Some people might want the comfort of a salary and no overhead expenses. This independent doc sees it a completely different way.
Many doctors ask themselves the following: Why be independent when you can be an employee on salary and pay no overhead expenses? You just go to the office and see patients. The hospital gives you an office, staff, insurance, and patients. The local hospital covers primary care between $1 million and $3 million in malpractice insurance.
Well on the latter, I purchase mine through the state physicians exchange and carry between $2 million and $4 million in coverage. The average case in my state settles for $800,000. One of the primary care physicians in my state lost a case in damages over the million dollar limit and his salary has been garnished by the lawyer to pay the balance awarded by the jury.
Moreover, the local hospital will not offer nursing home insurance. I have an office policy that covers me for nursing home expenses lifetime should I ever need it. The hospital uses a 401K plan matching up to 6 percent with limited choices. I have an employer vested plan that goes to 15 percent with unlimited investing choices. The hospital has disability insurance with the option of buying more. I have disability on myself as part of the office group and also a separate individual policy on myself covering me with two policies.
The hospital has no umbrella coverage on the doctors. I have umbrellas that cover myself individually and the office separately that covers up to $5 million should someone be hurt in my office, home, or in my car. The hospital has an HMO supplemental policy on the doctors. I have a broader secondary policy with no restrictions and great drug coverage.
As an employee you have few tax deductions so that 30-40 percent of your salary goes to the IRS and for state taxes. As an independent, I have a lot of deductions including my supplies, computers, and my vehicle, so that I do not pay as much in taxes. Since I am independent, if there is something that need to be purchased at the office, I can do so immediately without filling out forms and waiting for approval. Staff problems are solved quickly as I write the paychecks; and the office manager and I can deal with problems on the spot.
I personally enjoy the freedom to order testing, referrals, and medication for the patients the way I feel is in the best interest of the patient, not the employer. I set my own work schedule and can vary it if necessary since it is my own business. I do not have to punch a time clock or see a fixed number of patients per day so that I can work in sick patients as needed quickly. I like the freedom being independent gives me although I am on my own without the hospital to back me up financially.
Daniel Hoffman is a family solo practitioner in Mount Vernon, Ill.