if your health status declines.

• Guaranteed Renewable and Non-Cancelable – These policies cannot be canceled or altered by the insurance company due to change in health status or age (up to 65), and can be renewed at the same premium for as long as the policyholder desires.

Besides the aforementioned essentials, there are also other things to watch for. With the long-term nature of disability insurance and its payable benefits, choosing an insurance company that is financially strong and highly rated is essential. For example, Doctor Disability recommends companies with nothing lower than an “A” rating by AM Best. Doctor Disability also offers some additional shopping tips.

If you have specific questions about what you should look for in a disability policy, feel free to post them below and I will answer as soon as I see them.

Will the Government Negotiate Medicare Prescription Drug Prices?

2007-01-11T08:01:00.000-08:00

The result of the midterm elections – a new Democratic majority – could have a wide-ranging effect on the healthcare industry. While some issues, such as the House stem cell debate, are based primarily on ethics, many issues are largely fiscal in nature. Congress reconvened last week, and Speaker of the House Nancy Pelosi said that several of these issues will be voted on within its first 100 hours.

One hot topic concerns Medicare prescription drug prices, which have been determined by private health care plans since the Medicare Modernization Act of 2003. On Friday, the Democratic majority will introduce a bill that would allow the secretary of the Department of Health and Human Services (HSS), Mike Leavitt, to negotiate prices directly with pharmaceutical companies. Private health insurers would still be able to offer lower prices on Medicare prescription drugs than those negotiated by the HSS, but this bill would give the government an option in price setting.

The HSS, however, seems to be balking at the idea of negotiating prices. In a recent press release, they project decreasing Medicare costs. In addition, Secretary Leavitt recently stated that, “consumer choice is working” and “government interference will not lead to lower drug prices.”

In its 2007 advocacy agenda, the American Medical Association also generally mentions improving Medicare, along with several other specific issues. The AMA did not address the negotiation of Medicare drug prices in its advocacy agenda, but it has applauded Congress for other legislation.

While opinions on the Democratic agenda vary, what ultimately happens on Capitol Hill could alter your daily practice. The price and availability of prescription drugs, number of patients you see, or your patient demographic are just a few things that could change due to new legislation. By being aware of current events, you can anticipate these changes and prepare yourself accordingly.

Volunteering as a Physician

2007-01-03T16:05:00.000-08:00

Daily practice provides physicians with the opportunity to help others, but volunteering allows them to help people that might not otherwise be fortunate enough to receive regular medical care. Because practicing medicine is strenuous and time-consuming, it might seem that taking time to volunteer will make life more hectic, but many physicians find just the opposite to be true; the rewards of volunteering remind them why they chose to practice medicine in the first place. Volunteering can be enjoyable and even help prevent vocational burnout.

There are countless opportunities for physicians to volunteer their professional talents—from weekend aid in their own town to performing surgery overseas. Due to the large number of organizations dedicated to physician volunteering, you may find it easiest to browse websites that offer lists of organizations rather than search individually.

The American College of Physicians categorizes their list of volunteer sites into four groups: Domestic Volunteerism, Overseas Volunteerism, Disaster Response, and Caring for the Underinsured and Uninsured. The American Medical Association has a list of 32 health, relief, and human rights organizations that seek volunteers. Diversion Magazine has brief summaries and contact information for nearly 100 organizations.

If you volunteer, there are some insurance and legal issues to consider. In terms of malpractice liability, your insurance carrier should cover volunteer activities, but you must notify your insurer before you start. It would also be a good idea to check state licensing and liability laws for volunteer physicians, since they vary by state.

Financially, volunteering does offer a few tax breaks. A physician cannot deduct the value of his or her volunteer time or services, but can deduct expenses incurred that relate to those volunteer services, such as dues or fees paid to an organization of the cost of supplies or equipment.

Whether you are an accomplished volunteer or your last volunteer experience was when you were trying to bolster a medical school application, the opportunities are plentiful. You can volunteer your professional services for years at a time or for a just an hour or two. No matter how you volunteer, the results can be valuable and rewarding both personally and professionally.

Preventing Burnout Now

2006-12-31T16:32:00.000-08:00

Vocational burnout does not only happen mid-career. Residents and young physicians should be aware of burnout so that they can prevent its onset, but also because a career in medicine presents many of the job stressors that typically lead to burnout.

According to a study by the Journal of the American Medical Association, factors such as childhood development, personality traits, and family stress can contribute to burnout, but there are also certain work stressors that are common to most physicians. Perceived (and actual) work demands, financial deficits, Medicare audits, and concern about fraud, abuse, and malpractice suits are some factors that make burnout especially dangerous to physicians. Feeling lack of control in the work environment also increases the likelihood of burnout.

Medical school and residency can be so physically and emotionally exhausting that many physicians are prone to burnout before their careers start. The dean of the Vanderbilt University School of Medicine outlines that notion and also examines some of the preventative measures that can be taken to help defuse physician burnout.

The aforementioned JAMA article mentions specific ways that both physicians and health care organizations can prevent burnout. Physicians must find ways to limit their workload and seek sources of renewal, which could include exercise, time with family and friends, or maintaining a positive outlook/philosophy. Organizations can establish mentor programs and support groups, introduce sabbatical programs, and/or require physicians to have their own primary care physician. There are also workshops and courses designed to help physicians or students struggling with burnout.

If you feel vulnerable to burnout, a Maslach Burnout Inventory survey is a tool that assesses exhaustion levels and feelings of personal accomplishment.

Burnout can lead to physical or emotional problems with your health at home and in the workplace. There is no comprehensive cure or single preventative measure, so carefully evaluate where your stressors come from and how you can best respond to them.

What to Look for in Your First Job after Residency

2006-12-21T22:34:00.000-08:00

The successful transition from residency to practicing physician is littered with numerous hurdles and questions. Responsibilities such as creating a CV, interviewing, negotiating your first contract, and considering malpractice and disability insurance are important, but perhaps the most obvious task is finding the right job. Just as significant as how to look for a job is what to look for in a job.

A publication by Medical Doctor Associates on transitioning out of residency advises how to clearly define what you are looking for and narrow your job search. The section on negotiation suggests not necessarily taking the best financial offer, a notion that is also echoed in an article from the New England Journal of Medical, which cautions about the realities of the first year of practice. It profiles Jennifer Shu, M.D., who is the current chair of the American Medical Association’s Young Physicians Section. Based on her own experience, she recommends taking your time to evaluate options and doing your homework before diving into a career.

PAIRO, a medical organization based in Ontario, offers tips for evaluating practice opportunities that are relevant no matter what country you want to practice in. Their website poses some great questions to consider, and break down various practice management issues into three categories: Personal and Family Issues; Professional and Vocational Satisfaction Issues; and Income issues.

The American College of Physicians outlines and analyzes six resources that you can turn to not just for finding jobs, but also for advice, contacts, and information. These resources include professional organizations, attending physicians and residency alumni, professional publications, physician recruiters, database companies, and the Internet.

After years of schooling and training, you should be excited to start your career as a practicing physician; however, don’t let that excitement rush you through the process of finding the right job for you.

RAC: How the Tax Relief and Health Care Act of 2006 Will Affect You

2006-12-13T12:12:00.000-08:00

Medicare’s use of recovery audit contractors (“RAC”) is a polarizing subject. By recovering Medicare’s overpayments to physicians and other medical entities, RAC will save an estimated $10 billion over the next five years. Those savings should lower Medicare premiums. On the other hand, some physicians question the motives of RAC and see them as privately contracted “bounty hunters.” RAC have incentive-based pay—on average about 25 percent of the amount of recovered overpayments.

RAC are part of the Medicare Modernization Act of 2003, but have only been investigating overpayments to physicians since spring of 2005 in just three states: California, Florida, and New York… for now.

Less than a week ago, however, the U.S. House of Representatives approved the Tax Relief and Health Care Act of 2006, which calls for RAC to be expanded to all states no later than January 1, 2010 (see pages 163 – 167 of the legislative text). Dealing with RAC will soon be a reality for physicians nationwide.

Being proactive is ideal. When a Medicare overpayment is discovered, return the money before an audit can even take place. A recent article in Physician’s News Digest details who to notify and when.

Bruce A. Levy, an attorney specializing in health care fraud investigation and compliance, recommends three steps that can “audit proof” a practice. First of all, procedural codes and diagnosis codes should accurately describe services provided; beware of slightly differing codes or code modifiers. Additionally, taking detailed notes and documenting charts will help justify a physician’s actions, if audited. Finally, a voluntary compliance plan can be implemented to reduce billing errors and prevent erroneous claims. David Glaser, another attorney, also offers his advice for how to handle a Medicare audit.

As a physician, you may disagree with RAC and how Medicare overpayments are investigated. In light of the actions of Congress, it will be important to adjust and take preemptive measures, especially since Medicare overpayments are not uncommon.

Business Overhead Expense Insurance For Your Practice

2006-12-11T10:11:00.000-08:00

A practice that relies on a small number of people (or one person) to produce revenue is economically vulnerable if one of those individuals becomes disabled. Business expenses are just as relentless for those who suffer a disability. A business overhead expense (“BOE”) disability policy will cover ongoing operating expenses for a disabled practice-owning physician.

If the insured does become disabled, a BOE policy pays a monthly benefit based on business expenses, not anticipated profits. The following business overhead expenses are covered by BOE insurance:

- Rent or Mortgage Payments
- Employee Salaries and Benefits
- Utility Bills
- Property Taxes
- Accounting Fees, Legal Fees, and Professional Dues
- Malpractice and Other Business Insurance Premiums
- Maintenance and Janitorial Services
- Depreciation
- Interest on Business Debts
- Office Supplies
- Other Fixed Expenses that are Ordinary, Necessary, and Tax Deductible

Some policies even cover the salary of a temporary employee hired to do the duties of the disabled. Income taxes, the cost of inventory, and the cost of furniture are a few expenses that are not covered.

It is advantageous to purchase a BOE insurance policy when you are younger. Not only will you get lower rates, but additional coverage can be purchased later without providing further evidence of medical insurability.

BOE insurance does not protect your ability to generate income—that is what a personal disability policy does. Instead, it allows you to keep your practice open, or at least pay for its expenses until you recover. In the case of a long-term disability, it offers you up to two years to make a business decision about your practice without worrying about accruing debt from business expenses.

Your practice should allow you to earn income, not be a financial parasite if you become disabled. BOE insurance doesn’t just protect your practice… it protects you.

Choosing a Specialty

2006-12-07T11:22:00.000-08:00

It is interesting that even when lumped into relatively general groups, no single specialty dominates the field of medicine. There are many different types of medical specialties, as demonstrated by the American Medical Association’s dizzying list of national medical specialty society websites. The AMA also has a list of the most frequently entered specialties. If you are a medical student or a resident without a specific career path, there are many factors to consider when choosing a specialty.

Some of the first questions usually asked about a specialty concern earning power. The Association of American Medical Colleges has various specialty pages with salary ranges, as well as training, residency, workforce information, and links to the official academies, boards, and associations of each specialty. While money is important, there are other issues to consider.

The September 2004 issue of Academic Psychiatry did a study comparing burnout rates among residents in different specialties. Though it is a relatively small sample size, the results are interesting. Another study was done on the influence of malpractice risk on specialty choice.

If you want to speak with and learn more from representatives from primary care and specialty organizations, the American Medical Student Association has a Residency Fair & Specialty Showcase scheduled for March 2007 in Arlington, VA. This great resource, which offers an impressive lineup of events that span five days, gives you the opportunity to ask specific questions and get more of a feel for each specialty.

Aside from the statistics and opinions that you read or hear, never forget to factor in your level of interest in a specialty. Enjoying your career in medicine is just as important as salary and job outlook.

Malpractice Claims and How To Prevent Them

2006-12-01T11:11:00.000-08:00

The origins of professional malpractice date back to early eighteenth century English legal theory. Medical malpractice claims are prevalent 300 years later and do not figure to disappear any time soon.

The increase of medical malpractice lawsuits has cyclical ramifications that affect several parties. Insurance companies are forced to raise premiums so that they can operate profitably. In turn, physician fees increase, which has an impact on patients. Physicians have to deal with the stresses of potential legal problems, not to mention the financial risks of settling or losing a lawsuit. Besides the fiscal damage, physicians that make payments connected to malpractice settlements or judgments are also included in the National Practitioner Data Bank. That information is available to hospitals and state licensure boards, and may soon be available to the public.

Preventing a malpractice suit can be as simple as increasing the clarity of your notes, improving communication, fixing lapses in patient service, or even apologizing, but there are other measures you can take to avoid non-clinical errors that could lead to a lawsuit. You can also contact your county bar association to get a referral to an asset protection attorney, because each case of alleged malpractice is unique, as are malpractice insurance policies. The pros and cons of a consent to settle clause in a liability policy is just one example of an issue that you may need advice about.

As the average claim payment and the volume of malpractice suits have increased, malpractice insurance premiums have also been on the rise. The good news is that the cost of medical malpractice insurance premiums is finally stabilizing. Unfortunately, the danger of being sued for malpractice is still just as great. Eliminating the risk of being sued for malpractice is impossible, but reducing risk and protecting yourself is not.

How to Deal with Medical School Debt

2006-11-28T17:08:00.000-08:00

Resident physicians are well aware of the statistics regarding medical school debt. Repaying student loans is frustrating and can become overwhelming. Dozens of unfamiliar terms litter paperwork and mailers. Maintaining awareness about loans is important, but difficult for those with full schedules. Those already bogged down with the strain of exorbitant loans have several options. There are also preemptive measures that can prevent confusion.

When it comes to simplifying loan repayment and preventing hassles, the overarching theme is organization. Medical school financial aid exit interview information should stay with you and be accessible. Keep up with mail, which may have information regarding deadlines. A long-term calendar will allow you to track deadlines instead of relying on reminders. The Association of American Medical Colleges (AAMC) also offers other strategies for managing medical school loans.

These tips can help thwart problems, but offer little solace to those already mired in debt. Medical Economics magazine’s article about eliminating medical school debt covers options such as military or public service career opportunities, consolidation, and forbearance. Deferment and forbearance can delay loan repayment until you have greater income, but it is wise to at least pay interest that may accrue during these periods so that you avoid capitalization. Additionally, if you have multiple loans, be sure to keep track of various periods of grace, forbearance, and deferment, since they can all be loan specific.

Besides easing a debtor’s burden by reducing the overall cost of repayment, consolidating multiple loans also makes repayment more convenient; however, when and how to consolidate can be tricky. There are also differences between consolidating private and federal loans.

There is no easy way out of significant student loan debt, but you do have choices. Being disciplined, organized, and exploring consolidation or other options can prevent stress and get you out of the red.

What Causes Disabilities?

2006-11-20T07:53:00.000-08:00

Unfortunately, suffering a disability is not as unlikely as most people think. According to the National Safety Council’s 2001 Field Guide, the odds of suffering a disabling accident in a given year are 1 in 21. The importance and benefits of disability insurance were analyzed in a previous blog. What causes these disabilities?

Disabilities can be physical or mental and stem from accidents, injuries, or disease, among other things. They can be partially or totally disabling, short-term or life-long, and range from mild to severe. Dividing the causes of disability in 2003 into a pie chart produces a diverse and relatively balanced picture that might surprise most people.

Hartford Financial Services Group released a report entitled “Unintended Exposure: The Surprising ‘Big Gamble’ Employees Take Every Day,” which polled 600 working people between the ages of 18 and 65. The study found that most assumed the majority of disabilities were due to accident or injury, when in reality, accidents and injuries make up only 13 percent of short-term disabilities and 10 percent of long-term disabilities.

Perhaps what these figures best portray is the unpredictability of disability. There is no “primary cause” of disability. It is difficult, and in many instances impossible, to determine which individuals are predisposed to becoming disabled.

When healthy, it is easy to dismiss disabilities, but that does not decrease the risks they pose. Disability insurance protects you from the financial dangers of a disability, regardless of its cause.

Signing a Physician Employment Contract

2006-11-16T10:34:00.000-08:00

Reviewing and evaluating a physician employment contract can be confusing and tedious even for a physician who has previously been through the process. For a medical resident looking to sign a first contract, there are multiple issues and hazards to be aware of.

Many articles and websites offer advice about physician employment contracts. The American Medical Association has an extremely detailed and informative publication specifically for young physicians. The New England Journal of Medicine has a recent two-part series that discusses the anatomy of a contract and avoiding contract pitfalls. Additionally, Physician’s News Digest has an article that outlines various contract topics, the Minnesota Medical Association offers an FAQ and sample contract, and a physician employment contract checklist is available courtesy of Algos Research. Because it would take a considerable amount of time to mine through this vast amount of information, I will briefly highlight just a few of the most common themes in these articles.

• Restrictive Covenant/Non-Compete Clause – This agreement limits a departing physician from practicing within a certain radius of the employer for a specified time. What constitutes a fair non-compete clause will vary depending on specialty. The legality and enforceability of non-compete clauses also differs by state. Be sure that you are knowledgeable about this section of your contract and do not disregard it!

• Termination – This section typically mentions whether a physician can be terminated “with cause” or “without cause.” With cause allows an employer to terminate a physician for reasons specified in the contract. Without cause means either party can initiate early termination without justification, although there is usually a period of notice that must be given. Beware of vague and ambiguous wording in this section that could give an employer the right to terminate a physician for frivolous reasons.

• Compensation – The combination of various formulae, benefits, salary, and bonuses can make the overall value of a contract confusing. The contract should stipulate a concrete calculation of your compensation, show annual pay increases, and possibly have a partnership option. Do not underestimate the value of the benefits package, which can include medical, life, and disability insurance, vacation and CME pay, and retirement and stock options, among other things.

The aforementioned articles go into much greater detail about each of these issues as well as many others. Before signing your first contract, you might want to speak with an attorney or a physician who has experience signing contracts. Do your homework and do not rush into anything you are unsure of.

Basic Investing: Your Advantage as a Resident Physician

2006-11-11T10:36:00.000-08:00

One of the maxims of investing and saving is that the sooner you start, the better your eventual returns will be. This holds true regardless of your occupation. As a resident physician, however, your entire career is ahead of you and you will likely be a high income individual. The combination of those advantages and dedication to investing wisely can turn saving for the future into a relatively simple process.

The stock market is just one way of investing, but focusing on it can provide a great example. Looking at the overall performance of stocks in about the past 200 years, the compounded annual rate of return is about 10.2 percent. Obviously there are short-term ups and downs, but by investing early in your career, you can take advantage of the long-term benefits that the stock market yields. An annual return rate of 10.2 percent will double an initial investment in about seven years. It doesn’t take a math wiz to deduce that consistently investing over an extended period of time should produce impressive returns.

Some of the most difficult choices are where and how to invest. There are hundreds of investing theories and strategies and just as many firms and companies that offer their advice and services. Charles Schwab, Merrill Lynch, JP Morgan, Fidelity, and Vanguard are just a sampling of the hundreds of reputable companies that you can invest with. If you want to invest on your own, online brokerages such as E*TRADE or TD Ameritrade are also viable options.

I mentioned in a previous post that when purchasing disability insurance, working with a company that specializes in offering that product specifically for physicians is ideal. The same is true when searching for a financial advisor. It may not be a necessity to find a financial advisor that specializes in advising physicians, but working with a niche expert has its benefits.

Investing is still a complex process, but as a resident physician you have the time and resources to be successful. To make the most out of your savings, do your homework or find an advisor you trust and start investing today.

Job Searching Tips for a New Physician

2006-11-09T10:06:00.000-08:00

When looking for a job after residency, one given is that you will have plenty of options. There are many different career paths, regardless of your specialty. Some options include joining an existing group or practice or a career in research or academics. Starting your own practice was explored in a previous blog. Whether the position you are looking for is permanent or temporary – in a hospital, lab, or classroom – there are several means of conducting a job search that produces the career you are looking for.

Two of the best resources for a medicine-related job search are the career sections of popular medical journals. JAMA Career Net provides job seekers with searches by specialty and location, offers job alerts, and allows physicians to post a CV. Their online job database is updated weekly on Fridays and includes jobs in the United States and internationally. The NEJM Career Center also has advanced search options and email alerts. Additionally, it offers a downloadable PDF file of hundreds of job openings posted in the most recent issue of the journal.

Staffing firms are another way to find a temporary or permanent placement. For example, Aureus Medical Group is one healthcare staffer that can present you with options and help you make an informed choice, without sacrificing your time job hunting. Physician recruiters can also search for your ideal job at no cost to you. There are many staffing firms and physician recruiters to choose from. The website of the National Association of Physician Recruiters lists the contact information for over 300 physician recruiting organizations.

An alternative to permanent full-time practice that has emerged in recent years is locum tenens (Latin for “one holding a place”). Locum tenens can provide new physicians with the flexibility of trying different types of practices instead of committing to a long-term contract without fully knowing what to expect. Locum tenens is gaining popularity and is expected to generate $1.7 billion in revenue in 2007. The National Association of Locum Tenens Organizations (NALTO) provides a contact list of all of their member firms. All NALTO firms must adhere to strict guidelines.

With an impending physician shortage, medical job openings will be consistently available. Use the aforementioned resources along with information offered by your residency director to find the job that is right for you.

Reasons a Medical Resident Should Have Disability Insurance

2006-11-03T14:26:00.000-08:00

Fiscally, resident physicians and interns must find a way to bridge the gap between the debt of medical school and the income of a board certified physician. Residents are fully invested in their education financially, but are particularly vulnerable since they are not yet seeing a return relative to the size of that investment. With average salaries that pale in comparison to a physician’s median salary, resident physicians are treading water until their full income potential is realized.

Insuring the ability to earn that future income is crucial, especially considering the medical school debt that most medical residents are saddled with. An injury or illness to a medical resident could have debilitating long-term financial effects. A disability insurance policy protects future income and eliminates the risk of being unable to repay student loans.

According to the 1994 Statistical Abstract of the United States, in the course of a year, 1 in 10 people between the ages of 25 and 64 will suffer a disability. When comparing that ratio to the odds of being victim of a house fire (1 in 122); injured in an automobile accident (1 in 160); or even of death (1 in 117), the value and protection offered by disability insurance is clear.

Disability insurance rates are based on age and health status, so it is advantageous to purchase a policy while you are younger and likely healthier. A policy purchased by a resident has the flexibility to meet the changing needs of the insured after residency and offers significant financial advantages.

Disability insurance is available through many avenues, but you might want to consider discussing it with a company that specializes in disability insurance for residents and physicians.

A disability could render you helpless by taking away the one thing that you need to safeguard all other assets: your income. Disability insurance protects the hard work and substantial investment of time and money that you have made in your career.

Starting Your Own Medical Practice

2006-11-02T09:04:00.000-08:00

Starting your own practice takes ambition, courage, dedication, and perhaps most importantly, foresight and planning. While a physician that has recently completed residency training is equipped to care for patients, starting a medical practice presents many unique challenges. Some of the most daunting tasks—insurance and tax issues, contracting, and licensing—are financial or legal in nature. However, building a patient base, hiring staff, and even choosing the best office layout can present logistical hurdles that must also be cleared. Taking advantage of some of the resources that are available can take a lot of the headaches and guesswork out of the process.

Medical Economics magazine has an excellent seven-part series that outlines the steps to take in the 12 months prior to launching your own practice. Some of the many helpful tips in this free and comprehensive guide include how to research the demographics of a prospective practice location, advice on choosing the right fringe benefits plan for employees, and even naming suggestions. At the end of each series is a checklist to help keep track of what is otherwise an overwhelming lineup of responsibilities.

The American Academy of Family Physicians (AAFP) also offers a guide to starting a medical practice. On Your Own: Starting a Medical Practice from the Ground Up is a resource manual that combines general business information with suggestions that are specific to a medical practice.

Another place to glean advice regarding your medical practice is the business archives of the American Medical News, which contains articles on practice-management. Just browsing through the massive amount of articles will yield information that is relevant to you and your practice.

Successfully managing a business and simultaneously providing excellent patient care is a challenge. Be sure to utilize available resources so that you are informed and knowledgeable about how to best create, develop, and manage your practice.