The Mystery of the Disappearing Healthcare Patient

by Dr. Kelley Mulhern Leave a Comment

Think back to that disappearing healthcare patient who’s been tickling the back of your brain. You know the one – we all have them. The patient who you thought was doing well…getting better…seemed happy…and then one day, just disappeared from your private healthcare practice. Perhaps they were a relatively new patient, or maybe they’d been part of your practice for years. Why did they leave? Did they move away? Were you so successful in your treatment they didn’t need you anymore? Maybe they got laid off and now can’t afford your services.

There are dozens of reasons why a patient may leave your healthcare practice that have nothing to do with you or the quality of your services. But what if they’re not happy with you? Prior to an unsatisfied patient leaving your practice, they may stick around for a while…waiting to see if the issue corrects on its own. When you have a patient who doesn’t complain, do you assume they’re completely happy with the care and services you’ve provided? How do you know for sure?

When a patient disappears from your healthcare practice, how do you respond? Do you just continue on your merry way or do you reach out and try to determine why they left your practice? Obviously you don’t want to pester people…or spend all of your time following up on previous patients. But having a simple and efficient process in place to find out why patients have left your healthcare practice can be invaluable.

Finally, recent research reveals that for every complaint expressed by a customer, there can be up to 25 additional unregistered complaints¹. In terms of your independent healthcare practice, this means that for every patient who tells you they’re unsatisfied with your care or services, there are up to 25 more who say nothing. That’s right…they just walk out your door and never come back. And while they may say nothing to your face, what are they saying about you to their friends, relatives, and acquaintances?

Do you have a process in place to touch base with patients who’ve disappeared from your practice? If so, share it with us in the comments section. Together we can help each other solve the mystery of the disappearing patient!

For more information on building community connections, I encourage you to read my new book Community Connections! Relationship Marketing for Healthcare Professionals. If you want more valuable information about how to Connect with YOUR Community, you can find FREE healthcare practice marketing content, PowerPoint Presentation Jumpstart Kits, workbooks, blog articles, and my FREE “Practice Marketing Planner” Now!

¹Wysocki, AF, Kepner, KW, Glasser, MW. Customer Complaints and Types of Customers. University of Florida IFAS Extension. 2012; http://edis.ifas.efl.edu/hr005. Accessed September 2, 2014.

The BEST Healthcare Practice Building Advice I Can Give

by Dr. Kelley Mulhern Leave a Comment

Meet Dr. Kelley

I’m going to break a cardinal rule of online content marketing today. What rule is that, you ask? I’m going to share – in my very first blog – the single best piece of small business marketing advice I could give to a healthcare professional. I’m not going to make you pay for it. I’m not even going to make you wait for it. Are you ready? Here it is: The absolute best piece of relationship marketing advice I can give to a healthcare professional looking to grow their practice is to connect with your community. Sound simple enough? Let me explain. Best Practice Blue

Chances are, if you’ve found your way to my website, you’re a healthcare professional who’s looking to build their practice. Perhaps you’re about to graduate or are new in practice. Maybe you’ve been in practice for years but continue to struggle. Or, perhaps you’ve had a successful practice but you’re getting bored with your same old marketing events. No matter which category describes you, connecting with your community can help to ramp up and reinvigorate your practice. But what does connecting with your community mean?

The best way to build a successful private healthcare practice is to become involved in the local community, build genuine relationships, and leverage those relationships to the benefit of all involved. In other words, connect with your community, and allow those community connections to help you build the practice and life of your dreams.

Community building is a key component of success. The health and well-being of your community should be in the forefront every day, which means that you need to connect with them on all levels: physically (through office hours), emotionally (by caring for their needs) and intellectually as they are not just patients but friends too. Connecting with those who support my healthcare practice has been one invaluable resource I’ve used to grow my business!

Dr. Kelley 5k Community Event

When I was new in practice, I had lots of time on my hands. I decided to give back to my community by hosting free health workshops for the local Fire Department. I donated thousands of hours to participate in ride-alongs, to create and deliver the workshops, and to create and sponsor 5 K runs to benefit specific Fire Fighters. The 9 workshops became part of a “curriculum” which all First Responders had to go through and covered physical health, nutrition, and stress management. I created a lasting relationship with this Fire Department focused on their needs. But guess what? Over time, as they got to know and trust me, when they required the services of a chiropractor, many of them turned to me.

Dr. Kelley Pendleton Connecting with her Community

Dr. Kelley Mulhern Connecting with her Community

Connecting with your community doesn’t need to take a lot of time, nor does it need to cost you a lot of money. Find a cause or a population you’re passionate about and figure out a way you can make a meaningful difference for them. Remember – it’s not about you…it’s about your community. But if you take care of them, they’ll take care of you! How can you connect with your community?

Maintain or Regain Your Healthcare Practice?

by Dr. Kelley Mulhern Leave a Comment

Maintain or Regain?

Maintain or Regain Your Healthcare Practice?

I had an interesting conversation with my husband Michael, last week. We were talking about how for most people…if they change nothing about their nutrition, exercise, and emotional health habits…today is the healthiest they’ll ever be. For the majority of people who don’t eat well…don’t exercise…and let stress run their lives…they lose health incrementally each day. Thus making today their healthiest day…pretty sobering thought, isn’t it?

In my own healthcare practice, I see patients struggling to regain their health…to get back to a point where they used to be. Therefore, this wasn’t the interesting part of the conversation for me. No…the interesting part of the conversation was when I realized the same truth can be seen in other areas of life. If a person changes nothing about his poor spending or saving habits, today may be the wealthiest he’ll ever be. If a business owner changes nothing about her inconsistent healthcare marketing habits, today may be the most successful she’ll ever be. Yikes!

This discussion reminded me of something I used to tell my patients. It’s far easier to maintain your health (with regular exercise, proper nutrition, and stress management) than it is to regain your health once you’ve lost it. The same is true for money…reputation…fluency in a foreign language…trust…hard drive backups…physical upkeep of a house or business…etc.

Take an honest look at yourself and your healthcare practice. Consider making a list of the things you continuously excel at as well as a list of those skills, abilities, or intangibles you’ve let slide. Why do you excel at the things on the first list – natural aptitude, practice, or force of will? How can you apply those same abilities to the second list? What steps can you take to maintain your business success? In what areas do you need to regain your skills?

If you haven’t already developed your 2017 personal and professional goals, there’s still time! And if you head over to my website, you can sign up for my FREE healthcare marketing tip of the month newsletter and receive a FREE goals workbook to download. As an added bonus, you’ll receive the first two chapters of my e-book, Community Connections! Relationship Marketing for Healthcare Professionals.

Please share your comments, suggestions, and stories at dr-kelley.com and help me create a larger community of successful healthcare professionals!

For more information on building community connections, I encourage you to read my book Community Connections! Relationship Marketing for Healthcare Professionals. If you want more valuable information about how to Connect with YOUR Community, you can find FREE healthcare practice marketing content, PowerPoint Presentation Jumpstart Kits, workbooks, blog articles, and my FREE “Practice Marketing Planner” Now!

You’re Being Watched!

by Dr. Kelley Mulhern Leave a Comment

Before we go off on a conspiracy tangent, let me clarify! While we certainly could have an interesting and compelling discussion about surveillance technology, drones, and Internet monitoring, that’s not the point of this blog. Instead, I wanted to remind you that our actions speak much louder than our words, and people are watching. (If you’re a parent, you probably have a few stories from your child-rearing days where this was embarrassingly obvious.)

How does this apply to a healthcare practice? It’s simple. Every action or inaction on your part is observed and judged by someone. Just as children watch their parent’s actions and learn…patients also watch YOUR actions and learn! Perhaps it’s the server at the local restaurant who notices the cardiologist ordered the fried fish platter. Maybe it’s the cashier at your grocery store who sees the processed junk food in your cart and remembers when you came in to talk to his class about nutrition. Could be the gym owner who realizes you never come in to work out anymore… Or maybe it’s the patient you’ve lectured about living a healthy lifestyle who sees the soft drink or fast food on your desk.

While leadership and making community connections can help provide a solid foundation and growth for your practice, it comes at a price. And that price is that when you’re part of a community…the community is watching. Although people won’t call the exercise or nutrition police on you, they DO take notice when your actions aren’t congruent. The good news is that the community also notices when you sponsor a 5K run, participate in the local PTA, or host an awareness event for a health issue plaguing your community.

Your community is trusting you with their health. Make sure you’re worthy. Lead by example. Strive to make your actions congruent with the messages you send out. No one’s perfect, but we all have areas where we can improve. Do you have an experience to share where someone called you out because your actions didn’t match your words? (Or maybe you called someone else out!) How did you turn it around?

Please share your comments, suggestions, and stories at dr-kelley.com and help me create a larger community of successful healthcare professionals!

Continuing Care

by Dr. Kelley Mulhern Leave a Comment

One of the best areas to focus your marketing and patient education on is continuing care, especially if you are running or hoping to transition to a concierge practice.

Marketing Strategies for Massage Therapists Part 1

Cheaper to Keep ‘Em

Just as it’s less expensive to keep good employees than to continually hire new ones, it’s also cheaper to keep existing patients coming back than to always be marketing to find new ones. Happy patients also do a lot of the marketing work for you. They refer their family and friends to you. That kind of marketing costs you nothing and is the best endorsement you can receive.

Keep ‘Em Coming Back

If you’re practicing in a concierge model, you obviously need to sell continuing care. People aren’t going to join a membership practice if they only need to see you once a year or can stop coming in after the initial complaint is (or feels) resolved.

You have to show them the value of continued care, that it’s good value for the money they spend and for their health too.

Continuing Care Requires Continuing Education

If you want patients to keep coming back to your practice, you have to educate them on how they can benefit from continuing care. You aren’t just selling your specialty; you’re selling overall health and wellness. It’s common sense to us as practitioners that what we do impacts more than the initial issues that brought a patient into our office.

But not all people have been educated on matters of holistic wellness. When we do A, B through Z can be impacted, negatively or positively. I once worked with a chiropractor who told all his patients, “Always run it by your chiropractor.” What he meant was, no matter what health problem you’re having, even if you think it’s unrelated to what he does, let him know about it. Chiropractic does a lot more than heal a sore back or neck. pain

Even if their complaint is something you can’t help with, you can help guide them to the proper resources. That helps build trust between you and your patient, and helps to keep you involved in their overall health.

Structured Education

You shouldn’t take a haphazard approach to patient education. You want to have a structured program in place and apply it to everyone who comes into your practice. The first step is to educate potential patients on the structure of your practice. As soon as some people see “concierge practice,” they think it’ll be too expensive.

We know that isn’t true, especially for patients with high-deductible plans. But we have to show them it’s an affordable model.

Once you get past the money hurdle, you have to educate them on the value of continuing care. You can frame it like a subscription service. Rather than getting a package of makeup or snacks every month for a monthly fee, they get robust health!

You should devote part of your education plan to the benefits of continuing visits after the initial problem they sought help for has been resolved. This is the most important part of educating your patients. You want to build a relationship with your patients that lasts for many years, not just see them when they’re suffering and in pain.

Always Teaching

You want to have steady contact with your patients, but you want there to be value in every e-mail, newsletter, or mailing. If there isn’t that value, people start to think of stuff from your office as spam or junk mail, and they’ll treat it accordingly. spam

Everything you send to patients should have a component of education in it; when you alert them to your holiday hours, you can include information on how regular chiropractic visits can help to improve immune function. If you’re sending out information on chiropractic and kids, let them know you’re holding a clinic on the proper use of backpacks (this is a great one to get people back in the office if they’ve been putting it off during the summer).

It’s the education they’re receiving that creates value in their minds.

Make Your Job Easier

Educating your patients on the importance of continuing care makes your job easier. Patients are more compliant, they’ll trust you more, and they’ll keep coming back!

For more information on building community connections, I encourage you to read my new book Community Connections! Relationship Marketing for Healthcare Professionals. If you want more valuable information about how to Connect with YOUR Community, you can find FREE healthcare practice marketing content, PowerPoint Presentation Jumpstart Kits, workbooks, blog articles, and my FREE “Practice Marketing Planner” Now!

The Cost of Good Employees

by Dr. Kelley Mulhern Leave a Comment

Employees can make or break a practice. Even the best doctor can’t overcome a bad staff. If you want to keep your practice successful, you need to understand the cost of good employees. cost

The Front Line

We all know the cliché that your staff is the front line of your practice. They’re the first impression potential patients and patients get of your practice when they call or come into your office. And many of us emphasize this ad naseum to our employees.

But if they don’t feel valued and appreciated, they aren’t going to give their best. Once you understand the cost of good employees, their frustrations, and how you can reward them, your practice will thrive.

The Real Cost

The real cost of keeping good employees is high, very high. It’s estimated that it costs between 6-9 months of salary to replace a salaried employee. For high turnover, low paid positions, which account for many medical office jobs, it costs 16% of the annual salary to replace employees making less than $30,000 per year.

dollar To replace employees making between $30-50,000 a year, the cost is 20% of the salary. These costs account for things like hiring and training expenses.

We all know the cost in time and stress can be even higher. The hiring process is ponderous and frustrating. And some people interview really well, but turn out to be less than ideal once hired. It puts additional stress and responsibility on your long term employees too. They have to pick up the slack of constant turnover, and spend time training new co-workers. If you’ve ever trained someone you know how tiring it can be.

Hard vs Easy

Some positions in a practice are not necessarily hard, as in difficult to perform or requiring a lot of skill. And that’s why many people in those jobs are paid a low hourly wage, don’t get health insurance, retirement plans, paid holidays, paid vacation or even paid sick days.

But believe me, as someone who has been on both sides of the desk, just because a job isn’t hard doesn’t mean it’s always easy. Patients take out their frustrations on front desk and nursing staff in a way they wouldn’t dare with their doctor.

Reward Them

Not all practices are raking it in all the time and so can’t always afford to reward staff with pay increases. However, if you’re doing well, that certainly isn’t due to your efforts alone. Your staff is part of your success and you should share it with them.

There are other ways to reward your staff so they feel appreciated. Remember their birthdays and buy them a gift. Bring in lunch for the office occasionally. Give them a gift card when they’ve gone above and beyond for a patient. clouds

Even just asking if everything is all right when it seems like they’re having a bad day can go a long way to making sure they feel appreciated.

Listen to Your Staff

From time to time have individual meetings with each member of your staff. Ask them if they have any concerns or problems that need to be addressed. Sometimes a good venting session is all they need to feel better.

Have Their Back

We all know that when you deal with the public there are just certain things you have to put up with and most people are generally pleasant enough. But every office has a patient or two who are a real challenge.

You probably know more about the reasons behind that than your staff. You see a person frustrated by a health problem. Your staff just knows there’s someone who is nasty to them during every interaction. If your staff understands the reason behind the behavior, they’ll be more understanding.

That said, no patient has the right to abuse your staff. If you have a patient who consistently does so, you need to address their behavior directly with that patient. No one should be expected to accept abuse as part of their job.

Cheaper to Keep Them

It’s cheaper to keep good employees happy in terms of money, time, and aggravation. (Not to mention the well being of your practice.) Things run more smoothly when a team has been working together for a long time.

It gives a better impression of your practice when patients see and speak to the same people each time. When there’s a lot of turnover, people start to wonder if the problem is you.

It’s better for everyone, yourself included, when the office has a positive energy or feel. Patients will pick up on a happy office and want to be a part of it!

Metrics to Measure By

by Dr. Kelley Mulhern Leave a Comment

In order to gauge the success of your practice, you need to track certain data. In a sea of numbers, you need to know what metrics to measure by. ruler

Revenue Per Visit

It’s never easy to raise your fees but sometimes it’s necessary. You don’t want to do it arbitrarily, on January 1 for example, because it will seem to your patients, well, arbitrary!

You should have a solid number to base rate increases on. That’s what revenue per visit will give you. To calculate your revenue per visit, calculate the average amount you collect from patients and subtract the average cost of conducting a visit. Now that you have that number, you can determine if you need to increase your fees. (For additional information and guidelines, you can consult the most recent edition of the Physicians’ Fee Reference book.)

Not Always Dollars

Revenue isn’t the only metric you should judge your practice on. If you want to have long term success, you need to have a high patient satisfaction rating. You can design a brief survey for patients to fill out rating you on things like waiting time, ease of scheduling, how well you listen, and how helpful your staff is. A simple 1-10 rating on a few key questions is all that’s required to get some good data here.

stars-1128772_1280 If patients don’t feel they can address these issues with your office, you can bet they’ll address them on public forums like Yelp and Zocdoc and give you a poor review. Give them the chance to explain any frustrations to you.

Not Always Patients

It’s not only patient satisfaction you should be concerned about. How happy is your staff? How much turnover do you have? Unhappy employees aren’t going to treat patients the way you’d like them to be treated. Unhappy staff quit, and it’s frustrating for patients to see a different face each time they come in. It makes you look bad and it’s expensive to continuously hire and train new staff.

And honestly, a lot of doctors don’t know how to run the front desk. Some don’t even know how to schedule an appointment, let alone the complicated stuff like insurance billing or sending out blood for lab testing . If your entire staff quit without notice (whether that’s one person or several), how bad off would you be? You probably don’t want to find out.

You likely give feed back when a staff member does something you’re unhappy about. Give them the same opportunity to provide feedback to you. And make an effort to tell your staff when they’re doing something right!

Traffic Patterns

What times of day are you busy and slow? Do you open at 10:00 and wait until 12:00 for your first patient to come in? It’s easier for working people to come in before work or during lunch than late morning or late afternoon. Would your patients benefit from evening appointments? open

Start asking your patients if they’d have any interest in Saturday appointments. For people who are paid hourly, they lose money if they aren’t at work. Saturday appointments might work really well for them and increase patient satisfaction for you!

There’s a lot to be said for working a typical 9-5 schedule, but even if you were available one late evening a week or one Saturday a month, it might help increase your patient load.

Slow Times

Make note of busy and slow times of year too. Summer is typically slow for many practices. Use those times to go on vacation, to do renovations, or to do major systems upgrades. Sometimes if makes financial sense just to close the office rather than pay staff when it’s quiet.

Referrals

You should know where every patient who comes into your practice was referred from. By an existing patient, a Facebook ad, Google, another physician? If you want to grow you practice,you need to know where to concentrate your energy and money when it comes to attracting new patients.

If you aren’t getting patient referrals, something is wrong with your patient satisfaction or education. How can you fix it? If you aren’t getting a lot of referrals from people who were Googling, you need to improve your SEO.

If you aren’t getting traffic from ads you’re paying for, you need to rethink your advertising strategy. If you aren’t getting doctor referrals, you need to work harder at building relationships with your colleagues.

If You Don’t Measure It, You Can’t Improve It

You should always be striving to improve every aspect of your practice. And maybe you are, but if you aren’t using metrics to measure your improvements, you don’t know what impact those improvements are having. Or not having. And that wastes money, time and energy. If you don’t measure it, you can’t improve it.

Marketing Among the Madness

by Dr. Kelley Mulhern Leave a Comment

Summer is over and everyone’s lives are hectic again. When you’re marketing among the madness, make sure your message doesn’t get lost. Vacation

Vacation is Over

Summers tend to be slow for a lot of practioners. We hope you used your slow summer season productively. But summer is over now and we need to make up for the downtime and ramp up business through smart marketing. However, during this time of year, when people head back to reality, your marketing has to compete with all the other things vying for the attention of potential patients.

Make Partnerships

The two main things taking the attention of your potential patients right now are school and work. So instead of competing with those two things; partner with them! If you’re a chiropractor, hit the schools! A big concern for parents is the heft of backpacks their kids carry. Some schools are doing away with lockers for safety reasons and that means kids have to haul around all their books.

Offer to do a talk on backpack safety on the first parent’s night of the year (usually within a few weeks of classes starting). The parents are already at the school, so you have an automatic audience!

Human resources departments are always looking for ways to improve employee health because it saves them money both in insurance premiums and productivity lost to sick days. What are some large employers in your area who could benefit from wellness talks? If you have an employer near you that has shift workers, offer to talk about how to get good sleep. The WHO has classified working nights as a probable carcinogen. There’s your opening pitch. Not only is poor sleep dangerous to a worker’s overall health, but it’s also dangerous on the job. Lack of sleep is responsible for 274,000 workplace accidents a year.

Hit the Field

School sports are another area getting into high gear as we go into fall. One of the most controversial aspects of kids playing sports is head injuries. In the not too distant future, we may see sports like football eliminated in many schools. Until then, there are still plenty of kids who play and you can teach parents and coaches how to keep them safe. Helmet

Of course, head injuries aren’t the only injuries student athletes suffer. There’s plenty of room to talk about other safety measures and even things like proper nutrition and hydration for young athletes.

It’s Beginning to Look a Lot Like…

Christmas is how the lyric finishes and while it seems to start earlier and earlier each year, there are still some holidays between now and then you can incorporate into your marketing. Halloween is a fun holiday to do a bit of marketing.

If you have a lot of children or families in your practice, have a contest during the week of Halloween for the best costume. Even if you just stay late and hand out candy at the office, this is a good will gesture for your community. Candy

For Thanksgiving and Christmas, you can hold a food or coat drive. Coat drives are especially effective because nearly everyone has a few in their closets they’d be happy to get rid of and see go to a good home. Make sure you have gift certificates for sale and that you let patients know they’re available. What’s better than the gift of health?

You can also hold an open house. Do this soon after Thanksgiving as people tend to get booked up with parties and events the closer we get to Christmas. A great way to get people to attend is to hold a raffle. Sell tickets for a small fee with the money going to a charity. The winner must be present at the time the names are drawn in order to claim the prize.

Use it or Lose it

HSA dollars that is. Many plans require that the money set aside in an HSA account be spent on qualifying medical expenses by the end of the calendar year or it’s lost. This is your patient’s hard earned money! Encourage them to make appointments before the end of the year, not only so you can help them devise health-related New Year’s Resolutions, but so they don’t lose that money too.

Health is a Priority

Health is a priority for most people, but life can get in the way. Devise your marketing strategies during this time of year to push those health priorities to the forefront. It will mean better health for your patients and a healthier practice for you!

Transitioning To A Concierge Practice

by Dr. Kelley Mulhern Leave a Comment

To transition or not to transition, that is the question. What are the factors involved in transitioning to a concierge practice?

Education

The biggest fear most doctors have when they consider transitioning to a concierge practice is the loss of patients. When many patients hear the words “concierge practice” they think they can’t afford it.

This is where education comes in. Educating your patients on what this transition means is the single biggest factor that will determine whether your transition succeeds or fails. That means you will have to go above and beyond to help your patients understand that yes, they can still see you and no, they won’t go broke doing so.

Sending out a letter detailing the changes is a good way to start the education process. Next, you many consider scheduling one on one meetings with each patient or with those you think would be interested in the idea or conversely, those you think will be most resistant, to explain what the transition will entail.

If you have too many patients for one on one meetings, you can hold an informal “Ask the doctor” night where patients or potential patients, are free to ask any questions about the new practice model.

Preparing Staff

Your staff is more important than ever when you are transitioning to a concierge practice. The first thing most prospective patients will ask is if you accept insurance. If all they get in reply is a curt, “No,” most will hang up, and you will lose a patient.

There are many ways to structure a concierge practice. It doesn’t automatically mean that patients can’t use their insurance. Will your office file on their behalf and assign the benefits to them? That means that they are paying out of pocket up front, but you want the first half of this sentence to be the first thing your staff tells a potential patient, not the second half.

If you are going to eliminate insurance from your practice entirely, people will feel much more comfortable if they know the pricing up front. Think about it, would you order from a restaurant that had no prices on the menu? Establish a price list for your services and make it widely available; on your site, in your office, and included with any advertising you do.

Realistic Expectations

While you may eventually make more money with a concierge practice, it may not happen right away. And not all of the money will come from your patients. A lot of what makes concierge medicine appealing is the ability to get rid of lots of overhead which will save you money over time.

You need a big runway to launch this; some experts recommend having as much as $100,000-250,000 set aside to sustain your practice during the transition.

The ability to see fewer patients, spend more time with each one and make more money is also appealing, but when people are paying out of pocket, some will demand greater access to the doctor. Know that you may be dealing with patients after office hours than you are currently. Your days may not be as rushed and hectic as they were when you had a traditional practice, but they may be more intense.

Market, Market, Market

While some existing patients may not be interested in being with a concierge practice, there are plenty of people out there who would love to find one and so far haven’t found one in the area. There are also people who have not yet heard of the concept but will be really interested in this kind of care.

When you decide you’re transitioning to a concierge, you need to be prepared to mount a full-on marketing blitz. If you have been frugal with your marketing budget, you may need to spend some real money while you’re transitioning to a concierge practice. You need to do some market research to make sure the money you are spending is reaching a receptive audience.

Find Support

Concierge medicine is in its infancy but it’s been around for about two decades now so plenty have come before you. Some have failed, and some have succeeded, and both have advice to share. Seek out other practitioners and ask if they would be willing to talk to you about what worked and what did not work for them.

A Worthwhile Transition

If you are considering transitioning to a concierge practice because you think it will make you wildly rich, you’re doing it for the wrong reason and it likely won’t. But if you’re doing it because you want to provide your patients with a higher level of care, the transition will be worthwhile.

Financial Challenges Facing Physicians

by Dr. Kelley Mulhern Leave a Comment

There are unique financial challenges facing physicians. We earn more than the average person but we have some problems that our contemporaries do not.

Student Loan Debt

The average student loan debt for recent medical school graduates is nearly a staggering $200,000. The average salary for a primary care physician is $195,000 per year, the average for a specialist is $284,000, the average for an “alternative care provider” can be anywhere from $30,000 to $150,000. Add on another $8,000 in non-education related debt (most likely due to credit cards) and perhaps a mortgage. Being a resident or new in practice may not pay well, and there isn’t time for a second job, so a lot of life’s expenses get charged.

You Have a Late Start: Part One

Doctors start their careers full time much later than their contemporaries. Most people who attend college will start working full time in their early to mid-twenties. A doctor may not start earning full-time money until their early thirties. That also means they get a later start on paying back student loans.

You Live the “Doctor Lifestyle”

Rolex You worked hard to become a doctor, and you want to reap the benefits of that hard work. For many doctors, that means living the “doctor lifestyle” complete with big house, fancy car, expensive watches, vacation home; you get the idea. All of that not only adds up, but it might also be distracting you from paying off your student loans and investing.

You Have a Late Start: Part Two

Because doctors spend so many years pursuing education, they get a later start at other important things too; namely starting a family and investing. Delaying parenthood means you have less time to save for college if you want to help fund your children’s education. Currently, the average cost of one year of college ranges from $9,410-$32,405 depending on whether the college is public or private. By the time a newly minted doctor’s kids are ready for college, we can only shudder at how much higher those numbers will be.

The most important way to grow your money through investing isn’t how much you invest but how long you invest. Here’s an example of the power of time when it comes to investing:

Person A invests $10,000, and because they started young, that money is invested for 40 years. Person B, a doctor, gets a later start and invests $50,000 for 20 years. Both get a rate of return of 7%, which is average over a long period of time. Neither person invests any more money, just those initial amounts.

At the end of 40 years, Person A’s $10,000 has turned into $149,744.58. The doctor’s $50,000 has turned into $193,484.22. The doctor only made $43,739.64 more even though they invested five times more than what Person A invested. That is the power of time when it comes to investing your money.

What Can You Do?

The first thing to focus on is debt repayment, especially credit card debt which can have interest rates well into the 20% range. Student loan debt usually has a lower interest rate, so that can be secondary to credit card debt. You need a plan to pay off debt, just throwing whatever is left over at the end of the month isn’t good enough. It’ll take longer and cost you more. Follow either the stack or snowball method of debt repayment. Both have their pros and cons, but both are effective methods of debt repayment. Snow

Once you have all, or at least a big chunk, of your debt out of the way, you can focus on investing. Don’t let the fact that you’re late to the party make you ignore one of the most important tenets of investing; limiting risk. The same rules apply to you that apply to any other investors, ignore them at your (portfolio’s) peril.

Another big factor is avoiding “the doctor lifestyle” and lifestyle inflation, which can happen to anyone. Lifestyle inflation means that every bump in income means a big upgrade in lifestyle, a bigger house, a newer car, first-class flights and five-star resorts instead of flying coach and booking an AirBnB. Invest those income bumps rather than upgrading every facet of your life.

If the thought of managing your money is just too much to deal with when you’re busy with your career and family, there’s nothing wrong with getting some help and advice. There are a lot of generic financial advisors out there, but because of the unique situations doctors find themselves in, look for one who specializes in helping doctors manage their finances. One size does not fit all when it comes to financial advice.

You Still Have an Advantage

Don’t let all this get you down. As a physician, you have a great deal of earning power and, unlike some jobs where you’ll be pushed out upon reaching a certain age or physically unable to do a job anymore, you have many years ahead of you to earn money.

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