WCI #227: Starting a Medical Practice

This is the White Coat Investor Podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high income professionals stop doing dumb things with.

Their money since 2011.

Here is your host, Dr. Jim Dahli.

This is White Coat Investor podcast number 227. Starting a medical practice, do you ever find yourself wishing there was somewhere to go to ask your finance, insurance or investing questions? The White Coat Investor community is a great place to turn. We have a thriving community across all of our social, Facebook, Twitter, Instagram, Reddit and our WCI forum. We have been discussing solutions to your money problems since 2011. Join the Conversation with thousands of other white coat investors. Follow WCI on your favorite social media platform for financial resources, tips and strategies. Just head to your platform of choice and search for the White Coat Investor. You can do this and the White Coat Investor can help. All right, welcome back to the White Coat Investor Podcast. It's been a little bit since we recorded one and so it feels like, you know, I haven't seen you in a while. I guess I never see you, but you get to see me. Even though you get these podcasts once a week, we actually don't record one every single week. In fact, today we've been recording a bunch of milestones to Millionaire podcast. I hope you've checked that out. If you haven't, they drop every Monday. They're short episodes, they're only about 15 minutes long total. Basically inspiring stories from other doctors and white coat investors who have reached milestones. Whether it's getting back to broke and we have one coming up soon, that's just somebody who paid cash for a car. It doesn't take much, but if you're interested in being on that whitecoatinvestor.com Milestones is where you can apply to do that. You know what the other big news around here is? Sign up for wcicon. Right? WC Icon is our big conference. The Physician Wellness and Financial Literacy Conference goes live next week on Tuesday, September 14th at 7pm Mountain Time. Now this thing's gonna sell out. At least all the other ones have sold out and relatively quickly. The last time we had one of these that was in person is sold out. A third of it was sold out in seven minutes. So I'm not kidding. Mark your phone 7pm Mountain time on Tuesday. If you wanna come to this thing. I don't know how quickly it's gonna sell out, but. But I'd be very surprised if it doesn't sell out. And so if you want to come sign up early, get your room early, right? Because the block price is only good for a certain number of rooms, and then you got to either pay more or you got to go stay somewhere else. So make sure you get your room early, make sure you sign up early, and hopefully we'll be able to meet face to face at that conference. It's going to be awesome. This year. We got some great speakers coming. We got Bill Bernstein coming back. We got James Lang coming in. You may know him from his book, Retire Secure With. We have nationally syndicated Money columnist Michelle Singletary. Obviously, I'll be talking. Physician on fire will be there, Passive income md. We got a whole lineup of awesome talks, tons of wellness activities. You're gonna love it. All right, sign up is Tuesday, and I cannot guarantee if you don't get on and sign up at that time that you're gonna be able to come to the in person version. Now, there is gonna be a virtual version. It's also the backup if something happens with the COVID pandemic. But we expect to run both an in person and virtual hybrid conference. So that we think is going to be really pretty spectacular. All right. Speaking of COVID Holy smokes. What happened? This delta variant is crazy. All of a sudden, now young people are getting it. We only have, like, a third of the number of cases. We had it at its peak here in Utah, and yet our ICUs are all full of COVID patients. It feels like we kind of blew our wad too soon and. And shut down all our Covid units, and now it's time to open them all back up. I'm seeing more people in the ER with COVID now than I ever did last winter. And so for those of you who are on the front lines that feel like this thing is just going and going and going and going. I empathize with you. I'm right there with you. It does feel like it's gonna last forever sometimes, but it's not. It's gonna go away. Pfizer vaccine got approved by the fda. Apparently, some people have been holding out, waiting for that approval, so they're now getting vaccinated, too. And hopefully we are coming to the end of this at some point in the next year. Until then, hang in there and know that what you're doing is appreciated. It is hard. I know a lot of your wells are kind of running dry with empathy. I hear it in the ER from my partners. I hear it from the nurses. People are about to wring the neck of the anti Vaxxers. I mean, I saw an article today in the paper that basically said if you haven't gotten vaccinated, you shouldn't get ICU level care. That was actually the argument being made. And I can see how people can feel that way after a while. But remember your doctors, you took an oath to take care of people. Not necessarily to judge them, but to take care of them. I know it's hard sometimes, just like it's hard to take care of people that are spreading their tuberculosis all over the place. We see people every year that don't get flu vaccines and end up hospitalized because of flu. We see people hurting themselves all the time with alcohol or cigarettes or drugs or whatever. We can be empathetic and we can maintain our humanity even in a pandemic. Thanks for what you're doing. I'm proud of you for what you're doing. It's not easy. And hopefully as you go into work or you come home today, while you're listening to this podcast, you do feel appreciated. I hope somebody told you. Thank you today. If not, let me be the first. A couple other things coming up. Passive Income MD has got some stuff coming up. This podcast drops on the 9th tomorrow. I'm speaking in PIMDCON. This conference is all virtual. It's free. You can purchase kind of an upgraded premium version if you want. That gives you access to it forever. But for the next three days, the 9th, 10th, or sorry, 10th, 11th, 12th of September, PIMDCON is going on. So you can sign up for that whitecoatinvestor.com PIMDCON and you can sign up and watch those interviews and presentations virtually over the next few days. Toward the end of this month, Peter is also opening up Passive Real Estate Academy. This is his online course. It's a cohorted course. You can only sign up a couple of times a year. If you've been waiting for that to open back up, to learn how to invest passively in syndications and in private real estate funds, this is the course for you. It's not about direct real estate investing. If you want to go buy the property down the street and rent it out, this isn't going to teach you how to do that, but it's going to teach you how to evaluate syndications and funds and invest passively in that way. All right, we've got an interview today. I've got a couple people coming on a doc, as well as his wife who is the practice manager. We're going to be talking about starting a medical practice. I think It's a great thing to do. I'm a big fan of ownership. I think when you own your practice, you're able to get better care. I think you have more control and less burnout over your professional life. And in general, you make more money, too. So it's mostly all positive, although it does take some work up front. But we're gonna be talking about that work up front during this interview today. Let's get them on the call. All right, today I have Will and Julie on the White Coat Investor podcast with us. Will is a plastic surgeon. Julie is his wife and also the CFO of the practice. Welcome to the White Coat Investor podcast.

Thanks. Good morning, Dr. Dahl. Happy to be here.

Julie, I believe it was you, wasn't it, who submitted some guest posts in the past to the White Coat Investor blog? I think we've published from you before, correct?

Yes, we've done three posts for you in the past.

Awesome. And we appreciate that. Today we're going to talk a little bit about what some of those posts were about, which is about starting and running a medical practice, which you guys have had some pretty significant success doing. How. But before we start talking about your practice, I want to hear about each of you individually a little bit about your upbringing and how it influenced your thoughts on money. So let's start with you, Will, and then we'll hear from Julie.

This will be interesting thoughts on money from our two different perspectives. So I am originally from San Antonio. That's where my practice is today. I grew up one of six children. My dad is still practicing oral surgeon in town here. My mother's retired dentist. And growing up I was exposed to solo private practice with my dad in oral surgery. In fact, I worked several summers for my father doing everything, calling on insurance and sterilizing instruments and you name it. And it was an eye opening experience. And so I think that was my first exposure to solo practice and business actually, as far as money goes, I was always pretty, I don't know, not penny pinching. I just didn't spend a lot of money. And that's probably because we had six kids. And so a lot of hand me down clothes, that sort of thing. I don't know. I don't put too much emphasis on money still today, whereas Julie is more of an engineering background. And so I suspect she'll have a little bit of a different perspective on it.

I guess that's why she gets to be the cfo. All right, let's hear a little bit about your background, Julie.

Just as default Nobody else wanted that role. But my background is my family is probably more frugal and budget conscious than Will. My father was a PhD psychologist, so he did well, but definitely not to a doctor level. And my mother stayed at home, and she was always very conscious budgeting and planning for retirement. And they followed the Boglehead investing strategy, and they did retire at 60 and are doing quite well.

Awesome.

Boglehead, right?

It's Jack Bogle, so I assume it's Boglehead. But, you know, you're not the first one to hear it. Boglehead. You know, I even see people throw an extra G in there from time to time when they spell it. But, you know, it's like my kids, when they mispronounce something, I'm just happy to see that they're learning words from reading, because that's what it always tells me. So tell us a little bit about each of your education and careers up until the point where you decided to open a practice.

Excellent. I'll start there then. So undergrad is actually where both Julie and I met. University of Texas in Austin. I was a sophomore, she was a freshman. She was doing engineering, and I was doing microbiology and a lot of hanging out. I had anticipated going into oral surgery, so I was part of the dental interest group. And as the DAT date approached, I started getting cold feet because I knew I didn't want to do anything other than surgery. And so if you aren't at the top of your class in dental school, that might not happen. So I decided to go to medical school, where surgical fields were more plentiful, and went to University of Texas Medical Branch in Galveston. And actually, I thought I would do ent. So head and neck focus, I rotate on ent. Didn't like it. I liked hand anatomy. Thought I might do ortho hand surgery. Didn't like it. But plastic surgery did some of both of those things. So my older brother, who was two years ahead in medical school in Southwestern, was actually going into plastic surgery. And he started to tell me stories of types of cases that he was doing and how interesting it was. And so that's how the plastic surgery interest peaked. And then I matched into Penn State in Hershey, Pennsylvania. After that, my first job was with the University of Iowa. We'll probably talk about that later. In an employed kind of position. It's kind of a hybrid because it was in a private practice setting. And I'm sure we'll talk about that more later. And then I came here.

Okay. And how about you, Julie?

So Yes, I graduated and went into oil and gas engineering. I worked for ExxonMobil for about 10 years. We were able to kind of follow in his different job moves. But after 10 years it was starting to stress our marriage a little bit to be separated. We had spent most of our marriage in some sort of commuter relationship. So we made the decision for me. We went to Iowa to retire and stay at home full time. But then when Will wanted to start this practice, which has been his dream for a while, I agreed to help out.

So let's talk about the motivation to open a practice. I mean, this was something both of you were obviously involved in. What was the motivation? Why did you decide to go this route? You're in a swanky employment situation, private practice, and presumably doing okay. But you wanted to run the show. How come?

So I think it's a personal, I don't know, behavior or drive, I guess. I always had issues in university training settings too, with what I call institutional creep. Just the administrative overhead and dictating the things that you do and the way you do them, often in an inefficient way. The employees that you would end up encountering are. Some are spectacular and some probably shouldn't be there. And that was always very difficult to manage in the university setting. And then the kind of glacial process for decision making and going through several committees before something, you know, they have to think about doing something before they can actually start talking about it even. I don't, I don't understand the process there. And so I saw that in university training and then in my initial job, although it was university employed, I was in an entirely different location taking over a retiring solo surgeons practice. So it was kind of this hybrid model. And I thought, well, you know, he has managed his practice for 30 years. The folks who recruited me certainly seem to be excited about keeping that as somewhat hand arm's length kind of separate entity. But as I was there over the years, the institutional creep happened and I could see that that was not going to be the case long term, even though it's still kind of the case at the time. And so I decided we needed to do something about it.

So you went for the nuclear option?

Yes, I did. Well, it was, as Julie alluded to earlier, it was always something I had in the back of my mind. As you know, it wasn't a big scary option to me. I think that it is to many people because I saw my dad even before I was working with him in the summers. I got to see him struggle initially trying to start his practice, he was kind of an itinerant oral surgeon. He would carry his sterilized instruments around and Craftsman tool chest, and he put in the Suburban and he would drive around Central Texas into dentist's office doing extractions. And I mean, really, you know, struggle, struggle, struggle. And I knew. I knew as bad as it could possibly be, it would not get like that. You know, Google and the way you can market and the skill set that I had, I knew it was never going to be that bad. And I certainly felt that we could manage. And so it wasn't as scary, I think, as many people see it, which keeps them from doing it. And then I'm going to spill Julie's story here probably a little bit was she wouldn't let us commit to it until she did a risk analysis and had a business plan. And so she could factor out or calculate out a return on investment, actually. And then once she kind of proved it to herself, it was, hey, okay, let's move forward. And we did.

What'd you think when he first came home and said, you know, this isn't going to work out, I need to open a practice? Were you totally supportive right from the bat, or was that scary to you, Julie?

No. And one thing that will may share is we had thought originally after residency, you know, sort of our grand plan was actually to move to Houston and set up practice there, and then I could continue working with Exxon Mobil. But I was pregnant at the time with our second child. We weren't really sure about health insurance. We weren't sure about a lot of things. And so I kind of pulled the plug on that because I just wasn't comfortable at that time, especially with him having no operational experience outside of residency. So I definitely got cold feet a few times. It's just they'll think that when we made the final decision, it was a final decision.

Tell us about this analysis you performed.

Yeah, so I just. Economic analysis. So basically I just looked at what I projected his income to be over the next. I think it was 10. It was either 10 to 20 years, you know, at an employed position, and then did a calculation based on what I would project his income at a private practice based on kind of standard physician salary and also taking into account some tax incentives that are available for small business owners. And it came out to make sense. Obviously, there's still a huge leap of faith there because you got to actually earn that revenue, so. But all indicators seem to point that that was possible. I had great faith.

Well, as well she didn't factor in a global pandemic into her risk analysis.

Yeah, yeah. I think a lot of surgeons really did not enjoy last March, April and May. No, I think a lot of people had saw their income drop by 80% or more. And if you own a practice, you're not even covering overhead at that point, so it's a big deal. So let's get into the nitty gritty, the nuts and bolts, if you will. Tell us about the steps to open a practice in as much detail as we have time for.

Excellent. So we started talking about it earlier. Was the business plan. Well, I guess we could take a step back. Right. The first decision is to decide to do it and overcome that fear. Having the business plan can help you do that, or it may not. It may, you know, prove to you that where you are planning to open up a practice and the type of practice that you're thinking about setting up may not be the, the best choice. So location has to be factored in to your business plan. And in your business plan, you should have estimates for overhead expenses and employee salary, all of those things. Rent in that area, referral patterns, which hospitals, what referrers, what types of cases, what is the insurance climate for reimbursements in those areas, and who are your competitors? I think you need to really look at that. It will vary depending on what specialty you are in, most likely, I would assume. But for us, that was critically important and all of that needs to be factored into the business plan. And even though it may not be right, our business plan ended up being actually fairly wrong in many ways. The most notably, we had factored in trying to do a 50, 50 balance of insurance and cosmetic procedures, and that actually ended up not being the case. And we'll talk about that later. But yeah, the first, first part is a great business plan. We actually benefited from having other mentors around whom we could tag in and help out with. Business plan. We borrowed one from a previous resident of my program who had borrowed it from a private practice surgeon that he had worked with. And so it just kind of got handed down, handed down, you know, massaged and, you know, it's kind of just plug and play. You know, it's how much would you estimate for phone service, Internet service, malpractice insurance? Right. That would depend on your location and what type of practice you're going to have. And you just kind of plug and play and then back calculate kind of how, how much income you think you might have. I think we used mgma. I'M blanking on the.

That's the group that does the salary surveys for employers usually, correct?

Yeah. Yes. Right. So we based it loosely on that. And also what the business plans handed down were. We'd read books as much as we could on it, and that was it.

Well, we do have that. We have a Google Drive. It's obviously outdated, but we're happy to share that with anyone. Just go to alamoplasticsurgery.com and say, Send us your information. And we're happy to share that with anyone who might find that useful. The next step was really approaching banks to get a business loan or a line of credit, which that can be very daunting for someone who has at that point in time. We hadn't even had a mortgage before. But putting together the business plan and we put together, like a very simple presentation really helped us approach banks to get that line of credit, which we.

Chose rather than a small business loan, SBA loan.

And how many banks did you have to. Did you have to go to before you got one?

We probably approached 15 at least. Probably 11 told us no or tried to redirect us to the SBA loan approach. And I think at the end of the day, we got about four yeses. But there was a clear winner as far as the terms and the interest rate on who we ended up choosing. Now, to note, at this point in time with our savings, we did have a significant amount of savings set aside to start this practice. So the bank being sort of our backup plan if we needed it, which was very advantageous. Covid happened because we knew we had a fallback plan if needed.

Okay, so you got the loan. Now what happened next?

So finding the specific location, so office space, setting up things that you can do ahead of time. So very early on, I applied for insurance contracts with the major insurers in San Antonio. And that process has an incredible lag time. I think it's intentionally probably prolonged to get people who are not prepared for that to trap them in panic into accepting any contract that's offered. And so we started that several months in advance. We also could start working on a website, which is very important for our type of practice. So we had to put a lot of thought into that, A lot of time learning about websites. We actually ended up making our own website rather than going with a service or consultant. I'm not recommending that for everyone. That was kind of a. We have some time and let's try and figure it out ourselves, you know, just so we know what all is. Involved.

How hard can it be? That white coat investor guy did it, right? How hard can it be?

I actually did. Look, I think you had a blog or a forum on doing it, so. And by ourselves we contracted a website designer and developer through upwork. So we did not do it completely by ourselves. We did have help, but it was not through a marketing agency.

Yes. And that was a source for financial savings as well. Although as much time as we ended up putting into it, you know, on balance it probably didn't, didn't make a huge impact financially. But it was a learning opportunity for us and we know it was nice to go through a wireframing process and try and think about the website from usability standpoint and clean design. How can you minimize buttons but yet also allow people to quickly find what they're looking for? What opened my eyes was all the, the metadata, the Google search data that has to go into the website. Yeah, it's amazing.

Search engine optimization. Welcome to my life. You want to be found. For sure. You want to be found. I know it well. In fact, I now have a full time employee that. That's all she does.

Wow.

It's definitely both an art and a science and there's a lot that goes into it. But if you want to be found online, it's, it's definitely part of it. Right. You want them when they, when they Google San Antonio, you know, plastic surgeon, you want to be the first hit, not the 27th.

Correct. And that actually did the process with the website. It gave us a quick education on marketing. Right. With Google. And so it was a great segue for Julie then to take over marketing for us. And so it was, it was helpful.

I think we're going to get into marketing, but at this point, you know, you've got a lease, it sounds like you've got a loan, you've got insurance contracts, you've got a website.

Yes.

What's next?

So, clarification. So the insurance contracts we did not have, they essentially return contracts that were not in keeping with even Medicare. Actually some of the private or commercial plans were below Medicare for plastic surgery and for our procedures that we would code for. That's not possible. There's no profit found in those procedures at those rates. And so we ended up not taking those insurance contracts ultimately. And so we had to revamp our business model to then entirely cosmetic, which was not our intended goal. So that ended up changing. But yeah, it was setting up all the other things. Personal insurance, a health insurance plan, which Julie can talk about because that Was one of those, I don't know, speed bump that we had to overcome first before committing. Julie, you want to talk about that?

Yes. So for health insurance, since Will was now self employed, but we were going to have employees, we actually went through three different options. The first one we looked at a low cost, a cheap healthcare plan just found online. And what we found is that nobody accepted that insurance in San Antonio. So we had a situation where our son needed either ear tubes and the ENT doc that would accept it, wouldn't operate at the hospital that would accept our insurance. So then the next year when you're also expecting our third child, we decided we were going to go for the gold plated insurance. And that was a group health insurance plan, but still with a very high deductible because we were trying to optimize and get the health savings account. Ended up paying about 30 grand in 2020 for health insurance, which is way more than I pictured because really at the end of the day, even the gold plated health insurance plan didn't really cover much because we still had a high deductible. So now this year we are trying one of those Christian sharing plans with great success. You know, it's 220 bucks a month for a family of five and we have the same deductible limit as our gold plated health insurance policy. So now a disclaimer. We don't have any ongoing prescriptions that we're trying to fill or anything like that, but we're really have kind of been navigating the cash pay option for most of our medical needs.

Now we haven't gotten into employees yet, but is that the plan you're telling your employees to use as well or is there a separate plan for them?

Well, so we've looked at that and for us, for the group health insurance, it would cost us more money than what they could purchase individually. So we've also offered, there is a way to subsidize like basically they submit a receipt every month. We haven't instituted that yet, but we are hoping to do that next year.

Like some sort of a health reimbursement account, that sort of thing. An hra?

Yes. I forget what it's called. It's not called that. It's something a little bit more complex, but it's something similar to that.

All right, so at some point you had to hire some help. How did that go?

It was a bit sketchy initially and we really wanted to be obviously physically present in San Antonio at that time. And we knew we had a little bit of a lag time as we were doing finish out in our office. It was pretty mild changes. So we had some time before we could even open the doors. And that was going to be our chance to interview applicants. And so we, we did online, I think we used. Indeed. I don't know if supposed to say those things on here, but yeah, it's okay. But anyway, yes. And you know, it was very difficult to, you know, figure out how to phrase the position. And you know, the first thing was a practice manager wanted to have experience. It was hard to put a pay scale there. Obviously would differ depending on that experience that the applicant brought. And so the practice manager one wasn't too bad because that's kind of a more elevated position, but kind of the front office coordinator, a medical assistant. We were trying initially because I was not going to be very busy, obviously not taking in insurance and just doing cosmetic. I was looking at part time positions and at the time the unemployment rate was very low. The pool of candidates was a little bit lacking in a part time role. And so it was a little bit discouraging. I think that subsequently pushed us toward making decisions we really didn't want to do at that time but go for full time positions or take it up to the next caliber of applicant. So from an MA to then consider an rn, although that was in our business plan, something to do two, three years out once I was busy enough to support that. And so yeah, that was, that was the most difficult part was it was finding part time employees. And I would like to say, you know, everything goes very smoothly starting your practice and you're going to find people you're going to fall in love with and want to work with the rest of your career. But alas, that's probably not realistic. And it was the case for us as well. But every chance is a learning opportunity and I think we continue to make improvements on that front. But that's it on that one. I've got no secret sauce there.

I think all businesses, you know, that is a challenge for most small businesses because it takes a lot of effort to find a good candidate to hire them, to bring them on board, to train them and then when they don't work out, you're looking at restarting it all over again. And that can be a bit daunting to small business owners when you're already so struck for time.

So tell me about day one. I mean what happened? You unlocked the front door and everybody walked in and said I need an augmentation or whatever. Right. I mean, how does it work?

That's great. So our first patient who came, it was a male patient, older male patient. Interested in a revision. Revision, maybe. Revision, facelift. I'm not sure. He was originally scheduled on my first real day of clinic, but he just kind of moseyed on in several days. A week. A week ahead of time. I'm not sure. We were. I think we were interviewing applicants still. I mean, there was construction in the office and he's like, well, I'm here. And, you know, literally there's, you know, sheetrock on the ground. I'm like, well, let's just go to the back, we'll talk about it. So my first one was before my first day of class clinic. And alas, I had to. I had to set that one free and refer him to someone with more gray hair than I have. And that's what happened. But, yeah, it was slow, as anticipated. I had a little bit of experience in this regard because when I went to Iowa initially, the retiring solo private practice surgeon was still practicing. He was practicing for the next six months, and so his schedule was fairly full and mine was fairly not full. And so I was kind of used to that building. There's plenty of stuff that you can do with your time. For me, it was still working online with the website and photos and all the social media platform stuff, which unfortunately I really didn't have much experience with before going solo, and that was a mistake. I probably going back, I would try and become more facile with that during.

Residency if possible, particularly in plastics, where the marketing is so important.

Absolutely, absolutely. And so we just made our time useful. I did try traditional go out and meet folks in the community and take people cookies and cupcakes and drop off brochures, and we did all of that stuff. Unfortunately, with what I do here, that was pretty much a waste of time. But again, it's worth. Worth trying and learning from that. And ultimately, I had plenty of time on my hands to do it, so it was not a big problem. But, yeah, things picked up pretty quickly, I would say. Actually, I think our marketing plan and the website, our choice of location and then the way we present ourselves online really help speed things along.

Do you think the online marketing was really the way to go? Much more so than going around and visiting doctors or.

Yes, absolutely. And by online marketing, it wasn't just our website, it was Google Ads. You know, we were in quite a big spend in Google Ads, which helped, you know, basically you artificially rank number one on when somebody Googles for a service that we provide and think that was where most of our leads were coming from originally, have you been able.

To cut back on that advertising spend as word of mouth has increased or you still spend like you did in the beginning?

We've honed, you know they call it cost per conversion. So we've honed that number in. You know, I would say early on we are probably spending $100 per conversion. So that doesn't even mean somebody walk actually coming to their consultation. It just means that we got their information off of their click. And I think now we're spending around 20 to $25 a lead. So we continue to spend. We probably. We've reduced our Google Ads been to about a 16 of what we were spending originally, mainly driven by that conversion cost.

And there are some caveats. There is San Antonio is more conducive to word of mouth. It's a little more old fashioned that way rather than I suppose a place like Miami where online matters even more perhaps than the word of mouth. And so that may not be for everyone that advice.

So we've talked about a lot of the obstacles and challenges you had getting set up. Was there anything that turned out to be easier than you thought it was going to be?

So on my end it was the website content. I knew what I wanted to be on there and I wanted to say. And so it was just spending the time to do it how it looked and all that stuff. It was a challenge. But the actual what I'm showing, what I'm saying, that seemed actually pretty easy to me and that had to do with another thing that I had heard about when, when I was thinking about a solo practice was trying to be authentic and creating your own brand. I guess people really have to labor on that and I don't know, Soul Search and whatever, but for me it seemed fairly straightforward and I think that helped with the website content. And so that was, that was actually one of the easier things that I ended up doing. What about you, Julie?

You know, things have gotten easier as we have learned them, but it definitely has felt like every step of the way, you know, because it's all new at first, you know, it just takes time to learn and it is hard at first.

Most people assume practice owners make more money. I assume that's true for you as well, that you're making more than you were as an employee up north. How much of that do you think is due to working harder and taking on all these risks and hassles and how much is just cutting the middleman out when you have an employer?

Yeah, so it's an interesting question right now, two years out from employee position. The position I had I think was a pretty nice contract actually. And so we are now par with my employee contract. I do have colleagues who are in employed practice and make more than I am making now. Again, I think my ceiling is ultimately higher, but yeah, it's kind of, it's a little bit of a mixed bag. I have employed colleagues who are making less than I'm making now with similar years out in an employed setting. I also have an older brother who's in a large multi group specialty practice and I'm not sure his, his ceiling's pretty high. So I'm not sure if, if this is the way to go, if you're thinking just top dollar. But, but there are a lot of benefits to being in, in this seat rather than in a large group where you're just one of many voices and in a university setting you're just one cog among many. And that is not the case here. We need to make a decision. We make the decision. If we want to wait on that decision, we can and we know we're consciously waiting on that decision. And it's just not like, oh, it's being kicked around somewhere for six months. We need to spend money on X, Y or Z, we can do that. We need to cut money. And X, Y or Z, we can do that too. That is so beneficial to me and my mental sanity. I can't tell you that is worth some large pile of money to me. But yeah, the money is good. I'm not complaining there. We're ahead of our business plan despite Covid or actually because of COVID It's an interesting discussion to have with cosmetic services and Covid and work from home.

People want to look good on Zoom.

Yeah, Zoom and work from home. Opportunities to recover at home and not take time off. That is such a huge barrier. And so I think in a way that helped. Although the initial shutdown was quite painful. You know, you're going to have to do things that you don't want to do, but then you also get to do things that you don't do want to do. And there's a whole heck of a lot less frustration, you know, that chronic kind of grinding frustration that you get in institutions. It's just not here, at least in this type of practice. And so yeah, it's worth it from my standpoint.

Can I just add, I just want to say another Major benefit is he controls his time. So most nights he's home for dinner. I mean, he's always on call for patients, but hardly ever called in. So weekends are always at home. And, you know, if that ever changes, we can make that decision. But it's a decision we get to make, not somebody will tell him to do something.

Let's talk for a minute about your team, your staff members. How did you decide how much to pay them, what benefits to offer, whether to put a practice retirement plan in place, so on and so forth. How do you make those decisions?

Cautiously and then incorrectly. You have a need and you have to identify the need and make it specific. What exactly role are you trying to fill? What does that individual need to do day to day, and what are their abilities that they have to have to do that? We're still trying to figure that out, but we knew that we needed certain tasks done well. And so we looked for people with experience. And then usually with that experience, you end up having to. They'll have an idea for salary and you can kind of cross check it with US Bureau of Labor and Statistics, which will give you a median low and a high in your zip code, actually for different medical office manager, for example. And then you just see how great the need is to fill that position and make it happen. The individual also would bring, you know, demands to the table depending on their home situation. If they had health insurance with a spouse or whatever, then they. That's not something that would interest them here with us. And so that individual probably be more focused on salary or more paid time off. I see that as an excellent negotiating element of a contract is how much paid time off you allow and the flexibility there. And so if someone's negotiating with a potential applicant, that's an easy one to help sweeten the deal. We kind of control, you know, the benefits as, you know, they work out for our situation as the practice grows. So it actually has been changing. And Julie can talk about the retirement plan, because we do. We do have one.

Yes, the retirement plan was very important to me and how we to give ourselves time to decide on these benefits because there's so much going on when you first start a practice. We told all of our employees it would be at least a year before we offered any sort of health insurance or retirement plan. And so last year we did offer the Simple IRA through Vanguard, mainly because it was free. It was recommended by you, Jim, as one of the options for small business retirement plans.

Definitely one of the simplest options.

Yes. And so we thought that was a great option to get our feet wet this year, you know, but you do how much you can contribute? I think the number's around 13,000 that you can contribute per person. We did want to look at a 401k option. So the simplest option we could find for that is through guideline and they offer a 401k plan that they steward and also is a profit has profit sharing plan as well. And we've been fairly happy with that as well this year.

So a lot of docs worry about embezzlement from the practice management. I assume you have a pretty good safeguard in place there with you as the cfo. Jul, have you put any special processes in place to take care of that?

Absolutely, absolutely, yes. So everybody knows somebody who's had issues here and going to meetings. There are courses on it, in fact, and I've been to those courses and it's a tired phrase, but it's probably true. It's not a question of if, but when, how much, and that's probably a truth. So the way we set it up, since we do deal with cash payments and can be large cash payments, is to make it redundant and lots of checks and balances and no one person is doing all the steps in the process. So I am the one who generates the quotes for each individual and another employee can then present that quote to the patient. The patient would then sign that quote for that amount of money on paper. So there's a physical copy once a payment is made, I see all receipts, I check it against my original copy of quotes given and subsequently pass that on to our cfo who then cross checks that with the bank accounts and deposits. And that's, you know, pretty, you don't want to fall behind on that. So there's, there's not a long lag time there. And I think that's another element of it. There are different additional steps that I've been, you know, exposed to in the past. So one is having the patient sign for that payment and it's put directly into a safe deposit. And the person who gives the quote is always someone different than who accepts payment. That's one more step that we couldn't do just because the number of employees that we had doing different roles, we couldn't do that at the time. And so that would be one more fail safe to use is to whoever generates the quote is different than who discusses the quote, then is different than accepts payment and then is different than who deposits the payments. And that, that seems ridiculous and it is cumbersome that was the first thing Julie said when we were kind of dragging her into this process was this is so inefficient. And I despise inefficiencies. I really do, as probably most surgeons would say. But this one is, is one that you just can't afford not to do. Would be bad if you ended up losing money or a patient was taken advantage of. That would be terrible. But it's also bad just to have suspicion, right. If you didn't see a receipt, is that someone is. And then the employees don't like that responsibility either. It's like, oh no, no, don't, I didn't take anything. Here's the receipt or whatever. And so it's just, you have to nip it in the bud, have a process that is consistent and has lots of redundancy.

Well, our time is getting short, but you have the ear of 30 to 40,000 doctors and high income professionals by the time this podcast is all listened to. I wanted to give you a chance to talk about what you think they should know that we haven't yet talked about. And Julie, let's let you go first.

Well, you know, we didn't know if we were going to start the practice or not. It was always sort of a dream until it wasn't a dream. And so one of the things that we did is we still controlled how we lived after Will graduated from residency and we were able to save a significant amount of money that helped enable us to start his practice. And I think kind of no matter what, if you think you're always going to be an employed position, you may want to retire early. But I just can't stress enough how important it is to make sure that your savings are in line to enable you to achieve your dreams. To sound a little corny, Will, I.

Would like all these high income earners to know I have a GoFundMe account. No, I actually don't, but maybe I should. So, no, just like what Julie said, which is to stay flexible is the key in order to have flexibility and your career, I think you have to have financial soundness. You have to have money available to make those options open to you. If you know you're going to stay within academia and that's okay. It's just not for me. But if that is for you, I think the way medicine is going, you ought better have multiple options at all times, frankly. Always be prepared to come back to your employer and say, hey, I could go over here. They value me. Whatever benefits and salary and I think that's unfortunately what you have to do from here on out is just have multiple offers, multiple options. And in order to do that, you have to be financially able to do.

It and always be looking for your next job. That's what people in tech and finance are always doing. They're always having an interview out there and that's what they use to negotiate their raises. Good advice. Well, Will and Julie, thank you so much for coming on the White Coat Investor podcast. It's been wonderful to have you here. I know there's a lot of people out there that have at least thought about opening their own practice. And I think hearing your experience will help inspire them a bit and more importantly, inform them as to what they really need to know to make sure it's successful if they move forward and go ahead and do that. So thank you so much for your time today.

Thank you too.

It's been an honor. Jim. Thank you.

I hope you enjoyed that episode. It's becoming so rare to open a medical practice. Much more common still in dentistry, but becoming more and more rare each year in both of them. But I like seeing physicians who own their jobs. I think it makes for more career satisfaction. I think in a lot of ways it makes for better patient care. And I think it's certainly usually works out better financially in the long run to be an owner. You just have nobody skimming off what you're making. I know in emergency medicine contract management groups that percentage is usually about a third. About a third of what you're generating is going to the contract management group where if you're running the group yourself, your overhead might only be 4, 5, 6, 8%. And so it's not insignificant. At any rate, I want to make sure you remember to sign up. Tuesday, 7pm Mountain Time whitecoatinvestor.com WCICON22 or you can just go to the website. The links are going to be very prominent. If you want to sign up and come be with us in Phoenix, it's a great resort. It's going to be a great conference. You're going to go home feeling much less burnt out and much more financially literate. It's really going to be great. Thanks. For those of you who've left us a five star review and told your friends about the podcast, our most recent review comes in from Gus's dad who said invaluable A Concise High Yield Financial Podcast for Physicians. It's remarkable how much information Dr. Dali provides free of charge. Do you ever find yourself wishing there was somewhere to go to ask your finance, insurance or investing questions. The White Coat Investor community is a great place to turn. We have a thriving community across all of our social Facebook, Twitter, Instagram, Reddit and our WCI forum. We've been discussing solutions to your money problems since 2011. Join the Conversation with thousands of other White Coat Investors. Follow WCI on your favorite social media platform for financial resources, tips and strategies. Just head to your platform of choice and search for the White Coat Investor. You can do this and the White Coat Investor can help. Keep your head up, shoulders back. You've got this and we can help. We'll see you next time on the White Coat Investor Podcast.

My dad your host, Dr. Dahl is a practicing emergency physician, blogger, author and podcaster. He is not a licensed accountant, attorney or financial advisor. So this podcast is for your entertainment and information only and should not be considered official personalized financial advice.