2. Not Considering Industry Changes That Impact Finances
Day in and day out, physicians like to practice medicine. While some physicians are able to stay abreast of industry and regulatory changes, many are so consumed with the day-to-day challenges of the profession that these other concerns fall by the wayside.
The healthcare industry is constantly changing and evolving in ways that providers have little control over. Will we go to “Medicare for All”? Will our current healthcare system remain the same? How will the impending problems of Medicare and Medicaid insolvency affect reimbursements? What should physicians do now to try to protect against all of this?
These questions have prompted a shift in the industry. We have worked with more and more physicians who are moving away from solo practices and towards large practices, often affiliated with hospitals, that have professional management teams in place or work with medical consulting firms to keep all the affiliated physicians aware of the ever-changing landscape.
If your heart is set on opening a solo firm, you may benefit from working with a consulting firm to help evaluate everything that goes into running a practice. Or, perhaps you are more comfortable relying on the infrastructure in place at a larger practice or hospital. The choice will vary from doctor to doctor, but the shifts in the medical landscape should not be ignored. Just being a good doctor is not enough anymore—you also have to be a strategic planner or affiliated with a group or firm that can provide that service.
3. Not Having an Up-to-Date Estate Plan in Place for Risk Management
More often than not, we find that physicians either do not have the proper estate documents in place or have oversimplified ones. Many physicians place assets in their spouse’s name and hope this will be enough to protect them from potential legal claims; however, it is our first-hand experience that this approach is not always enough. Trusts, LLCs, and other legal tools set up with the assistance of a well-versed estate planning attorney in conjunction with a financial advisor can help physicians effectively shield their hard-earned assets from potential legal action.
Keep in mind that claims against assets can vary. The proper estate plan will not only seek to protect a physician’s assets from medical malpractice suits, but from common, everyday legal actions that could result from something as simple as an individual slipping and falling on the physician’s sidewalk.
Overall, the objective is to keep the physician’s financial situation as simple as possible while still shielding assets successfully. Wouldn’t the couple of hours spent with an estate planning attorney and a trusted financial advisor be worth the peace of mind these tools can provide? As physicians know all too well, life can change in the blink of an eye. It’s important to prepare for these life-changing possibilities as best we can.
Julianne F. Andrews, MBA, CFP®, AIF® is a principal and co-founder of Atlanta Financial Associates. She specializes in working with physicians and executives in the healthcare industry. Her passion for working with physicians comes from being a pediatrician’s spouse for more than three decades. Julie has been featured on Forbes’ list of America’s Top Women Wealth Advisors since 2017 as well as Forbes’ Best-in-State Wealth Advisors since 2018. Julie can be reached at [email protected].