WCI #248: Veterinarians and Their Finances

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 248 veterinarians and their finances. I estimate that 80% of doctors need, want and should use a financial advisor and or an investment manager. Some investment gurus such as Dr. William Bernstein think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you are getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White Coat Investor can help. Our quote of the day today comes from Rick Ferri. He said be prepared to marry forever the mutual funds you buy in a taxable account because divorce is often a taxing experience. That's the truth. In fact, you want it to be a taxing experience because if it wasn't, it means you lost money. Thanks so much for what you do. Whether you are a veterinarian, whether you are a nurse practitioner, a physician assistant, whether you are an optometrist, whether you're a physician or a dentist. Like most of our listeners, thanks for what you do. Your jobs are difficult. They're even more difficult during pandemics. And if no one said thanks today, let me be the first. If you are interested in doing something a little different on the side like being an expert witness, we have a course for you. You can get More information@whitecoatinvestor.com ExpertWitness but we are having a sale on this course that will teach you everything you need to about being an expert witness and help you develop this side gig. If you will take this course, it's great. It's on sale from February 1st through 14th and then it goes live on the 14th. So you can sign up anytime between now and then and enjoy that course. I know we've gotten a lot of great feedback on this one. This is not a course I do. This is one of our affiliate partners and it's really excellent for anybody who's thought about becoming an expert witness but really doesn't know where to take the next step. This course will take you by the hand, soup to nuts and teach you everything you need to know about becoming an expert witness, whether you want to work for the defense, whether you want to work with prosecution, whether you want to do both, whether you want to review charts. This is an option for you to use your medical knowledge to earn a little bit more money on the side in a way that's different from your usual clinical practice. I know a lot of people that have done this that feel like it makes them a better doctor. It helps them pay more attention to that which they're doing on a day to day basis and really benefits their practice and their bottom line. So if you're interested whitecoatinvestor.com expertwitness you can get more details. All right, we got a great episode today. For the first time, we're bringing a veterinarian on the podcast. Actually, I don't know this is the first time, I think a couple of years ago we had a veterinarian on here. We're going to talk more about veterinary medicine. We're going to talk about the finances of veterinarians and really get some insight into, you know, those who are physicians but not human physicians. Let's get our guest on the line. My guest today on the White Coat Investor podcast is Dr. Eric Hofmeister. He's a board certified anesthesiologist, a diploma to the American and European colleges of veterinary anesthesia and analgesia. He got his DVM from Washington State University in 2000, did an internship in small animal medicine and surgery and did a residency in anesthesia at Georgia. He stayed on faculty there from 2004 to 2016 where he was a section chief for surgery and earned master's degrees in health promotion and behavior and sport pedagogy. I don't even know if I'm pronouncing that right. Served as the department chair for surgery at Midwestern from 2016-19 and then went to Auburn where he's a professor of anesthesia there. He's a deputy editor of the Veterinary Anesthesia and Analgesia Journal. And his research interests include the scholarship of teaching and learning, evidence based decision making, and measurement and testing. Welcome to the White Coat Investor Podcast, Eric.

Thank you very much, Dr. Ali. Great to be here.

So we've had some veterinarians on before, but not a lot. And a lot of our audience may not be that familiar with your career, both your educational path and your career path. But let's start before we get to that, let's go back even further. Tell us about your upbringing and how that affected your views on money.

Yeah. It's really amazing how much upbringing affects you. I was raised upper middle class in west la. My father was an engineer, my mother was a teacher. And so, you know, we had a pretty good income and lived a pretty good lifestyle. But my parents invested in some kind of private equity deal and ended up losing basically their whole retirement investing when it fell under. And so my sister was coming through as a teenager when money was rolling in, everything was flush. And then I came through in very much lean times. And it's really interesting to see how that affected us. Like, she really likes, you know, the nice, nice cars, the nice things and all that. And I'm just accustomed to just doing without. And so it's really interesting to see, like, we're both raised by the same parents in the same situation, but very different sort of financial upbringings. And then my parents did have some rental property experience, but they never invested in the stock market. They equated it with gambling. And so for most of my life, I've just thought that it's gambling. So that's kind of my basic background.

So I went over the highlights of your education and training and career so far. Do you feel like that's pretty typical for a veterinarian or. I mean, you seem much more academically inclined than the typical practitioner.

Yeah, it's a good question. I think when we're talking about veterinary medicine, I think I tend to lump it into private practice, general practitioners and specialists that tend to be the ones that go into academia. So, you know, for academics, it's pretty typical to go school, internship, residency, faculty position or specialty, private practice. But there are a lot of different pathways that people take, especially for some reason. It seems like radiologists often go out in practice for a while and then come back and do their residency. So it differs a little bit by discipline, but it's, it's, it's a lot easier to go through straight than to take a spell in practice because, you know, you get accustomed to making that decent paycheck and then going back and making, you know, $25,000, 28,000 as an intern is tough to sell.

Yeah, I can certainly relate to that. So how did you pay for your schooling initially? Did you borrow? Did you work your way through? How'd it happen?

Yeah, so I was very fortunate. I was able to get residency in Washington state during my undergrad time, and so I was able to get in state tuition, which helps tremendously. And then my parents were able to cash flow it for me. So I was extremely fortunate in that I didn't graduate with any debt there. So they, you know, they definitely sacrificed to make that happen. And I think it's a little less doable now than it was, you know, 25 years ago. Just with the inflation of education being so much higher. It's a lot like health care. It's gone way past, you know, CPI inflation. So definitely harder for kind of upper middle class people to just cash flow of vet school education now. But I got through that way.

Now let's talk about a veterinary education these days. I mean, what, what does a typical education entail? What do you do as an undergrad? What do you do in school? Do people typically do postgraduate training? What does it cost? Give us the details on it.

Yeah, I think the undergrad looks a lot like pre med and in fact sometimes we'll have people, you know, go to vet school that we're aiming to go to med school. So all the prereqs are pretty similar, you know, biochem, organic chem, basic physics, those kinds of things. So undergrad is going to be pretty similar. The main difference obviously is the experience that you get. You know, we like to see students have hours of experience working for a vet clinic and in different animal interactive settings. And then, you know, once they get into vet school, it's a little bit different from med school in that we tend to have three preclinical years and then one clinical year instead of two and two, although some vet schools do have a two and two system. And then your clinic year is a lot like what I understand from human medicine. You rotate through different services, different specialties, get an opportunity to see cases and get your kind of basic clinical skills and then you graduate and you have a DVM and you get a license. And in contrast to human medicine, you can just go out and practice then and be a fully qualified practitioner or you can go on for additional training if you want to do a specialty or something like that.

And what would you say is typical? Do most people do a residency? Do most people not do a residency?

Yeah, so about 70% do not do an internship. So they just go out and practice. And the rotating internship is your first year out if you go to an internship and that's within a species. So there's small animal, equine and larger food animal. And so after your, your one year internship then you go to the match again for a residency or some people have to do a specialty internship if they don't get a residency, which is again just a one year time frame in your discipline. So you do a specialty internship in surgery, for example, and hopefully become more qualified to do a residency. So for internships there are about 1600 positions at 500 programs. So the match rate is about 67%. So the majority of those that apply for an internsh get one, although again, that's only about 30% of new graduates. And then for residency there's about 400 positions at 330 programs. Match rate for residency is only about 34%. So only about a third of those who apply for residency end up matching with one and the rates vary substantially. So the match rate for some disciplines like zoological medicine or exotics or herd health are in the single digits, you know, 7, 8%. Some of the disciplines are over 66%, like emergency critical care lab, animal radiation, oncology. So it really depends on what you want to go into. But most new graduates will go into, you know, just general practice, and that might be small animal care or large animal care or mixed animal practice, et cetera.

Well, it sounds like matching into a residency is really competitive. Yeah, I mean, those are pretty low match rates.

It is not. Yes. If you are planning for your life to go a certain way, like if you're like, I need to be a surgeon and that's the only way I can be happy, that's going to be tough because there's no guarantees. I know some people who have done two surgery specialty internships and still aren't matching for a residency. And then it's like, well, you know, you spent three years as an intern basically making 25,000 to $30,000 and you don't get the payout at the end of becoming a specialist. So, you know, there's some pretty substantial sunk cost risk there.

Do the residencies pay any more than the internships they do?

Marginally, yeah. And it depends on, you know, obviously if you're in an academic program versus a private practice, but they're still probably in the, you know, mid 30,000, maybe up towards to 40,000. If you're in like LA or something.

Like that, I guess you can count your blessings that you're not like the dentist, where they're paying still during their residencies.

Yeah, that is incredible to me.

What about getting into vet school? Competitive?

Yeah, I'd say so. It depends on who you ask. Like the statistics are about 1.2 applicants or so per seat in the US and Canada. So it's a little bit competitive. I think that if you talk to the applicants, they would say, oh my gosh, it's impossible to get to Vet school. But the actual statistics aren't too catastrophic, I think relatively comparable to human medicine.

Yeah, it sounds easier if you're saying five out of six get in. I mean, that's a lot better than medical school where it's about 1/3 are getting in of applicants at least the first time they apply.

Yeah, that might be, I'm not sure about first time applicant stats on that. So yeah, I'd say it's reasonably competitive. But we've had more schools opening up lately, more seats, because of course federal funding has been decreasing, state funding has been decreasing. So a lot more schools are trying to open up more seats to get those tuition dollars in.

So how about after you come out, what are veterinarians making? You know, generalists and specialists. And what can veterinarians do to make more to be higher on that range of incomes?

You know, it definitely differs depending on if you go into general practice versus an internships. Like I said, you know, interns are in the 33,000 range. And statistically they have the highest debt to income ratio, which is not surprising because they're deferring, making a reasonable salary. So new grads are about 100,000. But it depends on your discipline. Small animal practice, you're going to be making more than in large animal practice. Typically the compensation structure is a lot of them have a guaranteed salary and then you have a production on top of that. So if you exceed your production that generated that salary, you can bring in additional income. So typically the total salary is between 22 and 25% of your production. So if a vet brings in about 400,000 into the practice and that's paid, not billed, they can expect a salary around 100,000. And so academics, corporate and government, it's just a straight salary. So there's no production incentive in most academic settings. It's just you get the salary and to make more. It's pretty similar to human medicine. Work more hours, see more cases, see sicker cases. Because your average cost transaction is typically going to be higher for sicker cases than for wellness appointments and taking their release shifts, especially working ER. A lot of hospitals will pay 10001500 for a relief shift, which for a fed is pretty reasonable amount. And then ownership is really where it's at for veterinary medicine. And this is why you see lots of vet clinics that have 1, 2, 3, 4 doctors. Because you get to be an associate when you graduate. You're looking at the bottom line. You're like, man, if I just bought a practice, I would be making way more and so it tends to create the situation where you have lots of little practices because that's really the path, at least historically, for earning more money as a vet.

You say at least historically. Has that changed recently?

Yeah, I mean the surveys for new graduates is that not as many of them are interested in ownership. I think that like in human medicine we're seeing the private equity firms buying up clinics and making more vets employees. And you know, on the one hand, like I said, new grads seem to be okay with that, but I don't think that they realize the potential consequences to their financial life long term. You know, to not have as many ownership opportunities as we used to have because of all this consolidation might make it more problematic 20, 30 years down the line.

Now I understand a typical veterinarian's coming out with a couple hundred thousand dollars in debt these days. And if they're making $100,000, that's not an awesome ratio. I mean average debt to average income is significantly worse than it is for human medicine. What's your take on that debt to income ratio and on the viability of veterinary medicine as a smart financial move?

Yeah, I mean again like human medicine, it really depends on where you go to school and what you do jobs wise after. If you go to a state school and you get a reasonably well paying job when you graduate, I think it could be a reasonable investment. You should be able to graduate with a less than 2 to 1 debt to income ratio. If you go to a state school and you get a reasonably paying job, you know, in the $100,000 range. The problem is if you decide you want to go to an expensive school, and those are usually the island schools, there are some private schools in the US and what I see a lot is students are like, I have to be a veterinarian. That's the only thing I could imagine being. It's what I've always wanted to do. They don't get into their state school the first couple of times, then they apply to the private schools and they're just not thinking it through. You know that the private schools can be in the 350 to $400,000 range at the end of it. And then even if you're making a reasonable salary like 100,000, that's a 4 to 1 debt to income ratio. And obviously the only way you're getting rid of that is with income driven repayment options. So that's, I think that's a serious problem. And then the other thing that you see is, you know, I interview a lot of students who come from, you know, little town in rural Kentucky, and they're like, I want to go back to my little town in rural Kentucky and be the vet. Because that's what their model is. That's what they've seen. That's kind of how they got interested in going to vet school. And I'm like, that's great, but you're going to make like 50, $60,000. You know, like, you're. What's really going to happen is you're going to end up practicing small animal medicine in Atlanta to pay your debt in. You know, that they have these visions of what they want their life to be that are limited because of the debt that they incur going to school. You know, it's just a disconnect of reality. You know, if they came and they were like, you know, I understand that I'm going to have to sacrifice and, you know, my whole life is going to be dramatically affected by this decision. Because of the finances, I would say, okay, you know, you're going into it, you're with your eyes open. But most of them are like, I just want to be a little small town vet, and it's okay if I incur 400 grand in debt to get there.

They just don't realize that that's going to be hanging over their head for the next seven decades.

Yes, exactly. Exactly. Yeah. They just don't really kind of think it through.

Yeah. Now you've been pretty successful financially. You've become financially independent, I understand.

Yeah, yeah, exactly. We hit that last year.

How'd you manage to do that as a veterinarian? I mean, obviously you trained a while ago and so maybe avoided the more expensive schooling that's available now. But how did you do that throughout your career?

Yeah, I mean, obviously graduating without debt was tremendously helpful, and I don't think that there's that much magic to it. My first salary as a new assistant professor was 80,000 in 2004, and it slowly went up to 130,000 by 2016, and it's about 160 now. So it's a reasonable salary, I feel. I bought a house way below what I could afford, so I got just a reasonably sized house when I got my first attending job. My wife is a pharmacist. She's had a very variable salary. Her first year was in retail. She made 100,000. But then she's been a grad student making in the 30,000 range. Currently she's at 80,000. So having another salary Helps a lot. But what I discovered is that year after year, I'm like, why do I have more money in my bank account at the end of the year than I had at the beginning? I was very confused by that because I didn't know anyone in that situation. And I was like, what am I going to do with this? I mean, I guess I'll just build $1 million home one day. Like, I didn't have a clear vision for. For my finances. I just happened to have more. And then I discovered in 2017, Mr. Money Mustache. And I was like, oh, hey, I could use this money to retire early if I wanted to. And started to be, you know, more deliberate and realized how I got there was with, I mean, I never considered it frugality. I was just living my life. You know, I. I think frugality is kind of baked into veterinary medicine. If you read the James Harriet books and stuff, we're always trying to do more with less. To the point where early in my training in the 90s, vets would re sterilize gloves and re sterilize needles and all this stuff that you're like, that's bad and it's nonsense, and it actually probably costs you more because you're having to pay the staff to do it. But those kinds of things, it's just baked into veterinary medicine. So I think that I've always. I don't even consider it frugal. I just consider it maybe not extravagant.

You know, it's interesting because most doctors feel this pressure, this societal pressure. You're a doctor, you're supposed to be rich. You can pay the bills, you can, you know, you're supposed to be wealthy. Even though they're coming out of school owing $400,000, they feel this pressure. Is that not present at all in veterinary medicine?

No, no. And I would say almost the opposite. Like, if there's someone who drives a BMW into our parking lot, I think that there's this general, like, kind of frowning attitude. Like people are driving, you know, farm trucks to work routinely. And so, yeah, I don't think that that expectation is there for us. Or at least it hasn't been. Salaries the past few years have been going up relatively steeper than they had the previous, like 15 years or so. So as vets get to the point where they're maybe having a higher income, that might become more of an issue. But I'd say in general, we definitely don't feel those societal expectations. And I would say, like I said, maybe even flipped.

So it Sounds like in 2017, you got on the FI train. What did you start investing in with all this cash you had sitting around? What'd you put it in? What does your portfolio look like?

Yeah, so right now about half is in taxable, half is in our 403B governmental 457S. We have a small Roth IRA. But I only started that a couple of years ago. I did because my family had experience with rental houses. In 2008 and 2009, when everything tanked, I looked around and I was like, oh, hey, I can pick these up for a song and a dance. So I got a couple single family homes in Athens where I was working before. So those have appreciated marginally, but more importantly, they're paid off. And so we get a gross rental income about 3,200amonth for those, which is really nice. And then once I discovered that the stock market wasn't gambling and that it's actually buying real goods that exist in the world, we got on board with our allocations about 60% US stocks, that's in a 500 or all US stock, 30% international. That's mostly developed in all world, a little bit in REIT just to diversify away from the single family homes and then about 5% in muni bonds in our taxable that we're imagining for our kind of early retirement spending and we rebalance just with new contributions. And then I also have a pension from the state of Georgia that kicks in when I turn 60. That's estimated to be 2,500amonth, but it's not inflation adjusted. So between now and 15 years in the future, I don't expect that to help me very much, but it's nice to have at least a little bit of guaranteed income. There's.

Yeah, so fairly traditional portfolio stocks, bonds and real estate.

Yeah, exactly. Keep it pretty simple. I think the single family homes are the only thing that caused me a little bit of stress being a landlord and just having to get tenants in. And it's in a college town, so the turnover is relatively substantial. Everybody wants to have their three large sized dogs in there as well. And so that's always a little bit of a struggle just making sure that we get good tenants. But so far they've turned out pretty well.

So as a veterinarian, do you allow pets in your rentals?

Yeah, for sure. Because early on most of my tenants were through the vet school and I had some connection to them at least so that if they were a vet student, they were going to trash their profs. Rental house. And almost every vet student comes with a pet. So I kind of considered that par for the course there.

So was it worth it to deal with the hassles of being a landlord?

You know, that's a good question. I think that they've turned out to be very sound financially. Like I, you know, bought, bought them for like 110 and 120,000. So the return on investment's been pretty good for them and the hassle has not been that substantial. But probably if I knew then what I knew now, I would have just plowed it into, you know, all us stocks and forgotten the headache. We had our main house in Athens that we had been renting out, that we just sold maybe a year and a half ago. And I just put all of that into our stock fund. When I sold it, I was like, I don't want to buy another rental and increase that headache.

So let's turn the page a little bit. I've got a question for you. Should people buy pet health insurance?

Yeah. So I will say it's easier for the vet. So from our standpoint, most of the insurances reimburse the client, so the client pays us, so we get paid so we don't have to deal with the insurance company issues. And also from our standpoint, it lowers the barriers to the clients being able to pay for stuff. So we'll tend to get people saying yes more than if they don't have insurance. So from our standpoint, I always liked having clients who had insurance. For the pet owner standpoint, it's insurance, right? So the insurance company's got to make their money. I would strongly encourage any of your readers that are high income professionals to just self insure. The peak expenses aren't that much your worst case scenario with a 12 year old golden retriever and he's multiple transfusions swirling the drain, that's going to be maybe $15,000 and you should be able to cash flow that. I guess I'd say if it's hard for you to spend on your pet, maybe it would be like a psychological way to encourage you to do that. Similarly with wellness care, if you have a hard time justifying the, whatever, $250 for a yearly exam, maybe the insurance would be helpful there mostly in terms of convincing you to go in for regular exams to keep your pet healthy rather than financially. I think it's probably not a great deal for most of the listeners here. And we do have people that have financial struggles pretty routinely and there's a lot of care Credit and these kinds of institutions that can loan money for short term veterinary expenses. So even with people that can't cash flow it, there are other alternatives. So that's my take on it. I don't have health insurance for my pets and I never have.

So what does it cost if I have a 2 year old cat? What's it cost me to insure that cat?

Obviously it varies, but it's around $500 a year and that's with, you know, the deductible is not terribly substantial. You can get 100% coverage. Most of them are like 80, 90% coverage and includes like, you know, wellness and catastrophic accident and cancer and you know, all those kinds of things. But, but again, I mean, even if you have a dog who has a cruciate ligament rupture, you know, that's probably going to be a four or $5,000 surgery. You know, if you just saved that $500 time and invested it times, you know, whatever eight or nine years, you would, you would be breaking even and then, you know, you, you'd be well off if you didn't have a dog who had a cruciate ligament tear. So I mean, yeah, like I said, like, like all insurance products, you know, it's, it's a deal for the insurance company rather than the user for the most part. And the, the expenses for veterinary care are just not that great. You're not going to get bankrupt by, by your vet bill.

Let's talk a little bit about end of life care and end of life discussions. What do you think about people that treat their pets like a family member, such as spending tens of thousands to prolong life by a few months instead of putting the pet down?

You know, I don't think I'd have a job if we didn't have those people. You know, it's kind of like with breeds, like, you know, people didn't buy dachshunds and bulldogs and all that kind of stuff, we would be rapidly out of a job. I think that, you know, obviously comes down to individual values. I do personally get somewhat frustrated by that. You know, if you've got a 10 year old great Dane and heart failure and kidney failure and now we're doing surgery on him. I'm like, you know, like this dog has reached its expiration date. You know, like what are we really going to accomplish here? I think that probably one thing that factors into this is the suddenness with which it happens to the owner. Right? Because I think that in people, my impression is that people have some Idea that something's wrong. They're like, oh, there's tumor growing in me. Maybe I should go check that out. And we only really see animals once it reaches some catastrophic stage a lot of the time. So I think that that's part of it, is that the suddenness plays a role. And so they just haven't thought about, oh my gosh, what am I going to do if my dog has a hemo abdomen because he had a splenic tumor rupture? And I think there's also a lot of guilt that runs into things like owners run over their pet and then they come in with this multiple comminuted pelvic fracture case and they're like, do anything because they feel bad about it, which I understand, again, but it's tough. We know if you have a hemoabdomen case, the median survival time is 49 days. And that's going to be probably 5,000 to $8,000 bill at the minimum. So is it worth that? And I think that people make pretty emotional decisions rather than practical ones. And I had this a little bit personal experience. I had a cat with hypertrophic cardiomyopathy that threw a clot and ran her in. We had healthcare discussion about what we would do for our pets, but that was when they were 5 years old. And now I had this 17 year old cat that threw a clot. And so I was just acting on like, what we decided, you know, 12 years before for what to do with them. I'm like, yeah, let's do TPA and everything. But, you know, if I knew, if I thought about it for a second, I'm like, my cat's 17, she's got HC, a median survival time of six months. Even if she makes it through this, that's really not worth the thousands to me. And you know, I also kind of struggle with this is. This is a complex philosophical problem. But, you know, if you've got some, some young puppy the owners just got, you know, a couple months ago, gets hit by a car, you know, we're looking at a five to $8,000 surgery. You can buy a lot of puppies for $5,000, you know, and I understand that, like, for the individual, I'm like, yeah, but no, this is like my puppy. And I also understand that there's some obligation that we have to take care of our pets. But I think about that a lot. Like, I'm like, there are a lot of animals out there that need homes. And spending all these resources on this one animal sometimes makes That a little bit hard for me.

You know, one of the most interesting things about veterinary medicine is the comparison between species. Now, as human physicians, we get very little training in comparative medicine. What can we learn from our veterinary colleagues in that respect?

Yeah, it's really interesting to me to think about, you know, what human medical practitioners learn, because, you know, my wife's a pharmacist, and so I'll treat her as if she's a veterinarian. And I'll be like, oh, yeah, of course, you could use this drug and this drug and this drug. And she's like, what are you talking about? I'm like, oh, like, don't you know that it's just kind of walk around knowledge? You know, I think realizing how similar animals actually are among each other, I really like having medical professionals as clients because then I could talk to them more easily. You know, we use the same drugs, propofol and methadone and dexmedetomidine. And anesthesia is basically identical across species. And that's true for internal medicine and dermatology, et cetera. I really like cooperating with clients that are medical professionals. Sometimes they bring in a procedure, they're like, hey, we do this procedure on people. Can we do that on animals? I'm like, sure. I mean, it's an animal, let's try it. And sometimes I'm like, well, but why don't you do this? In human medicine, there are some drugs that we use like teladamine, steroid anesthetics, like alphaxalone. You know, it sounds like in human medicine they still use a lot of saline, even though it causes acidosis and is associated with poor outcomes. So there are things like this. I'm like, why? Why do you guys do it this way? And I'm not an oncologist, but I've heard oncology be like, yeah, dogs with naturally occurring lymphoma are just like people. And I'm like, okay, well, why aren't we using dogs as a. As a model, you know, for that? I think the other thing to realize is that, you know, you can get quite high level specialty care for your pet, you know, so if you don't like an answer that you get from your general practitioner, realize you can get a referral and get, you know, we have a 3T MRI, we have a varian system edge for radiosurgery, we do ultrasound and guided blocks, thoracoscopy, like all these sorts of things. But at the same time, there's some stuff that we don't do. Like we don't do transplants really. Except for kidneys and cats. We don't really do long term dialysis. Cardiac bypass is pretty rare. So there are some things that we just don't do in human medicine where I've had medical practitioners come in and they're like, oh, can't ugs do this? I'm like, we don't really have a dialysis unit. So sorry.

What's the largest endotracheal tube you've ever placed?

We have tubes up to 35. So I'll usually use those for like the big draft horses or sometimes the really big ruminants or One of my colleagues did a giraffe last year, so we used it for that. So yeah, it's quite a large endotracheal, dude. Especially people have relatively small tracheas compared to their size. So like in a 20, 30 kilogram dog I would expect to place a 9 or 10 dentatracheal tube, which I gather is what you often use for people. So it's interesting that we are. Trachea varies by species.

What's the hardest animal to innovate?

Oh man. Any herbivore is not designed to open its mouth right because they're just like nibble on grass. So hamsters and guinea pigs are very, very difficult. Rabbits are probably the one that we routinely anesthetize that are the most challenging. And I always say if you can intubate a rabbit, you can intubate pretty much anything. I spent some time at a human hospital in Australia and then, you know, I'd always heard that intubating people was very challenging. And so I saw them doing it. I'm like, I mean, yeah, this looks relatively hard, but like no harder than a pig, I think.

Nothing like a rabbit, huh?

Yeah, but rabbits, rabbits are tough.

What's the malpractice situation like for veterinarians?

This is probably going to upset a lot of your readers, but it's almost a non issue. In most states, animals are considered property, so they can really only sue for the value of the animal. And of course, if it's just a random dog, how much is that dog or cat really worth? That's more of a problem in equine medicine where you can have horses worth hundreds of thousands, even millions of dollars. So coverage for equine practitioners tends to be a bit higher for that. But for example, for the highest coverage, 1 in 3 million policy per year is about $2,600. For equine practitioners it's about $250 for small animal, exclusive. So I mean, just looking at how much the insurance costs tells you how much the insurance companies expect this to be a problem, which is very, very little. And the insurance coverage that we have typically is very good. They really go to bat for the veterinarian and they always defer to what the vet wants. So if the vet says, no, I want to fight this, the insurance company won't necessarily settle it without the vet being on board because it can be problematic for their reputation if there's an implication that the vet did something wrong and it gets settled even if they feel that it doesn't. And the coverage also includes wherever you practice, if you have an individual policy. So if you do locums or relief shifts, that sort of thing, your coverage goes with you. And of course with liability. It's always a question of what's the standard of care. And there is a wide range of standard of care in veterinary medicine and we don't have as much evidence based data about like what the best thing to do in this case is. And so, you know, it's really easy to argue, oh no, this is standard of care for rural Louisiana, for example. Even though, you know, if you're practicing in la, you would say that wouldn't be sufficient standard of care. The one thing that's a little bit different is that the vet may be liable for the client's safety as well. So if you're in the exam room and you get bit by your dog, that the vet could potentially be liable for that. So most of the time we won't have clients around their animals when we're doing stuff because we could be liable for their injuries.

Now a lot of docs I know have this dream of practicing without insurance or Medicare or rvus. Is it as nice to practice like that as human docs think it would be, or does it just mean you make less money?

You know, not having to mess with insurance is truly amazing. From what I've talked to, my uncle's a general practice physician, so it sounds like insurance sounds terrible on the human side. And most of our insurance reimburses the client, so the client pays us and then the client deals with the insurance company. We never have to see it. You know, I don't understand rvus very well. I think that on a certain level it could make it easier to set fees because right now every practice just determines like what they're going to charge for something and it's almost a random number generator. So, you know, not having insurance and Medicare means that we have a lot of patients which could be treated but aren't treated because of finances. So, you know, we have, we have quite a number of situations where the client comes in, we're like, okay, well, I think this is the best thing to do for your pet, and this is what it'll cost. And they're like, okay, well, I can't afford that. I'm like, okay, well, we'll try to treat symptomatically and hope for the best. And at least if all of our patients had insurance coverage, then we could consistently do what's the best thing for the patient. So I think it would just be a different type of stress and a different type of conflict. Every single client we talk to, money is a consideration and it's something that we talk about. And I don't think most physicians have any clue what things cost. And I am, I am acutely aware of how much it costs when I prescribe methadone for a patient, because I know it's going to go right onto their bill and it's going to dramatically increase their bill depending on what we're doing to them. So vets are all very aware of what things cost and that that creates a barrier for us to do the care that we want to provide.

And you're providing the drugs as well, out of the clinic.

Yeah, right, exactly. Yeah. So, yeah, most vet clinics will also prescribe with the event of online prescription systems. I think that that's probably less of a profit center than it used to be for veterinary clinics. But most of them, I mean, if you're there, your dog has an infection, it's easier to just get the amoxicillin from your vet rather than have to go to the pharmacy or order it online. So most of them do still maintain their own pharmacy.

Now, given the debt to income ratio that a lot of veterinary docs come out with, public service loan forgiveness has got to be something to think about that requires you to work full time for a 501 or a government agency. What job options are available for vets who want to go for pslf?

Yeah, I mean, academia obviously is easy. There are jobs in academia for general practitioners. So if someone doesn't want to do the internship, residency and make, you know, a terrible salary for four or five years, they could potentially, you know, get one of those positions. Most jobs in academia, though, are specialists, and that's going to be your four or five years of postgraduate education. But of course, as you're going through training, you could potentially get credit for that time, although you Know, some internships in residency are in private practice, so it kind of depends on how you go through. But academia is the one that comes to mind. A lot of shelters, a lot of animal shelters are 501c3 organizations. And shelter vets can make a decent salary depending on where they are geographically. So that might be a good option. There's government work, like you working for the USDA and zoos, and there are some other charities and kind of smaller things. But I think probably the big ones are academia shelters and government work. And we have a problem in academia attracting, attracting good specialists. And it's been a mystery to me. I mean, obviously there is a salary differential. It's not that substantial from my point of view. And yeah, if you could get public service loan forgiveness, that seems like an easy bet. So I think that it's probably more so the ignorance, like the lack of acknowledging the debt. Right. That they're accumulating debt in school and then they graduate and they don't think, oh, gosh, on the one hand, I could get rid of this in 10 years if I did internship, residency and worked for a university for a little bit longer, or I'll just go and practice. And again, that's how the debt influences your job selection. Right. So they go out into private practice to try to make more money to service that debt.

Now, there's probably a few vets listening to this. If there were some vet students or new attendings or somebody in a similar field with similar earnings, similar debt to income ratios, and they want to become financially successful like you have, what tips do you have for them? If a student comes to you and says, you know what, I don't want to be broke. How can I practice, be a good veterinarian and still be financially successful, what would you tell them?

I would say, you know, don't go to an expensive school and don't think I want to be a vet at any cost. You know, if they have a debt to income ratio over 2 to 1, strongly consider public service loan forgiveness. There are plenty of academic jobs that are open and eager to have people. And if you have significant debt, you need to consider extra shifts. You might need to think about doing a different type of practice. You may need to, you know, move to Phoenix and work an emergency practice to, to service that and get it paid off. And, you know, like I said, frugality really is built into the bones of veterinary medicine. So if they just avoided debt, I really do think that they would be fine on a starting vet salary.

All right, well, we're coming to the end of our time here, but you've got the year of 30,000 plus 40,000 high income professionals, mostly doctors that will eventually listen to this podcast. What do you think they should know that we've not yet talked about?

I think I would say when you are talking to kids about being medical professionals, make sure to talk about the finances and debt. Especially for low wake or earning disciplines like vet med. It kills me to see young students who are saying I want to do this no matter what and then get settled with these huge debt to income ratios that's going to affect their whole life. So as you're talking to these undergrads and these people that are thinking about pursuing medicine, just make sure that that debt discussion is part of that advice that you give them.

Awesome. Well, Dr. Hofmeister, thank you so much for coming on the White Coat Investor podcast. I know your comments will be useful to many and I for one enjoy learned a lot more about veterinary medicine than I knew before. So thank you so much.

Wonderful. Thank you Dr. Ali.

That was fascinating. I had no idea that people intubate rabbits. I mean, I guess for research purposes I can understand it, but I mean a rabbit's 30 bucks at the pet store, it's $10 from the shelter. I can't imagine people are going to spend a lot of money on a rabbit, but I guess if you're really attached to your rabbit, maybe that's the case. As bad as rabbits are to intubate, I can't imagine a hamster is much easier. At any rate, I thought that was a pretty interesting interview. I hope you enjoyed it. If you'd like to come to WCICON 22, you actually still can by the time this drops. It's February 3rd. Now the conference is the 9th through the 12th. You can't come in person. It's too late. We've already finalized the food by the time you hear this, but you can still come virtually. You can actually sign up right to the end of the conference if you like. You can do that@whitecoatinvestor.com WCICon22 we had a great virtual conference a year ago. It was really enjoyable this time. We've kind of married the in person conference to the virtual conference. And what I'm hoping is that we're going to have the best of both worlds. There'll be over 1,000 people there. It's going to be awesome. So if you'd like to come, you can still sign up. Whitecodeinvestor.com WCICon22 I estimate that 80% of doctors need, want and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you are getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White Coat Investor can help. Thank you for leaving us. Five star reviews Telling your friends about the podcast. Our most recent review comes from Christopher Iverson Said. Incredible resource for both the physician in training and the physician in practice. A wonderful resource on the topics they don't teach you in medical school. Five stars. Thanks so much Christopher for that review. 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.