Here are three issues that need to be on your shortlist for 2013 to re-visit and address proactively to help you and your medical practice.
We’ve covered a wide variety of asset protection, business, and legal issues here together over the last two years and covered some tough terrain in terms of the American business landscape for physicians. The year ahead is full of possibilities and changes both good and bad; fortunately you have professional resources that will help you navigate these waters including Physicians Practice itself.
In the year ahead we will cover a number of issues together including an in-depth series on a 12-month “practice makeover” giving you one key idea to focus on each month. Below are some issues that need to be on your shortlist for 2013 to re-visit and address proactively.
It’s time to protect your assets. Seriously.
Any physician that has not taken time to do so, or who has not at least examined the options available is taking a huge and irresponsible risk with their life’s efforts. We’ve detailed many of the common flaws in asset protection planning for you before, but the number one mistake physicians are still make is doing nothing. It does not matter how hard you worked or how busy you are if you lose all or most of what you’ve worked for. The responsibility is solely yours. As we have discussed, this is not “just” about malpractice exposure. Liabilities that we have commonly seen wipe out some of the most successful doctors in America include liability as employers, parents, and business people with general financial exposures.
It’s time to explore some serious tax reduction planning.
If the “Bush” tax cuts expire, you will pay higher income taxes; in some cases as high as 5 percent more than you pay today and the top rate will be nearly 40 percent of your income. As always, this number is optional. I’ll say that again. You can decide to lower your taxes paid by working with a top CPA and carefully planning when, how, and how much income you receive from your practice and implementing good tax plans to keep more of what you owe on that “engineered” number. The old, “I have a C-corporation but am too lazy to fix it or ask why,” days are over.
If you earn more than $200,000 as an individual or $250,000 as a couple you will face two increased Medicare taxes. Medicare will tax you nearly 2.5 percent on income above these amounts as well as 3.8 percent on investment income for both individuals and couples with income at this level. In a low rate of return environment, this is a significant amount of money and a real drag on your investment portfolio’s performance. Finally Social Security taxes will likely also go up by an additional 2 percent, returning to the previous 6.2 percent level on 2013 earned income.
This also means that tax scammers will be preying on your fears and desire to save taxes like never before. Doctors have always been targets for fraudulent or at least “over-reaching” tax planners, so due diligence and a great team are going to be more important to your future than ever.
It’s time to market your practice.
Patients are likely asking: Someone else in town likely does almost exactly what you, so why should I pick you? My dealing with thousands of doctors nationally involves a variety of topics, not all of them related to the law and my work as an asset protection attorney. Over the years we’ve had to examine a variety of issues with these doctors including many general business issues. I’m often surprised that when I ask doctors that basic question - Why you? - they can’t eloquently provide me a good answer, and they don't have a marketing presence that answers it for anyone else.
We’ve seen massive changes in the physician business and compensation model over just the last few years. These changes have forced many “old-time” doctors out of business while others have prospered and absorbed the patients of the less fortunate. In many of these cases the surviving practice treated itself like a retail store or a restaurant and re-vamped its marketing, physical appearance, procedures, office, and facilities. No patient owes you their “business” - you must have a patient experience that will attract and retain the patients you need. If your office is getting shabby and furnished with old furniture and technology (and ideas), assume you are in the autumn of your practice life.
In our next discussion, we’ll continue looking at some of these core issues and the resources available to help manage them.