compensation

[peduncle]

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Don't really like to revolve a thread around monetary compensation, but I recently talked to an ER doc that said working 3 days a week was barely enough to pay for his mortgage and to really enjoy your life, you have to work more shifts... is this true?? What have you guys heard about starting salary's and such.

 

[OSUdoc08]

Don't really like to revolve a thread around monetary compensation, but I recently talked to an ER doc that said working 3 days a week was barely enough to pay for his mortgage and to really enjoy your life, you have to work more shifts... is this true?? What have you guys heard about starting salary's and such.

The starting salary in Oklahoma City is $300,000 if you sign with the group that runs the residency program in town. They hired 100% of the residents that finished last year.

 

[ShyRem]

peduncle, that would depend on what his mortgage is. If his mortgage is $4,000/month, then he's strapped for cash (and living in a freekin' mansion). If his mortgage is $1000/month, then he's got some really expensive ECs (and a spendthrift wife counts as an expensive EC), an expensive drug habit, or he's paying massive amounts on loan repayment.

 

[peduncle]

He's not living in a mansion .... perhaps because he is working at a community hospital

 

[tequila_farm]

4000/mo is far from a mansion in southern california. That is the median price in some areas.

 

[ERMudPhud]

He's not living in a mansion .... perhaps because he is working at a community hospital

Community usually pays better than county or university.

 

[businessmd06]

My 4k per month gets me a 2bed 2 bath in NYC (1300 sqft) and thats in Harlem!! this space in the most glamerous area of NYC.... 8k per month....

🙂
or
🙁

depending how you look at it!

 

[NinerNiner999]

$250k per year amounts to about 17k after taxes each month with a decent accountant - I doubt he's strapped for cash. This is based on under 35 hours per week at $150/hr.

 

[deleted52758]

let me make the most obvious observation/conclusion.

1. it depends on where he lives
2. it depends on how big the house is.
3. it depends on his "extra-curricular" habits are.

therefore, his statement that working three shifts a week is not enough money may in fact be true for him, but not necessarily true for anyone else.

 

[EctopicFetus]

A friend of mine's dad was an orthopod (in his 60's) in Phoenix, I asked my friend when was his dad gonna quit and retire. The response was well.. they have almost no money for retirement.

As my man willynilly mentioned "it depends on (what) his "extra-curricular" habits are" this guy bought antique sports cars and raced them. He also wasnt very financially smart. There is a difference between making a lot of money and being wealthy.

 

[ShyRem]

Wow. Sorry - not familiar with rent in NYC or California.

Willynilly hit it spot on.

 

[jawicobike]

A friend of mine's dad was an orthopod (in his 60's) in Phoenix, I asked my friend when was his dad gonna quit and retire. The response was well.. they have almost no money for retirement.

As my man willynilly mentioned "it depends on (what) his "extra-curricular" habits are" this guy bought antique sports cars and raced them. He also wasnt very financially smart. There is a difference between making a lot of money and being wealthy.

This scenario is actually very prevalent amoung physicians. Dr Typical

 

[Apollyon]

This scenario is actually very prevalent amount physicians. Dr Typical

Wow - brief but enlightening. It's an idea I'd had, but didn't know that it was common. Food for thought, and a good place to start.

Thanks for the link!

 

[BKN]

Wow - brief but enlightening. It's an idea I'd had, but didn't know that it was common. Food for thought, and a good place to start.

Thanks for the link!

Read this book: The milllionaire next door http://www.amazon.com/gp/product/0671015206/qid=1143138218/sr=2-1/ref=pd_bbs_b_2_1/103-2286407-1803035?s=books&v=glance&n=283155

I have relatives who are worth consdierably more than a mill. They live nicely, but you wouldn't know that they are very well off.

What did I learn from them that my parents didn't teach me? Buy a house that's less than you can afford. Drive your cars until they drop, fix em up and do it again. Shop for bargains and never take the first offer.

bn

 

[jawicobike]

When I first read that book I remember trying to figure out why so few doctors are wealthy. In addition to everything said in the book, as well as and the little anecdotal story I linked above, I think that many doctors simply cheat themselves out of being weathy because of arrogance.

In order to obtain wealth one needs to make some wise investments. This requires financial knowledge which is excrutiatingly boring to obtain for many of my colleagues (on a side note I believe there is far too little finance taught in American schools). The other way is to hire someone who has financial knowledge to advise on financial affairs. I have found that this is difficult for many of my fellow classmates and physician colleagues (a short list I admit) because they have spent their lives being the best and the brightest and they have a difficult time not only taking advice, but paying for advice from a lowly accountant or financial planner who has spent considerably less time in school, and makes considerably less money (although in many cases has accumulated more wealth).

Now I'm not trying to make anybody bristle at this, but look at your colleagues and tell me that a few of them don't fit this description.

 

[average]

Physicians are strapped for cash because they think that they can do it all. Drive nice cars, live in a nice house, spend money left and right.

They finish medical school and think that they have arrived. While 150-250k is a lot of money, it can be easily spent.

Reasons physicians are strapped for cash and find it difficult to retire:

1. I will finish residency at age 31. Most of my friends have been trickling money into a 401k for 10 years at that point. If your money doubles every 10 years then that 10 years is HUGE. Consider this, retire at 61 (early for most)= 40 years of work for friend. Me=30 years. Start with 1$ doubling every 10 years. 30 years=8$ 40 years=16$. Huge difference!

2. I may make more money, but I have to save much more as a % of my income. First, because of statement (1) above. Two, because I get taxed in a higher tax bracket. Three, because I can't take advantage of tax free savings accounts as much as someone with a lower salary. Why? because they have maximum amounts. If I am making 250k but my 401k maxes out at 16k, then I can only save ~ 6% of my income. Friend makes 80k a year and has not problem saving enough with just his 401k.

3. People think wealth is exponential. If I can afford a nice car then I can afford to pay to have it washed/detailed. If I can afford a nice yard, then I can afford someone to mow it. I make lots of money, why should my wife have to work.

4. Many physicians are very good at what they do but do not have a clue about how to manage their finances. Why? because they have never been forced to. We go from making zero to making hundreds of thousands of dollars. Seems straight forward, ya right!

My advice. Take your first paycheck. Remove 30% of that money and find someone to invest it wisely/do it yourself (vangaurd index funds). If the stock market does well, you retire early. If the stock market does baddly, you retire at ~65.

Problems is that people don't do this. They justify not saving for a little while. (Well... I need to buy my first house and need to secure a good down payment. I need reliable transportation. I need new furniture for my house). They want to live like a doctor who has been in practice for 20 years but don't realize that it takes TIME to accumulate that stuff. Once they get used to spending that kind of money, then they can't back out and start spending less. They end up having to "sacrifice" just to put 5% into a retirement account. However, by this point, the time factor mentioned in (1) is in full force and they are another 5-10 years behind.

A bit winded but I fell strongly on the subject. Went through it somewhat myself, when my wife started working.

average

 

[waterski232002]

peduncle, that would depend on what his mortgage is. If his mortgage is $4,000/month, then he's strapped for cash (and living in a freekin' mansion). If his mortgage is $1000/month, then he's got some really expensive ECs (and a spendthrift wife counts as an expensive EC), an expensive drug habit, or he's paying massive amounts on loan repayment.

Most of my friends that are residents pay $1000 mortgages... His must be a hell of a lot higher than that! I'm sure he lives better than my friends and I do.

 

[docB]

I make good money. My mortgage is up there and I do feel strapped for cash every month but I'm also putting a good amount away in investments and IRA type stuff. The thing about being a doc is that you'll make good money but you'll never be fabulously wealthy. If you want to be fabulously wealthy you shoulda been a lawyer.

 

[NinerNiner999]

Live off of 8k per month. Period. This number will get you a great house, a great lifestyle, and great flexibility. Spend every last cent of your 8k per month - enjoy it. Get so used to it that you forget about the other 6k or 10k or whatever more each month you put away into investments, retirement funds, CD's, etc. The above poster summed it up well - you will never be fabulously wealthy - but your life will be very rich...

 

[jawicobike]

The thing about being a doc is that you'll make good money but you'll never be fabulously wealthy. If you want to be fabulously wealthy you shoulda been a lawyer.

Get so used to it that you forget about the other 6k or 10k or whatever more each month you put away into investments, retirement funds, CD's, etc. The above poster summed it up well - you will never be fabulously wealthy - but your life will be very rich...

$10 grand a month at 11% (high but certainly attainable, although I'm not so sure about the $10 grand a month)
16 yrs = $5.4 mil
26 yrs = $18 mil
36 yrs = $62 mil

I don't plan to work until I'm 70 but if I did $62 million seems fabulously wealthy to me. Wealth is much more dependant on time than it is on salary, anybody can be wealthy with a little discipline, although, it should be easier for doctors.

 

[cdql]

looks good but 11% may be a bit too generous

8% is the norm

 

[GuitarMan]

I love these couple of sentences from the first editorial review listed for "The Millionaire Next Door" at amazon.com:

"Stanley and Danko mercilessly show how wealth takes sacrifice, discipline, and hard work, qualities that are positively discouraged by our high-consumption society. "You aren't what you drive," admonish the authors."

Apparantly you are the balance in your bank account rather than the car in your garage. Aside from retirement, what makes wealth worth all the sacrifice and hard work? Do you really want to work like a slave and sacrifice like a buddhist for forty years so you can have a million dollars sitting in the bank when they bury you just for uncle sam to pinch?

I am not suggesting that people should blow every dime they acquire. I'm just pointing out that wealth has no intrinsic value if it is not utilized from time to time.

 

[jawicobike]

looks good but 11% may be a bit too generous

8% is the norm

Ok 8% then (though if I can't do better then the norm I should probably just buy an index fund instead of doing the research and sticking with the 13% I'm used to)

16 yrs = $4 mil
26 yrs = $10.7 mil
36 yrs = $47.9 mil

I am not suggesting that people should blow every dime they acquire. I'm just pointing out that wealth has no intrinsic value if it is not utilized from time to time.

The intrinsic value of wealth for many people is the feeling of security it gives. I agree with you completely, however, it seems that many people can't find that happy medium between wealth and possessions and thus never acquire enough wealth to remove themselves from their inflow of cash coming from their salary.

I don't plan to drive a Saturn for the rest of my life, but I'm not going to go out and get a brand new Benz straight out of residency either.

 

[docB]

16 yrs = $4 mil
26 yrs = $10.7 mil
36 yrs = $47.9 mil

You're being pretty generous on the amount of money you expect docs to be able to save to accomplish those numbers. You can only invest disposable income (what's left after you pay your bills). Most of us have loans to pay off so there's a chunk each month. If you're paid W2 wages taxes will hit you hard, 35% right off the top just for federal. Mortgages, car payments, utilities, groceries, insurance and so on.

 

[jawicobike]

You're being pretty generous on the amount of money you expect docs to be able to save to accomplish those numbers. You can only invest disposable income (what's left after you pay your bills). Most of us have loans to pay off so there's a chunk each month. If you're paid W2 wages taxes will hit you hard, 35% right off the top just for federal. Mortgages, car payments, utilities, groceries, insurance and so on.

You're right I was making the calculations to show the discrepancy of a previous post stating that saving $10 grand per month would not be enough to make one "fabulously wealthy".

That being said your post illustrates the need for a good tax accountant to enable one to maximize disposable income so that you can begin to approach the numbers presented.

 

[average]

historically, the stock market has made 12%. Inflation over that time has been 3.1%

Thus, one should not realistically plan on making greater than 9% per year.


My opinion about "beating" the stock market. I'm sure that you may have made 13% per year for however long, however anyone can get lucky over short periods of time. Talk to me in 30 years and I will be impressed.

There are only a handful of people in the US that can regularly beat the stockmarket and those people are rich, not working their butts off in the emergency room.

There are huge tournaments on coin flipping. Starting with thousands of people, they pair up flipping heads or tails, winner moves on. By the end, the last two contestants invariably think that they are special and can flip better than others- "its all in the technique." I would argue that this is the case for many investers. They do well for several years and start to think that they are special.

 

[waterski232002]

That's why the "special" one's use inside information!

 

[EctopicFetus]

FYI from the brookings institute.

The historical real stock market return averaged about 6.3%.


This takes into account inflation etc. And while we have been taught that 3% is normal we have had times in this country where the rate has been much higher.

http://www.brookings.edu/views/testimony/burtless/19990511.htm

Bottom line---- save money, dont think about living the pimp life from the get go, save some cash and get ahead of the curve and then all of life will be easier.

 

[EctopicFetus]

FYI businessweek in 2002 stated it was 7% adjusted for inflation etc.

 

[average]

FYI from the brookings institute.

The historical real stock market return averaged about 6.3%.


This takes into account inflation etc. And while we have been taught that 3% is normal we have had times in this country where the rate has been much higher.

http://www.brookings.edu/views/testimony/burtless/19990511.htm

Bottom line---- save money, dont think about living the pimp life from the get go, save some cash and get ahead of the curve and then all of life will be easier.

Interesting. I've never really read into the numbers but have heard 12% quoted by multiple sources. Turns out that 12.56% is the "arithmetic annual average return(1926-2000). The geometric return is 10.7%. Average inflation is 3.1%. This link talks about it more in depth http://radio.weblogs.com/0103811/2003/05/06.html
It goes on to talk about the long term equity-risk premium blah blah blah blah

Most of the math and terms are way over my head. Interestingly the Standard deviation for an anual return is over 19%. Says a lot about the importance of TIME.

Agree with aboves bottom line-- personally, I pLAN on a 3% annual return and but HOPE for historical averages.

 

[jawicobike]

The average person never gets into medical school. The average person does not become a doctor, and the average doctor isn't an EM physician. The average physician knows very little about financial investments. The average investor has holdings in broad based mutual funds or index funds. The average investor should be able to achieve the returns mentioned above.

Most people in this forum have found a way to be above average in medicine (and by taking the advice given by those people I hope to be above average when residency time comes around). Why is it that we settle for average when it comes to financial investments?

 

[mward04]

amen brotha!

Physicians are strapped for cash because they think that they can do it all. Drive nice cars, live in a nice house, spend money left and right.

They finish medical school and think that they have arrived. While 150-250k is a lot of money, it can be easily spent.

Reasons physicians are strapped for cash and find it difficult to retire:

1. I will finish residency at age 31. Most of my friends have been trickling money into a 401k for 10 years at that point. If your money doubles every 10 years then that 10 years is HUGE. Consider this, retire at 61 (early for most)= 40 years of work for friend. Me=30 years. Start with 1$ doubling every 10 years. 30 years=8$ 40 years=16$. Huge difference!

2. I may make more money, but I have to save much more as a % of my income. First, because of statement (1) above. Two, because I get taxed in a higher tax bracket. Three, because I can't take advantage of tax free savings accounts as much as someone with a lower salary. Why? because they have maximum amounts. If I am making 250k but my 401k maxes out at 16k, then I can only save ~ 6% of my income. Friend makes 80k a year and has not problem saving enough with just his 401k.

3. People think wealth is exponential. If I can afford a nice car then I can afford to pay to have it washed/detailed. If I can afford a nice yard, then I can afford someone to mow it. I make lots of money, why should my wife have to work.

4. Many physicians are very good at what they do but do not have a clue about how to manage their finances. Why? because they have never been forced to. We go from making zero to making hundreds of thousands of dollars. Seems straight forward, ya right!

My advice. Take your first paycheck. Remove 30% of that money and find someone to invest it wisely/do it yourself (vangaurd index funds). If the stock market does well, you retire early. If the stock market does baddly, you retire at ~65.

Problems is that people don't do this. They justify not saving for a little while. (Well... I need to buy my first house and need to secure a good down payment. I need reliable transportation. I need new furniture for my house). They want to live like a doctor who has been in practice for 20 years but don't realize that it takes TIME to accumulate that stuff. Once they get used to spending that kind of money, then they can't back out and start spending less. They end up having to "sacrifice" just to put 5% into a retirement account. However, by this point, the time factor mentioned in (1) is in full force and they are another 5-10 years behind.

A bit winded but I fell strongly on the subject. Went through it somewhat myself, when my wife started working.

average

 

[mward04]

Interesting. I've never really read into the numbers but have heard 12% quoted by multiple sources. Turns out that 12.56% is the "arithmetic annual average return(1926-2000). The geometric return is 10.7%. Average inflation is 3.1%. This link talks about it more in depth http://radio.weblogs.com/0103811/2003/05/06.html
It goes on to talk about the long term equity-risk premium blah blah blah blah

Most of the math and terms are way over my head. Interestingly the Standard deviation for an anual return is over 19%. Says a lot about the importance of TIME.

Agree with aboves bottom line-- personally, I pLAN on a 3% annual return and but HOPE for historical averages.

It was awfully convenient of those sources to leave out 2000-2006, huh?

 

[average]

It was awfully convenient of those sources to leave out 2000-2006, huh?

Probably wouldn't effect things a ton since stock market has recovered since 2000 and 6 years over that large of a time period is not huge. At the very most would take away 0.8% assuming no gains since 2000(not a correct assumption).

 

[average]

The average person never gets into medical school. The average person does not become a doctor, and the average doctor isn't an EM physician. The average physician knows very little about financial investments. The average investor has holdings in broad based mutual funds or index funds. The average investor should be able to achieve the returns mentioned above.

Most people in this forum have found a way to be above average in medicine (and by taking the advice given by those people I hope to be above average when residency time comes around). Why is it that we settle for average when it comes to financial investments?

The average person thinks that they are special. But I'm sure you are.

 

[jawicobike]

The average person thinks that they are special. But I'm sure you are.

Whoa there, for all you know I could be a finance major with a history running a fortune 500 company who got tired of it all and decided to go to medical school.

If the average person thinks they are special does that mean that only idiots think they are average, because special people probably know they are special?

In the end it seems that my earlier point about the arrogance of many in the medical field (myself included) has been proven as it is obviously difficult to listen to financial theories from someone who can't possibly be more financially knowledgeable than myself because he is just a lowly second year medical school student.

 

[average]

Whoa there, for all you know I could be a finance major with a history running a fortune 500 company who got tired of it all and decided to go to medical school.

If the average person thinks they are special does that mean that only idiots think they are average, because special people probably know they are special?

In the end it seems that my earlier point about the arrogance of many in the medical field (myself included) has been proven as it is obviously difficult to listen to financial theories from someone who can't possibly be more financially knowledgeable than myself because he is just a lowly second year medical school student.

If you once ran a fortune 500 company than by all means give me all the financial advice you can muster!

Actually, you are the lowly second year(class of 08'). I am an all-powerful 3rd year(07') 😀 . No, I don't have a degree in finance but do read a lot and do have a close friend who does have such a degree. I enjoy having lenghtly conversations with him about such matters. People do beat the market but others lose. Generally, the higher the returns, the more risk that is invovled . Also, research takes time, our time is valuable.

FYI, you contradict yourself in the above. First you tell me that I can't know if you are knowledgable because I don't know what you did before, then you tell me that I can't possibly be knowledgable because of my year in school?

Also, per above --"If the average person thinks they are special does that mean that only idiots think they are average"--- I ask you.... If all wuzzles own chickens. And some weezles love chicken. Then clearly, weezles want to eat wuzzles. no?

 

[jawicobike]

FYI, you contradict yourself in the above. First you tell me that I can't know if you are knowledgable because I don't know what you did before, then you tell me that I can't possibly be knowledgable because of my year in school?

If you will kindly reread my post you will notice that I made no reference to your year in school at all (I had no idea until you mentioned it). I didn't say you can't be knowledgeable at all. I said that it is difficult for many in the medical field to accept financial advice from those that are lower on the medical ladder (I was referring to myself as the lowly 2nd year). For example I have caught myself having difficulty listening to the opinions of premeds on how to do your finances during med school even though they may well know a lot more than I.

At any rate I would be curious as to some of the financial books you have read and liked, I'm always looking to add to my financial section in the bookshelf (maybe I'll have some time to do some leisure reading after step one). Feel free to PM me if you don't want to take any more space on the EM forum speaking of financial matters.

 

[cdql]

The average doctor cannot be an above average investor because medicine is a full time job.

To be a good investor, you have to read, read, read. There are conferences to attend. There are talks to listen to. It requires constant attention to the Wall Street Journal.

I find it hard that anyone can be amazingly good at both. My advice would be to save the money you make, invest in something low-risk for a long period of time, and enjoy the rewards when it comes time for retirement.

To play the stock market with a limited knowledge base is a good way to starve to death around the age of 65.

 

[NinerNiner999]

Or... you can invest half of your funds conservatively and put the other half in the hands of a trustworthy financial planner...

 

[jawicobike]

To play the stock market with a limited knowledge base is a good way to starve to death around the age of 65.

Therein lies the problem. One who plays the stock market may well starve as you point out, however making sound purchases of business securities that happen to be traded on the stock market floor is not playing the stock market.

Consider the opportunity to buy into a lucrative EM partnership. How much time would it require to research the opportunity to see if it is a sound investment for an EM doctor? A fair amount for sure, but probably not as much time as it would require for my accountant friend with no knowledge of the inner workings of the practice.

There are thousands of people out there that can tell you which pharmaceutical companies are good investments based on financial reports. That's all well and good and undoubtedly important, but as a medical professional you have an advantage to see which drugs really are prescribed more than others and which companies tend to make those drugs before the general masses. What about medical technology? Everybody always talks about getting rich by inventing the next great procedural tool, but why not just invest in the company that came out with the suture kit that you know will be in ever hospital in the country by next year, after making sure that their financial reports are in good shape of course.

Now I am the first to admit that the above information is far from all that is needed to make sound investments, but with the basic knowledge of finance and investing the above information makes you more of an expert in your particular sector than the wallstreet brokers that are looking at page after page of data and talking to salesmen CEOs.

Bill Gates got rich because he founded microsoft, but a lot of computer nerds also got rich from microsoft because they saw that Microsoft was making a great product and they jumped in early. They certainly weren't financial guru's but they had an expert view of a certain sector much the same way many doctors did 10 years ago before the biomedical bubble. Of course a basic knowledge of finace is certainly needed to avoid jumping in too late as many doctor's also did during the middle of the biomedical bubble.

Of course there is always the possibility that one of your friends is a brilliant financier and you can just jump on that bandwagon as was done by the many friends of Warren Buffett back in the 70's and 80's.

Sorry for the saga, but there is definitely a distinction between playing the stock market and investing to your strengths.

I'm not trying to disagree with the quoted statement rather I'm trying debunk the myth that one must be an expert financier in order to make sound investments.

 

[cdql]

What you said is very true.

And therefore, I will amend that statement to "placing the majority of your savings into stock market play or into risky investments is a good way to starve to death"

Certainly as one gets older (and hopefully better paid), doctors can begin to branch out and invest in more things. The key is to always have diverse investments and to limit the amount of money you place into risky investments.

 

[waterski232002]

Consider the opportunity to buy into a lucrative EM partnership. How much time would it require to research the opportunity to see if it is a sound investment for an EM doctor? A fair amount for sure, but probably not as much time as it would require for my accountant friend with no knowledge of the inner workings of the practice.

There are thousands of people out there that can tell you which pharmaceutical companies are good investments based on financial reports. That's all well and good and undoubtedly important, but as a medical professional you have an advantage to see which drugs really are prescribed more than others and which companies tend to make those drugs before the general masses. What about medical technology? Everybody always talks about getting rich by inventing the next great procedural tool, but why not just invest in the company that came out with the suture kit that you know will be in ever hospital in the country by next year, after making sure that their financial reports are in good shape of course.

Now I am the first to admit that the above information is far from all that is needed to make sound investments, but with the basic knowledge of finance and investing the above information makes you more of an expert in your particular sector than the wallstreet brokers that are looking at page after page of data and talking to salesmen CEOs.

Bill Gates got rich because he founded microsoft, but a lot of computer nerds also got rich from microsoft because they saw that Microsoft was making a great product and they jumped in early. They certainly weren't financial guru's but they had an expert view of a certain sector much the same way many doctors did 10 years ago before the biomedical bubble. Of course a basic knowledge of finace is certainly needed to avoid jumping in too late as many doctor's also did during the middle of the biomedical bubble.

This is ILLEGAL. It is a violation of federal law for physicians to invest in medical supplies, equipment, procedures, or medication/pharmaceuticals that we are directly involved with, or that we are indirectly involved with.

For example... if you are an FP, it is illegal for you to invest in a company making new "high resolution" CT scanners if you ever recommend CT scans to your patients. It is even illegal for one of your family members to be invested in the company who makes these "high resolution" CT scanners if you have ever recommended their use. And it does not make a difference if the "high resolution" CT scanners are or become the standard of care. You and your family can never be invested in them if they are a part of your patient care.

I know it sounds crazy, but for those of you who haven't started residency (or didn't pay close attention to your HIPPA/job training requirements at orientation) ask your lawyer if you don't believe me... it's 100% true, and unique to the medical profession. The government does not want physicians to be bias about the care we offer.

 

[EctopicFetus]

This is ILLEGAL. It is a violation of federal law for physicians to invest in medical supplies, equipment, procedures, or medication/pharmaceuticals that we are directly involved with, or that we are indirectly involved with.

For example... if you are an FP, it is illegal for you to invest in a company making new "high resolution" CT scanners if you ever recommend CT scans to your patients. It is even illegal for one of your family members to be invested in the company who makes these "high resolution" CT scanners if you have ever recommended their use. And it does not make a difference if the "high resolution" CT scanners are or become the standard of care. You and your family can never be invested in them if they are a part of your patient care.

I know it sounds crazy, but for those of you who haven't started residency (or didn't pay close attention to your HIPPA/job training requirements at orientation) ask your lawyer if you don't believe me... it's 100% true, and unique to the medical profession. The government does not want physicians to be bias about the care we offer.

Waterski I may be wrong but it my understanding that that only holds true if you were an FP who basically then sent your patients to a CT center owned by you. I think you can buy into a company who makes CT scanners since just because some guy bought one it has little to do with the profit generated by that CT scanner making company. The issue would be referring to something that would then make you money. This would be medicare fraud. If what you said was true then docs couldnt/wouldnt be allowed to invest in pharma. I know docs who do.

 

[jawicobike]

I assume you are talking about the anti-kickback act. Ectopic is correct on this one. The act as well as the safe harbor provisions can be found here http://library.findlaw.com/1999/Dec/1/127813.html . Specifically the information pertaining to the present discussion is in the paragraph under large and small investment interests.

"A safe harbor currently provides protection for investments in large entities, which are defined as those companies whose shares are traded on a national securities exchange (those with a capitalization of at least $50 million) and small entities (if they meet the "60 - 40" rules discussed above). 42 C.F.R. § 1001.952(a) "


Definitely not illegal!

 

[waterski232002]

Waterski I may be wrong but it my understanding that that only holds true if you were an FP who basically then sent your patients to a CT center owned by you. I think you can buy into a company who makes CT scanners since just because some guy bought one it has little to do with the profit generated by that CT scanner making company. The issue would be referring to something that would then make you money. This would be medicare fraud. If what you said was true then docs couldnt/wouldnt be allowed to invest in pharma. I know docs who do.

But if you are referring people to the CT scanner, you are in fact, promoting your own product (the use of a product you are invested in). So this would fall under the same category. At least, that is how I understand it.

I agree... I know people who are invested in similar situations. The point being--be careful, and consult an attorney. Investing in the health care industry is very tricky as a practicing physician.

 

[jawicobike]

Investing in the health care industry is very tricky as a practicing physician.

It's actually not tricky at all because large stocks are protected by a safe harbor written into the anti-kickback act as I revised in my last post.

Now if we're talking about investing in the local pharmacy then it gets a little tricky and a lawyer should definitely be consulted.

 

[EctopicFetus]

I agree with jawicobike it is ok to invest in the companies since I believe the anti kickback law is only if you directly own it not a 0.00004% ownership. A local pharmacy is different although I have seen where docs petition the govt esp in small areas because it is an overall good for people. Just throwing this out there.

 

[average]

I agree with jawicobike it is ok to invest in the companies since I believe the anti kickback law is only if you directly own it not a 0.00004% ownership. A local pharmacy is different although I have seen where docs petition the govt esp in small areas because it is an overall good for people. Just throwing this out there.

agreed, else you couldn't even buy a mutual fund in fear of it having one investment into a medical firm. They would have to make special mutaul fund just for physicians.

 

[8744]

....3 days a week was barely enough to pay for his mortgage and to really enjoy your life, you have to work more shifts...

You mean...like working five days a week?

The horror.