Chicago — Physicians sometimes forget that they're entrepreneurs in addition to being medical professionals — sometimes to the detriment of the business side of their practice and even to their personal lives.
An afternoon a month spent working on ownership issues, however, can help doctors realize the financial, tax and liability benefits that their practices, like any well-run business, should enjoy.
That was the message proffered by David B. Mandell, J.D., M.B.A., in his seminar, "Asset Protection, Income Tax Reduction and Estate Planning for Today's Plastic Surgeon". He presented this idea at the American Society of Plastic Surgeons' Plastic Surgery 2005, here.Physicians in business
"Doctors do what they do for a living for a lot of reasons," says Mr. Mandell, an attorney who specializes in asset protection for physicians.
"They have an altruistic desire to serve their patients, they're in a selfless profession that commands respect, they want the financial freedom to live well — in short, they want to do well while doing good."
Often, however, physicians overlook their role as business persons.
"Most physicians own a business, their practice, which means they're the C.E.O. and C.F.O. of that business," Mr. Mandell says. "They hire consultants and office managers to do business processes like coding and billing, but what about ownership and financial issues?"
Mr. Mandell tells physicians they need to pay more attention to the following business issues:
"Doctors are often unprepared to deal with such issues," Mr. Mandell tells Cosmetic Surgery Times. "Often they think the only solution for all financial issues is simple — they think all they have to do is see more patients. But that's a very limited and limiting solution, and usually causes stress from overwork and lack of sleep.
"There is a better way to make more money," he adds, "and it doesn't involve seeing more patients."
Mr. Mandell asks physicians to consider what their practices would look like and how their lives might change if they tried to maximize financial benefits from the business side — in other words, make their businesses work for them rather than them working for their businesses.
Improving business acumen
"The fact is that doctors put in almost 10,000 hours of training and 3,000 hours a year working, but rarely is any of that time spent on learning about business ownership," he says.
"My first lesson for doctors is that if they spend one afternoon a month on ownership issues, the return on that investment of time will be much greater than the ROI on seeing more patients."
Mr. Mandell's second lesson to doctors is that they need to become students of what he calls "unconventional wisdom." He advocates non-traditional, non-qualified pension plans; debt-shielding one's home rather than paying down the mortgage; and purchasing cash-value life insurance (rather than buying term insurance and investing the difference in cost).
"Qualified plans are burdened with a host of restrictions, costs and tax limitations," Mr. Mandell says. "Non-qualified deferred compensation plans are relatively unknown to physicians, even though most Fortune 1,000 companies make them available to their executives.