Doctors don’t like insurance companies. They generally accuse insurance companies of eroding their autonomy, unnecessarily increasing red tape and continually assaulting their incomes. The question must be asked, however, how did doctors ever get themselves in this position and more importantly, how do they get themselves out of it? It’s not difficult to understand how doctors got trapped into their predicament. It IS difficult, however, to understand why doctors continue to enslave themselves to their insurance company masters.

We all know that the funding for the freshly passed healthcare reform bill has to come from somewhere. If you have a successful medical practice, some of that money may come out of your pocket. The 3.8% Medicare Part A tax impacts individuals who make in excess of $200,000 per year. At this time, it looks like 2013 is the year when you will start seeing this additional tax impact your earnings.

However, that’s not the only option available if you want to maintain your standard of living and ensure your future financial wellbeing. The new tax will be assessed on “unearned income”. That includes things like capital gains on investments as well as dividend and annuity payments. Notably, the tax does not apply to the earnings accumulating in your IRA, 401(k), or other tax deferred retirement accounts.

Start Planning Now

If you aren’t taking full advantage of the opportunity to divert as much money as possible into these tax sheltered accounts, now is the time to start. If you are self-employed (and your spouse does not participate in an employer-sponsored retirement plan), you can generally make tax deductible contributions to a traditional IRA. Even better, 2010 is the year that you can convert a traditional IRA to a Roth IRA where money will grow tax free – not just tax deferred – if you wait until retirement age to take distributions.

Of course non-deductible IRAs and other retirement vehicles offer protection from other forms of taxation and are always well worth investigating. You could even consider branching out and adding real estate holdings to an IRA. Any income you make from leasing the property could be protected in the retirement account rather than being exposed to capital gains taxes.

Increase Your Retirement Contribution Limits

As a small business owner and/or a self-employed individual there are other options available as well. With such a low cap on annual contributions to an IRA ($5000 or $10,000 for couples), you might benefit from setting up a plan with higher limits. This could be a Simplified Employee Pension (SEP), Keogh plan, or Solo 401(k). These offer the potential for you to set aside as much as $49,000 per year in a retirement account.

With the plans listed above, you will need additional financial, legal, and HR related advice. Setting up a pension plan through your business is complicated and can have unintended consequences such as affecting the deductibility status of contributions to an IRA. In addition, you may be required to cut your employees in on the deal. That’s not a bad thing if you are looking to retain highly skilled workers by offering a better total compensation plan.

Are you going to sit down with your financial planner and re-evaluate your retirement planning this year? Do you have some ideas for maximizing your income while minimizing your tax exposure?

 

I met with a physician last week who was describing his substantial loss of money in his practice and investments over the last two years. As any prudent person would say, he commented, “And, I have had to cut back my promotional budget significantly.” I replied, “That’s the exact opposite of what you should be doing.” Follow my logic. If promoting your practice is the primary way that you grow, how could you expect to grow if you don’t promote your practice?

Granted, things are very scary out there. It is not business as usual. There is a “new normal” but nobody knows what it is. Every time I watch an economic commentary I want to cash it in! What is the natural inclination of people when they get scared? Most hunker down, close ranks, close in, get conservative. In my opinion, just the opposite of what you should be doing.

Now is the time for you to get creative, to get focused and figure out where to target your dollars. Most practices get lazy when times are good. Figure out what made you successful to begin with and do more of it now. Perhaps times have changed in such a way that the old way doesn’t work anymore. Look to new models of exposure like online practice promotion. Whatever you do, don’t do less of the things that will grow your practice.

 

It’s no secret that widespread dissatisfaction with insurance practices is driving practitioners toward alternative ways of being paid for their services. With the devastating 21% cut to Medicare reimbursement rates, many physicians are even less sure that they can continue to do business as usual.

Restoring profitability to private practices is going to be a challenge. Physicians will have to become thought leaders in creating a patchwork of solutions.

We have all seen practice managers that do little extras at work that they don’t expect to get kudos for but it helps the practice run a little more smoothly or efficiently so they just do it. These are the types of actions that show you that person views his or her position as a career not just a job. Here is your chance to nominate them for PracticeManager of the Month. Submit a paragraph telling us what this manger has done that was above and beyond the call of duty. Maybe they did something to help the budget or compiled all the Red Flag Rules for your office. We will publish the best story and send that practice manager a $50.00 gift card.

 

COMMENTS:

 

 
Eden Baber is our practice manager.  She has gone far beyond the scope of caring for her employees on more than one occasion.

there was a time I became very ill after I had used all of my acquired paid time off, she paid me for the entire week, she did the same thing for other employees in need and did not require anything paid back. she helps where ever needed and always asks if there is anything she can help us with. she is kind and very patient and treats all of her employees as if they were family. lets face it we spend more time with our co-workers than our own family most of the time. she is very good at solving disputes between employees and because this is a small office that can be very stressful but she has handled them with care and consideration of each person or persons involved. she can be strong when need be and motherly at the same time. all if us here appreciate her very much and could not ask for a better Office Manager.

Sincerely,
Dana Rea – billing Supervisor

Dr John T Baber”s office
Dana Rea
04/07/2010

Our Practice Manager is Melissa Edwards. She manages three different offices with the same efficiency most managers handle one. Melissa has the patience to train new employees and the foresight to pick really great employees. She has some staff that have been with her for over 10 years. She started with Dr. Heresco when she was only 23 and built the three clinics he now owns today. She has been there for each and every employee at one time or another. She makes sure our staff is well trained as well as happy in there position. Melissa is a benefit to Heresco Chiropractic, Advanced Chiropractic and Westlake Chiropractic. Thanks Melissa. Nominated by Kim Palmer, Insurance Manager, Heresco Chiropractic
Kimberly Palmer
04/07/2010

My Practice Manager is Ernestine Peoples. She truely deserves to be recognized. Ernestine not only goes above and beyond the call of work but always goes beyond the call for all of our patients. She is definately my right arm. She makes sure the office runs smoothly as well as me. I often have to call her on the weekend to check on my schedule. She is often at work on Saturdays and Sundays catching up on things and never clocks in or expects to get paid for that time. She does her job in a spirit of excellence and treats all of our staff fair making sure they understand the vision of our office. What is more important there have been many times that we have patients that are in need of finances or emotional support. She often takes up money if a patient needs food or clothes. She takes the time to give patients her personal phone number to contact her for emotional support especially becoming a role model to many of our teenage patients helping them graduate from high school and helping complete college applications and financial aid paperwork. I can not tell you how many times people tell me how blessed we are to have Ernestine. We recently opened an ASC, Ernestine ensured that we were totally prepared for our Joint Commission survey in addition to all of her other responsibilities and duties. She never complained about the extra work and did everything in her power to make sure the survey was a success and went smoothly. She implemented new policies and procedures in which our surveyor was truly impressed.
Ernestine also makes sure that we build relationships with our patients and they are not just a number. Our growth in the community is a direct result of the caring professional service we provide and that is largely due to Ernestine.
Dr. R. Flippin
04/09/2010

Jennifer Wright is our practice manager. She just had a baby girl by c-section and it was only 10 days after that that she was in the office to ensure the payroll was going through. Talk about dedication!
Jonathan Cromwell, D.C., P.C.
04/12/2010

We will be collecting these stories until April 25th! So keep on submitting these nominations!
Sherry Krueger
04/19/2010

Marilyn is so good at being a visionary. She has the vision to look ahead, but also to tend to the details to make the vision become a reality. She puts so much time into the clinic and creating an environment that is so conducive to a team. And she is part of the team, she gets into the trenches and works right along side us. She is intelligent, however, never makes us feel that we are beneath her. She is an extreme advocate for us. She is the best!!
Jennifer
05/07/2010

We have an outstanding Practice manager!! She not only runs our office but we have two other offices in the Willamette Valley. One of the offices is in Lake Oswego, Oregon. The doctor there is very competent and has great clinical skills. She is fresh out of school and has not quite mastered the “professional look” that patients expect from their doctor. Not necessarily her fault but a problem none the less. Or manager, Melissa, on her own set up an appointment with a “make-over” person to consult with Dr. D, and then Melissa and the other two women, on her own time took Dr. D shopping to get ‘just the right look’ for Dr. D.
I am so grateful to have on our team someone who takes her position so seriously. Melissa is great.
Dr. Frank Heresco
06/16/2010