It’s rare that we discover something that can truly change the landscape of medicine. The idea of financial well-being and freedom is one such example in my experience. However, I recently came upon another. And this one takes the form of a truly new and exciting employment option for doctors.
The way that I came across this idea is via my interactions with Dr. Tod Stillson. He is a family practice doctor in Indiana…or as I like to call is, “God’s country.”
Anyway, I met Tod awhile back and he explained to me his thoughts on the employment landscape for physicians. He even went into the interesting way he has structured his contract. These general thoughts can be found here in this guest post from Tod.
I understood some of the advantages of this approach then. But it wasn’t until this past week, when I finished reading his new book, “Doctor Incorporated: Stop The Insanity of Traditional Employment and Preserve Your Professional Autonomy”, that I really recognized it for the paradigm shift that it is and can be.Buy the book for just $0.99 from March 24-28, 2023!
So, I am really excited to share my thoughts of the book and more importantly the new employment options for doctors shared within!
Doctor Incorporated: Stop The Insanity of Traditional Employment and Preserve Your Professional Autonomy
The basic tenet of this very easy-to-read book (it took me about a week of leisurely reading to finish the book) is that the current evolving employment landscape is not working. So doctors need to evaluate and search for a new employment option. And in Dr. Stilson’s mind, a PC-employment lite is just the employment arrangement to revolutionize the landscape and rejuvenate physicians!
Let’s dig a little deeper…
What is the problem?
Without giving it all away, the problem is that doctors are losing their autonomy and in the process their well-being. This leads to burnout (more on that here) which leads to worse patient care and a crisis in the healthcare system.
I mean, tell us something that we don’t know…
And while many solutions center on doctors themselves – things like resiliency training and the like – what is really needed is a systemic change and solution.
FIRE is one such solution. But, if someone doesn’t like their job, that still requires putting our nose to the grindstone while we are getting there in some cases.
So, Tod proposes another solution: a PC-employment lite arrangement.
What is PC-employment lite?
In very simple terms, this employment options for doctors involves an individual doctor forming a PC (Professional Corporation). Their employer then hires this PC – rather than the individual doctor themselves – using a traditional employment contract.
In this arrangement, money now flows from the employer to the PC and then to the doctor’s household rather than from the employer to the doctor directly.
This may seem like a semantic distinction, but it is not.
Employment carries benefits for doctors
There is a reason that >50% of doctors now choose traditional employment. Major benefits include:
- Quick-start without taking on any additional financial risk
- Predictable paycheck at fair market value rates
- Robust benefit package that saves you the time & effort of sourcing them yourself
- Term limits in your contract that make it easier to change jobs. This is important since 50% of doctors leave their first job
- Time away from work rather than using your non-clinical time to operate-manage your practice and its employees.
- Great remedy for your business illiteracy
However, there are disadvantages, the biggest of which are:
- Loss of professional and personal autonomy
- Loss of our “small business superpowers”
- Lack of financially beneficial options as W2 employees
- Limitations in scope of practice outside of our employer
PC-employment lite provides the best of both worlds
PC-employment lite is one of the best ways for both employers and doctors to win in business relationship that supports a doctor’s well being.
In this book, Tod argues that the formation of his own PC-employment lite agreement restored a significant amount of both his personal and professional autonomy. And all while maintaining his employment relationship with his hospital.
Further, now that the hospital was contracting with a PC rather than an employed doctor, compensation ceilings were higher allowing him to earn more.
Tod also now had more freedom to explore other clinical and non-clinical physician side gigs like these!
Add on top of this that he now had available to him a variety of tax beneficial options for his income. This meant that he could actually keep more of his income for himself as well! That’s because, while there are things W2 physicians can do to lower their tax burden, more options are available for 1099 and self-employed physicians…
On the flip side, the hospital actually saved costs associated with maintaining this working relationship. And they still got to keep a productive doctor within their network.
That’s a win-win.
But will your employer really go for it?
In my mind, one of the best parts about this book is that it goes in depth into the potential barriers to implementation of a PC-employment lite arrangement.
And while our employer is usually the first one we think won’t go for it, the truth is that we first must convince ourselves. We are human and humans generally don’t like change. Even when the status quo isn’t working, we tend to stick with it. As Tod points out, this is the definition of insanity according to Einstein. But it is in our nature and nature is hard to break.
So, the book dedicates chapters to help us work on our mindset. But it also spends a great deal of time laying out the benefits of a PC-employment lite arrangement for employers. This along with other negotiating advice will help us go into negotiations confident and with good data to help improve out position.
Tod also helps lay out options if your employer does not go for the arrangement initially so that you can continue progressing towards this structure in the future.
And how do we form a PC?
There are nuances to this.
However, the book does go into the actual process of forming a PC. While this is not a recommend DIY process, it helps to understand it fully so that you can find the right help.
And, on that topic, a lot of people including myself may be worried about the challenges and complexity of managing a PC. Again, this can be a DIY endeavor. But a better plan is to work with a team that helps run your PC legal entity and maximizes its advantages for you. Any cost is well worth it.
My takeaways from the book
As I write this now, I am actually in the process of negotiating my second contract with my employer. So reading the book was very timely.
As a result of reading the book, I really do believe that a PC-employment light option for doctors presents a lot of advantages. And the biggest of these may be more personal and professional autonomy.
I plan to discuss this option with my employer and build a memorandum of understanding (MOA) into the contract to revisit this arrangement at my next negotiation. I even discussed this with Tod who recommended this approach since I am already near a completed contract that I like.
You can read more details about my contract negotiations here!
Take home message for you
PC-employment lite does represent a new and very exciting employment option for doctors.
The current job landscape for doctors is quickly becoming more treacherous. And employment does provide many advantages. But this comes at a great cost.
“Doctor Incorporated: Stop The Insanity of Traditional Employment and Preserve Your Professional Autonomy” by Dr. Tod Stillson provides an amazing blueprint to help all doctors reclaim their autonomy and small business powers, accelerating their path to financial freedom and being the best doctors they can be.
Because I truly believe that a world of financially free doctors would change healthcare for the better in unimaginable ways. In fact, here are 9 Powerful Ways Financially Free Doctors Can Improve Healthcare!
In the end, I highly recommend this book for all physicians!Buy the book for just $0.99 from March 24-28, 2023!
What do you think? Have you explored a new employment option for doctors? Does a PC-employment lite arrangement seem beneficial? Why or why not? Let me know in the comments below!
2 thoughts on “Exploring an Exciting New Employment Option for Doctors”
A student from an affluent family graduates from medical school debt free. He completes his plastic surgery residency debt free. He passes licensure for the state where he wants to live and becomes board-certified in plastic surgery.
Is he legally allowed to enter private practice if he forms a corporation and hires himself as the sole employee? Or is he obligated to work for a hospital?
Of course their practice formation decisions are their own to make. Not sure I understand the question….