Physician Income Maximization

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Next-Gen Rules for Success

Dr. David E. Marcinko; MBA, CMP™


Money, received by medical professionals as salary in the present, can earn money over a period of time (making the amount ultimately larger than if the same initial sum were received later). And, both the amount of investment return and the length of time it takes to receive that return affect the rate of return (i.e., the value of the return).

This principle, known as the time-value of money (TVM), is a vital compensation issue regarding ultimate wealth accumulation.

Retirement Corpus Estimates

For example, as noted by our firm and according to the March 31, 2005 issue of Physician’s Money Digest, a 47-year-old doctor with $184,000 in annual income would need about $5.5 million dollars for retirement at age 65.

This should serve as a wake-up call that physicians may need to cut personal consumption and professional expenses, and to save more aggressively to harvest the TVM to finance the retirement they’re working toward. Remember, compensation is not the sole arbiter of success. To run your own numbers:

Therefore, according to Eugene Schmuckler, PhD of the Institute of Medical Business Advisors, Atlanta, GA it is not too difficult to imagine the following rules for those innovative doctors wishing to maximize compensation.

Practice Strategies and Wealth Building Rules for Doctors

Rule No. 1: A great idea or competitive advantage can earn generous compensation while still serving the public. It’s a unit-of-one healthcare economy where “Me Inc.” is the standard and physicians must maneuver for advantages that boost credibility among patients and payers.  You must also realize the power of networking, vertical integration and the establishment of prn “medical practices,” which physically or virtually come together to treat a patient or cohort, and then disband when a successful outcome is achieved. 

Rule No. 2:Differentiate yourself among your medical peers. Do or learn something new and unknown by your competitors. Market your accomplishments and let the world know. Be a non-conformist. Doctors should create and innovate; do not blindly follow leaders into oblivion.

Rule No. 3:Challenge conventional wisdom, think outside the box, recapture your dreams and ambitions, and work harder than you have ever worked before. Remember the old saying, “if everyone is thinking alike, then nobody is thinking.” 

Rule No 4:Realize that the present is not necessarily the future. Attempt to see the future and discern your place in it. Master the art of the quick change, and fast but informed decision making. Do what you love, disregard what you don’t, and let the fates have their way with you. Then, decide for yourself if you should be an employer or employee, or adhere to the traditional compensation models.


Stay tuned for more on this topic!

We will post some examples of next-generation physicians who are making it under these new rules for success in the modern era.

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:


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7 Responses

  1. N=1

    I couldn’t agree with this post more, especially after reading a new book on customer service, The New Age of Innovation, by CK Prahalad and MS Krishnan, [McGraw-Hill, 2008].* The thrust of their core service philosophy is the mathematical concept, N = 1.

    Here is a brief excerpt. As you read, just replace the word “customer or consumer” with “patient” in your mind’s eye. The bracket insertions are my own for Next-Gen medical practitioner emphasis:

    “We believe that the movement toward N=1 is not a choice. The focus of the young on websites like MySpace, YouTube, Orkut, Facebook and others suggest that a whole generation of customers will grow up expecting to be treated as unique individuals, and they will have the skills and propensity to engage in a [medical] marketplace defined by N=1.”

    This is not about a single [doctor or medical practice] and its success. This is about the acceleration of a social movement toward a personalized, co-created experience. Value for this new generation of consumers is not embedded in traditional motions of quality. That is a given. These consumers want to be involved in shaping their own experiences.” (Chapter 1, page 40).

    Of course, the relevancy of this book to emerging fields of genomics [medical R&D], consumer directed health plans [insurance], retail health clinics [service delivery], health information technology [HIT], as well as customers [patients], medical practitioners [vendors], hospitals [malls and stores] and all stakeholders of the healthcare industrial complex, is staggering.

    And, for those doctors and healthcare executives who enjoy this type of read, a similar book Excellence Every Day, has been released by industry thought leader Lior Arussy.*

    * I am not affiliated with these books or authors.

    Hope Rachel Hetico; RN, MHA
    Managing Editor
    Medical Executive-Post


  2. Society for Healthcare Strategy & Marketing Development of the American Hospital Association

    Dr. Marcinko, according to SHSMD’s Futurescan 2010™, physicians are looking to hospitals to stabilize their incomes through accessing hospital revenues by:

    • Directly competing with the hospital through office-based and freestanding outpatient services.
    • Developing a joint venture in which a physician demands a share of the hospital’s revenues by investing in a given service.
    • Demanding a stipend payment for services previously provided voluntarily such as emergency department call.
    • Seeking a full employment arrangement.

    The study found that by 2013, 25% of physicians on active hospital staff will be employed by the hospital, up from 10% in 2008-09.

    Carolyn Merriman


  3. MDs and $$$

    Money is the number one reason why physicians leave their practice group Many groups rush to create the compensation plan design before they bother to develop clear-cut strategies that would guide the building of the plan. They also neglect to reevaluate the plan on a periodic basis and to pay closer attention to critical signs of dissatisfaction with the plan. When developing or reevaluating your group’s compensation plan, here are some guidelines to keep in mind.



  4. More on Physician Salary and Pay

    But remember, income is not net worth.

    The CPA


  5. Feds Issue Special Fraud Alert on Physician-Owned Distributorships

    Doctors who hold part ownership in medical device companies, beware: People in HHS’ inspector general’s office are watching you. And they don’t like what they see. The inspector general’s office published a special fraud alert Tuesday on the rapidly growing phenomenon of physician-owned distributorships, or PODs, saying, “OIG views PODs as inherently suspect under the anti-kickback statute.”

    Under federal law, it may be legal for a surgeon to hold shares in a company that manufactures devices that the doctor prescribes for his patients, even if it’s a small company that manufactures a product not widely used outside of the hospital where the doctor practices. But such arrangements are risky and easy to abuse, the alert says. Medicare’s Anti-Kickback law makes such arrangements illegal if even one of the doctors’ motives in prescribing devices he has ownership in is for personal profit.

    Source: Joe Carlson, Modern Physician [3/26/13]


  6. The Reasons Physicians Fail to Build Wealth

    What keeps physicians from building wealth? Here are the reasons usually cited:

    * Medical school debt
    * Late start on earning and savings
    * Failure to protect assets against know and overlooked risks
    * Poor tax planning
    * Getting investment advice from the wrong people
    * Fraud and theft.

    This is like saying patients become obese because they eat too many donuts. It may be true, but it fails to tell the whole story.

    Further it fails to lead to sustained solutions that deliver different outcomes. Budgets work about as well as diets.

    Vicki Rackner MD


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