In this special video post edition of The Prudent Plastic Surgeon, I speak with Dr. David Song about all things business and finance.
Dr. Song needs no introduction for those readers in the plastic surgery community, but for those who are not or may not be in medicine at all, Dr. Song is MedStar Health’s Physician Executive Director for MedStar Plastic & Reconstructive Surgery and Academic Chair for the Department of Plastic Surgery at Georgetown University Medical Center.
An internationally recognized expert and a prolific researcher, Dr. David Song is a frequent speaker at national and international conferences, especially speaking about the business of medicine.
Before joining Georgetown, Dr. Song was chief of Plastic and Reconstructive Surgery at The University of Chicago Medicine where he also obtained his MBA.
I’ve admired Dr. Song from afar for some time as I’ve read so many of his papers and book chapters and have heard him speak innumerable times at our plastic surgery conferences. As I started on this journey and began my financial education, I can’t help but think back to many of Dr. Song’s talks with an even greater appreciation for his passion in advocating for greater business and finance understanding for physicians.
I am honored that he took the time from his busy schedule to speak with me and all of you!
Watch, Listen, or Read
Watch the full video interview on The Prudent Plastic Surgeon YouTube channel, listen to the audio recording below, or read the summary on on all things finance, business, and medicine with David Song below!
See the full interview on the The Prudent Plastic Surgeon YouTube channel
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Financial Well-Being and the Physician
To begin, I ask Dr. David Song how financial well-being and business knowledge has played a role in his life personally and impacted his work as a physician.
Dr. Song shares a story about his very first day as an attending. He found a retirement brochure slid under the door of his office. He recalls feeling that this was a bit odd since he hadn’t even really started working yet.
But then read the entire packet. He learned about how to plan for retirement, creating a stable financial base, and the interaction between financial well-being and overall well-being. He thinks everyone should start their career this way as financial stability leads to life stability. As physicians, we often deal with the unstable. Building stability into your life helps counteract this.
Good enough for Nobel laureates, good enough for a plastic surgeon
Through business school, Dr. Song met two Nobel laureates in economics. As physicians and surgeons, most of us don’t have the bandwidth to foray into really high risk investments that may offer a high rewards if they hit.
In speaking with his Nobel-winning friends, they gave him simple advice: put as much money as early as you can into the market in index funds as you can. And then let compound interest do its thing. Before you know it, 10-30 years later and you are set. Wisely, he advocates for taking the money pre-tax from your paycheck before you even see it.
What about those more risky investments?
I shared my proclivity for boring old index fund investing. Dr. Song reminds me that it is still ok to have fun with investing. He’s dabbled in angel investing and individual stock investing. But only with a very small percentage of his portfolio. He equates it to going to Vegas.
I think that if you go into these investments with that mindset and with a (very) small portion of your portfolio, there’s no issue. Have your fun. But if you think that an investment like that is going to fund your retirement, you’re in trouble as Dr. Song notes. We only hear about our friends that hit it big, but there are way more failures that we don’t hear about.
The business of medicine
I ask Dr. Song about how he got interested in the business of medicine, a topic that he lectures internationally about.
He shares the story of how he found himself as Chief of Plastic Surgery at the University of Chicago only 3 (!) years out of residency.
His administrator came in with a huge binder with revenue projections and financial algorithms to discuss with him. It was like speaking a different language. So, he set a goal of immersing himself in the business of medicine. This was the motivation for obtaining his MBA.
Like so many others, he had mentors tell him that doctors should not worry about finances or business. But he realized that, like it or not, healthcare and medicine is a business. And we as physicians should be stewards of that business to make sure it runs equitably and continues to provide the best care to patients.
How to know your value
As many of you know, I just began my first attending job after graduating from training. This means I just went through the job search and contract negotiation phase. For so many new and even established physicians, negotiating a contract is a black box.
Dr. Song has long advocated for physicians to know their value in going into negotiations. I ask him how we can do this.
He notes that there is unfortunately a purposeful asymmetry of information as many healthcare administrators do not want to be transparent in their information. MedStar Georgetown, where he works, is abnormal in that it’s packages and compensation are very transparent.
However, there can be an advantage at most other places where transparency is not the norm. And that is that everything is negotiable.
The best strategy in Dr. Song’s mind is for recruits to be knowledgable and prepared. He appreciates candidates that come in asking a lot of questions and pushing for more, respectfully of course. This shows that they are confident in their worth.
To prepare, Dr. Song recommends speaking with mentors and fellow residents/fellows about their experiences. You can also check 990 forms for non-profit organizations to extrapolate salary information from the listed salaries of top earners. Find a mentor like Dr. Song that is financially literate and has information that they are willing to share.
In both of our experience, physicians are generally open to sharing their information to help others. We are all on the same team. And great teams always try to surround themselves with great talent!
Financial education for trainees
Financial education is hugely lacking for medical trainees. I ask Dr. Song if he thinks this should be integrated into trainee curriculum and how he would do it.
As a realist, Dr. Song notes that this is a struggle. Residency is long but it’s really a limited time to train someone in the full breath and depth of information that is need to become an independent physician. Weaving in new important topics like cultural bias training compete with financial education for limited time.
At Georgetown, he combats this with informal education, teaching them how to read profit/loss statements and balance sheets, for example. In terms of more widespread implementation of a financial curriculum, the answer is still out there waiting to be found…maybe by you.
Reacting to the recent market volatility
I test Dr. Song to see how he has reacted to the recent market volatility surrounding the COVID period. Like me, he has essentially done nothing. He advises everyone to focus on the long-term view. Save money, invest in index funds, set it and forget it. We are investing for 20-30 years for now, not tomorrow. So when the market is down, don’t even look at it!
Like he said earlier, if you have a small amount set aside to invest in Apple because you think it is down, then fine. But this should have essentially no impact on your actual retirement plan. It’s legal gambling.
We also tie this in to real estate investing. Dr. Song dabbles in REITs and real estate ETFs but advises listeners to be careful, especially when not diversified in real estate investing.
If real estate is a passion and you have savings allocated for it, that is an option. I am a huge fan of a hybrid model to wealth building with both equity and real estate investing. However, for the average high-income earning physician with a long timeline, optimizing pre-tax dollars for index fund investing that will take advantage of compound interest is the best advice that anyone can give.
The big target on our backs
As physicians, and especially plastic surgeons, we are seen as easy prey because we are so busy without time to perform due diligence and typically are financially illiterate.
Dr. Song reminds us to make sure that if we are paying for financial advice, to make sure it is good advice from a fiduciary. Free advice is not free, you are getting sold bad products from a commissioned salesperson.
The big why
I finish up by asking Dr. Song about his big why. What makes him tick and constantly strive for more.
For Dr. Song, his big why is to be able to tie his passion with his everyday purpose. Financial stability allows one to focus on projects that are rooted in passion, rather than that are a means to an end of surviving financially. This is an important metric of happiness, to love what you do!
I’d like to thank Dr. David Song again so much for sharing his time as well as business and finance wisdom with us all. I learned a lot and I hope all of you did as well!
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