The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants

Personal Financial Stress Management for Physicians

Dr. David E. Marcinko; MBA, CMP™

[Publisher in Chief]

The physician who remains in practice long enough is sure to undergo some adverse situation that may negatively affect his financial life. When it occurs, you must have a crisis management plan in place to deal successfully with the matter. In fact, the following three scenarios typically occur somewhere along life’s journey for the average doctor:                       

· Office Crisis Management

· Employment Crisis Management

· Financial Windfall Crisis Management.

1. Office Crisis Management

Crisis management is a matter of perception versus reality. For example, a high profile patient may die under your watch inducing a PR fiasco. But, then again, such a celebrity had confidence in you in the first place, so all is not lost. Therefore, honest spin control is needed when tragedy strikes: 

· Stay calm and relaxed; but act immediately

· Release detrimental but accurate information and stay neutral

· Educate your staff and local community

· Fix the problem, or minimize recurrence

· Continually release information

· Monitor and report your strategy to all affected parties. 

2. Employment Crisis Management

Sooner or later the employed doctor will be terminated or reduced. Or, a partnership will dissolve; a major local employer will relocate or your hospital will close. If you become aware of impending job loss, the following may help: 

· Decrease retirement contributions to the minimum company match

· Place retirement contribution differences in an after-tax emergency fund

· Eliminate unnecessary payroll deductions and deposit the difference to cash

· Replace group term life insurance with personal term or universal life

·Take your old group term life insurance policy with you, if possible

· Establish a home equity line of credit to verify employment

· Borrow against your pension plan as a last resort.

After you loose your job, negotiate your departure and execute the following: 

· Prioritize fixed monthly bills: rent or mortgage; car payments, utility bills; minimum credit card payments; and restructured long-term debt.

· Consider liquidating assets: emergency fund, checking accounts, investments, or assets held in a child’s name

· Review coverage and increase deductibles on homeowner’s and automobile insurance

· Sell stocks or mutual funds; personal valuables like furnishings, jewelry or real estate; and assets not in pensions or annuities

· Keep or rollover any lump-sum pension or savings plan distribution to your new practice. Pay taxes and penalties as a last resort

· Apply for unemployment insurance and review COBRA coverage

· Consider a high-deductible health plan using tax-deferred dollars. 

3. Financial Windfalls

Although ironic, a financial windfall may be more problematic than short-term financial disadvantage. Consider these suggestions:

· Be discrete; don’t quit practice or disrupt your life materially

· Deposit cash into a money market account and limit access

· Title securities correctly

· Redefine your financial plans, and continue to save and invest

· Pay down non-deductible debt

· Review insurance policies, will, estate plan or trusts

· As an executor, be aware of estate tax freeze benefits using the alternate valuation method

· Consider charitable gifting carefully. 

Hire an Expert 

If any of the above occurs, get tax advice immediately, retain an attorney and hire a financial professional. And, unlike stock-brokers and most financial designees, the Certified Medical Planner© is an emerging new financial-advisor subspecialist and fiduciary with focused medical specificity. 

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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