Financial Savvy for
THIS PRESENTATION IS A GENERAL OVERVIEW OF BEST FINANCIAL LITERACY PRACTICES
REGARDING MANAGING PERSONAL FINANCES AND FINANCING HIGHER EDUCATION AND
ARE NOT INTENDED TO BE FINANCIAL, TAX OR LEGAL ADVICE. THE LAWS, REGULATIONS
AND OTHER RULES APPLICABLE TO SPECIFIC SITUATIONS ARE COMPLEX, SUBJECT TO
CHANGE AND ARE DEPENDENT ON THE FACTS OF EACH PARTICULAR CASE. YOU SHOULD
CONSULT YOUR FINANCIAL, TAX OR LEGAL ADVISORS WITH QUESTIONS REGARDING YOUR
Planning Out Your Future as
a Health Professional
• The Future for the Health
• Current Salaries
• The Cost of Achieving the Dream
• Fine Tuning the Direction of Your
• Is a Private Practice In my
• Financial Considerations for New
How did you get here?
The decision to become a doctor
was not something that just
Maybe there was a parent or
relative who inspired you…
Maybe it was after a trip to the
doctor’s office that clinched it for
Or maybe it was a profound
interest in Science and Medicine
that made you know that you
were fated to become a doctor.
Whatever the reason for your
• Here you are, in the midst of that long
journey, finally approaching the long
• So far, your journey has been about
long hours of academic and clinical
study, lab reports and tests, long nights
of studying and anxiety over MCATs,
GPAs and applications to Med School.
• The cost and financial sacrifice has
been high for many of you continuing in
Med School, long after many of your
peers have gone on to work in the real
• Maybe you have avoided long term
relationships, put off getting married or
struggle to support a family on limited
Whatever your story is..
• You know deep in your heart that
it has been worth it.
• The question is, in this economy,
will it be worth it?
• What is the future outlook for
• How much debt can one incur
before it’s not worth it?
• Will you ever be able to afford a
• These are questions well worth
THE FUTURE OUTLOOK
FOR THE MEDICAL/HEALTH
The Good News…
…is that jobs in the Health
Profession are expected to grow
at a faster pace than most career
industries. The most recent
statistics (2008) by the Bureau of
Labor Statistics reports that there
are over 14.3 million jobs
currently available. Within the
next 10 year period, 2008-2018,
an additional 3.2 million jobs are
expected to be developed.
The fact is that our population is
not only growing but aging. The
demand for medical professionals
to meet the needs of a growing
and aging population is
considerable. With life
expectancy rates increasing, the
need for highly trained health care
providers to treat the population
will continue to be in demand.
Although improvements in
technology contribute significantly
to the quality and efficiency of
care, this is a field that relies on a
highly skilled/trained workforce.
So where will the jobs be?
Currently, health professionals work in
three major settings: hospitals,
ambulatory care and nursing facilities.
While hospitals employ a large
percentage of these providers, hospitals
comprise a little over 1.3 % of the health
care facilities, with 87.3% of medical
care being provided in private and group
Going forward, it is predicted that
ambulatory care will play an even more
significant role in health care and that is
where there is expected to be significant
growth. The largest increases are
expected to be in Medical Offices (34%),
Home Health Care (46%), Other Health
Offices (41%), Outpatient Care (38.6%)
and Medical Diagnostic Labs (39.8%).
Hospitals (10%) and Nursing Facilities
(21%) will have less growth.
Healthcare Professions by
category (Bureau of Labor Statistics, 2008)
Management level (finance & business) -
Professional - 43.8%
• Counselors - 1.2%
• Social Workers - 1.4%
• Dieticians and Nutritionists - .3%
• Pharmacists - .5%
• Physicians and Surgeons - 3.6%
• Physicians’ Assistants - .5%
• RNs - 15.3%
• Clinical Technicians - 1.9%
• EMT and Paramedics - 1.0%
• LPN and orderlies - 4.3%
Office support and administration -
* Note that occupations with smaller numbers have not been included,
hence the percentages indicated do not total up.
The current status of the Medical
Field and Increased Specialization
• As of 2008, there were 661,400
physicians in the US. 12% of them
identified themselves as self employed,
53% work in medical practices and 19%
work in hospitals.
• While 32% of all doctors work in primary
care, an increasing number of doctors
choose to continue on in their education
and specialize. The AMA (2009)
reports the following top seven areas of
– Internal Medicine - 20.1%
– Family and General Practice - 12.4%
– Pediatrics - 9.6%
– Ob/Gyn - 5.6%
– Anesthesiology - 5.5%
– Psychiatry - 5.0%
– Emergency Medicine - 4.1%
Rising educational costs
• We all have heard about the rising cost
of a college education in general.
• It is not uncommon to meet students
who have graduated from college with a
Bachelor’s Degree, with debt in excess
of 50,000 dollars.
• Knowing that, we cannot be surprised
that there are many medical school
graduates who will complete their
education by borrowing in excess of
200,000 dollars. And regardless of the
total amount borrowed, the Association
of American Medical Colleges reported
in 2007 that over 85% of all public
medical school graduates and 86% of
all private medical school graduates
have some level of educational debt.
Is the cost worth the
• Most students who have taken on
educational debt to finance medical
school justify the debt by pointing
out the high earning potential of a
• While the salary is just one of many
rewarding reasons why a person
pursues an MD or DO or DDS, it
makes sense to keep an eye on
current employment and salary
trends. After all, life does not stop
at graduation. There are
considerations about the future to
be made: Residency and Sub
specialization, debt repayment,
private practice, family, etc.
• Bureau of Labor Statistics (2008)
report the annual median salary
for Primary Care physicians at
• The annual median salary for
physicians in some specialty/sub
specialty is significantly higher at
• In general salaries will vary
depending upon geographic
region, number of years in
practice, hours worked, skill
level, personality and
Salaries of the top 4 popular
Specialty Mean Hourly Mean Annual
Family & GP $83.59 $173,860
Internist $91.10 $189,480
Ob/Gyn $101.13 $210,340
Pediatrics $79.67 $165,720
Although these salaries have probably increased
since 2008, it is important for students currently
enrolled in medical school programs to consider these
numbers. These are average salaries of doctors who
have already established some level of medical
practice. Current residency programs may pay a
quarter of this salary annually. Depending on the
length of the program, a new doctor may have to wait
anywhere from 3-7 years before collecting a salary
that approximates these figures. Once you factor in
educational loan repayment, you will have a much
more realistic idea of what your disposable income is.
Dealing with Money Matters
• Whether you pursue a specialty that
can guarantee you higher earning
potential or start up a private practice
earlier than planned, the direction you
take in protecting your financial future is
something that you must start thinking
• Although you have probably spent most
of your time studying, training and
competing for the best educational and
training opportunities, it is now time to
start thinking about the financial side of
the business. Even if you plan on
working in a hospital or group practice,
there are many financial concerns you
will have, starting with your educational
What happens after the ink
dries on the diploma?
• For many of you, the temptation to run
out and splurge, to buy that item that
you always dreamed of owning is
appealing. After all, you earned it after
all of that hard work. And of course,
you’re a doctor now!
• But as appealing as that may be, you
have a lot of other things to consider.
Not only do you have college debt
hanging over your head, you also have
to start thinking about the other things
that you want to accomplish in your life.
– Purchasing a home
– Starting a family
– Opening a private practice
– Doing volunteer work
– Taking a vacation
A Financial Strategy will get
you where you want to go
• In addition to debt repayment, you
need to consider:
– Life insurance
– Disability Insurance
– Educational Expenses for your
– Purchasing a New Home
– Starting a Private Practice
– Saving for retirement
Most financial planners caution young
doctors to take this part of their life as
seriously as they took the years
leading up to graduation. The same
planning and sacrifice has to be
utilized if you plan on attaining the
future you worked so hard for.
Do I jump into a private
practice right away?
A private practice is not for everyone.
At the end of the day, you are a small
business owner. Do you have what it
takes to run your own business?
There are pros and cons to both sides.
Many individuals like the idea of
working for themselves and being able
to reap all of the earnings from their
own hard work. Maybe you would
prefer to work in a setting outside of the
hospital. Perhaps you envision setting
up a practice in a suburban or rural
community that has a strong need for
your services. Many private
practitioners like the independence they
have to forge a practice that fits their
own values, interests and lifestyle.
Or do I work for a hospital
and collect a paycheck?
On the other hand, some people like to
work as part of a team or be in the
midst of the medical advancements and
training often found in the larger
regional or teaching hospitals. Maybe a
group practice appeals to you because
you are able to share some of the
bigger expenses of a practice:
equipment, office space, staffing and
insurance while remaining more
independent. Maybe you just want to
practice Medicine and don’t want the
financial headache of billing, hiring staff
or worrying about HR. This is the time
to visit practices and a variety of
settings, to talk with doctors and get
some advice from your mentors.
Which work setting fits you?
Things to consider if you
start a private practice.
• Start with a Plan - It tells you where you’re going and
how you want to get there. If you know you are going
to need to borrow for your start up, you will have to
have projections, financial statements and a pro
forma to demonstrate what you think it will cost to run
your business over at least 3 years.
• Have you consulted a lawyer/accountant to
determine what type of business you want to
register as? Have you filed the appropriate paper
work, obtained a tax id number, established banking
in the company name?
• In addition to Malpractice Insurance,
Are you covered for corporate liability, workmen’s
comp, health and disability and personal life
• Credentialing with Third Party Payers - Without
these contracts, your ability to compete as a starting
practice is very limited. Even if you have not had a
positive experience with many of the larger health
insurance companies, this is a fast way of getting
referrals. But be aware that the amount of time it can
take to be approved can be problematic. Also, keep
in mind that most procedures must take that into
consideration. Have you applied for hospital
privileges at the local hospitals in your area?
Next steps to establishing a
• Medical Facilities: Finding the right office location
and obtaining the equipment and supplies you need
can be a challenge. Many practices take advantage
of existing clinic space, or rent space in medical
office buildings to save on some of the office build
• Staffing: Hiring the right people is key to a
successful practice. You need to find motivated,
responsible, experienced staff to get things rolling.
Here is one place you don’t want to skimp. Aside
from the nightmare of discovering that your billing
manager has been stealing from you, the cost of
hiring and training new personnel can take up time
that is better spent seeing patients.
• Identifying Sources: Referral, support and back up
coverage are extremely important. As a private
practitioner, you may not have the opportunities to
consult with colleagues on a daily basis, so
networking is extremely important. Good tech
support and a user friendly EMR system can make
Record Keeping and Billing much easier.
Am I what I do?
• It is natural after spending so
much time in your life pursuing the
degree to begin to identify
yourself as nothing more than a
• It doesn’t help if you work 6 days
a week, 8-10 hours a day.
• It’s hard to just be You when you
are continually sought out to field
medical questions by family,
friends, and neighbors.
You are so much more than
what you do!
• Keeping your profession in perspective to the
rest of your life will allow you the balance to
really enjoy the various aspects of your life:
work, relationships, family, recreation. It will
also help you avoid many of the mistakes that
many middle aged professionals struggle with
as they review the direction their lives have
taken. It is very hard to recover the time one
has lost. That’s why a little financial planning
now can help you to have the kind of life you’ll
want years from now. Whether it’s time
teaching or engaging in meaningful research,
traveling on a medical mission, playing golf
on Wednesday afternoons or showing up at
your child’s soccer game, having the time and
financial independence to pursue your
interests is well worth all of the hard work that
you have put into your life.
• The last thing you want to do 40 years from
now is wake up with regrets…that’s not what
all this work has been about.