By Harry Rein, M.D. J.D.
Doctor – Lawyer – Judge
April 12, 2016
Physicians live in a world of financial uncertainty dependent on the actions of the stock market, government, the hospitals in our community, the uncertainty of future medical insurance, taxation of our hard earned income, and even the whim of our legislators. Planning, prediction, understanding and control are essential.
I have seen the metamorphosis of the medical enterprise system of practice go from cash only for services rendered and occasional bartering service for products, to negotiating with insurance companies for your employees, contracting with large corporations for their employees, Blue Cross and Blue Shield, to the further development of Medicaid, Medicare, and finally to the new controversial Obamacare. Amendment, alteration, and replacement of all of these events are certain to follow. They have and will continue affect your personal pocketbook, just as hospitals engulfing private practices has done. You know how these affect your emotional response better than anyone does, but the reach and understanding of such financial encroachments requires more.
I am Harry Rein, a doctor, lawyer and judge, who has lived through and participated in these events and in the development of a detailed money management technique that I will discuss here. I make this information available to private practices through my lectures and private consultations because these issues are so important.
The secret is an open method known to many but implemented by relatively few physicians and high earning professionals, because it seems much easier to accept the status quo than to invest in learning how you will be affected by legislation, your competition, and what hospitals have planned for your community. These plans are sometimes surprising; even, financially shocking.
One example that very few physicians know about, or think about, or plan for is what is known in Florida legislation as the ” balance billing” issue. This particular Florida statute was aimed at emergency room physicians, who, under its terms would not be permitted to bill the patient for a balance not covered by insurance, nor for any part of the fee if there was insurance company refusal to pay for the particular service. This law is one of many that negatively affect physicians. Others can be sure to follow. There are dozens of traps, but for every one of them, if you are in private practice, there are beneficial plans of action.
Business planning, professional expenses, financial prudence, and the old Benjamin Franklin teaching, “ A penny earned is a penny saved” is meaningful every day and must be expanded to include office overhead, negotiated insurance fees, the use of car purchases and leasing, your children’s education, golf weekends, and what physicians do worse of all other professions: investing and financial planning. I continue to be amazed by how poorly balance sheets are prepared and not understood by us, a large group of highly trained professionals. I have concluded it is because of continuous substantial cash flow. This is particularly true in reference to investing – in the industry known as money management.
There are many kinds of business ventures: conservative, aggressive, balanced, speculative, domestic, international, bond portfolios, common stock, penny stocks, real estate, and more. Speculative portfolio salespeople know and frequently joke privately that the easiest high-income professionals to sell are physicians. This has serious implications and impact on your family financial planning; because we as physicians work under significant stress. At the same time we are subject to frequent and continuing financial opportunities. But these opportunities can be evaluated very poorly. The preparation process for determining a roadmap must not be done without the right knowledge, understanding and interpretation of family status and all financial resources and expenditures, present and projected.
At the core of financial planning is resource preservation. You may lose many of your good investments. And, you may even lose some of your great investments. But when you win, how great it feels.
If you are a laparoscopic surgeon, think of why you do not operate on acoustic neuromas. All of our individual skills require specialized training, understanding, experience, individualization, and successful repetitive performance. Ask yourself, “Is the right thing being done at the right time, in the right way for the right reason, and getting the desired result? And if not, why not?” That is the definition of my risk management method, applicable to all professional fields. This definition and method have been under continuous development for the past 40 years.
Dr. Harry Rein has taught SLS programs for over a decade and has consulted in 30 states and five countries. He is the only active physician, trial lawyer and retired judge in the U.S. and is known for his teaching and lectures. He is the author of From Stethoscope to Gavel: Of Becoming A Doctor, Lawyer and Judge (on Amazon). Currently a trial lawyer whose practice includes teaching doctors his money management program that “Money Can Buy Happiness”. You can reach him at:DrRein@uscourt.com; or see www.uscourt.com; or the best way is call: 407-333-4444