Financial Idependence (FI) and Direct Care

​No offense, but taking an employed-physician job is easy (or at least an easy way to start).  Sign your contract, work your hours, collect your paycheck.  Just follow their rules and meet their standards.  Work with your numerous staff and focus your 7-10 minutes per patient encounter in your office on writing your note the way the insurer wants it, and coding so that you meet your RVUs.  The hard part is that this fee-for-service model handcuffs you into a way of practice and drains the love of medicine out of many of us.

You are not independent.  You are dependent in every sense of the word.  When COVID hit, did you get furloughed or have your pay cut back?  If you think you're indispensable, think again.  Your one employer can cut your pay and take your job any day he or she wants.  Independence comes from working for yourself and your patients - the way medicine was meant to be.  

Financial Independence (F.I.) - made famous by the likes of Mister Money Mustache and Physician on FIRE informed many of my decision along my Direct Care journey.  I chose independence from corporate medicine instead of signing a six-figure contract out of residency because I saw the potential independence and happiness I could achieve.

In F.I. the major motivator is savings rate - the more you save, the faster you reach your goal, and the sooner you can retire and live off of your savings.  Math makes the calculation simple and cutting back your monthly expenses makes the goal achievable.  Physician F.I. Bloggers, like Physician on Fire, XRAYVSN, and the Darwinian Doctor all have their own versions of F.I.  But, as my journey into F.I. blogs deepened alongside my journey as a Direct Care doctor, I realized the important caveat to F.I. for my husband and I as physicians - we can (and now DO) love our work. 

The best way to reignite the passion for our work has come in the form of DPC (lite).  Much like F.I., our practice model focuses on keeping overhead ("monthly expenses") at a low percentage of our revenue.  In F.I. the point is to minimize expenses --> to maximize savings --> to gain ultimate independence and freedom financially (rather than maximize income --> to continue along with exorbitant expenses).  In Direct Care (lite) the aim is to minimize expenses to gain independence and freedom professionally.

A doctor with 600 patients, at an average of $60/member/month with a 60% overhead takes home $172,800 gross income.  A doctor with 350 patients, at the same average, with a 20% overhead takes home $201,600.  If you think it's not possible to keep overhead to 20% - I have a secret to share.  I am that second doctor.  I have 350 patients and the math is accurate.  My partner and husband and I share a practice and we're at close to 1000 patients without any staff.  

When you add monthly expenses (i.e. staff/benefits and overhead) to your Direct Care practice, you lose financial flexibility and you get stuck in the Fee-For-Service Conundrum all over again - more time on more patients to cover more costs to pay yourself the same.  Time, control, and flexibility shrink away.  

More on Financial Independence...

more on direct Care...