Showing posts with label Money. Show all posts
Showing posts with label Money. Show all posts

Saturday, April 23, 2022

How To Become An Anesthesiologist

You've heard about the great incomes that anesthesiologists make. You long for the legendary lifestyle of working with propofol and volatile anesthetics. So now you're wondering what it takes to become an anesthesiologist. 

You could search through the history of this blog to get all the scintillating details of anesthesiology as a career. Or you can read through this nice little article from Forbes on the process of becoming an anesthesiologist. 

It details the long education process necessary to earn the title, at least a decade of schooling and training after high school. First you have to earn a Bachelor's Degree, which takes at least four years. Then there is another four years of medical school to become a physician. That doesn't include the extra time some students take get another degree like an MPH, PhD, or JD. After that, with any luck you will match into an anesthesiology residency, which is getting harder all the time. There you will spend four more years of anesthesia training to just qualify for taking the anesthesia boards. But that's not the end of the line. Most anesthesia residents now take another year for a fellowship like cardiac, pediatric, or pain medicine. Add it all up and it's a minimum of twelve years to become become board eligible to sit for your certification exams.

Phew. It's not an easy road to earn the moniker of anesthesiologist. If that path is too daunting, Forbes has some alternative choices which involves some anesthesia work. You could become an anesthesia technician, which only takes two years. Or you could be an anesthesia assistant, which requires a bachelor's degree and needs about six years total. Or you could become a CRNA, which takes about seven to ten years. 

While the article in general is fairly accurate, I have a quibble with their assertion that board certification is optional to be an anesthesiologist. That may have been true fifty years ago, but nowadays, no hospital will hire you if you are not at least board eligible working towards certification. I know anesthesiologists a generation older than me who were grandfathered into their positions despite not ever having been board certified, but that generation is quickly retiring or dying off so now almost every anesthesiologist is BE/BC. That is not the same thing as having limited vs lifetime board certification, which is a whole other discussion.

If you're curious about how well trained anesthesiologist are, and why we're not just frustrated surgeon wannabes, take a careful read of Forbes. You'll realize that anesthesiologists are some of the best trained physicians in the country.

Saturday, April 16, 2022

Anesthesiology Compensation In 2022

Medscape has released its annual Physician Compensation Report for 2022. The report polled over 13,000 doctors about their salaries and other details about their work. It looks like the pandemic induced reduction in physicians' incomes are over. For the first time in Medscape's survey history, all medical specialties saw increases in compensation during the past year. ENT topped the list with a 13% increase in average annual income.

Anesthesiologists fared well, as usual. This year, anesthesiologists reported an average income of $405,000. That is up significantly from last year when they disclosed an average of $378,000. That is a seven percent improvement over 2021 which was down five percent from 2020 due to Covid shutdowns.

Since 2015, physician salaries have increased an average of 29%. By comparison, inflation in the U.S. over the last five years has been 14.7%. Anesthesiologists didn't fare as well. In 2015, Medscape said anesthesiologists made an average of $358,000. So In the past seven years, anesthesiologists salaries have flatlined, not even keeping up with inflation. Perhaps that's why our specialty doesn't rank in the top ten anymore of the highest paid physicians. And the ASA wants to keep opening more anesthesia residency spots at the same time.

The top five states with the highest physician incomes are: Kentucky, Tennessee, Alabama, Missouri, and Oregon. If you think you would never live in a rural state even if they have very low cost of living and high salaries, then you're stuck in a bicoastal elitist mentality. Though these states may seem rural, they have very cosmopolitan urban centers too, such as Nashville, Louisville, and St. Louis. Alabama even has nice beaches also. So if you're looking for the biggest bang for your buck, don't overlook this list. 

There's a lot more information in Medscape's survey than what I have listed here, including one nice aspect of working in anesthesiology that tops all other specialties. Check it out.

Sunday, October 17, 2021

Doctors Should Make Passive Income A Priority

Doctors are always complaining about being overworked and underpaid. They dream of accomplishing the gospel of FIRE, financial independence/retire early. Yet few physicians are able to execute that plan because it calls for massive financial deprivation (saving 50% or more of your income) and social hardships (no fancy cars or vacations to pay off debt). All this to retire by the age of 50 and worry whether your portfolio will last the next 40 years. 

Yet you regularly read news of people who are able to parlay their smarts and sweat equity into substantial passive income. There are the two children from Dallas, 14 and 9, who are now making $30,000 per month mining cryptocurrency. Ishaan Thakur and his younger sister Aanya started by converting their gaming computer to mine ether after watching YouTube videos. The first day they made $3. Just like that they made money from thin air. Satisfied with their results, they added more processors and made $1000 their first month. As they made more crypto income they kept adding more processors. In four months they were making $36,000 per month! Their only expense is paying utilities to a data center which is about $3000 per month. These kids are doing the ultimate FIRE and could retire before they finish high school.

Then there is this story of an ex-pastor and his wife who are now living comfortably on their rental income generated from 30 properties. They started with nothing and were able to accomplish this feat in two years. (Business Insider subscription required.) The young couple were living paycheck to paycheck in Denver when their daughter had a medical emergency. They realized how little safety net they had. So they started watching house flipping shows on HGTV and read real estate investment books. They sold their house in pricey Denver and bought a house in St. Louis, saving hundreds of thousands of dollars. The family began with one house where they did all their own rehab to save money. Before long they were renting out the property, earning a small income. With that cash flow they kept buying more houses, fixing them up, and renting them out. Within two months they were renting out three properties making $1000 per month. Now less than two years later they have thirty properties and live comfortably on their rental income.

It seems like doctors should be able to generate this level of passive income easily with our high levels of education and large salaries to start. These people did not go to school as long as us and basically started out with nothing but their smarts and hard work. Why can't doctors routinely do the same thing?

Is it because with our high salaries it takes a lot of passive income to move the needle and so many doctors don't think it's a worthwhile endeavor? If you're making $4000 per month and generate an extra $1000 per month renting houses, you've substantially increased your earnings. However if you're earning $40,000 per month as a doctor, making another $1000 per month doesn't seem worth the trouble.

Or maybe it's because we're too busy to think about starting a second income stream. When you're working sixty hours per week, the last thing you want to worry about is going to a rental to fix a leaky toilet after getting off work at 7:00 PM. If you hire somebody to do all the repairs then that destroys your cash flow and you wind up losing money on that property. So perhaps doctors would rather spend their off hours resting at home than running off to fix a tenant's complaints.

Maybe our education narrows our mental focus. All those years of medical school blinds us to business opportunities when they present themselves because we're concentrating so much on running a medical practice. Any thought about earning extra money invariably is medically related, such as becoming an expert witness for malpractice cases or getting honorariums giving talks for pharmaceutical companies. We should broaden our scope and look beyond the medical industrial complex. With our ample incomes, why can't doctors also buy a bunch of crypto miners and start generating crypto money? If two children can do it, surely physicians with over a decade of higher education can too. 

Next time, before buying that new Mercedes to replace the three year old Mercedes, maybe think about keeping the old car and use that money for creating a meaningful change in your life. Plenty of people are able to create wealth for themselves with far less education and cash flow. Perhaps we should get on this gravy train too.

Thursday, September 16, 2021

How Much Do CRNAs Make And Why I'm Totally Jealous

US Bureau of Labor Statistics

The U.S. Bureau of Labor Statistics has released the numbers for the average salaries of CRNAs. You better sit down for this. They are quite astonishing. Remember when nurse anesthetists first broke into six figure incomes and everybody thought that was amazing? Well now they are doing much much better. According to the federal government, the average CRNA income was $189,190. However many CRNAs are doing even better than that. The nurses in Oregon are doing the best, with annual incomes of $236,540. As a matter of fact, CRNAs from eleven states earn over $200,000 per year. 

Why should I be jealous of this when the average income for anesthesiologists is twice as much? Medscape's annual physician compensation survey this year showed that anesthesiologists reported earning over $370,000 per year. I shouldn't be upset that somebody makes half my income, right?

Remember that CRNAs also have work schedules that resemble any other nurses in the hospital. They have a set schedule during the day that are practically inviolable. If they have a 12 hour shift, by golly they are only working 12 hours that day. We've had an instance where the case reached a critical period and because it happened right at the end of their shift, the anesthetist simply walked away from the patient and boogied their way to the parking lot. The anesthesiologist was the one who stayed behind to finish the case and make sure the patient was satisfactorily taken to the recovery room.

The anesthetists also have guaranteed morning and afternoon breaks along with a luxurious lunch break. We've had CRNAs literally quit because they didn't get their required lunch break one day. I've had days where I'm lucky to get a two minute run to the bathroom between cases. Getting a daily 30 minute lunch break is the stuff of fevered dreams.

CRNAs also don't work as many hours. Like other nurses, they work three days a week. Ours also don't take any calls or work any weekends. So with all that free time they can work at other locations and double their salaries if they so choose.

I've been told by CRNAs that not all of them have such schedules. Many of them work in remote or dangerous places unlike anesthesiologists who prefer to congregate in nicer locations. Some also take calls and work long unpredictable hours like anesthesiologists. But I suspect those work conditions are fairly uncommon and they always have the option of moving to a different job with all the perks.

So yes I'm jealous of the CRNAs. I know many anesthesiologists who would gladly take half their incomes for a work schedule that includes guaranteed breaks, guaranteed hours, three day work weeks, no calls or weekends, and the most important thing, little liability for any incident. I would say that's a fair trade. Wouldn't you agree?

Monday, April 26, 2021

ASA Gets Sued For Scientific Article

Pacira BioSciences, the maker of Exparel, a liposomal bupivacaine, has sued the American Society of Anesthesiologists and writers in the journal Anesthesiology for economic damages. They are seeking a retraction of the articles. The articles involved in the lawsuit appeared in the February 2021 issue.

According to Pacira, the papers in question disputed their assertion that liposomal bupivacaine is superior to plain bupivacaine. The articles exposed possible biases in research that originally led the company to tout the superiority of Exparel over bupivacaine. Previous papers claimed that Exparel achieved increased analgesia 24 hours after injection. However further study of the data showed that it did not meet the relevant threshold to make this statement.

Other biases leading the FDA to approve Exparel include the company submitting studies comparing the superior action of the drug to placebo. This is an easy thing to prove as it most likely will be better than injecting saline into the body. However when the company conducted research comparing Exparel to other local anesthetics like ropivacaine or nonliposomal bupivacaine, it failed to show increased effectiveness.

Why would a company sue the ASA over studies questioning its drugs? As always, just follow the money. When Exparel was approved by the FDA, sales at the company increased double digits annually, reaching over $400 million in 2019. One dose of Exparel costs $334 compared to only $3 for regular bupivacaine. Yes Exparel costs over 100x more than nonliposomal bupivacaine. To promote this costly drug, the company over the last decade has spent over $25 million to 27,000 physicians for speaking fees and nonaccredited educational events ie/fancy dinners at the local steakhouse and free gifts and rounds of golf.

In the lawsuit, Pacira claims it, "has suffered and will continue to suffer significant pecuniary harm as both existing and potential customers who have seen the disparaging articles, have either canceled contracts with Exparel, declined to purchase Exparel, or are considering removing Exparel from hospital formularies."

I want to congratulate the ASA for publishing some hard hitting articles that will help patient care and improve healthcare economics. However I also remember that there were some MOCA Minute questions in the past that stated liposomal bupivacaine is superior. I hope the writers of MOCA Minute go back and review these questions in light of the new research. ASA, keep up the good work to keep us anesthesiologists well informed and patients safe.

Sunday, August 2, 2020

Which Specialties Will Make You Rich?

Most people think that all doctors are rich, right? One definition of rich is somebody who makes more money than you. If that is the case, then nearly all doctors are richer than the average American. But to really understand how well off somebody is, you need to look at their net worth. A high income doesn't mean anything if it is frittered away and there is nothing left to show for it. A Charles Schwab Modern Wealth Survey reported that most people considered a net worth of $2.3 million as a definition of being wealthy. That is a considerably higher bar to hurdle than just merely have a high income.

For most physicians, that is a difficult, though not impossible goal to achieve. Obviously if you're just starting out, $2.3 million in net worth sounds like a pipe dream. But as your career flourishes, the goal gets closer and closer within your grasp. And certain specialties have an innate advantage in achieving high a net worth.

While the average person thinks $2.3 million defines the wealthy, physicians have a different point of view. Most doctors would probably be happier with $5 million in net worth. Can't show up at the country club driving a Mercedes when your colleagues roll in with their Bentleys and Aston Martins. So here are the ten specialties that have the most doctors who have a net worth of over $5 million courtesy of Medscape.

1. Orthopedics, 19%
2. Plastic Surgery, 16%
3. Gastroenterology, 16%
4. Cardiology, 15%
5. Oncology, 15%
6. Dermatology, 15%
7. Otolaryngology, 14%
8. Urology, 14%
9. Radiology, 13%
10. Ophthalmology, 13%
*11. Anesthesiology, 12%

Medscape Physician Compensation Survey 2020
Medscape Physician Compensation Survey 2020

Naturally most of the fields in this list are also the same ones who have the highest incomes. But making a lot of money doesn't guarantee that you'll end up with a high net worth. If you spend all your money on fancy cars, bad investments, and multiple wives and children, you can still end up a pauper despite making a six figure income. I know doctors who are working well into their 60s and 70s because of poor life choices over the years.

While this list looks impressive, fifty percent of all physicians have net worth of under $1 million. Since there are no ages associated with these statistics, it's probably safe to say that most of the doctors under 50 years don't have a net worth of $5 million. In fact, in some fields like pediatrics and family medicine, over 40% have net worth of under $500 thousand.

So all you millenial physicians just starting your careers, keep saving into those tax deferred accounts and other wealth building plans. Five million dollars may seem impossible to attain at your current situation, but keep plugging away. Compound interest and six figure incomes will work to your advantage in the future.

* I just had to add anesthesiology to the list to show how close we are to the top ten of wealth generating specialties.

Monday, July 27, 2020

The Richest Doctors In The World

Do you think doctors make a lot of money? They can but not by practicing medicine. Forbes list of billionaires in the world includes six physicians and none of them practice clinical medicine.

1. Thomas Frist, MD. Founder of HCA Healthcare, the largest hospital company in America. Net worth: $11.6 billion

2. Patrick Soon-Shiong, MD. Inventor of Abraxane. $6.7 billion

3. Phillip Frost, MD. Inventor of Opko Health. $2.4 billion

4. Gary Michelson, MD. Retired spine surgeon and inventor. $1.7 billion

5. James Leininger, MD. Founder of Kinetic Concepts. $1.5 billion

6. George Yancopoulos, MD. Chief Medical Scientific of Regeneron. $1.4 billion

The lesson here is that if you think you can make it rich seeing a bunch of Medicare and Medicaid patients, you are in the wrong field.

Friday, July 24, 2020

Best of Both Worlds

Imagine a job where you get to practice medicine but don't have to go through medical school. Then while treating your patients you are not legally responsible for your actions if something goes wrong. On top of that you make more money than many actual physicians? What kind of dream job is this? A certified nurse anesthetist, of course.

Working as a CRNA just got a whole lot sweeter after a court in North Carolina declared that they are not responsible for their actions because they are really just a "nurse" who can't be held liable for what they do. This involves a tragic case of a three year old child who suffered a cardiac arrest and anoxic brain injury after the CRNA and physician anesthesiologist induced her with sevoflurane for a cardiac ablation. 

The anesthesiologist was able to settle the case out of court but the hospital and the CRNA went to trial. At the trial the judge found the CRNA not liable because of a 1932 ruling by the North Carolina Supreme Court that said nurses are not responsible for their actions. As the judge wrote, "The Court reasoned that nurses 'are not supposed to be experts in the technique of diagnosis or the mechanics of treatment.'" Therefore the current appeals court could not rule against the precedent set by the NC Supreme Court, even if it occurred nearly 80 years ago.

So now CRNA's, at least in North Carolina, have the best of both worlds. They can claim they are just as skilled and intelligent as physician anesthesiologists. Yet when the s*** hits the fan, they can also claim they cannot be held liable because the courts said nurses are not experts in diagnosis or treatment.

Seriously who would want to be a physician anesthesiologist when CRNA's have the best job in the world

Tuesday, February 18, 2020

Is Gastroenterology The Best Medical Field?

Cha Ching!
Is gastroenterology the best field in medicine? Gastroenterologists enjoy some of the highest incomes among physicians. Some 18 million colonoscopies are done each year in the US, making it the most commonly performed procedure in the country. GI is estimated to bring in almost $3 million in revenue per physician in 2019, double what it made only three years ago. By some calculations, gastroenterology is responsible for $1 TRILLION in medical expenditures each year.

With eye opening numbers like these, it's no wonder that the smart money is starting to pour into gastroenterology. Private equity investors are buying up GI practices to get in on this hot action. The investors are cutting expenses by consolidating office and equipment expenses. They are also able to negotiate better insurance reimbursements by forming larger groups.

GI is relatively easy to make money through buyouts. Many gastroenterologists practice in ambulatory surgery centers that are usually already highly profitable. Purchasing multiple ASC's gives them higher purchasing power and a more efficient backoffice. They are making their businesses even more profitable by bringing inhouse other expenses like pathology and anesthesia services. Why pay another physician a fee when you can pay them a set salary?

So is GI the best field in medicine? From a financial standpoint, it sure looks like a winner. The fees generated from endoscopic procedures would make any general surgeon hopping mad with envy. GI doctors can do dozens of procedures per day in each ASC, generating tens of thousands of dollars in revenue. Surgeons by comparison may only do two or three operations on a good day. As endoscopy gets more advanced, GI doctors are also slowly encroaching on the general surgeons' bread and butter of treating bowel diseases, with the advantage of not making any painful incisions. It looks like GI is ready to take over the medical world. The smartest people in the financial world certainly believe that.

Tuesday, January 7, 2020

Anesthesia Salaries Still Tops In 2020

As we start a new year, and a new decade, let's look back on how the field of anesthesiology has done financially. According to a couple of recent surveys, anesthesiologists' salaries are still some of the most lucrative in medicine.

According to the latest US News & World Reports, anesthesiologists have the highest median salaries of any profession in America. If you recall, a median is where fifty percent are higher and fifty percent are lower. So anesthesiologists have a median salary of $267,020. The number is based on the US Bureau of Labor Statistics. To me that number seems a bit low, especially out here in coastal California where the cost of living is so high. I think it would be fair to say that more than half of the anesthesiologists in southern California make more than that.

The second highest salaries were reported by surgeons, with a median of $255,110. They are followed by ENT ($242,370), OB/GYN ($238,320), and orthodontists ($225,760).

A different survey conducted at Doximity looked at the job offers that were being made for specialties that are most in demand by employers. Here the numbers are quite a bit higher. Anesthesiologists are being offered jobs that pay about $405,000. However, we're not the highest paid specialty. Radiologists can receive $428,572 while cardiologists can command $453,515. But it's nice to know anesthesiology is in the top ten of the most in demand specialties.

But if we looked at the highest paid physicians overall, nobody can top neurosurgeons, who can rake in $616,823. They are followed by thoracic surgeons ($584,287) and orthopedic surgeons ($526,385). I didn't know radiation oncology can be so lucrative, with salaries of $486,089 and ranking fourth on the list.

It's good to see that anesthesiology hasn't been affected negatively yet by all the surprise billing legislation, competition from CRNA's, or the Medicare 33% rule. Our incomes are still higher than average, we're top ten in physician demand, and we have the best lifestyle in medicine. This decade is starting off on the right foot.

Monday, November 18, 2019

Anesthesia SimSTAT. How The ASA Is Making Board Recertification As Painless As Possible

Yes I've ranted about the American Board of Anesthesiologists' Maintenance of Certification in Anesthesiology (MOCA) for quite some time. First of all, the doctors who really need to continue lifelong learning to maintain their medical knowledge are grandfathered out of MOCA's requirements. They get to keep their board certification for the rest of their lives without reading a single page of books or studying for any exams. Then there is the question of whether physicians who have to recertify through MOCA are really any more qualified than those who don't. I don't think you'll find many older anesthesiologists who think they are not as smart as their younger colleagues or more dangerous to their patients.

But since the ABA has to follow the rules set by the ABMS, MOCA is a fact of life for an increasingly large number of anesthesiologists. After all, lifetime board certificates for anesthesiologists ended nearly 20 years ago. The last anesthesiologists who received lifetime certificates are already more than halfway through their careers.

Since MOCA is here to stay, at least it's nice to see that the ABA has been receptive to the loud complaints about the complexity of keeping up with its onerous requirements. One of the most significant changes it made to maintain certification was the elimination of a single winner take all, make it or break it exam at the end of the MOCA cycle. This was extremely intimidating as your whole career could be derailed by one bad exam result. Now you just need to take short online quizzes called the MOCA Minute every year for ten years. The scoring system is a bit opaque despite the ABA's explanations on their website. But let's just say they're not in the business of kicking anybody out of their jobs.

The next hurdle the ABA tackled was the simulation requirement for MOCA Part 4. I know colleagues who were scared to death about Part 4. This was perhaps the most time consuming and expensive portion of MOCA. You needed to make a reservation at an ABA approved simulation center, which is usually in a big city academic facility possibly hundreds of miles away. The simulations are expensive, usually at least a couple of thousand dollars. This doesn't even count the time away from work, transportation costs, or hotel stays if you had to travel a long distance. Then just the thought of going through an oral board type exam, but this time in front of other anesthesiologists, was perhaps the worst part of the entire MOCA experience. Though there are other ways to complete Part 4, most of those involved starting research projects and how they would change their practice based on the results. Seriously, who has time to do that when you're in the OR ten hours a day?

Now the ASA has come to the rescue, assuming you're willing to part with some cold hard cash. The ASA has an online simulation called Anesthesia SimStat. For a cool $1125, if you're an ASA member (and I hope all my anesthesiologist readers are), you get to fulfill your Part 4 requirements from the comfort of your living room or office. Any gaffes you make will only be known to yourself. Nobody's judging your inability to think on your feet or make a critical differential diagnosis. It's all done in the privacy of your own place.

Anesthesia SimStat is truly an exam for the next generation. It is anesthesia through the sensibilities of a video game. I have taken all the scenarios and I've come away impressed, though I was never an avid gamer. It is private, relatively cheap, and meets a requirement to keep one's employment. I predict it will be a big boon for the ASA and anesthesiologists alike. Next I will give some insight in how to "win" at Anesthesia SimStat.

Monday, April 15, 2019

Anesthesiologists Are Making More Money Than Ever

Despite all the concerns about the changes in the healthcare industry, physicians appear to be doing quite well. Medscape just released its latest annual report about physician compensation. For 2019, the survey shows that primary care doctors earned 21.5% more than in 2015. For specialists, the pay increase was 20%. That's well above the consumer price index and shows the fear of Obamacare may have been overblown.

Anesthesiologists are still some of the top earners in medicine. Sure we don't reach quite the heights like Cardiology or Orthopedics, but our income is still ranked in the top ten of all physicians. Medscape reports that in 2019, anesthesiologists reported an average compensation of $392,000. That compares to $358,000 back in 2015, an increase of 9.5%. While that's not the 20% increase of other specialists, it still keeps us in the upper echelon, though not in the top five as in previous surveys.

Could the reason that anesthesia income hasn't risen as much is because more women are entering the field? Another part of the survey shows that the specialties that women gravitate towards, like primary care, tend to have lower income. But that's not necessarily because of sex discrimination. The poll shows that women work about ten percent fewer hours than men. Meanwhile the top income earners like ortho and cardiology have much fewer women in their ranks. Or perhaps we are just training too many anesthesiologists for the market to bear.

To sum it up, anesthesiologists' incomes are still rising. It's not going up as quickly as other specialties but it is still a respectable compensation. And I would much prefer to be an anesthesiologist than some face disfiguring ENT surgeon any day.

Friday, August 24, 2018

Bigger Is Better, Even In Anesthesia

This is a cautionary for all anesthesia practices and residents evaluating anesthesia groups to join after graduation. Olean General Hospital in New York has just informed its anesthesia providers, Southern Tier Anesthesiologists, that it has decided to go with a different group for their anesthesia needs. Bye bye. And don't let the door hit you on the way out.

What's particularly galling is that STA had no conflicts with the hospital prior to them seeking proposals from others. STA members asked directly if there were any issues with their work and the hospital denied any work or personality conflicts. Ultimately the work contract was awarded to another anesthesia group out of Buffalo who were willing to work for less money.

STA had been OGH's exclusive anesthesia providers for 24 years. And OGH has been the exclusive hospital to STA for the last fifteen. Unfortunately they may just have been too small to compete with groups that are much larger and have economies of scale. STA only has six anesthesiologists and two CRNA's. Meanwhile, hospitals and insurance companies are merging at a furious pace. OGH is part of a much larger hospital group, Kaleida Health. When large corporations start running hospitals, loyalty takes a back seat to the bottom line.

For the anesthesiologists in STA, the future looks bleak. It's unclear if they will be absorbed by the Buffalo group if they are willing to work for less money. Otherwise, there are no other hospitals within an hour drive and the physicians will have to move away to find other jobs.

While it may be desirable to work in quaint small towns with Mayberry quality lifestyles, medicine isn't practiced like the 1950's anymore. Corporate medicine is creeping into even the smallest medical practices. I've had personal friends who thought they found the perfect anesthesia jobs after residency. Then one day, they show up for work and find out their hospital has negotiated with a different anesthesia group willing to work for less money. They were suddenly unemployed. Devastating.

In order to compete, doctors will need to team up or get run out of town by companies with billions of dollars in revenue and no compunction to fire staff at will if it helps their stock holders. I wish all the luck to the members of Southern Tier Anesthesiologists in their careers and hope they land somewhere that will provide a more stable job environment for themselves and their families.

Thursday, January 11, 2018

What Cars Do Doctors Drive?

Surprise! What your doctor likely drives.
When I picture for you the image of a doctor driving carefree along the sunny California coast or along the boulevards of Beverly Hills, what kind of car do you see in your mind? A Porsche Carrera GTS? A Bentley Continental GT? Maybe even a Ferrari 488 GTB? Well, the latest Medscape Physician Lifestyle and Happiness report has the answer for that.

In a survey of over 15,000 doctors, some of the questions were related to the wheels they own. If you thought that physicians usually drive some exotic European import to work, you'd be mostly wrong. According to the responses, the most popular make of cars among doctors is a Toyota, with 21%. The second most common car driven by doctors is a Honda with 16%. As you can see, many doctors are quite practical and frugal in the types of vehicles they own.

But then you get to the next three: BMW, Lexus, and Mercedes. Now these are the more stereotypical cars that one would expect physicians who make six figures are more likely to possess. However each of these brands holds less than ten percent market share among doctors. The rest of the top ten are Ford, Subaru, Chevrolet, Acura, and Audi.

No longer your typical doctor's car. Sad.
What are the least favorite cars among physicians? Bringing up the bottom are Lincoln, Kia, and Cadillac, each with about 1% ownership with doctors. Then they are followed by Dodge and Volvo. I find it sad that storied nameplates like Lincoln and Cadillac, once the epitome of wealth and success, are now irrelevant among the monied set.

Even though nearly all physicians make six figure incomes, does the medical specialty influence the type of cars they drive? I mean, any doctor could theoretically afford a Mercedes if they wanted one. In reality the specialty you practice does make a difference. Toyota is owned  by more primary medical doctors than specialists 23% to 20%. Honda also has more PMD's in their corner 18% to 16%.

But once you look at the luxury imports, the reverse happens. Far more specialists than PMD's own BMW, 11% to 6%. Same with Lexus 9%-7% and Mercedes 9%-7%. Is it more evidence that PMD's don't make enough money in this country compared to the specialists? Is it an indictment of our healthcare system that prizes costly interventions over preventive care? You be the judge.

It would have been interesting if the survey broke down the types of cars owned by the age of the physician. The report notes that over 50% of the respondents are under the age of 50. In fact, nearly one fifth of the respondents say they are in the 28-34 year old age bracket. That's extremely young, practically fresh out of residency. They will be the ones most likely to still be driving the old Honda and Toyota they had in college while they are trying to set up a practice and pay off student loans.

So next time you see a Mercedes GT-R roaring down the street, know that it is unlikely to be driven by a physician. The driver is more likely to be a Wall Street titan or business mogul than a doctor. We sacrificed years of our lives to go through medical school. Practicality and delayed gratification are in our blood. It would be uncharacteristic for doctors to blow their money on such exotic rides. Unless you're a plastic surgeon in Beverly Hills.

Wednesday, January 10, 2018

Anesthesiology Still The Best Paying Job In America

This is beginning to sound like a broken record. The latest statistics from CNBC show that anesthesiologists have the best paying job in America. We have an average salary of $269,600 according to the U.S. Bureau of Labor Statistics.

As a matter of fact, the top eleven best paid jobs are all in healthcare. The number two job is surgery with a salary of $252,910 followed by OB/GYN with a pay of $234,310. The top nonmedical career field is petroleum engineer, with a salary of $147,030. Lawyers, a career once associated with steady high income, clocks in at sixteen, with a mean salary of $139,880.

Despite these great numbers, they all appear suspect. The physician salaries seem low compared to Medscape's annual compensation survey that showed anesthesiologists last year made on average $364,000. Lawyers' mean salary may be only $140,000 but they have a much greater variation in their compensation compared to doctors. Many earn much less than $100,000 while some make well over $1 million. The data also don't look at the medical subspecialties that earn much more than mere anesthesiologists, such as neurosurgery, gastroenterology, or interventional cardiology, many of whom earn well over half a million dollars per year.

So for all you naysayers who claim the best days of medicine are in the past, there's still hope for continued good times in the medical field. As the old saying goes, while past performance may not predict future results, it's still a good starting point to have.

Wednesday, January 3, 2018

The Big Kahuna Of Physician Investment Advisors

As a doctor, if you've done any research at all into financial management, you almost surely will have come across The White Coat Investor. Started by James Dahle MD, FACEP, an emergency physician, WCI has morphed into a financial advisory empire. It's been featured in mainstream press, has published advise books, conducts speaking tours, and holds extensive forums on the site for its readers to argue about money and taxes. They even offer scholarships for graduate students.

The web site is vast. There are hundreds of posts and thousands of forum threads to read. Most of the posts are no longer written by Dr. Dahle but by guest contributors. If you have any questions about money I'm sure there is at least one post that covers that topic. You could lose yourself on that site for days trying to read everything they have.

He is very candid about his success. Each year he posts the latest financial results of his business. In his January 2017 article, he notes how quickly the site has grown in readership and monetary success. His income from the blog would make even an orthopedic surgeon blush. He is so successful that when he temporarily lost his physician job (look it up), he was quite happy about possibly taking a year off from the drudgery of working in medicine. Now that is real financial independence.

I hope you have a chance to read through all these investment blogs that I've mentioned this week. You'll quickly realize that you are far from being alone as a doctor who dreams about escaping the tedium of medical practice to live a fulfilling life outside of medicine. There are plenty of people willing to offer advice on how to pull that off. Let's see if you can make 2018 the year you actually take the steps necessary to realize your life goals and financial dreams.

Tuesday, January 2, 2018

Physician On FIRE

To start the new year, I've decided to bone up on my financial knowledgebase and wealth management. I've already written about Passive Income MD. It offered me some of the best tax advice I've come across for calculating my potential new tax liabilities with the tax reform law that was recently passed by Congress.

Now I'm going to give a shout out to another financial blog for physicians. It is called Physician on FIRE. It's written by an anesthesiologist and is all about working towards early retirement. FIRE stands for Financial Independence, Retire Early. The author claims he achieved financial independence at the age of 39 years old, only nine years after starting his career.

His bio is rather interesting. He started out working in a small hospital as the only anesthesiologist on staff. His dreams of a stable long term career were shattered soon after when the hospital closed for financial reasons. He then went through a series of locum tenens jobs before landing at another permanent job position. Thinking he needed to have more financial stability he started thinking about becoming financially independent which eventually led to his blog.

While quickly perusing his site, it seems to emphasize long term investing in stocks and real estate with a healthy dose of prudent spending. His family appears to live modestly which allow them to keep expenses down and let them live well within their means. That in essence is the recipe for long term monetary success. So check it out if you want to see why you are living paycheck to paycheck despite earning a six figure income. Your goal in 2018 should be getting away from that precarious position and start enjoying your work, not just working for that next check.

Tomorrow, we'll talk about one of the granddaddies of investment websites for physicians. This doctor has truly achieved financial freedom using nothing but the written word and thousands of followers.

Monday, January 1, 2018

The Best Pass Through Corporate Tax Law Explanation I've Read

The recently passed tax reform law is confusing to say the least. Rather than minimizing the reporting requirements to a single postcard as many Republicans claimed they were after, the new law maintains seven tax brackets and myriads of new and expired tax deductions.

Some of the most befuddling new rules are the deductions for pass through companies such as subchapter S or C corporations. What made it even more difficult to understand was that initially its new lower deductions didn't apply to service professionals like physicians, attorneys, accountants, or essentially anybody running a service business. The favorable tax treatments only apply to manufacturers. Luckily that unfair treatment seemed to have changed somewhat after the House and Senate reconciled the differences in their bills. Now professionals also get a low corporate deduction, but only up to a point.

I spent many days searching through the internet trying to find a simple explanation for how tax reform will affect S corporation professionals like myself. I believe I've found it. It's written by Passive Income MD and it gives great examples of how different income levels are treated differently by the tax laws.

Conveniently for me, PIMD uses a hypothetical situation that is very similar to mine: married couple with children, lives in a high tax state like California, uses an S corporation with about half salary and half distribution, and a fairly large mortgage (this is coastal California after all). Just scroll down through the article to see how the taxes change for incomes ranging from $400,000 to $700,000.

The good news is that for the average anesthesiologist income as reported by Medscape, we should do very well with tax reform. After accounting for all the deductions, we should wind up in a lower tax bracket and have more take home pocket money.

For higher paid specialties like orthopedic surgery or interventional cardiology, the picture doesn't look so rosy. The pass through deduction of 20% starts phasing out at $315,000 adjusted gross income and is completely gone by $415,000. Essentially fifty cents of every dollar earned over $415,000 will be paid to the government in taxes.

The only relief from high tax payments will be to maximize my 401K contributions each year and thank my lucky stars that I purchased a nice expensive home in Los Angeles with large mortgage interest payments that have been grandfathered into the new law. Other than that many of my old deductions like my high state, local, and property taxes will only get a minuscule $10,000 in deductions from now on.

Thank you Passive Income MD for this easy to understand explanation of the tax reform law and how it will affect high income professionals like us physicians. I'm going to put a link to his site on my home page since I believe his informative articles will be of great interest to my readers.

Wednesday, December 20, 2017

Should Doctors Switch To A C Corporation?

The great tax reform bill has now passed Congress and is on its way to the White House for President Trump's signature. While it lowers taxes for nearly everybody, it left a lump of coal for so called pass through businesses who use an S corporation tax structure. Specifically it doesn't allow professionals like doctors, lawyers, and accountants to benefit from the lower corporate tax rates given to other businesses. This was a deliberate act by Congress since their feeling was that we're not really aiding the economy like a widget manufacturer does. Screw you Congressional Republicans.

However, the bill lowers the tax rate of C corporations down to 21%, same as other businesses that got the lower corporate tax rate. Since many physicians have structured themselves as S corporations, should they now switch to a C corp instead to capture the lower rate?

I find the nuances between an S corp and a C corp very confusing. I am no tax expert at all. I've never even tried to do my own taxes on TurboTax. Therefore I went to Google CPA and looked up several articles on this issue. I found the most helpful article in Accounting Today. The desktop website requires a free registration to read but surprisingly the mobile site is open. This is what I've learned.

An S corp pays its taxes on the owner's individual tax rate, which in high income professions is currently 39.6%. A C corp pays taxes using the corporate tax rate, which is 35%. When it pays dividends to its shareholders, the shareholder has to pay taxes on that, which is 20% plus Medicare taxes, another 3.8%. Now that we have the basics down, let's compare the tax implications for both structures.

If your S corp earns a profit of $1,000,000, the taxes on it is based on the owner's 39.6% rate which would leave a net income of $604,000. If it's a C corp, the $1,000,000 will pay a corporate tax of $350,000. The remaining profit of $650,000 is then paid out as a dividend to its shareholders, who pay a 23.8% tax, leaving $495,300. Clearly an S corporation is more advantageous prior to the tax changes.

Let's see what happens now with the new tax law going into effect. In the S corp, that $1,000,000 profit will pay the owner's individual tax rate of 37%, leaving them with a net profit of $630,000. So yes the law helps your income just a teeny little bit as Congress promised. If the physician decides to switch to a C corp, the $1,000,000 profit will pay a corporate tax of 21%, or $210,000, leaving $790,000 to distribute as dividends. The dividend is then taxed at the same 23.8% as before since Congress didn't change those laws. That will leave a net income of $602,000.

So if you were a C corp before, the new tax laws will give you a tremendous boost in your net income, over $100,000 per year in this hypothetical situation. However if you're currently an S corporation, the decrease in the top individual tax bracket helps offset the decreased corporate tax rate the C corp enjoys. The S corp still winds up with a higher net income.

One also has to consider any potential new changes in the tax laws in the future. As it stands now, these individual tax rates are set to expire in ten years, reverting back to the old brackets. Who knows what a future Congress will do to the corporate tax rates too even though it's written to be permanent. Congressional Democrats are already threatening to changes the tax laws again next year if they win Congressional majorities. You don't want to be writing new corporate books every year at the whim of Congress.

Now this is just the most basic calculation I gleaned from the internet. I'm sure there are hundreds of tax minutia that I haven't taken into account. That's why it's still important to consult your accountant or tax attorney before making any leap in your business structure. Good luck.

Friday, December 8, 2017

Is Anesthesiology Better Served By Having More Women?

The University of Wisconsin, Madison's Department of Anesthesiology has one of the most storied programs in American medical history. They were pioneers in the field during its infancy and invented practices that were eventually adopted by anesthesiologists all over the country and the world. Yet it is being brought low by accusations of bias against women.

The Wisconsin State Journal details the problems in the department that were brought up during a "climate review" after Dr. Robert Pearce, the former department chair, resigned last July. The report noted multiple grievances among the female staff. They described the atmosphere within the department as a "good-old boy network."

The male staff significantly outnumber the women who mostly work part time. The women felt belittled when the men told them they are less committed to their profession because they take more time off to take care of family. Many of the female anesthesiologists who work at the American Family Children's Hospital felt insulted when their workplace was described as "the crying hospital" or "candyland." Female residents were told not to "rock the boat." CRNA's felt they were not valued in the department.

Oy! These are a lot of complaints that really don't seem justified in this male blogger's point of view. First of all, so what if the men outnumber the women by two to one? Must every single job have an equal distribution of the sexes to make it free from discrimination and bias? The truth is one can be harassed whether one is in the majority or minority in a group. Plenty of men have felt they were treated unfairly in their jobs by their male colleagues or superiors.

Let's face the facts here about women who work part time yet expect the same respect at work as men. Yes it's admirable that they want to go home and take care of our children so that we can continue to work hard for the family. But don't expect to get equal pay or get invited to departmental committees if one has to leave by 3:00 PM every day to pick up the kids. It wouldn't be fair to the men who toil away 12 hours a day at their jobs. No disrespect but you can't expect to get the same appreciation from your colleagues if you're only working half the time as others. In fact many of the female anesthesiologists in our department want to work part time. Some even leave our group to work at other hospitals that allow even greater time flexibility. That is no stigma against their dedication to their jobs when they are at work.

The other complaints just seem silly. Calling a children's hospital a crying hospital or candyland doesn't sound insulting, it sounds appropriately descriptive. Describing it as such doesn't demean the people who work there. Stop being so sensitive. Female residents shouldn't rock the boat? Why would you want to? As a resident all I wanted to do was finish my training and get the hell out so I can start my practice. Why would I want to make my life more difficult than it already was as a resident? CRNA's who don't feel valued by the doctors in the department? If they want to feel valued then they need to go get a medical degree.

The department is rectifying the situation by appointing a new female interim chair, Dr. Aimee Becker. While I'm sure Dr. Becker is a fantastic anesthesiologist, I can't help but feel that this was a very political choice to deflect the uproar over the report. When can we get past the sexual politics and just hire the best people for the job without counting how many X chromosomes are in one's DNA?