Physicians and Financials: Dealing with the Financial Side of Medicine

Healthcare continues to evolve and new techniques are developed each year. The research and technology that goes into these developments is often done quietly, behind the scenes. Medical schools and teaching hospitals offer ongoing training and continuing education for doctors of all experience levels. Primary care physicians as well as specialists are required to continually enhance their training. These additional certifications often come at a high price. This is just one area where physicians and financials intersect. Here are a few of the other financial considerations physicians have to make.

Beyond Medical School

Medical practitioners spend hundreds of thousands of dollars in pursuit of their degree. Long hours and personal sacrifices are among the uncalculated costs of becoming a doctor. National and state boards have stringent requirements before a doctor can be licensed to practice in any field of medicine. By the time most physicians actually begin their practices, they have huge amounts of debt from their educational journey.

Insurance Considerations

Healthcare is a highly regulated industry. Insurance claims are heavily scrutinized by underwriters and government agencies. Medicare and Medicaid claims often require two or three submissions in order to pay a single claim. To help track their progress and expenses, many physicians get Sunshine Act compliance and aggregate spend reportingservices. Without an accurate understanding of this data, healthcare providers could face serious consequences during an audit.

Partnerships and Corporations

In order to expand their exposure and decrease operating costs, some physicians form legal partnerships and medical corporations. The expenses associated with setting up these entities are usually offset by the lower costs of medical malpractice insurance and regular monthly expenses. In addition, forming such a group provides a greater work-life balance for each member.

Retirement Planning

Financial planning for retirement is another major concern for independent physicians. Most doctors are unable to contribute to a retirement plan during their internship and residency. Even when a 403(b) or other organized plan is offered, there is simply not enough disposable income to consider contributing at these early stages of their career. Making up for lost time is the goal of many physicians when their individual practice, partnership, or medical corporation is finally earning consistent income.

These few examples represent a high level overview of just a few of the financial concerns that physicians encounter throughout their career. Licensing, insurance, and practice operating expenses are all mandatory components that must be fulfilled. There is simply no way around these costs. Physicians must learn to be cognizant of their financial goals and responsibilities early in their career.