Done with residency? Financial tips for the road ahead

“Young physicians have spent years learning medicine, not business,” said Dr. John Greggain, a family doctor and president of Doctors of BC. “They don’t have MBAs, they don’t have training in human resources. So they end up either choosing work that doesn’t make them have to deal with all the things you need to do when you’re running your own business, or they cobble together whatever information and resources they can to get started.” There’s a lot that needs cobbling together. The Medical Post asked two physicians—who’ve been there, done that and are still doing it—what early-career doctors need to know as they transition from residency to full-fledged practice. Understand obligations Dr. Stephanie Zhou, a Toronto-based addiction medicine physician who led the development of the financial literacy curriculum at the University of Toronto’s faculty of medicine, said it’s generally uncommon for early-career doctors to start their own practice because high clinic overhead and startup capital requirements make that near-impossible. Consequently, many choose to start a practice with a partner or become a partner in an existing practice. Understanding what this partnership entails—from a clinical, legal and financial perspective—is critical, said Dr. Zhou. “Make sure you have a clear understanding of how you’ll be dividing the work, what portion of the overhead each of you is responsible for paying and how decisions that affect the business will be made,” she said. Ideally, a young doctor entering a multi-physician practice will find someone among the group who will be willing to help their new colleague figure out the business side of running a practice, said Dr. Zhou. “When you’re looking to join a practice, you need to make sure the other partners in there are willing to mentor you,” she said. “Because you’re not just there to practise medicine, you’re there as part of a business. Whether or not your partners will make the time to show you the ropes around the business should factor into your decision to join a practice.” An increasingly common situation is doctors entering into contractual agreements to practise in clinics operated by a non-physician owner or private company. Doctors of BC’s guidance in this scenario underlines the importance of paying attention to things like an indemnification clause in a contract—which stipulates that one party must provide compensation if the other party suffers harm or loss—and a confidentiality clause. With the latter, it’s critical for doctors to know their obligation to maintain electronic medical records and how long those obligations stay in place once the contract term ends. Hiring At some point, you’re likely going to have to hire a medical office administrator or manager. “Finding someone with good people skills is probably the most important part,” said Dr. Greggain. “So you may end up tapping someone on the shoulder at a coffee shop and asking if they’d be interested in working for you because you see how hard they’re working and that they’re good with people.” Dr. Zhou said many doctors go on social media platforms, such as Facebook, to post their ads for office staff while others prefer to advertise on traditional job sites like Indeed. In the clinic where she works, part of the staff recruiting strategy involves reaching out to colleges and, for summer staff, to local schools. However you choose to recruit, make sure you’ve got employment agreements and other human resources material—such as job descriptions, codes of conduct and patient confidentiality agreements—already prepared and reviewed by an employment lawyer or an HR consultant, said Dr. Greggain. You should also make sure you understand your responsibilities and obligations as an employer, and that you’re prepared to manage your employees. “Different physicians have a different appetite for HR—the applications that need to be reviewed, interviewing, hiring and firing,” said Dr. Greggain. “But if you’re a physician running your own practice, then these are things you must learn to do, and do well, because the smooth operation of your clinic depends on you hiring and managing the right people.” Spend like a resident “It’s definitely tempting, especially when people start making more money and they’re seeing their friends having kids and buying homes, to go out and start spending,” said Dr. Zhou. Her advice to young doctors is one she’s also heard from other doctors: Live like a resident for the first several years—some physicians suggest a decade—after you’ve finished residency. Pay down debts and start building a nest egg. Young doctors who feel at a loss or overwhelmed by the road ahead should remember there are a number of support systems available to them. Their first outreach should be to their association, said Dr. Greggain. Doctors of BC, for one, has a business pathways program that gives doctors access to experts and resources that can guide them through starting and running a practice and later closing it down. In Ontario, the Ontario Medical Association has a guide for starting a practice that includes advice on what doctors should do at particular milestones, starting from as early as two years before opening a practice, all the way to opening day. The various associations also have partnerships that give their members access to third-party experts in financial services and insurance. Dr. Zhou said early-career doctors might also want to connect online with physician peer groups such as the College of Family Physicians of Canada’s First Five Years in Family Practice. “We’re starting to see specialist groups too, and ones that are a mix of specialists and generalists,” she said. “I think that’s great because it gives doctors, at any stage of their careers, a network and platform to go to with their questions. At the same time, I encourage young doctors to try and find mentors who can really guide them as they’re starting out. Don’t think you have to do it alone.”

Done with residency? Financial tips for the road ahead

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