Good Decision/Bad Decision: Being Your Own Boss
Good Decision/Bad Decision
Today’s subject will hopefully be part of a regular series of Monday posts. As you recall, I recently started Gratitude Wednesdays. This series will focus on my past decisions to shed light on some financial wins and losses. My hope is to discover what I did right, and help others avoid my mistakes. Whether epic fail or triumphant victory, these were my decisions. The topic for today is being your own boss.
Do you work for yourself or do you work for the proverbial man?
Good Decision
There are two major economic models for most physicians. You can set out on your own, start your own business, hang a shingle on the door, and begin seeing patients. This was the predominant method for the greater part of the twentieth century. Changes in compliance and the advent of electronic medical records have transformed the landscape. Being your own boss has become a lot more difficult. For this as well as other reasons, most physicians now opt to join a preestablished practice owned by a medical center or other corporate entity.
I have worked in both environments.
By far, the greatest accelerator to my yearly income was moving from being an employee to a business owner. As an employee, I became very efficient at seeing patients, and very popular in the community. The problem was, however, that no matter how hard I worked, I would only see a small portion of the newly generated revenue. Before I got paid, there was a bevy of both non-medical and medical administrators who got their share of the till first.
When I transitioned from employee to owner, my income jumped from X to 5X. I was neither seeing more patients nor working longer hours, I was simply allowed to keep every cent that I made. There was no intermediary to pay off.
Furthermore, there was no longer anyone telling me what to do. In my previous job, I was constantly being ordered around: when to work, when to take call, and how to practice. Being my own boss has allowed me to create a situation where I have complete control. I have to answer to myself and my patients, no one else.
Bad Decision
When I transitioned into my own practice, I quickly learned that being your own boss is difficult. Running a business is time-consuming. On top of trying to give excellent care to my patients, I now had to worry about such things as payroll, hiring and firing, and health insurance.
The daily annoyances can be far more than trivial. And when things go wrong, you are completely on the hook. You forget to renew your medical license. Looks like someone isn’t getting paid until that is taken care of!
The tradeoff for some is too steep. In order to be your own boss as a physician, you have to accept that you will spend less time taking care of patients and more being a CEO. This is a hard pill to swallow, and definitely is not a good idea for someone who is disorganized and doesn’t pay attention to detail.
In Summary
Leaving corporate medicine is one of the best decisions I have ever made. I was able to pay myself more, gain control of my schedule, and feel the exhilaration of being an entrepreneur. The cost, of course, was time and anxiety.
When you strike out on your own, you take a risk. There is no way to predict the troubles that will befall you once you become the name and face of a business. This is the choice you make when you take full responsibility for your work life.
I would be interested in hearing from physicians and non physicians who have struggled with this issue. Did you go into business on your own? How has the experience been? Would you do it again?
I’ve never gone into business on my own but I’ve seen my friends struggle with this. I have 2 architect friends who could have pretty much written this post and just have substituted “doctor” with “architect”. One seems to like the business stuff more than the other. Both admit that owning the business is more work, so it comes down to a money/time trade-off. As so many things do 🙂
For me, at least, it was well worth the time!
I’ll take a crack.
After I got out of the Navy we had no kids, no debt so I signed up for locums, becoming a self employed 1099 contractor. We traveled around on longer jobs moving from beach community to beach community and lived off the per diem and banked the pay. My wife wanted kids, so I next moved to a permanent gig Fee for Service Solo private practice and split a billing office with 2 other docs. Next the hospital forced us to become a group so I became a group owner and experienced all of the stuff you wrote about. I became an expert in medical contracts and staffing as well and there was a lot of learning involved. It was a lot of work and responsibility but very worthwhile. Later we jettisoned the billing office for a billing company as regs and compliance became more difficult. Eventually the hospital jettisoned our contract in favor of going with Team Health (Blackstone) ER, Anesthesia and Hospitalist. (Have we got a deal for you! It’s called a revolving door.) I didn’t want to work for Blackstone so we started a surgery center down the road and made a lot of money there. We eventually sold our practice to Sheridan because we needed to provide continuity to the center once we retired. So I went from a contractor to corporate over my practice lifetime, mostly being the owner of myself instead of being owned. I didn’t dig the corporate gig but I wanted some healthcare and cash flow and that job provided that until I got in Medicare range. My retirement nut was made a long time before we went to the surgery center. There definitely can be more money in being the owner by multiples. There are definitely more headaches. There is also considerably more risk. We tend to live our lives unloading risk. When we’re kids our risk is unloaded on our parents. In school it unloaded on the school. Once we get a job it’s unloaded on the owner. If you become an owner, nobody whom to unload risk.
As I look at FIRE blogs I think it’s this dichotomy of corporate medicine and self employed ownership that drives people out of medicine, even if the “side gig” isn’t medical, even if it pays 1/4 of the medical gig, you’re not being constantly pounded into a piece of meat the thickness of a perfect paper thin chicken cordon bleu. It’s what I like about living in America. If you’re tired of being someone’s boy, you’re free to become da man.
Your work history is interesting. The consistent thread, however, is that you mostly maintained control. I’m like you. For better or worse, I want control over my destiny. I’m willing to put in extra hours for it. I’m not sure I could ever work for someone else again. Thanks for the great comment.
It’s not jus control. Da man pulls out 40% of the cashflow which stays in your pocket when you’re da man. You don’t keep all of that but you get to tune what you keep
Amen, brother.