The hidden menu of physician contracts


Many of you prioritize the clinical aspects of our profession, but understanding the business side of medicine is equally crucial. One key area to consider is your contract, as it can significantly impact your career path and financial stability.

I believe it’s essential for every doctor to be knowledgeable about the variety of contracts they may encounter in the marketplace. The most common type of contract is the business-to-individual contract, where you choose to work for someone else’s business, also known as traditional employment. This is likely to be the starting point for the majority of you and will be the default structure of most full-time job offers.

The hidden menu

But unbeknownst to most of you, there is a hidden menu of contracts that companies can use to hire you, they are known as business-to-business contracts. In the physician labor industry, these are most commonly referred to as professional service agreements.

It’s time to shed light on these less visible contract types and explore the opportunity you have to enter the marketplace using one as a self-employed 1099 micro-corporation rather than as a traditional employee. This approach could be the key to your long-term success.

Let me start by sharing a story to demonstrate my point. Several weeks ago, I was working with a physician who was transitioning from one job to another. His new employer had offered him a position as a traditional W-2 employee, which is the industry norm. This was the only type of contract the physician had experienced in his 7-year career as an attending, and thus he viewed it as his only option. The negotiable aspects were compensation, benefits, etc., but not the type of contract.

Before leaving his job, he met a fellow physician in the surgical dressing room. The physician shared how pleased he was with his transition from traditional employment to an employment lite contract. He encouraged the doctor, who was heading to a new job, to contact me to discuss if this type of arrangement could work for him as well. After reviewing things and providing him with some coaching points, I encouraged him to ask the administration to access their hidden contract menu for business-to-business contracts called PSAs. Guess what? He did it, and the administrator responded by saying, “Sure, let’s get legal involved and make it happen.”

Here’s the point: Too many of you look for jobs assuming your only option is to accept the first contract structure offered by a prospective employer. Typically, this will be a traditional employment contract that heavily favors their control over you. They are going to say that this is “the best way to standardize contracts for all physicians so that they are all treated equally without any favorites,” —which is another way of saying that physician labor should be managed with a social twist—-because from their vantage point, we are all just workers in their health care factories.

It’s a mistake to blindly accept the first offer on the table. Sadly, many of you will follow the herd without considering any alternatives. I suggest taking a moment to reconsider how you enter the marketplace. Instead of being just an individual taxpayer, consider entering as a micro-business. This simple yet impactful decision can empower you as a business owner and lead to jobs organized as business-to-business contracts instead of traditional individual-to-business contracts.

In today’s competitive job market, especially with the current physician shortage, you should have the power to choose the contract structure that best suits your needs.

This idea runs in stark opposition to the physician labor trends in the marketplace, wherein 2024, 74% of US physicians are employees of hospitals, health systems, or corporate entities. Additionally, nearly 90% of physicians who take on a new position this year will be hired as employees. In just over one generation, our profession has transitioned from a community of small business owners to a workforce primarily composed of traditional employees.

This massive generational shift has led to powerful negative effects on physician well-being, and I believe is the fundamental systemic cause of the burnout crisis.

If you’ve been employed for any length of time, you’ll know the burning question that you ask yourself every day: How can I regain control over my professional life and restore my work-life balance?

The fundamental systemic solution to the current burnout crisis involves swinging the pendulum back to restoring physicians’ micro-business powers. This structure is the best way to preserve professional autonomy.

The movement to incorporate yourself will compel employers vying for your professional services to present one of their less visible business-to-business contract options, putting you in control of your life instead of them.

Unlocking autonomy and financial freedom through self-employment

One of the most crucial decisions you’ll make regarding your job contract is your employment status. Although many of you will jump in as W-2 employees, I want you to know that there are significant advantages to starting as a self-employed 1099 micro-corporation instead. Let me briefly recount them for you.

1. Flexibility and autonomy

  • As a self-employed 1099 contractor, you have more control over your schedule, patient load, and work environment.
  • You can choose the types of jobs and contracts that best align with your interests and career goals.

2. Tax benefits

  • Self-employed individuals can take advantage of numerous tax deductions and credits that aren’t available to W-2 employees.
  • By structuring your practice as a micro-corporation, you can further optimize your tax strategy and minimize your tax liability.

3. Preparation for future opportunities

  • Starting your micro-corporation prepares you for any additional 1099 job opportunities that may arise, such as side jobs or consulting work. This is known as job stacking.
  • It allows you to establish your business entity and build a professional network that can lead to future collaborations and partnerships.

4. Avoiding conversion challenges

  • Attempting to transition from a W-2 employee to a 1099 contractor after starting a job can be challenging and may result in complications with your employer and the IRS.
  • Starting as a self-employed 1099 micro-corporation from the beginning eliminates the need for conversion and ensures a smoother establishment of your 1099 contractor status.

The urgency of now

Physician contracts play a crucial role in your professional life. Employers generally favor traditional employment contracts over business-to-business contracts (PSAs). If you want to access their hidden menu, you will likely need to request it specifically.

In the complex realm of physician contracts, you need to know there is a hidden menu that will greatly influence your professional path. As you progress in your career, grasping this menu and making informed decisions about entering the marketplace as a micro-business can result in increased autonomy, financial security, and a flourishing professional life. By investing time in understanding your choices and planning, you can position yourself for lasting success in your medical career.

As the ancient Chinese proverb goes, “The best day to start is yesterday. The second best day is today.” I encourage you not to wait for the perfect moment. Launch your micro-corporation now and declare to the marketplace that you want to be seen as a business. This will empower you to stack jobs, diversify your income, and embrace autonomy. Whether you’re eyeing side gigs or long-term independence, starting your micro-corporation is the key.

Tod Stillson is a family physician, entrepreneur, and Amazon best-selling author of Doctor Incorporated: Stop the Insanity of Traditional Employment and Preserve Your Professional Autonomy. He can be reached at SimpliMD.  Follow him on FacebookInstagram, and X @DrInc9, or join his Facebook community for doctors, Every Doctor Is A Business.

Dr. Stillson is the founder of SimpliMD, an exclusive physician community that supports doctors on their journey to micro-business competency through community, courses, content, coaching, and consultation. At SimpliMD, he inspires and informs doctors about the benefits of micro-incorporation through his content and regular blog posts titled The Truth.

Schedule a business consultation meeting with Dr. Stillson to discuss how micro-incorporation can help you.


Prev





Source link

About The Author

Scroll to Top