Financial/Legal

Retirement planning starts the day we start our careers. Whenever we start any project, it is always worthwhile to learn how the project works, what we want to pursue and achieve with the project, how to exit the project, and when is the right time to exit.

As physicians, gastroenterologists go through several years of vigorous training, years spent studying, researching, practicing, and juggling between work and life, trying to lead a well-balanced life. With all the years of medical training, we do not get the same level of education in financial planning in order to attain financial stability, financial empowerment, or resources that we need to put in place for a successful retirement.

Dr. Appalaneni

Many physicians like to work and provide services as long as they can, provided the physical and mental capacity permits. Retirement planning should start as early as possible — at your first job, with the first paycheck. Having a strategic plan and understanding several personal factors can help one make this journey successful.

Retirement involves planning at multiple levels, including but not limited to financial planning, transition planning, healthcare coverage, estate planning, and social, leisure, and emotional planning.
 

Financial Planning

Financial planning starts with investments in 401k, IRA, defined benefit, and defined contribution plans, as early as possible and to the maximum extent possible. It is beneficial to contribute at the first opportunity and contribute enough to the employer retirement plan to earn the full employer match. Also consider capital investment opportunities that match your risk appetite and returns, as these compound and grow over time. This can be done by adjusting personal expenses and lifestyle, giving priority to savings and future wealth management, and auto-escalation of permitted retirement contributions annually.

Assessing your financial situation periodically to determine retirement needs based on how long you intend to work and preferred lifestyle post retirement (travel, leisurely activities, etc.) is important. It is also pertinent to align revenue earned, expenses made, and wealth saved to support post-retirement life. Consider hiring a financial advisor who has the best interests in your personal wealth management. These are usually found with reputable institutions at a fixed percentage cost. Finding a trustworthy knowledgeable advisor is the key. Learning from your colleagues, networking, and learning from friends in and out of healthcare are good resources to find the right financial advisor.

Healthcare expenses should be planned as well as part of financial planning. Short-term and long-term disability and long-term care expenses should be investigated when planning for healthcare needs.
 

Transition Planning

Timing of retirement is based on factors such as age, financial status, personal health and preferences. The transition can be facilitated by better communication with colleagues, partners, employer, staff, and patients. Identifying a successor and planning for continuity of care of the patients, such as transitioning patients to another provider, is important as well. This may involve hiring a new associate, merging with another practice, or selling the practice.

Healthcare Coverage

One of the biggest expenses with retirement is healthcare coverage. Healthcare coverage options need to be analyzed which may include Medicare eligibility, enrollment, potential needs after retirement, including preventative care, treatment of chronic conditions, long term care services, and unexpected health outcomes and consequences.

Lifestyle and Travel Planning

Reflect on the retirement lifestyle, hobbies, and passions to be explored. Some activities like volunteer work, continuing educational opportunities, and advisory work, will help maintain physical and mental health. Consider downsizing living arrangements to align with retirement lifestyle goals which may include relocating to a different area as it fits your needs.

Legal and Estate Planning

Review and update legal documents including power of attorney, healthcare directives, will, trusts, and periodically ensure that these documents reflect your wishes.

Professional Development

Retirement may not mean quitting work completely. Some may look at this as an opportunity for professional development and pivoting to a different career that suits their lifestyle and needs. Gastroenterologists may contribute to the field and stay connected by being mentors, advisors, or, industry partners; being involved in national organizations; leading purposeful projects; or teaching part-time or on a volunteer basis.

Emotional and Social Support

Being a physician and a leader on treatment teams after so many years, some may feel lonely and unproductive with a lack of purpose in retirement; while others are excited about the free time they gained to pursue other activities and projects.

The process can be emotionally challenging even for well-prepared individuals. Finding friends, family, and professionals who can support you through this process will be helpful as you go through the uncertainties, anxiety, and fear during this phase of life. Think of developing hobbies and interests and nurturing networks outside of work environment that will keep you engaged and content during this transition.

Gastroenterologists can plan for a financially secure, emotionally fulfilling, and professionally satisfying transition tailored to their needs and preferences. Seeking help from financial advisors, legal experts, mentors, and other professionals who can provide valuable advice, support, and guidance is crucial during this process.

Do what you love and love what you do.

Dr. Appalaneni is a gastroenterologist at Dayton Gastroenterology in Beavercreek, Ohio, and a clinical assistant professor at Boonshoft School of Medicine, Wright State University in Dayton, Ohio. This article is not a financial planning document, nor legal advice; these are the author’s learnings, experiences, and opinions and are not considered financial advice.

Retirement planning starts the day we start our careers. Whenever we start any project, it is always worthwhile to learn how the project works, what we want to pursue and achieve with the project, how to exit the project, and when is the right time to exit.

As physicians, gastroenterologists go through several years of vigorous training, years spent studying, researching, practicing, and juggling between work and life, trying to lead a well-balanced life. With all the years of medical training, we do not get the same level of education in financial planning in order to attain financial stability, financial empowerment, or resources that we need to put in place for a successful retirement.

Dr. Appalaneni

Many physicians like to work and provide services as long as they can, provided the physical and mental capacity permits. Retirement planning should start as early as possible — at your first job, with the first paycheck. Having a strategic plan and understanding several personal factors can help one make this journey successful.

Retirement involves planning at multiple levels, including but not limited to financial planning, transition planning, healthcare coverage, estate planning, and social, leisure, and emotional planning.
 

Financial Planning

Financial planning starts with investments in 401k, IRA, defined benefit, and defined contribution plans, as early as possible and to the maximum extent possible. It is beneficial to contribute at the first opportunity and contribute enough to the employer retirement plan to earn the full employer match. Also consider capital investment opportunities that match your risk appetite and returns, as these compound and grow over time. This can be done by adjusting personal expenses and lifestyle, giving priority to savings and future wealth management, and auto-escalation of permitted retirement contributions annually.

Assessing your financial situation periodically to determine retirement needs based on how long you intend to work and preferred lifestyle post retirement (travel, leisurely activities, etc.) is important. It is also pertinent to align revenue earned, expenses made, and wealth saved to support post-retirement life. Consider hiring a financial advisor who has the best interests in your personal wealth management. These are usually found with reputable institutions at a fixed percentage cost. Finding a trustworthy knowledgeable advisor is the key. Learning from your colleagues, networking, and learning from friends in and out of healthcare are good resources to find the right financial advisor.

Healthcare expenses should be planned as well as part of financial planning. Short-term and long-term disability and long-term care expenses should be investigated when planning for healthcare needs.
 

Transition Planning

Timing of retirement is based on factors such as age, financial status, personal health and preferences. The transition can be facilitated by better communication with colleagues, partners, employer, staff, and patients. Identifying a successor and planning for continuity of care of the patients, such as transitioning patients to another provider, is important as well. This may involve hiring a new associate, merging with another practice, or selling the practice.

Healthcare Coverage

One of the biggest expenses with retirement is healthcare coverage. Healthcare coverage options need to be analyzed which may include Medicare eligibility, enrollment, potential needs after retirement, including preventative care, treatment of chronic conditions, long term care services, and unexpected health outcomes and consequences.

Lifestyle and Travel Planning

Reflect on the retirement lifestyle, hobbies, and passions to be explored. Some activities like volunteer work, continuing educational opportunities, and advisory work, will help maintain physical and mental health. Consider downsizing living arrangements to align with retirement lifestyle goals which may include relocating to a different area as it fits your needs.

Legal and Estate Planning

Review and update legal documents including power of attorney, healthcare directives, will, trusts, and periodically ensure that these documents reflect your wishes.

Professional Development

Retirement may not mean quitting work completely. Some may look at this as an opportunity for professional development and pivoting to a different career that suits their lifestyle and needs. Gastroenterologists may contribute to the field and stay connected by being mentors, advisors, or, industry partners; being involved in national organizations; leading purposeful projects; or teaching part-time or on a volunteer basis.

Emotional and Social Support

Being a physician and a leader on treatment teams after so many years, some may feel lonely and unproductive with a lack of purpose in retirement; while others are excited about the free time they gained to pursue other activities and projects.

The process can be emotionally challenging even for well-prepared individuals. Finding friends, family, and professionals who can support you through this process will be helpful as you go through the uncertainties, anxiety, and fear during this phase of life. Think of developing hobbies and interests and nurturing networks outside of work environment that will keep you engaged and content during this transition.

Gastroenterologists can plan for a financially secure, emotionally fulfilling, and professionally satisfying transition tailored to their needs and preferences. Seeking help from financial advisors, legal experts, mentors, and other professionals who can provide valuable advice, support, and guidance is crucial during this process.

Do what you love and love what you do.

Dr. Appalaneni is a gastroenterologist at Dayton Gastroenterology in Beavercreek, Ohio, and a clinical assistant professor at Boonshoft School of Medicine, Wright State University in Dayton, Ohio. This article is not a financial planning document, nor legal advice; these are the author’s learnings, experiences, and opinions and are not considered financial advice.

Retirement planning starts the day we start our careers. Whenever we start any project, it is always worthwhile to learn how the project works, what we want to pursue and achieve with the project, how to exit the project, and when is the right time to exit.

As physicians, gastroenterologists go through several years of vigorous training, years spent studying, researching, practicing, and juggling between work and life, trying to lead a well-balanced life. With all the years of medical training, we do not get the same level of education in financial planning in order to attain financial stability, financial empowerment, or resources that we need to put in place for a successful retirement.

Dr. Appalaneni

Many physicians like to work and provide services as long as they can, provided the physical and mental capacity permits. Retirement planning should start as early as possible — at your first job, with the first paycheck. Having a strategic plan and understanding several personal factors can help one make this journey successful.

Retirement involves planning at multiple levels, including but not limited to financial planning, transition planning, healthcare coverage, estate planning, and social, leisure, and emotional planning.
 

Financial Planning

Financial planning starts with investments in 401k, IRA, defined benefit, and defined contribution plans, as early as possible and to the maximum extent possible. It is beneficial to contribute at the first opportunity and contribute enough to the employer retirement plan to earn the full employer match. Also consider capital investment opportunities that match your risk appetite and returns, as these compound and grow over time. This can be done by adjusting personal expenses and lifestyle, giving priority to savings and future wealth management, and auto-escalation of permitted retirement contributions annually.

Assessing your financial situation periodically to determine retirement needs based on how long you intend to work and preferred lifestyle post retirement (travel, leisurely activities, etc.) is important. It is also pertinent to align revenue earned, expenses made, and wealth saved to support post-retirement life. Consider hiring a financial advisor who has the best interests in your personal wealth management. These are usually found with reputable institutions at a fixed percentage cost. Finding a trustworthy knowledgeable advisor is the key. Learning from your colleagues, networking, and learning from friends in and out of healthcare are good resources to find the right financial advisor.

Healthcare expenses should be planned as well as part of financial planning. Short-term and long-term disability and long-term care expenses should be investigated when planning for healthcare needs.
 

Transition Planning

Timing of retirement is based on factors such as age, financial status, personal health and preferences. The transition can be facilitated by better communication with colleagues, partners, employer, staff, and patients. Identifying a successor and planning for continuity of care of the patients, such as transitioning patients to another provider, is important as well. This may involve hiring a new associate, merging with another practice, or selling the practice.

Healthcare Coverage

One of the biggest expenses with retirement is healthcare coverage. Healthcare coverage options need to be analyzed which may include Medicare eligibility, enrollment, potential needs after retirement, including preventative care, treatment of chronic conditions, long term care services, and unexpected health outcomes and consequences.

Lifestyle and Travel Planning

Reflect on the retirement lifestyle, hobbies, and passions to be explored. Some activities like volunteer work, continuing educational opportunities, and advisory work, will help maintain physical and mental health. Consider downsizing living arrangements to align with retirement lifestyle goals which may include relocating to a different area as it fits your needs.

Legal and Estate Planning

Review and update legal documents including power of attorney, healthcare directives, will, trusts, and periodically ensure that these documents reflect your wishes.

Professional Development

Retirement may not mean quitting work completely. Some may look at this as an opportunity for professional development and pivoting to a different career that suits their lifestyle and needs. Gastroenterologists may contribute to the field and stay connected by being mentors, advisors, or, industry partners; being involved in national organizations; leading purposeful projects; or teaching part-time or on a volunteer basis.

Emotional and Social Support

Being a physician and a leader on treatment teams after so many years, some may feel lonely and unproductive with a lack of purpose in retirement; while others are excited about the free time they gained to pursue other activities and projects.

The process can be emotionally challenging even for well-prepared individuals. Finding friends, family, and professionals who can support you through this process will be helpful as you go through the uncertainties, anxiety, and fear during this phase of life. Think of developing hobbies and interests and nurturing networks outside of work environment that will keep you engaged and content during this transition.

Gastroenterologists can plan for a financially secure, emotionally fulfilling, and professionally satisfying transition tailored to their needs and preferences. Seeking help from financial advisors, legal experts, mentors, and other professionals who can provide valuable advice, support, and guidance is crucial during this process.

Do what you love and love what you do.

Dr. Appalaneni is a gastroenterologist at Dayton Gastroenterology in Beavercreek, Ohio, and a clinical assistant professor at Boonshoft School of Medicine, Wright State University in Dayton, Ohio. This article is not a financial planning document, nor legal advice; these are the author’s learnings, experiences, and opinions and are not considered financial advice.

As gastroenterologists, we spend innumerable years in medical training with an abrupt and significant increase in our earning potential upon beginning practice. The majority of us also carry a sizeable amount of student loan debt. This combination results in a unique situation that can make us hesitant about how best to set ourselves up financially while also making us vulnerable to potentially predatory financial practices.

Although your initial steps to achieve financial wellness and build wealth can be obtained on your own with some education, a financial adviser becomes indispensable when you have significant assets, a high income, complex finances, and/or are experiencing a major life change. Additionally, as there are so many avenues to invest and grow your capital, a financial adviser can assist in designing a portfolio to best accomplish specific monetary goals. Studies have demonstrated that those working with a financial adviser reduce their single-stock risk and have more significant increase in portfolio value, reducing the total cost associated with their investments’ management.¹ Those working with a financial adviser will also net up to a 3% larger annual return, compared with a standard baseline investment plan.^2,3

Dr. Luthra

Based on this information, it may appear that working with a personal financial adviser would be a no-brainer. Unfortunately, there is a caveat: There is no legal regulation regarding who can use the title “financial adviser.” It is therefore crucial to be aware of common practices and terminology to best help you identify a reputable financial adviser and reduce your risk of excessive fees or financial loss. This is also a highly personal decision and your search should first begin with understanding why you are looking for an adviser, as this will determine the appropriate type of service to look for.
 

Types of Advisers

A certified financial planner (CFP) is an expert in estate planning, taxes, retirement saving, and financial planning who has a formal designation by the Certified Financial Planner Board of Standards Inc.⁴ They must undergo stringent licensing examinations following a 3-year course with required continuing education to maintain their credentials. CFPs are fiduciaries, meaning they must make financial decisions in your best interest, even if they may make less money with that product or investment strategy. In other words, they are beholden to give honest, impartial recommendations to their clients, and may face sanctions by the CFP Board if found to violate its Code of Ethics and Standards of Conduct, which includes failure to act in a fiduciary duty.⁵

CFPs evaluate your total financial picture, such as investments, insurance policies, and overall current financial position, to develop a comprehensive strategy that will successfully guide you to your financial goal. There are many individuals who may refer to themselves as financial planners without having the CFP designation; while they may offer similar services as above, they will not be required to act as a fiduciary. Hence, it is important to do your due diligence and verify they hold this certification via the CFP Board website: www.cfp.net/verify-a-cfp-professional.

An investment adviser is a legal term from the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) referring to an individual who provides recommendations and analyses for financial securities such as stock. Both of these agencies ensure investment advisers adhere to regulatory requirements designed to protect client investers. Similar to CFPs, they are held to a fiduciary standard, and their firm is required to register with the SEC or the state of practice based on the amount of assets under management.⁶

An individual investment adviser must also register with their state as an Investment Adviser Representative (IAR), the distinctive term referring to an individual as opposed to an investment advising firm. Investment advisers are required to pass the extensive Series 65, Uniform Investment Advisor Law Exam, or equivalent, by states requiring licensure.⁷ They can guide you on the selection of particular investments and portfolio management based on a discussion with you regarding your current financial standing and what fiscal ambitions you wish to achieve.

A financial adviser provides direction on a multitude of financially related topics such as investing, tax laws, and life insurance with the goal to help you reach specific financial objectives. However, this term is often used quite ubiquitously given the lack of formal regulation of the title. Essentially, those with varying types of educational background can give themselves the title of financial adviser.

If a financial adviser buys or sells financial securities such as stocks or bonds, then they must be registered as a licensed broker with the SEC and IAR and pass the Series 6 or Series 7 exam. Unlike CFPs and investment advisers, a financial adviser (if also a licensed broker) is not required to be a fiduciary, and instead works under the suitability standard.⁸ Suitability requires that financial recommendations made by the adviser are appropriate but not necessarily the best for the client. In fact, these recommendations do not even have to be the most suitable. This is where conflicts of interest can arise with the adviser recommending products and securities that best compensate them while not serving the best return on investment for you.

Making the search for a financial adviser more complex, an individual can be a combination of any of the above, pending the appropriate licensing. For example, a CFP can also be an asset manager and thus hold the title of a financial adviser and/or IAR. A financial adviser may also not directly manage your assets if they have a partnership with a third party or another licensed individual. Questions to ask of your potential financial adviser should therefore include the following:

• What licensure and related education do you have?
• What is your particular area of expertise?
• How long have you been in practice?
• How will you be managing my assets?

Financial Adviser Fee Schedules

Prior to working with a financial adviser, you must also inquire about their fee structure. There are two kinds of fee schedules used by financial advisers: fee-only and fee-based.

Fee-only advisers receive payment solely for the services they provide. They do not collect commissions from third parties providing the recommended products. There is variability in how this type of payment schedule is structured, encompassing flat fees, hourly rates, or the adviser charging a retainer. The Table below compares the types of fee-only structures and range of charges based on 2023 rates.⁹ Of note, fee-only advisers serve as fiduciaries.¹⁰

Fee-based financial advisers receive payment for services but may also receive commission on specific products they sell to you.⁹ Most, if not all, financial experts recommend avoiding advisers using commission-based charges given the potential conflict of interest: How can one be absolutely sure this recommended financial product is best for you, knowing your adviser has a financial stake in said item?

In addition to charging the fees above, your financial adviser, if they are actively managing your investment portfolio, will also charge an assets under management (AUM) fee. This is a percentage of the dollar amount within your portfolio. For example, if your adviser charges a 1% AUM rate for your account totaling $100,000, this equates to a $1,000 fee in that calendar year. AUM fees typically decrease as the size of your portfolio increases. As seen in the Table, there is a wide range of the average AUM rate (0.5%–2%); however, an AUM fee approaching 2% is unnecessarily high and consumes a significant portion of your portfolio. Thus, it is recommended to look for a money manager with an approximate 1% AUM fee.

Many of us delay or avoid working with a financial adviser due to the potential perceived risks of having poor portfolio management from an adviser not working in our best interest, along with the concern for excessive fees. While anyone can invest in an Exchange Traded Fund or Index Fund, we can lose on not seeking a financial adviser’s expertise to increase our asset growth and fund of financial knowledge. In many ways, it is how we counsel our patients. While they can seek medical information on their own, their best care is under the guidance of an expert: a healthcare professional. That being said, personal finance is indeed personal, so I hope this guide helps facilitate your search and increase your financial wellness.

Dr. Luthra is a therapeutic endoscopist at Moffitt Cancer Center, Tampa, Florida, and the founder of The Scope of Finance, a financial wellness education and coaching company focused on physicians. Her interest in financial well-being is thanks to the teachings of her father, an entrepreneur and former Certified Financial Planner (CFP). She can be found on Instagram (thescopeoffinance) and X (@ScopeofFinance). She reports no financial disclosures relevant to this article.

References

1. Pagliaro CA and Utkus SP. Assessing the value of advice. Vanguard. 2019 Sept.

2. Kinniry Jr. FM et al. Putting a value on your value: Quantifying Vanguard Advisor’s Alpha. Vanguard. 2022 July.

3. Horan S. What Are the Benefits of Working with a Financial Advisor? – 2021 Study. Smart Asset. 2023 July 27.

4. Kagan J. Certified Financial PlannerTM(CFP): What It Is and How to Become One. Investopedia. 2023 Aug 3.

5. CFP Board. Our Commitment to Ethical Standards. CFP Board. 2024.

6. Staff of the Investment Adviser Regulation Office Division of Investment Management, U.S. Securities and Exchange Commission. Regulation of Investment Advisers by the U.S. Securities and Exchange Commission. 2013 Mar.

7. Hicks C. Investment Advisor vs. Financial Advisor: There is a Difference. US News & World Report. 2019 June 13.

8. Roberts K. Financial advisor vs. financial planner: What is the difference? Bankrate. 2023 Nov 21.

9. Clancy D. Average Fees for Financial Advisors in 2023. Harness Wealth. 2023 May 25.

10. Palmer B. Fee- vs. Commission-Based Advisor: What’s the Difference? Investopedia. 2023 June 20.

As gastroenterologists, we spend innumerable years in medical training with an abrupt and significant increase in our earning potential upon beginning practice. The majority of us also carry a sizeable amount of student loan debt. This combination results in a unique situation that can make us hesitant about how best to set ourselves up financially while also making us vulnerable to potentially predatory financial practices.

Although your initial steps to achieve financial wellness and build wealth can be obtained on your own with some education, a financial adviser becomes indispensable when you have significant assets, a high income, complex finances, and/or are experiencing a major life change. Additionally, as there are so many avenues to invest and grow your capital, a financial adviser can assist in designing a portfolio to best accomplish specific monetary goals. Studies have demonstrated that those working with a financial adviser reduce their single-stock risk and have more significant increase in portfolio value, reducing the total cost associated with their investments’ management.¹ Those working with a financial adviser will also net up to a 3% larger annual return, compared with a standard baseline investment plan.^2,3

Dr. Luthra

Based on this information, it may appear that working with a personal financial adviser would be a no-brainer. Unfortunately, there is a caveat: There is no legal regulation regarding who can use the title “financial adviser.” It is therefore crucial to be aware of common practices and terminology to best help you identify a reputable financial adviser and reduce your risk of excessive fees or financial loss. This is also a highly personal decision and your search should first begin with understanding why you are looking for an adviser, as this will determine the appropriate type of service to look for.
 

Types of Advisers

A certified financial planner (CFP) is an expert in estate planning, taxes, retirement saving, and financial planning who has a formal designation by the Certified Financial Planner Board of Standards Inc.⁴ They must undergo stringent licensing examinations following a 3-year course with required continuing education to maintain their credentials. CFPs are fiduciaries, meaning they must make financial decisions in your best interest, even if they may make less money with that product or investment strategy. In other words, they are beholden to give honest, impartial recommendations to their clients, and may face sanctions by the CFP Board if found to violate its Code of Ethics and Standards of Conduct, which includes failure to act in a fiduciary duty.⁵

CFPs evaluate your total financial picture, such as investments, insurance policies, and overall current financial position, to develop a comprehensive strategy that will successfully guide you to your financial goal. There are many individuals who may refer to themselves as financial planners without having the CFP designation; while they may offer similar services as above, they will not be required to act as a fiduciary. Hence, it is important to do your due diligence and verify they hold this certification via the CFP Board website: www.cfp.net/verify-a-cfp-professional.

An investment adviser is a legal term from the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) referring to an individual who provides recommendations and analyses for financial securities such as stock. Both of these agencies ensure investment advisers adhere to regulatory requirements designed to protect client investers. Similar to CFPs, they are held to a fiduciary standard, and their firm is required to register with the SEC or the state of practice based on the amount of assets under management.⁶

An individual investment adviser must also register with their state as an Investment Adviser Representative (IAR), the distinctive term referring to an individual as opposed to an investment advising firm. Investment advisers are required to pass the extensive Series 65, Uniform Investment Advisor Law Exam, or equivalent, by states requiring licensure.⁷ They can guide you on the selection of particular investments and portfolio management based on a discussion with you regarding your current financial standing and what fiscal ambitions you wish to achieve.

A financial adviser provides direction on a multitude of financially related topics such as investing, tax laws, and life insurance with the goal to help you reach specific financial objectives. However, this term is often used quite ubiquitously given the lack of formal regulation of the title. Essentially, those with varying types of educational background can give themselves the title of financial adviser.

If a financial adviser buys or sells financial securities such as stocks or bonds, then they must be registered as a licensed broker with the SEC and IAR and pass the Series 6 or Series 7 exam. Unlike CFPs and investment advisers, a financial adviser (if also a licensed broker) is not required to be a fiduciary, and instead works under the suitability standard.⁸ Suitability requires that financial recommendations made by the adviser are appropriate but not necessarily the best for the client. In fact, these recommendations do not even have to be the most suitable. This is where conflicts of interest can arise with the adviser recommending products and securities that best compensate them while not serving the best return on investment for you.

Making the search for a financial adviser more complex, an individual can be a combination of any of the above, pending the appropriate licensing. For example, a CFP can also be an asset manager and thus hold the title of a financial adviser and/or IAR. A financial adviser may also not directly manage your assets if they have a partnership with a third party or another licensed individual. Questions to ask of your potential financial adviser should therefore include the following:

• What licensure and related education do you have?
• What is your particular area of expertise?
• How long have you been in practice?
• How will you be managing my assets?

Financial Adviser Fee Schedules

Prior to working with a financial adviser, you must also inquire about their fee structure. There are two kinds of fee schedules used by financial advisers: fee-only and fee-based.

Fee-only advisers receive payment solely for the services they provide. They do not collect commissions from third parties providing the recommended products. There is variability in how this type of payment schedule is structured, encompassing flat fees, hourly rates, or the adviser charging a retainer. The Table below compares the types of fee-only structures and range of charges based on 2023 rates.⁹ Of note, fee-only advisers serve as fiduciaries.¹⁰

Fee-based financial advisers receive payment for services but may also receive commission on specific products they sell to you.⁹ Most, if not all, financial experts recommend avoiding advisers using commission-based charges given the potential conflict of interest: How can one be absolutely sure this recommended financial product is best for you, knowing your adviser has a financial stake in said item?

In addition to charging the fees above, your financial adviser, if they are actively managing your investment portfolio, will also charge an assets under management (AUM) fee. This is a percentage of the dollar amount within your portfolio. For example, if your adviser charges a 1% AUM rate for your account totaling $100,000, this equates to a $1,000 fee in that calendar year. AUM fees typically decrease as the size of your portfolio increases. As seen in the Table, there is a wide range of the average AUM rate (0.5%–2%); however, an AUM fee approaching 2% is unnecessarily high and consumes a significant portion of your portfolio. Thus, it is recommended to look for a money manager with an approximate 1% AUM fee.

Many of us delay or avoid working with a financial adviser due to the potential perceived risks of having poor portfolio management from an adviser not working in our best interest, along with the concern for excessive fees. While anyone can invest in an Exchange Traded Fund or Index Fund, we can lose on not seeking a financial adviser’s expertise to increase our asset growth and fund of financial knowledge. In many ways, it is how we counsel our patients. While they can seek medical information on their own, their best care is under the guidance of an expert: a healthcare professional. That being said, personal finance is indeed personal, so I hope this guide helps facilitate your search and increase your financial wellness.

Dr. Luthra is a therapeutic endoscopist at Moffitt Cancer Center, Tampa, Florida, and the founder of The Scope of Finance, a financial wellness education and coaching company focused on physicians. Her interest in financial well-being is thanks to the teachings of her father, an entrepreneur and former Certified Financial Planner (CFP). She can be found on Instagram (thescopeoffinance) and X (@ScopeofFinance). She reports no financial disclosures relevant to this article.

References

1. Pagliaro CA and Utkus SP. Assessing the value of advice. Vanguard. 2019 Sept.

2. Kinniry Jr. FM et al. Putting a value on your value: Quantifying Vanguard Advisor’s Alpha. Vanguard. 2022 July.

3. Horan S. What Are the Benefits of Working with a Financial Advisor? – 2021 Study. Smart Asset. 2023 July 27.

4. Kagan J. Certified Financial PlannerTM(CFP): What It Is and How to Become One. Investopedia. 2023 Aug 3.

5. CFP Board. Our Commitment to Ethical Standards. CFP Board. 2024.

6. Staff of the Investment Adviser Regulation Office Division of Investment Management, U.S. Securities and Exchange Commission. Regulation of Investment Advisers by the U.S. Securities and Exchange Commission. 2013 Mar.

7. Hicks C. Investment Advisor vs. Financial Advisor: There is a Difference. US News & World Report. 2019 June 13.

8. Roberts K. Financial advisor vs. financial planner: What is the difference? Bankrate. 2023 Nov 21.

9. Clancy D. Average Fees for Financial Advisors in 2023. Harness Wealth. 2023 May 25.

10. Palmer B. Fee- vs. Commission-Based Advisor: What’s the Difference? Investopedia. 2023 June 20.

As gastroenterologists, we spend innumerable years in medical training with an abrupt and significant increase in our earning potential upon beginning practice. The majority of us also carry a sizeable amount of student loan debt. This combination results in a unique situation that can make us hesitant about how best to set ourselves up financially while also making us vulnerable to potentially predatory financial practices.

Although your initial steps to achieve financial wellness and build wealth can be obtained on your own with some education, a financial adviser becomes indispensable when you have significant assets, a high income, complex finances, and/or are experiencing a major life change. Additionally, as there are so many avenues to invest and grow your capital, a financial adviser can assist in designing a portfolio to best accomplish specific monetary goals. Studies have demonstrated that those working with a financial adviser reduce their single-stock risk and have more significant increase in portfolio value, reducing the total cost associated with their investments’ management.¹ Those working with a financial adviser will also net up to a 3% larger annual return, compared with a standard baseline investment plan.^2,3

Dr. Luthra

Based on this information, it may appear that working with a personal financial adviser would be a no-brainer. Unfortunately, there is a caveat: There is no legal regulation regarding who can use the title “financial adviser.” It is therefore crucial to be aware of common practices and terminology to best help you identify a reputable financial adviser and reduce your risk of excessive fees or financial loss. This is also a highly personal decision and your search should first begin with understanding why you are looking for an adviser, as this will determine the appropriate type of service to look for.
 

Types of Advisers

A certified financial planner (CFP) is an expert in estate planning, taxes, retirement saving, and financial planning who has a formal designation by the Certified Financial Planner Board of Standards Inc.⁴ They must undergo stringent licensing examinations following a 3-year course with required continuing education to maintain their credentials. CFPs are fiduciaries, meaning they must make financial decisions in your best interest, even if they may make less money with that product or investment strategy. In other words, they are beholden to give honest, impartial recommendations to their clients, and may face sanctions by the CFP Board if found to violate its Code of Ethics and Standards of Conduct, which includes failure to act in a fiduciary duty.⁵

CFPs evaluate your total financial picture, such as investments, insurance policies, and overall current financial position, to develop a comprehensive strategy that will successfully guide you to your financial goal. There are many individuals who may refer to themselves as financial planners without having the CFP designation; while they may offer similar services as above, they will not be required to act as a fiduciary. Hence, it is important to do your due diligence and verify they hold this certification via the CFP Board website: www.cfp.net/verify-a-cfp-professional.

An investment adviser is a legal term from the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) referring to an individual who provides recommendations and analyses for financial securities such as stock. Both of these agencies ensure investment advisers adhere to regulatory requirements designed to protect client investers. Similar to CFPs, they are held to a fiduciary standard, and their firm is required to register with the SEC or the state of practice based on the amount of assets under management.⁶

An individual investment adviser must also register with their state as an Investment Adviser Representative (IAR), the distinctive term referring to an individual as opposed to an investment advising firm. Investment advisers are required to pass the extensive Series 65, Uniform Investment Advisor Law Exam, or equivalent, by states requiring licensure.⁷ They can guide you on the selection of particular investments and portfolio management based on a discussion with you regarding your current financial standing and what fiscal ambitions you wish to achieve.

A financial adviser provides direction on a multitude of financially related topics such as investing, tax laws, and life insurance with the goal to help you reach specific financial objectives. However, this term is often used quite ubiquitously given the lack of formal regulation of the title. Essentially, those with varying types of educational background can give themselves the title of financial adviser.

If a financial adviser buys or sells financial securities such as stocks or bonds, then they must be registered as a licensed broker with the SEC and IAR and pass the Series 6 or Series 7 exam. Unlike CFPs and investment advisers, a financial adviser (if also a licensed broker) is not required to be a fiduciary, and instead works under the suitability standard.⁸ Suitability requires that financial recommendations made by the adviser are appropriate but not necessarily the best for the client. In fact, these recommendations do not even have to be the most suitable. This is where conflicts of interest can arise with the adviser recommending products and securities that best compensate them while not serving the best return on investment for you.

Making the search for a financial adviser more complex, an individual can be a combination of any of the above, pending the appropriate licensing. For example, a CFP can also be an asset manager and thus hold the title of a financial adviser and/or IAR. A financial adviser may also not directly manage your assets if they have a partnership with a third party or another licensed individual. Questions to ask of your potential financial adviser should therefore include the following:

• What licensure and related education do you have?
• What is your particular area of expertise?
• How long have you been in practice?
• How will you be managing my assets?

Financial Adviser Fee Schedules

Prior to working with a financial adviser, you must also inquire about their fee structure. There are two kinds of fee schedules used by financial advisers: fee-only and fee-based.

Fee-only advisers receive payment solely for the services they provide. They do not collect commissions from third parties providing the recommended products. There is variability in how this type of payment schedule is structured, encompassing flat fees, hourly rates, or the adviser charging a retainer. The Table below compares the types of fee-only structures and range of charges based on 2023 rates.⁹ Of note, fee-only advisers serve as fiduciaries.¹⁰

Fee-based financial advisers receive payment for services but may also receive commission on specific products they sell to you.⁹ Most, if not all, financial experts recommend avoiding advisers using commission-based charges given the potential conflict of interest: How can one be absolutely sure this recommended financial product is best for you, knowing your adviser has a financial stake in said item?

In addition to charging the fees above, your financial adviser, if they are actively managing your investment portfolio, will also charge an assets under management (AUM) fee. This is a percentage of the dollar amount within your portfolio. For example, if your adviser charges a 1% AUM rate for your account totaling $100,000, this equates to a $1,000 fee in that calendar year. AUM fees typically decrease as the size of your portfolio increases. As seen in the Table, there is a wide range of the average AUM rate (0.5%–2%); however, an AUM fee approaching 2% is unnecessarily high and consumes a significant portion of your portfolio. Thus, it is recommended to look for a money manager with an approximate 1% AUM fee.

Many of us delay or avoid working with a financial adviser due to the potential perceived risks of having poor portfolio management from an adviser not working in our best interest, along with the concern for excessive fees. While anyone can invest in an Exchange Traded Fund or Index Fund, we can lose on not seeking a financial adviser’s expertise to increase our asset growth and fund of financial knowledge. In many ways, it is how we counsel our patients. While they can seek medical information on their own, their best care is under the guidance of an expert: a healthcare professional. That being said, personal finance is indeed personal, so I hope this guide helps facilitate your search and increase your financial wellness.

Dr. Luthra is a therapeutic endoscopist at Moffitt Cancer Center, Tampa, Florida, and the founder of The Scope of Finance, a financial wellness education and coaching company focused on physicians. Her interest in financial well-being is thanks to the teachings of her father, an entrepreneur and former Certified Financial Planner (CFP). She can be found on Instagram (thescopeoffinance) and X (@ScopeofFinance). She reports no financial disclosures relevant to this article.

References

1. Pagliaro CA and Utkus SP. Assessing the value of advice. Vanguard. 2019 Sept.

2. Kinniry Jr. FM et al. Putting a value on your value: Quantifying Vanguard Advisor’s Alpha. Vanguard. 2022 July.

3. Horan S. What Are the Benefits of Working with a Financial Advisor? – 2021 Study. Smart Asset. 2023 July 27.

4. Kagan J. Certified Financial PlannerTM(CFP): What It Is and How to Become One. Investopedia. 2023 Aug 3.

5. CFP Board. Our Commitment to Ethical Standards. CFP Board. 2024.

6. Staff of the Investment Adviser Regulation Office Division of Investment Management, U.S. Securities and Exchange Commission. Regulation of Investment Advisers by the U.S. Securities and Exchange Commission. 2013 Mar.

7. Hicks C. Investment Advisor vs. Financial Advisor: There is a Difference. US News & World Report. 2019 June 13.

8. Roberts K. Financial advisor vs. financial planner: What is the difference? Bankrate. 2023 Nov 21.

9. Clancy D. Average Fees for Financial Advisors in 2023. Harness Wealth. 2023 May 25.

10. Palmer B. Fee- vs. Commission-Based Advisor: What’s the Difference? Investopedia. 2023 June 20.

Physicians spend years of their lives in education and training. There are countless hours devoted to studying, researching, and clinical training, not to mention residency and possible fellowships. Then literally overnight, they transition out of a resident salary into a full-time attending pay with little to no education around what to do with this significant increase in salary.

Every job position is unique in terms of benefits, how compensation is earned, job expectations, etc. But they all share one thing in common — taxes. Increased income comes with increased taxes. This article will help answer many frequently asked questions and provide insight to explore opportunities to keep more of your income in your pocket.

Courtesy Erin Anderson

FAQ 1. What is the difference between W2 income and 1099 income?

A: If you are a W2 employee, your employer is responsible for paying half of your Social Security and Medicare taxes. You, as the employee, are then responsible only for the remaining half of your Social Security and Medicare taxes. Additionally, your employer will withhold these taxes, along with federal income taxes, from your paycheck each pay period. You are not responsible for remitting any taxes to the IRS or state agencies, as your employer will do this for you. As a W2 employee, you are not able to deduct any employee expenses against your income.

Andrea Murphy Photography

As a 1099 contractor, you are considered self-employed and are responsible for the employer and employee portion of the Social Security and Medicare taxes. You are also responsible for remitting these taxes, as well as quarterly estimated federal withholding, to the IRS and state agencies. You can deduct work-related expenses against your 1099 income.

Both types of income have pros and cons. Either of these can be more beneficial to a specific situation.
 

FAQ 2. How do I know if I am withholding enough taxes?

A: This is a very common issue I see, especially with physicians who are transitioning out of training into their full-time attending salary. Because this transition happens mid-year, often the first half of the year you are withholding at a rate much lower than what you will be earning as an attending and end up with a tax surprise at filing. One way to remedy this is to look at how much taxes are being withheld from your paycheck and compare this to what tax bracket you anticipate to be in, depending on filing status (Figure 1). If you do this and realize you are not withholding enough taxes, you can submit an amended form W4 to your employer to have additional withholding taken out each pay period.

FAQ 3. I am a 1099 contractor; do I need a PLLC, and should I file as an S-Corporation?

A: The term “S-Corp” gets mentioned often related to 1099 contractors and can be extremely beneficial from a tax savings perspective. Often physicians may moonlight — in addition to working in their W2 positions — and would receive this compensation as a 1099 contractor rather than an employee. This is an example of when a Professional Limited Liability Company (PLLC) might be advisable. A PLLC is created at a state level and helps shield owners from potential litigation. The owner of a PLLC pays Social Security and Medicare taxes on all income earned from the entity, and the PLLC is included in the owner’s individual income tax return.

A Small-Corporation (S-Corporation) is a tax classification that passes income through to the owners. The PLLC is now taxed as an S-Corporation, rather than a disregarded entity. The shareholders of the S-Corporation are required to pay a reasonable salary (W2 income). The remaining income passes through to the owner and is not subject to Social Security and Medicare taxes, only federal income tax. This taxation status requires an additional tax return and payroll service. Because there are additional expenses with being taxed as an S-Corporation, a cost-benefit analysis should be done before changing the tax classification to confirm that the tax savings are greater than the additional costs.
 

FAQ 4. What is the ‘backdoor Roth’ strategy? Should I implement it?

A: A Roth IRA is a specific type of Individual Retirement Account (IRA) that is funded with after-tax dollars. The contributions and growth in a Roth IRA can be withdrawn at retirement, tax free. As physicians who are typically high earners, you are not able to contribute directly to a Roth IRA because of income limitations. This is where the Roth conversion strategy — the backdoor Roth — comes into play. This strategy allows you to make a nondeductible traditional IRA contribution and then convert those dollars into a Roth IRA. In 2023, you can contribute up to $6,500 into this type of account. There are many additional considerations that must be made before implementing this strategy. Discussion with a financial advisor or CPA is recommended.

FAQ 5. I’ve always done my own taxes. Do I need to hire a CPA?

A: For many physicians, especially during training, your tax situation may not warrant the need for a Certified Public Accountant (CPA). However, as your income and tax complexity increase, working with a CPA not only decreases your risk for error, but also helps ensure you are not overpaying in taxes. There are many different types of services that a CPA can offer, the most basic being tax preparation. This is simply compiling your tax return based on the circumstances that occurred in the prior year. Tax planning is an additional level of service that may not be included in tax preparation cost. Tax planning is a proactive approach to taxes and helps maximize tax savings opportunities before return preparation. When interviewing a potential CPA, you can ask what level of services are included in the fees quoted.

These are just a few of the questions I regularly answer related to physicians’ taxation. The tax code is complex and ever changing. Recommendations that are made today might not be applicable or advisable in the future to any given situation. Working with a professional can ensure you have the most up-to-date and accurate information related to your taxes.
 

Ms. Anderson is with Physician’s Resource Services and is on Instagram @physiciansrs .  Dr. Anderson is a CA-1 Resident in Anesthesia at Baylor Scott and White Health. The authors have no conflicts of interest.

Physicians spend years of their lives in education and training. There are countless hours devoted to studying, researching, and clinical training, not to mention residency and possible fellowships. Then literally overnight, they transition out of a resident salary into a full-time attending pay with little to no education around what to do with this significant increase in salary.

Every job position is unique in terms of benefits, how compensation is earned, job expectations, etc. But they all share one thing in common — taxes. Increased income comes with increased taxes. This article will help answer many frequently asked questions and provide insight to explore opportunities to keep more of your income in your pocket.

Courtesy Erin Anderson

FAQ 1. What is the difference between W2 income and 1099 income?

A: If you are a W2 employee, your employer is responsible for paying half of your Social Security and Medicare taxes. You, as the employee, are then responsible only for the remaining half of your Social Security and Medicare taxes. Additionally, your employer will withhold these taxes, along with federal income taxes, from your paycheck each pay period. You are not responsible for remitting any taxes to the IRS or state agencies, as your employer will do this for you. As a W2 employee, you are not able to deduct any employee expenses against your income.

Andrea Murphy Photography

As a 1099 contractor, you are considered self-employed and are responsible for the employer and employee portion of the Social Security and Medicare taxes. You are also responsible for remitting these taxes, as well as quarterly estimated federal withholding, to the IRS and state agencies. You can deduct work-related expenses against your 1099 income.

Both types of income have pros and cons. Either of these can be more beneficial to a specific situation.
 

FAQ 2. How do I know if I am withholding enough taxes?

A: This is a very common issue I see, especially with physicians who are transitioning out of training into their full-time attending salary. Because this transition happens mid-year, often the first half of the year you are withholding at a rate much lower than what you will be earning as an attending and end up with a tax surprise at filing. One way to remedy this is to look at how much taxes are being withheld from your paycheck and compare this to what tax bracket you anticipate to be in, depending on filing status (Figure 1). If you do this and realize you are not withholding enough taxes, you can submit an amended form W4 to your employer to have additional withholding taken out each pay period.

FAQ 3. I am a 1099 contractor; do I need a PLLC, and should I file as an S-Corporation?

A: The term “S-Corp” gets mentioned often related to 1099 contractors and can be extremely beneficial from a tax savings perspective. Often physicians may moonlight — in addition to working in their W2 positions — and would receive this compensation as a 1099 contractor rather than an employee. This is an example of when a Professional Limited Liability Company (PLLC) might be advisable. A PLLC is created at a state level and helps shield owners from potential litigation. The owner of a PLLC pays Social Security and Medicare taxes on all income earned from the entity, and the PLLC is included in the owner’s individual income tax return.

A Small-Corporation (S-Corporation) is a tax classification that passes income through to the owners. The PLLC is now taxed as an S-Corporation, rather than a disregarded entity. The shareholders of the S-Corporation are required to pay a reasonable salary (W2 income). The remaining income passes through to the owner and is not subject to Social Security and Medicare taxes, only federal income tax. This taxation status requires an additional tax return and payroll service. Because there are additional expenses with being taxed as an S-Corporation, a cost-benefit analysis should be done before changing the tax classification to confirm that the tax savings are greater than the additional costs.
 

FAQ 4. What is the ‘backdoor Roth’ strategy? Should I implement it?

A: A Roth IRA is a specific type of Individual Retirement Account (IRA) that is funded with after-tax dollars. The contributions and growth in a Roth IRA can be withdrawn at retirement, tax free. As physicians who are typically high earners, you are not able to contribute directly to a Roth IRA because of income limitations. This is where the Roth conversion strategy — the backdoor Roth — comes into play. This strategy allows you to make a nondeductible traditional IRA contribution and then convert those dollars into a Roth IRA. In 2023, you can contribute up to $6,500 into this type of account. There are many additional considerations that must be made before implementing this strategy. Discussion with a financial advisor or CPA is recommended.

FAQ 5. I’ve always done my own taxes. Do I need to hire a CPA?

A: For many physicians, especially during training, your tax situation may not warrant the need for a Certified Public Accountant (CPA). However, as your income and tax complexity increase, working with a CPA not only decreases your risk for error, but also helps ensure you are not overpaying in taxes. There are many different types of services that a CPA can offer, the most basic being tax preparation. This is simply compiling your tax return based on the circumstances that occurred in the prior year. Tax planning is an additional level of service that may not be included in tax preparation cost. Tax planning is a proactive approach to taxes and helps maximize tax savings opportunities before return preparation. When interviewing a potential CPA, you can ask what level of services are included in the fees quoted.

These are just a few of the questions I regularly answer related to physicians’ taxation. The tax code is complex and ever changing. Recommendations that are made today might not be applicable or advisable in the future to any given situation. Working with a professional can ensure you have the most up-to-date and accurate information related to your taxes.
 

Ms. Anderson is with Physician’s Resource Services and is on Instagram @physiciansrs .  Dr. Anderson is a CA-1 Resident in Anesthesia at Baylor Scott and White Health. The authors have no conflicts of interest.

Physicians spend years of their lives in education and training. There are countless hours devoted to studying, researching, and clinical training, not to mention residency and possible fellowships. Then literally overnight, they transition out of a resident salary into a full-time attending pay with little to no education around what to do with this significant increase in salary.

Every job position is unique in terms of benefits, how compensation is earned, job expectations, etc. But they all share one thing in common — taxes. Increased income comes with increased taxes. This article will help answer many frequently asked questions and provide insight to explore opportunities to keep more of your income in your pocket.

Courtesy Erin Anderson

FAQ 1. What is the difference between W2 income and 1099 income?

A: If you are a W2 employee, your employer is responsible for paying half of your Social Security and Medicare taxes. You, as the employee, are then responsible only for the remaining half of your Social Security and Medicare taxes. Additionally, your employer will withhold these taxes, along with federal income taxes, from your paycheck each pay period. You are not responsible for remitting any taxes to the IRS or state agencies, as your employer will do this for you. As a W2 employee, you are not able to deduct any employee expenses against your income.

Andrea Murphy Photography

As a 1099 contractor, you are considered self-employed and are responsible for the employer and employee portion of the Social Security and Medicare taxes. You are also responsible for remitting these taxes, as well as quarterly estimated federal withholding, to the IRS and state agencies. You can deduct work-related expenses against your 1099 income.

Both types of income have pros and cons. Either of these can be more beneficial to a specific situation.
 

FAQ 2. How do I know if I am withholding enough taxes?

A: This is a very common issue I see, especially with physicians who are transitioning out of training into their full-time attending salary. Because this transition happens mid-year, often the first half of the year you are withholding at a rate much lower than what you will be earning as an attending and end up with a tax surprise at filing. One way to remedy this is to look at how much taxes are being withheld from your paycheck and compare this to what tax bracket you anticipate to be in, depending on filing status (Figure 1). If you do this and realize you are not withholding enough taxes, you can submit an amended form W4 to your employer to have additional withholding taken out each pay period.

FAQ 3. I am a 1099 contractor; do I need a PLLC, and should I file as an S-Corporation?

A: The term “S-Corp” gets mentioned often related to 1099 contractors and can be extremely beneficial from a tax savings perspective. Often physicians may moonlight — in addition to working in their W2 positions — and would receive this compensation as a 1099 contractor rather than an employee. This is an example of when a Professional Limited Liability Company (PLLC) might be advisable. A PLLC is created at a state level and helps shield owners from potential litigation. The owner of a PLLC pays Social Security and Medicare taxes on all income earned from the entity, and the PLLC is included in the owner’s individual income tax return.

A Small-Corporation (S-Corporation) is a tax classification that passes income through to the owners. The PLLC is now taxed as an S-Corporation, rather than a disregarded entity. The shareholders of the S-Corporation are required to pay a reasonable salary (W2 income). The remaining income passes through to the owner and is not subject to Social Security and Medicare taxes, only federal income tax. This taxation status requires an additional tax return and payroll service. Because there are additional expenses with being taxed as an S-Corporation, a cost-benefit analysis should be done before changing the tax classification to confirm that the tax savings are greater than the additional costs.
 

FAQ 4. What is the ‘backdoor Roth’ strategy? Should I implement it?

A: A Roth IRA is a specific type of Individual Retirement Account (IRA) that is funded with after-tax dollars. The contributions and growth in a Roth IRA can be withdrawn at retirement, tax free. As physicians who are typically high earners, you are not able to contribute directly to a Roth IRA because of income limitations. This is where the Roth conversion strategy — the backdoor Roth — comes into play. This strategy allows you to make a nondeductible traditional IRA contribution and then convert those dollars into a Roth IRA. In 2023, you can contribute up to $6,500 into this type of account. There are many additional considerations that must be made before implementing this strategy. Discussion with a financial advisor or CPA is recommended.

FAQ 5. I’ve always done my own taxes. Do I need to hire a CPA?

A: For many physicians, especially during training, your tax situation may not warrant the need for a Certified Public Accountant (CPA). However, as your income and tax complexity increase, working with a CPA not only decreases your risk for error, but also helps ensure you are not overpaying in taxes. There are many different types of services that a CPA can offer, the most basic being tax preparation. This is simply compiling your tax return based on the circumstances that occurred in the prior year. Tax planning is an additional level of service that may not be included in tax preparation cost. Tax planning is a proactive approach to taxes and helps maximize tax savings opportunities before return preparation. When interviewing a potential CPA, you can ask what level of services are included in the fees quoted.

These are just a few of the questions I regularly answer related to physicians’ taxation. The tax code is complex and ever changing. Recommendations that are made today might not be applicable or advisable in the future to any given situation. Working with a professional can ensure you have the most up-to-date and accurate information related to your taxes.
 

Ms. Anderson is with Physician’s Resource Services and is on Instagram @physiciansrs .  Dr. Anderson is a CA-1 Resident in Anesthesia at Baylor Scott and White Health. The authors have no conflicts of interest.

I informally surveyed several young gastroenterologists to understand their biggest personal finance questions and we will tackle the top five here. While this article will get you started, these are complex topics, and each could warrant several standalone articles. I strongly encourage you to develop some basic understanding of personal finance through books, websites, and podcasts. If you can manage Barrett’s esophagus, Crohn’s, and cirrhosis, you can understand the basics of personal finance.

For trainees debating an academic/501(c)(3) position vs. private practice, I would generally not advise making a career choice based purely on PSLF eligibility. However, borrowers with very high federal student loan burdens (e.g., debt to income ratio of > 2:1), or who are very close to the PSLF 10-year requirement may want to consider choosing a qualifying position for a few years to receive PSLF student loan forgiveness. Please see TNG’s 2020 article³ for a deeper discussion. Consultation with a company specializing in student loan advice for physicians may be well worth the upfront cost.
 

2. Do I need disability insurance? What should I look for?

I would strongly advise getting disability insurance as soon as possible (including while in training). While disability insurance is not cheap, it is one of the first steps you should take and one of the most important ways to protect your financial future. It is essential to look for a specialty-specific own occupation policy. Such a policy will provide disability payments if you are no longer able to work as a gastroenterologist/hepatologist (including an injury which prevents you from doing endoscopies).

There are two major types of disability policies: group policies and individual policies. See table 1 for a detailed comparison.

3. Do I need life insurance? What type should I get?

If anyone is dependent on your income (partner, child, etc.), you should have life insurance. Moreover, if you expect to have dependents in the near future (e.g., children), you could consider getting life insurance now while you are younger and healthier. For a young GI with multiple financial obligations, term life insurance is generally the right product. Term life insurance is a straightforward, affordable product that can be purchased from multiple high-quality insurance carriers. There are two major considerations: The amount of coverage ($2 million, $3 million, etc.) and the length of coverage (20 years, 30 years, etc.). To estimate the appropriate amount of coverage, start with your expected annual household living expenses, and multiply by 25-30. While this is a rule of thumb, it will get you in the ballpark. For many young physicians, a $2-$5 million policy with 20- to 30-year coverage is reasonable.

Many financial advisers may suggest whole life insurance policies. These are typically not the ideal policy for young GIs who are just starting their careers. While whole life insurance may be the right choice in select cases, term life insurance will be the best product for most of TNG’s audience. As an example, a $3 million, 25-year term policy for a healthy, nonsmoking 35-year-old male would cost approximately $175 per month. A similar $3 million whole life policy could cost $2,000 per month or more.
 

4. What do I need to know about retirement accounts and investing?

The alphabet soup of retirement accounts can be confusing – IRA, 401k, 457. Retirement accounts provide a tax break to incentivize saving for retirement. Traditional (“non-Roth”) accounts provide a tax break today, but you will pay taxes when withdrawing the money in retirement. Roth accounts provide no tax break now but provide tax-free growth for decades, and no taxes are due when withdrawing money. See table 2 for a detailed comparison of retirement accounts.

Once you place money into a retirement account, you will need to choose specific investments to grow your money. The two most common asset classes are stocks and bonds, though there are many other reasonable assets, such as real estate, commodities, and alternative currencies. It is generally recommended to have a higher proportion of stock-based investments early on (60%-90%) and then increase the ratio of bonds closer to retirement. Using low cost, passive index funds (or exchange traded funds) is a good way to get stock exposure. Target date retirement funds can be a nice tool for beginning investors since they will automatically adjust the stock/bond ratio for you.

Calculating the amount needed for retirement is beyond the scope of this article. However, saving at least 20% of your gross income specifically for retirement is a good starting point and should set you up for a reasonable retirement in about 30 years. For the average GI physician, this would mean saving $4,000 or more per month for retirement. If you aim to retire earlier, consider investing a higher percentage.
 

5. What do I need to know about buying a house?

The first question to ask is whether it makes sense to rent or buy a house. This is a personal and lifestyle decision, not just a financial decision. Today’s market is difficult with both high home prices and high rent costs. If there is a reasonable chance that you will be moving within 3-5 years, I would consider not buying until your long-term plans are more stable. Moreover, a high proportion of physicians change jobs.^4,5,6 If you are just starting a new job, it is often wise to wait at least 6-12 months before buying a house to ensure the new job is a good fit. If you are in a stable long-term situation, it may be reasonable to buy a house. While it is commonly believed that buying a house is a “good financial move,” there are many hidden costs to home ownership, including big ticket repairs, property taxes, and real estate fees when selling a home.

First-time physician home buyers can often secure a physician mortgage with competitive interest rates and a low down payment of 0%-10% instead of the traditional 20% down payment. Moreover, a good physician mortgage should not have private mortgage insurance (PMI). Given the variation between mortgage companies, my most important piece of advice is to shop around for a good mortgage. An independent mortgage broker can be very valuable.
 

Dr. Jain is associate professor of medicine in the division of gastroenterology and hepatology, University of North Carolina School of Medicine, Chapel Hill. He has no conflicts of interest. The information in this article is meant for general educational purposes only. For individualized personal finance advice, please seek your own financial advisor, tax accountant, insurance broker, attorney, or other financial professional. Follow Dr. Jain @AJainMD on X.

References

1. Future of PSLF Fact Sheet

2. The Loophole That Can Get Thousands of Doctors into PSLF

3. Student loan management: An introduction for the young gastroenterologist

4. Study Shows First Job after Medical Residency Often Doesn’t Last

5. More physicians want to leave their jobs as pay rates fall, survey finds

6. Physician turnover rates are climbing as they clamor for better work-life balance

I informally surveyed several young gastroenterologists to understand their biggest personal finance questions and we will tackle the top five here. While this article will get you started, these are complex topics, and each could warrant several standalone articles. I strongly encourage you to develop some basic understanding of personal finance through books, websites, and podcasts. If you can manage Barrett’s esophagus, Crohn’s, and cirrhosis, you can understand the basics of personal finance.

For trainees debating an academic/501(c)(3) position vs. private practice, I would generally not advise making a career choice based purely on PSLF eligibility. However, borrowers with very high federal student loan burdens (e.g., debt to income ratio of > 2:1), or who are very close to the PSLF 10-year requirement may want to consider choosing a qualifying position for a few years to receive PSLF student loan forgiveness. Please see TNG’s 2020 article³ for a deeper discussion. Consultation with a company specializing in student loan advice for physicians may be well worth the upfront cost.
 

2. Do I need disability insurance? What should I look for?

I would strongly advise getting disability insurance as soon as possible (including while in training). While disability insurance is not cheap, it is one of the first steps you should take and one of the most important ways to protect your financial future. It is essential to look for a specialty-specific own occupation policy. Such a policy will provide disability payments if you are no longer able to work as a gastroenterologist/hepatologist (including an injury which prevents you from doing endoscopies).

There are two major types of disability policies: group policies and individual policies. See table 1 for a detailed comparison.

3. Do I need life insurance? What type should I get?

If anyone is dependent on your income (partner, child, etc.), you should have life insurance. Moreover, if you expect to have dependents in the near future (e.g., children), you could consider getting life insurance now while you are younger and healthier. For a young GI with multiple financial obligations, term life insurance is generally the right product. Term life insurance is a straightforward, affordable product that can be purchased from multiple high-quality insurance carriers. There are two major considerations: The amount of coverage ($2 million, $3 million, etc.) and the length of coverage (20 years, 30 years, etc.). To estimate the appropriate amount of coverage, start with your expected annual household living expenses, and multiply by 25-30. While this is a rule of thumb, it will get you in the ballpark. For many young physicians, a $2-$5 million policy with 20- to 30-year coverage is reasonable.

Many financial advisers may suggest whole life insurance policies. These are typically not the ideal policy for young GIs who are just starting their careers. While whole life insurance may be the right choice in select cases, term life insurance will be the best product for most of TNG’s audience. As an example, a $3 million, 25-year term policy for a healthy, nonsmoking 35-year-old male would cost approximately $175 per month. A similar $3 million whole life policy could cost $2,000 per month or more.
 

4. What do I need to know about retirement accounts and investing?

The alphabet soup of retirement accounts can be confusing – IRA, 401k, 457. Retirement accounts provide a tax break to incentivize saving for retirement. Traditional (“non-Roth”) accounts provide a tax break today, but you will pay taxes when withdrawing the money in retirement. Roth accounts provide no tax break now but provide tax-free growth for decades, and no taxes are due when withdrawing money. See table 2 for a detailed comparison of retirement accounts.

Once you place money into a retirement account, you will need to choose specific investments to grow your money. The two most common asset classes are stocks and bonds, though there are many other reasonable assets, such as real estate, commodities, and alternative currencies. It is generally recommended to have a higher proportion of stock-based investments early on (60%-90%) and then increase the ratio of bonds closer to retirement. Using low cost, passive index funds (or exchange traded funds) is a good way to get stock exposure. Target date retirement funds can be a nice tool for beginning investors since they will automatically adjust the stock/bond ratio for you.

Calculating the amount needed for retirement is beyond the scope of this article. However, saving at least 20% of your gross income specifically for retirement is a good starting point and should set you up for a reasonable retirement in about 30 years. For the average GI physician, this would mean saving $4,000 or more per month for retirement. If you aim to retire earlier, consider investing a higher percentage.
 

5. What do I need to know about buying a house?

The first question to ask is whether it makes sense to rent or buy a house. This is a personal and lifestyle decision, not just a financial decision. Today’s market is difficult with both high home prices and high rent costs. If there is a reasonable chance that you will be moving within 3-5 years, I would consider not buying until your long-term plans are more stable. Moreover, a high proportion of physicians change jobs.^4,5,6 If you are just starting a new job, it is often wise to wait at least 6-12 months before buying a house to ensure the new job is a good fit. If you are in a stable long-term situation, it may be reasonable to buy a house. While it is commonly believed that buying a house is a “good financial move,” there are many hidden costs to home ownership, including big ticket repairs, property taxes, and real estate fees when selling a home.

First-time physician home buyers can often secure a physician mortgage with competitive interest rates and a low down payment of 0%-10% instead of the traditional 20% down payment. Moreover, a good physician mortgage should not have private mortgage insurance (PMI). Given the variation between mortgage companies, my most important piece of advice is to shop around for a good mortgage. An independent mortgage broker can be very valuable.
 

Dr. Jain is associate professor of medicine in the division of gastroenterology and hepatology, University of North Carolina School of Medicine, Chapel Hill. He has no conflicts of interest. The information in this article is meant for general educational purposes only. For individualized personal finance advice, please seek your own financial advisor, tax accountant, insurance broker, attorney, or other financial professional. Follow Dr. Jain @AJainMD on X.

References

1. Future of PSLF Fact Sheet

2. The Loophole That Can Get Thousands of Doctors into PSLF

3. Student loan management: An introduction for the young gastroenterologist

4. Study Shows First Job after Medical Residency Often Doesn’t Last

5. More physicians want to leave their jobs as pay rates fall, survey finds

6. Physician turnover rates are climbing as they clamor for better work-life balance

I informally surveyed several young gastroenterologists to understand their biggest personal finance questions and we will tackle the top five here. While this article will get you started, these are complex topics, and each could warrant several standalone articles. I strongly encourage you to develop some basic understanding of personal finance through books, websites, and podcasts. If you can manage Barrett’s esophagus, Crohn’s, and cirrhosis, you can understand the basics of personal finance.

For trainees debating an academic/501(c)(3) position vs. private practice, I would generally not advise making a career choice based purely on PSLF eligibility. However, borrowers with very high federal student loan burdens (e.g., debt to income ratio of > 2:1), or who are very close to the PSLF 10-year requirement may want to consider choosing a qualifying position for a few years to receive PSLF student loan forgiveness. Please see TNG’s 2020 article³ for a deeper discussion. Consultation with a company specializing in student loan advice for physicians may be well worth the upfront cost.
 

2. Do I need disability insurance? What should I look for?

I would strongly advise getting disability insurance as soon as possible (including while in training). While disability insurance is not cheap, it is one of the first steps you should take and one of the most important ways to protect your financial future. It is essential to look for a specialty-specific own occupation policy. Such a policy will provide disability payments if you are no longer able to work as a gastroenterologist/hepatologist (including an injury which prevents you from doing endoscopies).

There are two major types of disability policies: group policies and individual policies. See table 1 for a detailed comparison.

3. Do I need life insurance? What type should I get?

If anyone is dependent on your income (partner, child, etc.), you should have life insurance. Moreover, if you expect to have dependents in the near future (e.g., children), you could consider getting life insurance now while you are younger and healthier. For a young GI with multiple financial obligations, term life insurance is generally the right product. Term life insurance is a straightforward, affordable product that can be purchased from multiple high-quality insurance carriers. There are two major considerations: The amount of coverage ($2 million, $3 million, etc.) and the length of coverage (20 years, 30 years, etc.). To estimate the appropriate amount of coverage, start with your expected annual household living expenses, and multiply by 25-30. While this is a rule of thumb, it will get you in the ballpark. For many young physicians, a $2-$5 million policy with 20- to 30-year coverage is reasonable.

Many financial advisers may suggest whole life insurance policies. These are typically not the ideal policy for young GIs who are just starting their careers. While whole life insurance may be the right choice in select cases, term life insurance will be the best product for most of TNG’s audience. As an example, a $3 million, 25-year term policy for a healthy, nonsmoking 35-year-old male would cost approximately $175 per month. A similar $3 million whole life policy could cost $2,000 per month or more.
 

4. What do I need to know about retirement accounts and investing?

The alphabet soup of retirement accounts can be confusing – IRA, 401k, 457. Retirement accounts provide a tax break to incentivize saving for retirement. Traditional (“non-Roth”) accounts provide a tax break today, but you will pay taxes when withdrawing the money in retirement. Roth accounts provide no tax break now but provide tax-free growth for decades, and no taxes are due when withdrawing money. See table 2 for a detailed comparison of retirement accounts.

Once you place money into a retirement account, you will need to choose specific investments to grow your money. The two most common asset classes are stocks and bonds, though there are many other reasonable assets, such as real estate, commodities, and alternative currencies. It is generally recommended to have a higher proportion of stock-based investments early on (60%-90%) and then increase the ratio of bonds closer to retirement. Using low cost, passive index funds (or exchange traded funds) is a good way to get stock exposure. Target date retirement funds can be a nice tool for beginning investors since they will automatically adjust the stock/bond ratio for you.

Calculating the amount needed for retirement is beyond the scope of this article. However, saving at least 20% of your gross income specifically for retirement is a good starting point and should set you up for a reasonable retirement in about 30 years. For the average GI physician, this would mean saving $4,000 or more per month for retirement. If you aim to retire earlier, consider investing a higher percentage.
 

5. What do I need to know about buying a house?

The first question to ask is whether it makes sense to rent or buy a house. This is a personal and lifestyle decision, not just a financial decision. Today’s market is difficult with both high home prices and high rent costs. If there is a reasonable chance that you will be moving within 3-5 years, I would consider not buying until your long-term plans are more stable. Moreover, a high proportion of physicians change jobs.^4,5,6 If you are just starting a new job, it is often wise to wait at least 6-12 months before buying a house to ensure the new job is a good fit. If you are in a stable long-term situation, it may be reasonable to buy a house. While it is commonly believed that buying a house is a “good financial move,” there are many hidden costs to home ownership, including big ticket repairs, property taxes, and real estate fees when selling a home.

First-time physician home buyers can often secure a physician mortgage with competitive interest rates and a low down payment of 0%-10% instead of the traditional 20% down payment. Moreover, a good physician mortgage should not have private mortgage insurance (PMI). Given the variation between mortgage companies, my most important piece of advice is to shop around for a good mortgage. An independent mortgage broker can be very valuable.
 

Dr. Jain is associate professor of medicine in the division of gastroenterology and hepatology, University of North Carolina School of Medicine, Chapel Hill. He has no conflicts of interest. The information in this article is meant for general educational purposes only. For individualized personal finance advice, please seek your own financial advisor, tax accountant, insurance broker, attorney, or other financial professional. Follow Dr. Jain @AJainMD on X.

References

1. Future of PSLF Fact Sheet

2. The Loophole That Can Get Thousands of Doctors into PSLF

3. Student loan management: An introduction for the young gastroenterologist

4. Study Shows First Job after Medical Residency Often Doesn’t Last

5. More physicians want to leave their jobs as pay rates fall, survey finds

6. Physician turnover rates are climbing as they clamor for better work-life balance

In July, the Centers for Medicare and Medicaid Services released the 2024 Physician Fee Schedule (PFS) proposed rule on proposed policy changes for Medicare payments. The proposed rule contains 2,883 pages of proposals for physician, hospital outpatient department, and ambulatory surgery center (ASC) payments for calendar year 2024. For gastroenterologists, there was good news and bad news.

CMS proposed to decrease the RVU conversion factor from $33.8872 in 2023 to $32.7476 in 2024, which would result in a 3.36% cut to physician payment. Medicare physician payments have been cut each year for the better part of a decade, with additional cuts proposed for 2024.

According to the American Medical Assocition, Medicare physician payment has already declined 26% in the last 22 years when adjusting for inflation, and that’s before factoring in the proposed cuts for 2024. Physicians are one of the only health care providers without an automatic inflationary increase, the AMA reports.

AGA opposes additional cuts to physician payments and will continue to advocate to stop them. AGA and many other specialty societies support H.R. 2474, the Strengthening Medicare for Patients and Providers Act. This bill would provide a permanent, annual update equal to the increase in the Medicare Economic Index, which is how the government measures inflation in medical practice. We will continue to advocate for permanent positive annual inflation updates, which would allow physicians to invest in their practices and implement new strategies to provide high-value care.

But in some positive news from the 2024 Medicare PFS, the Hospital Outpatient Prospective Payment System (OPPS) and the ASC proposed rules include increased hospital outpatient departments and ASC payments, continued telemedicine reimbursement and coverage through 2024, and a second one-year delay in changes to rules governing split/shared visits. Specifically:

OPPS Conversion Factor: The proposed CY 2024 Medicare conversion factor for outpatient hospital departments is $87.488, an increase of 2.8%, for hospitals that meet applicable quality reporting requirements.

ASC Conversion Factor: The proposed CY 2024 Ambulatory Surgical Center conversion factor is $53.397, an increase of 2.8%, for ASCs that meet applicable quality reporting requirements. The AGA and our sister societies continue to urge CMS to reduce this gap in the ASC facility fees, when compared to the outpatient hospital facility rates, which are estimated to be a roughly 48% differential in CY 2024.

Telehealth: CMS proposes to continue reimbursing telehealth services at current levels through 2024. Payment for audio-only evaluation and management (E/M) codes will continue at parity with follow-up in-person visits as it has throughout the pandemic. Additionally, CMS is implementing telehealth flexibilities that were included in the Consolidated Appropriations Act 2023 by allowing telehealth visits to originate at any site in the United States. This will allow patients throughout the country to maintain access to needed telehealth services without facing the logistical and safety challenges that can surround in-person visits. CMS is proposing to pay telehealth services at the nonfacility payment rate, which is the same rate as in-person office visits, lift the frequency limits on telehealth visits for subsequent hospital and skilled nursing facility visits, and allow direct supervision to be provided virtually.

Split (or shared) visits: CMS has proposed a second one-year delay to its proposed split/shared visits policy. The original proposal required that the billing provider in split/shared visits be whoever spent more than half of the total time with the patient (making time the only way to define substantive portion). CMS plans to delay that through at least Dec. 31, 2024. In the interim, practices can continue to use one of the three key components (history, exam, or medical decision-making) or more than half of the total time spent to determine who can bill for the visit. The GI societies will continue to advocate for appropriate reimbursement to align with new team-based models of care delivery.

Notably, the split (or shared) visits policy was also delayed in 2023 because of widespread concerns and feedback that the policy would disrupt team-based care and care delivery in the hospital setting. The American Medical Association CPT editorial panel, the body responsible for creating and maintaining CPT codes, has approved revisions to E/M guidelines that may help address some of CMS’s concerns.

For more information on issues affecting gastroenterologists in the 2024 Medicare PFS and OPPS/ASC proposed rules, visit the AGA news website.

Dr. Garcia serves as an advisor to the AGA AMA Relative-value Update Committee. She is clinical associate professor of medicine at Stanford (Calif.) University, where she is director of the neurogastroenterology and motility laboratory in the division of gastroenterology and hepatology, and associate chief medical information officer in ambulatory care at Stanford Health Care.

Dr. Mehta serves as an alternate advisor to the AGA AMA Relative-value Update Committee. She is associate chief innovation officer, Penn Medicine, and associate professor of medicine and health policy, University of Pennsylvania, Philadelphia.

Neither author has relevant conflicts of interest.

In July, the Centers for Medicare and Medicaid Services released the 2024 Physician Fee Schedule (PFS) proposed rule on proposed policy changes for Medicare payments. The proposed rule contains 2,883 pages of proposals for physician, hospital outpatient department, and ambulatory surgery center (ASC) payments for calendar year 2024. For gastroenterologists, there was good news and bad news.

CMS proposed to decrease the RVU conversion factor from $33.8872 in 2023 to $32.7476 in 2024, which would result in a 3.36% cut to physician payment. Medicare physician payments have been cut each year for the better part of a decade, with additional cuts proposed for 2024.

According to the American Medical Assocition, Medicare physician payment has already declined 26% in the last 22 years when adjusting for inflation, and that’s before factoring in the proposed cuts for 2024. Physicians are one of the only health care providers without an automatic inflationary increase, the AMA reports.

AGA opposes additional cuts to physician payments and will continue to advocate to stop them. AGA and many other specialty societies support H.R. 2474, the Strengthening Medicare for Patients and Providers Act. This bill would provide a permanent, annual update equal to the increase in the Medicare Economic Index, which is how the government measures inflation in medical practice. We will continue to advocate for permanent positive annual inflation updates, which would allow physicians to invest in their practices and implement new strategies to provide high-value care.

But in some positive news from the 2024 Medicare PFS, the Hospital Outpatient Prospective Payment System (OPPS) and the ASC proposed rules include increased hospital outpatient departments and ASC payments, continued telemedicine reimbursement and coverage through 2024, and a second one-year delay in changes to rules governing split/shared visits. Specifically:

OPPS Conversion Factor: The proposed CY 2024 Medicare conversion factor for outpatient hospital departments is $87.488, an increase of 2.8%, for hospitals that meet applicable quality reporting requirements.

ASC Conversion Factor: The proposed CY 2024 Ambulatory Surgical Center conversion factor is $53.397, an increase of 2.8%, for ASCs that meet applicable quality reporting requirements. The AGA and our sister societies continue to urge CMS to reduce this gap in the ASC facility fees, when compared to the outpatient hospital facility rates, which are estimated to be a roughly 48% differential in CY 2024.

Telehealth: CMS proposes to continue reimbursing telehealth services at current levels through 2024. Payment for audio-only evaluation and management (E/M) codes will continue at parity with follow-up in-person visits as it has throughout the pandemic. Additionally, CMS is implementing telehealth flexibilities that were included in the Consolidated Appropriations Act 2023 by allowing telehealth visits to originate at any site in the United States. This will allow patients throughout the country to maintain access to needed telehealth services without facing the logistical and safety challenges that can surround in-person visits. CMS is proposing to pay telehealth services at the nonfacility payment rate, which is the same rate as in-person office visits, lift the frequency limits on telehealth visits for subsequent hospital and skilled nursing facility visits, and allow direct supervision to be provided virtually.

Split (or shared) visits: CMS has proposed a second one-year delay to its proposed split/shared visits policy. The original proposal required that the billing provider in split/shared visits be whoever spent more than half of the total time with the patient (making time the only way to define substantive portion). CMS plans to delay that through at least Dec. 31, 2024. In the interim, practices can continue to use one of the three key components (history, exam, or medical decision-making) or more than half of the total time spent to determine who can bill for the visit. The GI societies will continue to advocate for appropriate reimbursement to align with new team-based models of care delivery.

Notably, the split (or shared) visits policy was also delayed in 2023 because of widespread concerns and feedback that the policy would disrupt team-based care and care delivery in the hospital setting. The American Medical Association CPT editorial panel, the body responsible for creating and maintaining CPT codes, has approved revisions to E/M guidelines that may help address some of CMS’s concerns.

For more information on issues affecting gastroenterologists in the 2024 Medicare PFS and OPPS/ASC proposed rules, visit the AGA news website.

Dr. Garcia serves as an advisor to the AGA AMA Relative-value Update Committee. She is clinical associate professor of medicine at Stanford (Calif.) University, where she is director of the neurogastroenterology and motility laboratory in the division of gastroenterology and hepatology, and associate chief medical information officer in ambulatory care at Stanford Health Care.

Dr. Mehta serves as an alternate advisor to the AGA AMA Relative-value Update Committee. She is associate chief innovation officer, Penn Medicine, and associate professor of medicine and health policy, University of Pennsylvania, Philadelphia.

Neither author has relevant conflicts of interest.

In July, the Centers for Medicare and Medicaid Services released the 2024 Physician Fee Schedule (PFS) proposed rule on proposed policy changes for Medicare payments. The proposed rule contains 2,883 pages of proposals for physician, hospital outpatient department, and ambulatory surgery center (ASC) payments for calendar year 2024. For gastroenterologists, there was good news and bad news.

CMS proposed to decrease the RVU conversion factor from $33.8872 in 2023 to $32.7476 in 2024, which would result in a 3.36% cut to physician payment. Medicare physician payments have been cut each year for the better part of a decade, with additional cuts proposed for 2024.

According to the American Medical Assocition, Medicare physician payment has already declined 26% in the last 22 years when adjusting for inflation, and that’s before factoring in the proposed cuts for 2024. Physicians are one of the only health care providers without an automatic inflationary increase, the AMA reports.

AGA opposes additional cuts to physician payments and will continue to advocate to stop them. AGA and many other specialty societies support H.R. 2474, the Strengthening Medicare for Patients and Providers Act. This bill would provide a permanent, annual update equal to the increase in the Medicare Economic Index, which is how the government measures inflation in medical practice. We will continue to advocate for permanent positive annual inflation updates, which would allow physicians to invest in their practices and implement new strategies to provide high-value care.

But in some positive news from the 2024 Medicare PFS, the Hospital Outpatient Prospective Payment System (OPPS) and the ASC proposed rules include increased hospital outpatient departments and ASC payments, continued telemedicine reimbursement and coverage through 2024, and a second one-year delay in changes to rules governing split/shared visits. Specifically:

OPPS Conversion Factor: The proposed CY 2024 Medicare conversion factor for outpatient hospital departments is $87.488, an increase of 2.8%, for hospitals that meet applicable quality reporting requirements.

ASC Conversion Factor: The proposed CY 2024 Ambulatory Surgical Center conversion factor is $53.397, an increase of 2.8%, for ASCs that meet applicable quality reporting requirements. The AGA and our sister societies continue to urge CMS to reduce this gap in the ASC facility fees, when compared to the outpatient hospital facility rates, which are estimated to be a roughly 48% differential in CY 2024.

Telehealth: CMS proposes to continue reimbursing telehealth services at current levels through 2024. Payment for audio-only evaluation and management (E/M) codes will continue at parity with follow-up in-person visits as it has throughout the pandemic. Additionally, CMS is implementing telehealth flexibilities that were included in the Consolidated Appropriations Act 2023 by allowing telehealth visits to originate at any site in the United States. This will allow patients throughout the country to maintain access to needed telehealth services without facing the logistical and safety challenges that can surround in-person visits. CMS is proposing to pay telehealth services at the nonfacility payment rate, which is the same rate as in-person office visits, lift the frequency limits on telehealth visits for subsequent hospital and skilled nursing facility visits, and allow direct supervision to be provided virtually.

Split (or shared) visits: CMS has proposed a second one-year delay to its proposed split/shared visits policy. The original proposal required that the billing provider in split/shared visits be whoever spent more than half of the total time with the patient (making time the only way to define substantive portion). CMS plans to delay that through at least Dec. 31, 2024. In the interim, practices can continue to use one of the three key components (history, exam, or medical decision-making) or more than half of the total time spent to determine who can bill for the visit. The GI societies will continue to advocate for appropriate reimbursement to align with new team-based models of care delivery.

Notably, the split (or shared) visits policy was also delayed in 2023 because of widespread concerns and feedback that the policy would disrupt team-based care and care delivery in the hospital setting. The American Medical Association CPT editorial panel, the body responsible for creating and maintaining CPT codes, has approved revisions to E/M guidelines that may help address some of CMS’s concerns.

For more information on issues affecting gastroenterologists in the 2024 Medicare PFS and OPPS/ASC proposed rules, visit the AGA news website.

Dr. Garcia serves as an advisor to the AGA AMA Relative-value Update Committee. She is clinical associate professor of medicine at Stanford (Calif.) University, where she is director of the neurogastroenterology and motility laboratory in the division of gastroenterology and hepatology, and associate chief medical information officer in ambulatory care at Stanford Health Care.

Dr. Mehta serves as an alternate advisor to the AGA AMA Relative-value Update Committee. She is associate chief innovation officer, Penn Medicine, and associate professor of medicine and health policy, University of Pennsylvania, Philadelphia.

Neither author has relevant conflicts of interest.

The American Gastroenterological Association and other gastrointestinal-specific organizations have excellent resources available to members that focus on optimizing reimbursement in your clinical and endoscopic practice. In this article we take a deep dive into opportunities for a practice to find value in the care they provide outside of the clinical or endoscopic encounters.

During the COVID-19 pandemic and public health emergency (PHE), many previously noncovered services were now covered under rules of the Centers for Medicare & Medicaid Services. During the pandemic, patient portal messages increased by 157%, meaning more work for health care teams, negatively impacting physician satisfaction, and increasing burnout.¹ Medical burnout has been associated with increased time spent on electronic health records, with some subspeciality gastroenterology (GI) groups having a high EHR burden, according to a recently published article in the American Journal of Gastroenterology.2

This topic is a timely discussion as several large health systems have implemented processes to bill for non–face-to-face services (termed “asynchronous care”), some of which have not been well received in the lay media. It is important to note that despite these implementations, studies have shown only 1% of all incoming portal messages would meet criteria to be submitted for reimbursement. This impact might be slightly higher in chronic care management practices.

Providers and practices have several options when considering billing for non–face-to-face encounters, which we outline in Table 1.³

The focus of this article will be to review the more common non–face-to-face evaluation and management services, such as telephone E/M (patient phone call) and e-visits (patient portal messages) as these have recently generated the most interest and discussion amongst health care providers.

Telemedicine after COVID-19 pandemic

During the beginning of the pandemic, a web-based survey study found that almost all providers in GI practices implemented some form of telemedicine to continue to provide care for patients, compared to 32% prior to the pandemic.^4,5 The high demand and essential requirement for telehealth evaluation facilitated its reimbursement, eliminating the primary barrier to previous use.⁶

One of the new covered benefits by CMS was asynchronous telehealth care.⁷ The PHE ended in May 2023, and since then a qualified health care provider (QHCP) does not have the full flexibility to deliver telemedicine services across state lines. The U.S. Department of Health and Human Services has considered some telehealth policy changes after the COVID-19 PHE and many of those will be extended, at least through 2024.⁸ As during the pandemic, where the U.S. national payer network (CMS, state Medicaid, and private payers) and state health agencies assisted to ensure patients get the care they need by authorizing providers to be compensated for non–face-to-face services, we believe this service will continue to be part of our clinical practice.

We recommend you stay informed about local and federal laws, regulations, and alternatives for reimbursement as they may be modified at the beginning of a new calendar year. Remember, you can always talk with your revenue cycle team to clarify any query.
 

Telephone evaluation and management services

The patient requests to speak with you.

Telephone evaluation and management services became more widely used after the pandemic and were recognized by CMS as a covered medical service under PHE. As outlined in Table 1, there are associated codes with this service and it can only apply to an established patient in your practice. The cumulative time spent over a 7-day period without generating an immediate follow-up visit could qualify for this CPT code. However, for a patient with a high-complexity diagnosis and/or decisions being made about care, it might be better to consider a virtual office visit as this would value the complex care at a higher level than the time spent during the telephone E/M encounter.

A common question comes up: Can my nurse or support team bill for telephone care? No, only QHCP can, which means physicians and advanced practice providers can bill for this E/M service, and it does not include time spent by other members of clinical staff in patient care. However, there are CPT codes for chronic care management, which is not covered in this article.
 

Virtual evaluation and management services

You respond to a patient-initiated portal message.

Patient portal messages increased exponentially during the pandemic with 2.5 more minutes spent per message, resulting in more EHR work by practitioners, compared with prior to the pandemic. One study showed an immediate postpandemic increase in EHR patient-initiated messages with no return to prepandemic baseline.¹

Although studies evaluating postpandemic telemedicine services are needed, we believe that this trend will continue, and for this reason, it is important to create sustainable workflows to continue to provide this patient driven avenue of care.⁹

E-visits are asynchronous patient or guardian portal messages that require a minimum of 5 minutes to provide medical decision-making without prior E/M services in the last 7 days. To obtain reimbursement for this service, it cannot be initiated by the provider, and patient consent must be obtained. Documentation should include this information and the time spent in the encounter. The associated CPT codes with this e-service are outlined in Table 1.

A common question is, “Are there additional codes I should use if a portal message E/M visit lasts more than 30 minutes?” No. If an e-visit lasts more than 30 minutes, the QHCP should bill the CPT code 99423. However, we would advise that, if this care requires more than 30 minutes, then either virtual or face-to-face E/M be considered for the optimal reimbursement for provider time spent. Another common question is around consent for services, and we advise providers to review this requirement with their compliance colleagues as each institution has different policies.



Virtual check-in

Medicare also covers brief communication technology–based services also known as virtual check-ins, where patients can communicate with their provider after having established care. During this brief conversation that can be via telephone, audio/video, secure text messaging, email, or patient portal, providers will determine if an in-person visit is necessary. CMS has designed G codes for these virtual check-ins that are from the Healthcare Common Procedure Coding System (HCPCS). Two codes are available for this E/M service: G2012, which is outlined in Table 1, and G2010, which covers the evaluation of images and/or recorded videos. In order to be reimbursed for a G2010 code, providers need at least a 5-minute response to make a clinical determination or give the patient a medical impression.
 

Patient satisfaction, physician well-being and quality of care outcomes

Large health care systems like Kaiser Permanente implemented secure message patient-physician communication (the patient portal) even before the pandemic, showing promising results in 2010 with reduction in office visits, improvement in measurable quality outcomes, and high level of patient satisfaction.¹⁰ Post pandemic, several large health care centers opted to announce the billing implementation for patient-initiated portal messages.¹¹ A focus was placed on educating their patients about when a message will and will not be billed. Using this type of strategy can help to improve patient awareness about potential billing without affecting patient satisfaction and care outcomes. Studies have shown the EHR has contributed to physician burnout and some physicians reducing their clinical time or leaving medicine; a reduction in messaging might have a positive impact on physician well-being.

The challenge is that medical billing is not routinely included as a curriculum topic in many residency and fellowship programs; however, trainees are part of E/M services and have limited knowledge of billing processes. Unfortunately, at this time, trainees cannot submit for reimbursement for asynchronous care as described above. We hope that this brief article will help junior gastroenterologists optimize their outpatient billing practices.
 

Dr. Nieto is an internal medicine chief resident with WellStar Cobb Medical Center, Austell, Ga. Dr. Kinnucan is a gastroenterologist with Mayo Clinic, Jacksonville, Fla. The authors have no conflicts of interest to disclose for this article. The authors certify that no financial and grant support has been received for this article.

References

1. Holmgren AJ et al. J Am Med Inform Assoc. 2021 Dec 9. doi: 10.1093/jamia/ocab268.

2. Bali AS et al. Am J Gastroenterol. 2023 Apr 24. doi: 10.14309/ajg.0000000000002254.

3. AAFP. Family Physician. “Coding Scenario: Coding for Virtual-Digital Visits”

4. Keihanian T. et al. Telehealth Utilization in Gastroenterology Clinics Amid the COVID-19 Pandemic: Impact on Clinical Practice and Gastroenterology Training. Gastroenterology. 2020 Jun 20. doi: 10.1053/j.gastro.2020.06.040.

5. Lewin S et al. J Crohns Colitis. 2020 Oct 21. doi: 10.1093/ecco-jcc/jjaa140.

6. Perisetti A and H Goyal. Dig Dis Sci. 2021 Mar 3. doi: 10.1007/s10620-021-06874-x.

7. Telehealth.HHS.gov. Medicaid and Medicare billing for asynchronous telehealth. Updated: 2022 May 4.

8. Telehealth.HHS.gov. Telehealth policy changes after the  COVID-19  public health emergency. Last updated: 2023 Jan 23.

9. Fox B and Sizemore JO. Telehealth: Fad or the future. Epic Health Research Network. 2020 Aug 18.

10. Baer D. Patient-physician e-mail communication: the kaiser permanente experience. J Oncol Pract. 2011 Jul. doi: 10.1200/JOP.2011.000323.

11. Myclevelandclinic.org. MyChart Messaging.

12. Sinsky CA et al. J Gen Intern Med. 2022 Aug 29. doi: 10.1007/s11606-022-07766-0.

The American Gastroenterological Association and other gastrointestinal-specific organizations have excellent resources available to members that focus on optimizing reimbursement in your clinical and endoscopic practice. In this article we take a deep dive into opportunities for a practice to find value in the care they provide outside of the clinical or endoscopic encounters.

During the COVID-19 pandemic and public health emergency (PHE), many previously noncovered services were now covered under rules of the Centers for Medicare & Medicaid Services. During the pandemic, patient portal messages increased by 157%, meaning more work for health care teams, negatively impacting physician satisfaction, and increasing burnout.¹ Medical burnout has been associated with increased time spent on electronic health records, with some subspeciality gastroenterology (GI) groups having a high EHR burden, according to a recently published article in the American Journal of Gastroenterology.2

This topic is a timely discussion as several large health systems have implemented processes to bill for non–face-to-face services (termed “asynchronous care”), some of which have not been well received in the lay media. It is important to note that despite these implementations, studies have shown only 1% of all incoming portal messages would meet criteria to be submitted for reimbursement. This impact might be slightly higher in chronic care management practices.

Providers and practices have several options when considering billing for non–face-to-face encounters, which we outline in Table 1.³

The focus of this article will be to review the more common non–face-to-face evaluation and management services, such as telephone E/M (patient phone call) and e-visits (patient portal messages) as these have recently generated the most interest and discussion amongst health care providers.

Telemedicine after COVID-19 pandemic

During the beginning of the pandemic, a web-based survey study found that almost all providers in GI practices implemented some form of telemedicine to continue to provide care for patients, compared to 32% prior to the pandemic.^4,5 The high demand and essential requirement for telehealth evaluation facilitated its reimbursement, eliminating the primary barrier to previous use.⁶

One of the new covered benefits by CMS was asynchronous telehealth care.⁷ The PHE ended in May 2023, and since then a qualified health care provider (QHCP) does not have the full flexibility to deliver telemedicine services across state lines. The U.S. Department of Health and Human Services has considered some telehealth policy changes after the COVID-19 PHE and many of those will be extended, at least through 2024.⁸ As during the pandemic, where the U.S. national payer network (CMS, state Medicaid, and private payers) and state health agencies assisted to ensure patients get the care they need by authorizing providers to be compensated for non–face-to-face services, we believe this service will continue to be part of our clinical practice.

We recommend you stay informed about local and federal laws, regulations, and alternatives for reimbursement as they may be modified at the beginning of a new calendar year. Remember, you can always talk with your revenue cycle team to clarify any query.
 

Telephone evaluation and management services

The patient requests to speak with you.

Telephone evaluation and management services became more widely used after the pandemic and were recognized by CMS as a covered medical service under PHE. As outlined in Table 1, there are associated codes with this service and it can only apply to an established patient in your practice. The cumulative time spent over a 7-day period without generating an immediate follow-up visit could qualify for this CPT code. However, for a patient with a high-complexity diagnosis and/or decisions being made about care, it might be better to consider a virtual office visit as this would value the complex care at a higher level than the time spent during the telephone E/M encounter.

A common question comes up: Can my nurse or support team bill for telephone care? No, only QHCP can, which means physicians and advanced practice providers can bill for this E/M service, and it does not include time spent by other members of clinical staff in patient care. However, there are CPT codes for chronic care management, which is not covered in this article.
 

Virtual evaluation and management services

You respond to a patient-initiated portal message.

Patient portal messages increased exponentially during the pandemic with 2.5 more minutes spent per message, resulting in more EHR work by practitioners, compared with prior to the pandemic. One study showed an immediate postpandemic increase in EHR patient-initiated messages with no return to prepandemic baseline.¹

Although studies evaluating postpandemic telemedicine services are needed, we believe that this trend will continue, and for this reason, it is important to create sustainable workflows to continue to provide this patient driven avenue of care.⁹

E-visits are asynchronous patient or guardian portal messages that require a minimum of 5 minutes to provide medical decision-making without prior E/M services in the last 7 days. To obtain reimbursement for this service, it cannot be initiated by the provider, and patient consent must be obtained. Documentation should include this information and the time spent in the encounter. The associated CPT codes with this e-service are outlined in Table 1.

A common question is, “Are there additional codes I should use if a portal message E/M visit lasts more than 30 minutes?” No. If an e-visit lasts more than 30 minutes, the QHCP should bill the CPT code 99423. However, we would advise that, if this care requires more than 30 minutes, then either virtual or face-to-face E/M be considered for the optimal reimbursement for provider time spent. Another common question is around consent for services, and we advise providers to review this requirement with their compliance colleagues as each institution has different policies.



Virtual check-in

Medicare also covers brief communication technology–based services also known as virtual check-ins, where patients can communicate with their provider after having established care. During this brief conversation that can be via telephone, audio/video, secure text messaging, email, or patient portal, providers will determine if an in-person visit is necessary. CMS has designed G codes for these virtual check-ins that are from the Healthcare Common Procedure Coding System (HCPCS). Two codes are available for this E/M service: G2012, which is outlined in Table 1, and G2010, which covers the evaluation of images and/or recorded videos. In order to be reimbursed for a G2010 code, providers need at least a 5-minute response to make a clinical determination or give the patient a medical impression.
 

Patient satisfaction, physician well-being and quality of care outcomes

Large health care systems like Kaiser Permanente implemented secure message patient-physician communication (the patient portal) even before the pandemic, showing promising results in 2010 with reduction in office visits, improvement in measurable quality outcomes, and high level of patient satisfaction.¹⁰ Post pandemic, several large health care centers opted to announce the billing implementation for patient-initiated portal messages.¹¹ A focus was placed on educating their patients about when a message will and will not be billed. Using this type of strategy can help to improve patient awareness about potential billing without affecting patient satisfaction and care outcomes. Studies have shown the EHR has contributed to physician burnout and some physicians reducing their clinical time or leaving medicine; a reduction in messaging might have a positive impact on physician well-being.

The challenge is that medical billing is not routinely included as a curriculum topic in many residency and fellowship programs; however, trainees are part of E/M services and have limited knowledge of billing processes. Unfortunately, at this time, trainees cannot submit for reimbursement for asynchronous care as described above. We hope that this brief article will help junior gastroenterologists optimize their outpatient billing practices.
 

Dr. Nieto is an internal medicine chief resident with WellStar Cobb Medical Center, Austell, Ga. Dr. Kinnucan is a gastroenterologist with Mayo Clinic, Jacksonville, Fla. The authors have no conflicts of interest to disclose for this article. The authors certify that no financial and grant support has been received for this article.

References

1. Holmgren AJ et al. J Am Med Inform Assoc. 2021 Dec 9. doi: 10.1093/jamia/ocab268.

2. Bali AS et al. Am J Gastroenterol. 2023 Apr 24. doi: 10.14309/ajg.0000000000002254.

3. AAFP. Family Physician. “Coding Scenario: Coding for Virtual-Digital Visits”

4. Keihanian T. et al. Telehealth Utilization in Gastroenterology Clinics Amid the COVID-19 Pandemic: Impact on Clinical Practice and Gastroenterology Training. Gastroenterology. 2020 Jun 20. doi: 10.1053/j.gastro.2020.06.040.

5. Lewin S et al. J Crohns Colitis. 2020 Oct 21. doi: 10.1093/ecco-jcc/jjaa140.

6. Perisetti A and H Goyal. Dig Dis Sci. 2021 Mar 3. doi: 10.1007/s10620-021-06874-x.

7. Telehealth.HHS.gov. Medicaid and Medicare billing for asynchronous telehealth. Updated: 2022 May 4.

8. Telehealth.HHS.gov. Telehealth policy changes after the  COVID-19  public health emergency. Last updated: 2023 Jan 23.

9. Fox B and Sizemore JO. Telehealth: Fad or the future. Epic Health Research Network. 2020 Aug 18.

10. Baer D. Patient-physician e-mail communication: the kaiser permanente experience. J Oncol Pract. 2011 Jul. doi: 10.1200/JOP.2011.000323.

11. Myclevelandclinic.org. MyChart Messaging.

12. Sinsky CA et al. J Gen Intern Med. 2022 Aug 29. doi: 10.1007/s11606-022-07766-0.

The American Gastroenterological Association and other gastrointestinal-specific organizations have excellent resources available to members that focus on optimizing reimbursement in your clinical and endoscopic practice. In this article we take a deep dive into opportunities for a practice to find value in the care they provide outside of the clinical or endoscopic encounters.

During the COVID-19 pandemic and public health emergency (PHE), many previously noncovered services were now covered under rules of the Centers for Medicare & Medicaid Services. During the pandemic, patient portal messages increased by 157%, meaning more work for health care teams, negatively impacting physician satisfaction, and increasing burnout.¹ Medical burnout has been associated with increased time spent on electronic health records, with some subspeciality gastroenterology (GI) groups having a high EHR burden, according to a recently published article in the American Journal of Gastroenterology.2

This topic is a timely discussion as several large health systems have implemented processes to bill for non–face-to-face services (termed “asynchronous care”), some of which have not been well received in the lay media. It is important to note that despite these implementations, studies have shown only 1% of all incoming portal messages would meet criteria to be submitted for reimbursement. This impact might be slightly higher in chronic care management practices.

Providers and practices have several options when considering billing for non–face-to-face encounters, which we outline in Table 1.³

The focus of this article will be to review the more common non–face-to-face evaluation and management services, such as telephone E/M (patient phone call) and e-visits (patient portal messages) as these have recently generated the most interest and discussion amongst health care providers.

Telemedicine after COVID-19 pandemic

During the beginning of the pandemic, a web-based survey study found that almost all providers in GI practices implemented some form of telemedicine to continue to provide care for patients, compared to 32% prior to the pandemic.^4,5 The high demand and essential requirement for telehealth evaluation facilitated its reimbursement, eliminating the primary barrier to previous use.⁶

One of the new covered benefits by CMS was asynchronous telehealth care.⁷ The PHE ended in May 2023, and since then a qualified health care provider (QHCP) does not have the full flexibility to deliver telemedicine services across state lines. The U.S. Department of Health and Human Services has considered some telehealth policy changes after the COVID-19 PHE and many of those will be extended, at least through 2024.⁸ As during the pandemic, where the U.S. national payer network (CMS, state Medicaid, and private payers) and state health agencies assisted to ensure patients get the care they need by authorizing providers to be compensated for non–face-to-face services, we believe this service will continue to be part of our clinical practice.

We recommend you stay informed about local and federal laws, regulations, and alternatives for reimbursement as they may be modified at the beginning of a new calendar year. Remember, you can always talk with your revenue cycle team to clarify any query.
 

Telephone evaluation and management services

The patient requests to speak with you.

Telephone evaluation and management services became more widely used after the pandemic and were recognized by CMS as a covered medical service under PHE. As outlined in Table 1, there are associated codes with this service and it can only apply to an established patient in your practice. The cumulative time spent over a 7-day period without generating an immediate follow-up visit could qualify for this CPT code. However, for a patient with a high-complexity diagnosis and/or decisions being made about care, it might be better to consider a virtual office visit as this would value the complex care at a higher level than the time spent during the telephone E/M encounter.

A common question comes up: Can my nurse or support team bill for telephone care? No, only QHCP can, which means physicians and advanced practice providers can bill for this E/M service, and it does not include time spent by other members of clinical staff in patient care. However, there are CPT codes for chronic care management, which is not covered in this article.
 

Virtual evaluation and management services

You respond to a patient-initiated portal message.

Patient portal messages increased exponentially during the pandemic with 2.5 more minutes spent per message, resulting in more EHR work by practitioners, compared with prior to the pandemic. One study showed an immediate postpandemic increase in EHR patient-initiated messages with no return to prepandemic baseline.¹

Although studies evaluating postpandemic telemedicine services are needed, we believe that this trend will continue, and for this reason, it is important to create sustainable workflows to continue to provide this patient driven avenue of care.⁹

E-visits are asynchronous patient or guardian portal messages that require a minimum of 5 minutes to provide medical decision-making without prior E/M services in the last 7 days. To obtain reimbursement for this service, it cannot be initiated by the provider, and patient consent must be obtained. Documentation should include this information and the time spent in the encounter. The associated CPT codes with this e-service are outlined in Table 1.

A common question is, “Are there additional codes I should use if a portal message E/M visit lasts more than 30 minutes?” No. If an e-visit lasts more than 30 minutes, the QHCP should bill the CPT code 99423. However, we would advise that, if this care requires more than 30 minutes, then either virtual or face-to-face E/M be considered for the optimal reimbursement for provider time spent. Another common question is around consent for services, and we advise providers to review this requirement with their compliance colleagues as each institution has different policies.



Virtual check-in

Medicare also covers brief communication technology–based services also known as virtual check-ins, where patients can communicate with their provider after having established care. During this brief conversation that can be via telephone, audio/video, secure text messaging, email, or patient portal, providers will determine if an in-person visit is necessary. CMS has designed G codes for these virtual check-ins that are from the Healthcare Common Procedure Coding System (HCPCS). Two codes are available for this E/M service: G2012, which is outlined in Table 1, and G2010, which covers the evaluation of images and/or recorded videos. In order to be reimbursed for a G2010 code, providers need at least a 5-minute response to make a clinical determination or give the patient a medical impression.
 

Patient satisfaction, physician well-being and quality of care outcomes

Large health care systems like Kaiser Permanente implemented secure message patient-physician communication (the patient portal) even before the pandemic, showing promising results in 2010 with reduction in office visits, improvement in measurable quality outcomes, and high level of patient satisfaction.¹⁰ Post pandemic, several large health care centers opted to announce the billing implementation for patient-initiated portal messages.¹¹ A focus was placed on educating their patients about when a message will and will not be billed. Using this type of strategy can help to improve patient awareness about potential billing without affecting patient satisfaction and care outcomes. Studies have shown the EHR has contributed to physician burnout and some physicians reducing their clinical time or leaving medicine; a reduction in messaging might have a positive impact on physician well-being.

The challenge is that medical billing is not routinely included as a curriculum topic in many residency and fellowship programs; however, trainees are part of E/M services and have limited knowledge of billing processes. Unfortunately, at this time, trainees cannot submit for reimbursement for asynchronous care as described above. We hope that this brief article will help junior gastroenterologists optimize their outpatient billing practices.
 

Dr. Nieto is an internal medicine chief resident with WellStar Cobb Medical Center, Austell, Ga. Dr. Kinnucan is a gastroenterologist with Mayo Clinic, Jacksonville, Fla. The authors have no conflicts of interest to disclose for this article. The authors certify that no financial and grant support has been received for this article.

References

1. Holmgren AJ et al. J Am Med Inform Assoc. 2021 Dec 9. doi: 10.1093/jamia/ocab268.

2. Bali AS et al. Am J Gastroenterol. 2023 Apr 24. doi: 10.14309/ajg.0000000000002254.

3. AAFP. Family Physician. “Coding Scenario: Coding for Virtual-Digital Visits”

4. Keihanian T. et al. Telehealth Utilization in Gastroenterology Clinics Amid the COVID-19 Pandemic: Impact on Clinical Practice and Gastroenterology Training. Gastroenterology. 2020 Jun 20. doi: 10.1053/j.gastro.2020.06.040.

5. Lewin S et al. J Crohns Colitis. 2020 Oct 21. doi: 10.1093/ecco-jcc/jjaa140.

6. Perisetti A and H Goyal. Dig Dis Sci. 2021 Mar 3. doi: 10.1007/s10620-021-06874-x.

7. Telehealth.HHS.gov. Medicaid and Medicare billing for asynchronous telehealth. Updated: 2022 May 4.

8. Telehealth.HHS.gov. Telehealth policy changes after the  COVID-19  public health emergency. Last updated: 2023 Jan 23.

9. Fox B and Sizemore JO. Telehealth: Fad or the future. Epic Health Research Network. 2020 Aug 18.

10. Baer D. Patient-physician e-mail communication: the kaiser permanente experience. J Oncol Pract. 2011 Jul. doi: 10.1200/JOP.2011.000323.

11. Myclevelandclinic.org. MyChart Messaging.

12. Sinsky CA et al. J Gen Intern Med. 2022 Aug 29. doi: 10.1007/s11606-022-07766-0.

When we found out we were expecting our first child, we were ecstatic. Our excitement soon gave way to panic, however, as we realized that we needed a plan for childcare. As full-time physicians early in our careers, neither of us was prepared to drop to part-time or become a stay-at-home caregiver. Not knowing where to start, we turned to our friends and colleagues, and of course, the Internet, for advice on our options.

In our research, we discovered three things. First, with COVID-19, the cost of childcare has skyrocketed, and availability has decreased. Second, there are several options for childcare, each with its own benefits and drawbacks. Third, there is no one-size-fits-all solution. Our goal for this article is to provide an overview of the common childcare solutions and provide some practical tips to help other physicians determine what might work best for their family and situation.
 

Family

Using family members to provide childcare is often cost-effective and provides a familiar, supportive environment for children. Proximity does not guarantee a willingness or ability to provide long-term care, however, and it can cause strain on family relationships, lead to intrusions and boundary issues, and create feelings of obligation and guilt. It is important to have very honest, up-front discussions with family members about hopes and expectations if this is your childcare plan.

Daycare, facility-based

Daycare centers are commercial facilities that offer care to multiple children of varying ages, starting from as young as 6 weeks. They have trained professionals and provide structured activities and educational programs for children. Many daycares also provide snacks and lunch, which is included in their tuition. They are a popular choice for families seeking full-time childcare and the social and educational benefits that come with a structured setting.

Daycares also have some downsides. They usually operate during normal workday hours, from 7:00 a.m. to 6:00 p.m., which may not be convenient for physicians who work outside of these hours. Even with feasible hours, getting children dressed, ready, and dropped off each morning could add significant time and stress to your morning routine. Additionally, most daycares have policies that prohibit attendance if a child is sick or febrile, which is a common occurrence, particularly for daycare kids. In case of an illness outbreak, the daycare may even close for several days. Both scenarios require at least one parent to take a day off or have an alternative childcare plan available on short notice.

Availability of daycare can be limited, particularly since the COVID pandemic, creating waitlists that can be several months long. Early registration, even during pregnancy, is recommended to secure a spot. It can be helpful to find out if your employer has an agreement with a specific daycare that has “physician-friendly” hours and gives waitlist priority to trainees or even attending physicians. The cost of daycare for one child is typically affordable, around $12,000 per year on average, but can be as high as $25,000 in cities with high cost of living. A sibling discount may be offered, but the cost of daycare for multiple children could still exceed in-home childcare options.¹
 

Daycare, home-based (also known as family care centers)

Family care centers offer a home-like alternative to daycares, with smaller staff-to-child ratios and often more personalized care. They are favored by families seeking a more intimate setting. They might offer more flexible scheduling and are typically less expensive than facility-based daycares, at up to 25% lower cost.¹ They may lack the same structure and educational opportunities as facility-based daycares, however, and are not subject to the same health and safety regulations.

Nannies

Nannies are professional caregivers who provide in-home childcare services. Their responsibilities may include feeding, changing, dressing, bathing, and playing with children. In some cases, they may also be expected to do light housekeeping tasks like meal preparation, laundry, and cleaning. It is common for nannies in high-demand markets to refuse to perform these additional tasks, however. Nannies are preferred by families with hectic schedules due to their flexibility. They can work early, late, or even overnight shifts, and provide care in the comfort of your home, avoiding the hassle of drop-off and pick-up times. Nannies also can provide personalized care to meet each child’s specific needs, and they can care for children who are sick or febrile.

When hiring a nanny, it is important to have a written contract outlining their expected hours, wages, benefits, and duties to prevent misunderstandings in the future. Finding a trustworthy and reliable nanny can be a challenge, and families have several options for finding one. They can post jobs on free websites and browse nanny CVs or use a fee-based nanny agency. The cost of using an agency can range from a few hundred to several thousand dollars, so it is important to ask friends and colleagues for recommendations before paying for an agency’s services.

The cost of hiring a nanny is one of its main drawbacks. Nannies typically earn $15 to $30 per hour, and if they work in the family’s home, they are typically considered “household employees” by the IRS. Household employees are entitled to overtime pay for work beyond 40 hours per week, and the employer (you!) is responsible for payroll taxes, withholding, and providing an annual W-2 tax statement.² There are affordable online nanny payroll services that handle payroll and tax-filing to simplify the process, however. The average annual cost of a full-time nanny is around $40,000 and can be as high as $75,000 in some markets.¹ A nanny-share with other families can lower costs, but it may also result in less control over the caregiver and schedule.

It is important to consult a tax professional or the IRS for guidance on nanny wages, taxes, and payroll, as a nanny might rarely be considered an “independent contractor” if they meet certain criteria.
 

Au pair

An au pair is a live-in childcare provider who travels to a host family’s home from a foreign country on a special J-1 visa. The goal is to provide care for children and participate in cultural exchange activities. Au pairs bring many benefits, such as cost savings compared to traditional childcare options and greater flexibility and customization. They can work up to 10 hours per day and 45 hours a week, performing tasks such as light housekeeping, meal preparation, and transportation for the children. Host families must provide a safe and comfortable living environment, including a private room, meals, and some travel and education expenses.¹

The process of hiring an au pair involves working with a designated agency that matches families with applicants and sponsors the J-1 visa. The entire process can take several months, and average program fees cost around $10,000 per placement. Au pairs are hired on a 12-month J-1 visa, which can be extended for up to an additional 12 months, allowing families up to 2 years with the same au pair before needing to find a new placement.

Au pairs earn a minimum weekly stipend of $195.75, set forth by the U.S. State Department.³ Currently, au pairs are not subject to local and state wage requirements, but legal proceedings in various states have recently questioned whether au pairs should be protected under local regulations. Massachusetts has been the most progressive, explicitly protecting au pairs as domestic workers under state labor laws, raising their weekly stipend to roughly $600 to comply with state minimum wage requirements.⁴ The federal government is expected to provide clarity on this issue, but for the time being, au pairs remain an affordable alternative to a nanny in most states.
 

Conclusion

Choosing childcare is a complicated process with multiple factors to consider. Figure 1 breaks down the estimated annual cost of each of the options outlined above for a single child in low, average, and high cost-of-living areas. But your decision likely hinges on much more than just cost, and may include family dynamics, scheduling needs, and personal preferences. Gather as much advice and information as possible, but remember to trust your instincts and make the decision that works best for your family. At the end of the day, what matters most is the happiness and well-being of your child.

Dr. Hathorn and Dr. Creighton are married, and both work full-time with a 1-year-old child. Dr. Hathorn is a bariatric and advanced therapeutic endoscopist at the University of North Carolina at Chapel Hill. Dr. Creighton is an anesthesiologist at UNC Chapel Hill. Neither reported any conflicts of interest.

References

1. Care.com. This is how much childcare costs in 2022. 2022 Jun 15.

2. Internal Revenue Service. Publication 926 - Household Employer’s Tax Guide 2023.

3. U.S. Department of State. Au Pair.

4. Commonwealth of Massachusetts. Domestic workers.

Disclaimer

The financial and tax information presented in this article are believed to be true and accurate at the time of writing. However, it’s important to note that tax laws and regulations are subject to change. The authors are not certified financial advisers or tax specialists. It is recommended to seek verification from a local tax expert or the Internal Revenue Service to discuss your specific situation.

When we found out we were expecting our first child, we were ecstatic. Our excitement soon gave way to panic, however, as we realized that we needed a plan for childcare. As full-time physicians early in our careers, neither of us was prepared to drop to part-time or become a stay-at-home caregiver. Not knowing where to start, we turned to our friends and colleagues, and of course, the Internet, for advice on our options.

In our research, we discovered three things. First, with COVID-19, the cost of childcare has skyrocketed, and availability has decreased. Second, there are several options for childcare, each with its own benefits and drawbacks. Third, there is no one-size-fits-all solution. Our goal for this article is to provide an overview of the common childcare solutions and provide some practical tips to help other physicians determine what might work best for their family and situation.
 

Family

Using family members to provide childcare is often cost-effective and provides a familiar, supportive environment for children. Proximity does not guarantee a willingness or ability to provide long-term care, however, and it can cause strain on family relationships, lead to intrusions and boundary issues, and create feelings of obligation and guilt. It is important to have very honest, up-front discussions with family members about hopes and expectations if this is your childcare plan.

Daycare, facility-based

Daycare centers are commercial facilities that offer care to multiple children of varying ages, starting from as young as 6 weeks. They have trained professionals and provide structured activities and educational programs for children. Many daycares also provide snacks and lunch, which is included in their tuition. They are a popular choice for families seeking full-time childcare and the social and educational benefits that come with a structured setting.

Daycares also have some downsides. They usually operate during normal workday hours, from 7:00 a.m. to 6:00 p.m., which may not be convenient for physicians who work outside of these hours. Even with feasible hours, getting children dressed, ready, and dropped off each morning could add significant time and stress to your morning routine. Additionally, most daycares have policies that prohibit attendance if a child is sick or febrile, which is a common occurrence, particularly for daycare kids. In case of an illness outbreak, the daycare may even close for several days. Both scenarios require at least one parent to take a day off or have an alternative childcare plan available on short notice.

Availability of daycare can be limited, particularly since the COVID pandemic, creating waitlists that can be several months long. Early registration, even during pregnancy, is recommended to secure a spot. It can be helpful to find out if your employer has an agreement with a specific daycare that has “physician-friendly” hours and gives waitlist priority to trainees or even attending physicians. The cost of daycare for one child is typically affordable, around $12,000 per year on average, but can be as high as $25,000 in cities with high cost of living. A sibling discount may be offered, but the cost of daycare for multiple children could still exceed in-home childcare options.¹
 

Daycare, home-based (also known as family care centers)

Family care centers offer a home-like alternative to daycares, with smaller staff-to-child ratios and often more personalized care. They are favored by families seeking a more intimate setting. They might offer more flexible scheduling and are typically less expensive than facility-based daycares, at up to 25% lower cost.¹ They may lack the same structure and educational opportunities as facility-based daycares, however, and are not subject to the same health and safety regulations.

Nannies

Nannies are professional caregivers who provide in-home childcare services. Their responsibilities may include feeding, changing, dressing, bathing, and playing with children. In some cases, they may also be expected to do light housekeeping tasks like meal preparation, laundry, and cleaning. It is common for nannies in high-demand markets to refuse to perform these additional tasks, however. Nannies are preferred by families with hectic schedules due to their flexibility. They can work early, late, or even overnight shifts, and provide care in the comfort of your home, avoiding the hassle of drop-off and pick-up times. Nannies also can provide personalized care to meet each child’s specific needs, and they can care for children who are sick or febrile.

When hiring a nanny, it is important to have a written contract outlining their expected hours, wages, benefits, and duties to prevent misunderstandings in the future. Finding a trustworthy and reliable nanny can be a challenge, and families have several options for finding one. They can post jobs on free websites and browse nanny CVs or use a fee-based nanny agency. The cost of using an agency can range from a few hundred to several thousand dollars, so it is important to ask friends and colleagues for recommendations before paying for an agency’s services.

The cost of hiring a nanny is one of its main drawbacks. Nannies typically earn $15 to $30 per hour, and if they work in the family’s home, they are typically considered “household employees” by the IRS. Household employees are entitled to overtime pay for work beyond 40 hours per week, and the employer (you!) is responsible for payroll taxes, withholding, and providing an annual W-2 tax statement.² There are affordable online nanny payroll services that handle payroll and tax-filing to simplify the process, however. The average annual cost of a full-time nanny is around $40,000 and can be as high as $75,000 in some markets.¹ A nanny-share with other families can lower costs, but it may also result in less control over the caregiver and schedule.

It is important to consult a tax professional or the IRS for guidance on nanny wages, taxes, and payroll, as a nanny might rarely be considered an “independent contractor” if they meet certain criteria.
 

Au pair

An au pair is a live-in childcare provider who travels to a host family’s home from a foreign country on a special J-1 visa. The goal is to provide care for children and participate in cultural exchange activities. Au pairs bring many benefits, such as cost savings compared to traditional childcare options and greater flexibility and customization. They can work up to 10 hours per day and 45 hours a week, performing tasks such as light housekeeping, meal preparation, and transportation for the children. Host families must provide a safe and comfortable living environment, including a private room, meals, and some travel and education expenses.¹

The process of hiring an au pair involves working with a designated agency that matches families with applicants and sponsors the J-1 visa. The entire process can take several months, and average program fees cost around $10,000 per placement. Au pairs are hired on a 12-month J-1 visa, which can be extended for up to an additional 12 months, allowing families up to 2 years with the same au pair before needing to find a new placement.

Au pairs earn a minimum weekly stipend of $195.75, set forth by the U.S. State Department.³ Currently, au pairs are not subject to local and state wage requirements, but legal proceedings in various states have recently questioned whether au pairs should be protected under local regulations. Massachusetts has been the most progressive, explicitly protecting au pairs as domestic workers under state labor laws, raising their weekly stipend to roughly $600 to comply with state minimum wage requirements.⁴ The federal government is expected to provide clarity on this issue, but for the time being, au pairs remain an affordable alternative to a nanny in most states.
 

Conclusion

Choosing childcare is a complicated process with multiple factors to consider. Figure 1 breaks down the estimated annual cost of each of the options outlined above for a single child in low, average, and high cost-of-living areas. But your decision likely hinges on much more than just cost, and may include family dynamics, scheduling needs, and personal preferences. Gather as much advice and information as possible, but remember to trust your instincts and make the decision that works best for your family. At the end of the day, what matters most is the happiness and well-being of your child.

Dr. Hathorn and Dr. Creighton are married, and both work full-time with a 1-year-old child. Dr. Hathorn is a bariatric and advanced therapeutic endoscopist at the University of North Carolina at Chapel Hill. Dr. Creighton is an anesthesiologist at UNC Chapel Hill. Neither reported any conflicts of interest.

References

1. Care.com. This is how much childcare costs in 2022. 2022 Jun 15.

2. Internal Revenue Service. Publication 926 - Household Employer’s Tax Guide 2023.

3. U.S. Department of State. Au Pair.

4. Commonwealth of Massachusetts. Domestic workers.

Disclaimer

The financial and tax information presented in this article are believed to be true and accurate at the time of writing. However, it’s important to note that tax laws and regulations are subject to change. The authors are not certified financial advisers or tax specialists. It is recommended to seek verification from a local tax expert or the Internal Revenue Service to discuss your specific situation.

When we found out we were expecting our first child, we were ecstatic. Our excitement soon gave way to panic, however, as we realized that we needed a plan for childcare. As full-time physicians early in our careers, neither of us was prepared to drop to part-time or become a stay-at-home caregiver. Not knowing where to start, we turned to our friends and colleagues, and of course, the Internet, for advice on our options.

In our research, we discovered three things. First, with COVID-19, the cost of childcare has skyrocketed, and availability has decreased. Second, there are several options for childcare, each with its own benefits and drawbacks. Third, there is no one-size-fits-all solution. Our goal for this article is to provide an overview of the common childcare solutions and provide some practical tips to help other physicians determine what might work best for their family and situation.
 

Family

Using family members to provide childcare is often cost-effective and provides a familiar, supportive environment for children. Proximity does not guarantee a willingness or ability to provide long-term care, however, and it can cause strain on family relationships, lead to intrusions and boundary issues, and create feelings of obligation and guilt. It is important to have very honest, up-front discussions with family members about hopes and expectations if this is your childcare plan.

Daycare, facility-based

Daycare centers are commercial facilities that offer care to multiple children of varying ages, starting from as young as 6 weeks. They have trained professionals and provide structured activities and educational programs for children. Many daycares also provide snacks and lunch, which is included in their tuition. They are a popular choice for families seeking full-time childcare and the social and educational benefits that come with a structured setting.

Daycares also have some downsides. They usually operate during normal workday hours, from 7:00 a.m. to 6:00 p.m., which may not be convenient for physicians who work outside of these hours. Even with feasible hours, getting children dressed, ready, and dropped off each morning could add significant time and stress to your morning routine. Additionally, most daycares have policies that prohibit attendance if a child is sick or febrile, which is a common occurrence, particularly for daycare kids. In case of an illness outbreak, the daycare may even close for several days. Both scenarios require at least one parent to take a day off or have an alternative childcare plan available on short notice.

Availability of daycare can be limited, particularly since the COVID pandemic, creating waitlists that can be several months long. Early registration, even during pregnancy, is recommended to secure a spot. It can be helpful to find out if your employer has an agreement with a specific daycare that has “physician-friendly” hours and gives waitlist priority to trainees or even attending physicians. The cost of daycare for one child is typically affordable, around $12,000 per year on average, but can be as high as $25,000 in cities with high cost of living. A sibling discount may be offered, but the cost of daycare for multiple children could still exceed in-home childcare options.¹
 

Daycare, home-based (also known as family care centers)

Family care centers offer a home-like alternative to daycares, with smaller staff-to-child ratios and often more personalized care. They are favored by families seeking a more intimate setting. They might offer more flexible scheduling and are typically less expensive than facility-based daycares, at up to 25% lower cost.¹ They may lack the same structure and educational opportunities as facility-based daycares, however, and are not subject to the same health and safety regulations.

Nannies

Nannies are professional caregivers who provide in-home childcare services. Their responsibilities may include feeding, changing, dressing, bathing, and playing with children. In some cases, they may also be expected to do light housekeeping tasks like meal preparation, laundry, and cleaning. It is common for nannies in high-demand markets to refuse to perform these additional tasks, however. Nannies are preferred by families with hectic schedules due to their flexibility. They can work early, late, or even overnight shifts, and provide care in the comfort of your home, avoiding the hassle of drop-off and pick-up times. Nannies also can provide personalized care to meet each child’s specific needs, and they can care for children who are sick or febrile.

When hiring a nanny, it is important to have a written contract outlining their expected hours, wages, benefits, and duties to prevent misunderstandings in the future. Finding a trustworthy and reliable nanny can be a challenge, and families have several options for finding one. They can post jobs on free websites and browse nanny CVs or use a fee-based nanny agency. The cost of using an agency can range from a few hundred to several thousand dollars, so it is important to ask friends and colleagues for recommendations before paying for an agency’s services.

The cost of hiring a nanny is one of its main drawbacks. Nannies typically earn $15 to $30 per hour, and if they work in the family’s home, they are typically considered “household employees” by the IRS. Household employees are entitled to overtime pay for work beyond 40 hours per week, and the employer (you!) is responsible for payroll taxes, withholding, and providing an annual W-2 tax statement.² There are affordable online nanny payroll services that handle payroll and tax-filing to simplify the process, however. The average annual cost of a full-time nanny is around $40,000 and can be as high as $75,000 in some markets.¹ A nanny-share with other families can lower costs, but it may also result in less control over the caregiver and schedule.

It is important to consult a tax professional or the IRS for guidance on nanny wages, taxes, and payroll, as a nanny might rarely be considered an “independent contractor” if they meet certain criteria.
 

Au pair

An au pair is a live-in childcare provider who travels to a host family’s home from a foreign country on a special J-1 visa. The goal is to provide care for children and participate in cultural exchange activities. Au pairs bring many benefits, such as cost savings compared to traditional childcare options and greater flexibility and customization. They can work up to 10 hours per day and 45 hours a week, performing tasks such as light housekeeping, meal preparation, and transportation for the children. Host families must provide a safe and comfortable living environment, including a private room, meals, and some travel and education expenses.¹

The process of hiring an au pair involves working with a designated agency that matches families with applicants and sponsors the J-1 visa. The entire process can take several months, and average program fees cost around $10,000 per placement. Au pairs are hired on a 12-month J-1 visa, which can be extended for up to an additional 12 months, allowing families up to 2 years with the same au pair before needing to find a new placement.

Au pairs earn a minimum weekly stipend of $195.75, set forth by the U.S. State Department.³ Currently, au pairs are not subject to local and state wage requirements, but legal proceedings in various states have recently questioned whether au pairs should be protected under local regulations. Massachusetts has been the most progressive, explicitly protecting au pairs as domestic workers under state labor laws, raising their weekly stipend to roughly $600 to comply with state minimum wage requirements.⁴ The federal government is expected to provide clarity on this issue, but for the time being, au pairs remain an affordable alternative to a nanny in most states.
 

Conclusion

Choosing childcare is a complicated process with multiple factors to consider. Figure 1 breaks down the estimated annual cost of each of the options outlined above for a single child in low, average, and high cost-of-living areas. But your decision likely hinges on much more than just cost, and may include family dynamics, scheduling needs, and personal preferences. Gather as much advice and information as possible, but remember to trust your instincts and make the decision that works best for your family. At the end of the day, what matters most is the happiness and well-being of your child.

Dr. Hathorn and Dr. Creighton are married, and both work full-time with a 1-year-old child. Dr. Hathorn is a bariatric and advanced therapeutic endoscopist at the University of North Carolina at Chapel Hill. Dr. Creighton is an anesthesiologist at UNC Chapel Hill. Neither reported any conflicts of interest.

References

1. Care.com. This is how much childcare costs in 2022. 2022 Jun 15.

2. Internal Revenue Service. Publication 926 - Household Employer’s Tax Guide 2023.

3. U.S. Department of State. Au Pair.

4. Commonwealth of Massachusetts. Domestic workers.

Disclaimer

The financial and tax information presented in this article are believed to be true and accurate at the time of writing. However, it’s important to note that tax laws and regulations are subject to change. The authors are not certified financial advisers or tax specialists. It is recommended to seek verification from a local tax expert or the Internal Revenue Service to discuss your specific situation.

The first time I considered telehealth as a viable option for care delivery was in February 2020. I had just heard that one of my patients had been diagnosed with COVID-19 and admitted to Evergreen Health, a hospital our practice covered just outside of Seattle. The news was jarring. Suddenly, it became crystal clear that patient access to care and the economic survival of our business would require another approach. Seemingly overnight, we built a telehealth program and began seeing patients virtually from the comfort and safety of home.

We certainly weren’t alone. From January to March 2020, the Centers for Disease Control and Prevention showed a 154% increase in telehealth visits.¹ Even as the postpandemic era settles in, the use of telehealth today is 38 times greater than the pre-COVID baseline, creating a market valued at $250 billion per year.² What value might gastroenterologists gain from the use of telehealth going forward? Data are emerging that virtual care can reduce expensive and unnecessary emergency room visits, help effectively manage chronic disease, address disparities in care, and increase access to specialty care.³ For today’s overburdened GI practices, telehealth can improve patient access to care, alleviate the clinician shortage with work-from-home options for practitioners, and present innovative methods of increasing revenue streams – all while improving quality of care.
 

As GI demand outpaces supply, it’s time to consider alternative channels of care

The prevalence of gastrointestinal illness, the size of the market, and the growing difficulty in gaining access to care makes it natural to consider whether virtual care may benefit patients and GI practices alike. Approximately 70 million Americans, or 1 in 5, live with chronic GI symptoms.⁴ On an annual basis, more than 50 million primary care visits and 15 million ER visits in the United States have a primary diagnostic code for GI disease.⁵ Annual expenditures to address GI conditions, valued at $136 billion, outpace those of other high-cost conditions such as heart disease or mental health.⁶ And with the recent addition of 21 million patients between 45 and 49 years of age who now require colon cancer screening, plus the expected postpandemic increase in GI illness, those numbers are likely to grow.⁷

Compounding matters is a shortage of clinicians. Between early physician retirements and a limited number of GI fellowships, gastroenterology was recently identified by a Merritt Hawkins survey as the “most in-demand” specialty.⁸ Patients are already waiting months, and even up to a year in some parts of the country, to see a gastroenterologist. GI physicians, likewise, are running ragged trying to keep up and are burning out in the process.
 

The case for virtual GI care

Until the pandemic, many of us would not have seriously considered a significant role for virtual care in GI. When necessity demanded it, however, we used this channel effectively with both patients and providers reporting high rates of satisfaction with telehealth for GI clinic visits.⁹

In a recent published study with a sizable cohort of GI patients across a wide spectrum of conditions, only 17% required a physical exam following a telehealth visit. Over 50% said they were very likely or likely to continue using telehealth in the future. Interestingly, it was not only a young or tech-savvy population that ranked telehealth highly. In fact, Net Promoter Scores (a proven measure of customer experience) were consistently high for employed patients aged 60 or younger.¹⁰

Recent research also has demonstrated that telehealth visits meet quality standards and do so efficiently. A Mayo Clinic study demonstrated that telehealth visits in GI were delivered with a similar level of quality based on diagnostic concordance,¹¹ and a recent study by Tang et al. found that 98% of visits for routine GI issues were completed within 20 minutes.¹²

Finally, establishing a virtual channel allows a clinic to increase its staffing radius by using geographically dispersed GI providers, including appropriately licensed physicians or advanced practice providers who may reside in other states. The use of remote providers opens up the possibility for “time zone arbitrage” to allow for more flexible staffing that’s similar to urgent care with wraparound and weekend hours – all without adding office space or overhead.
 

Financial implications

Given the long tail of demand in GI, increasing capacity will increase revenue. Telehealth increases capacity by allowing for the efficient use of resources and expanding the reach of practices in engaging potential providers.

The majority of telehealth visits are reimbursable. Since 1995, 40 states and the District of Columbia have enacted mandatory telehealth coverage laws, and 20 states require that telehealth visits be paid on par with in-person visits.¹³ With the pandemic Medicare waivers, parity was extended through government programs and is expected by many insiders to continue in some form going forward. By an overwhelming bipartisan majority, the House of Representatives recently passed the Advancing Telehealth Beyond COVID-19 Act, which would extend most temporary telemedicine policies through 2024. This legislation would affect only Medicare reimbursement, but changes in Medicare policy often influence the policies of commercial payers.¹⁴

While reimbursement for clinic visits is important, the larger financial implication for extending clinics virtually is in the endoscopy suite. Most revenue (70%-80%) in community GI practices is generated from endoscopic services and related ancillary streams. For an endoscopist, spending time in the clinic is effectively a loss leader. Adding capacity with a virtual clinic and geographically dispersed providers can open up GI physicians to spend more time in the endoscopy suite, thereby generating additional revenue.

Given the rapid consolidation of the GI space, income repair post private equity transaction is top of mind for both established physicians and young physicians entering the labor market. Having a virtual ancillary differentiates practices and may prove useful for recruitment. Increasing access by using remote providers during evenings and weekends may “unclog the pipes,” improve the patient and provider experience, and increase revenue.
 

Overcoming obstacles

Creating a telehealth platform – particularly one that crosses state lines – requires an understanding of a complex and evolving regulatory environment. Licensing is one example. When telehealth is used, it is considered to be rendered at the location of the patient. A provider typically has to be licensed in the state where the patient is located at the time of the clinical encounter. So, if providers cross jurisdictional boundaries to provide care, multiple state licenses may be required.

In addition, medical malpractice and cyber insurance for telemedicine providers are niche products. And as with the use of any technology, risks of a data breach or other unauthorized disclosure of protected health information make it vital to ensure data are fully encrypted, networks are secure, and all safeguards are followed according to the Health Information and Portability and Accountability Act (HIPAA).

Perhaps most challenging are payers, both commercial and governmental. The location of a distant site provider can affect network participation for some but not all payers. Understanding payer reimbursement policies is time-intensive, and building relationships within these organizations is crucial in today’s rapidly changing environment.
 

The ultimate aim: Better patient outcomes

Of course, the main goal is to take care of patients well and in a timely fashion. Better access will lead to an improved patient experience and a greater emphasis on the important cognitive aspects of GI care. Moreover, efficient use of physician time will also improve clinician satisfaction while increasing revenue and downstream value. Most importantly, increased access via a virtual channel may positively impact patient outcomes. For instance, data show that distance from an endoscopy center is negatively associated with the stage of colon cancer diagnosis.¹⁵ Providing a virtual channel to reach these distant patients will likely increase the opportunity for high-impact procedures like colonoscopy.

Change can be hard, but it will come

The old saying is that change comes slowly, then all at once. Access is a chronic pain point for GI practices that has now reached a critical level.

The GI market is enormous and rapidly evolving; it will continue to attract disruptive interest and several early-stage digital first GI companies have entered the ecosystem. There is a risk for disintermediation as well as opportunities for collaboration. The next few years will be interesting.

As we transition to a postpandemic environment, telehealth can continue to improve patient access and present new revenue streams for GI practices – all while improving quality of care. Seeing around the corner likely means expanding the reach of your clinic and offering multiple channels of care. There is likely a significant opportunity for those who choose to adapt.
 

Dr. Arjal is cofounder, chief medical officer, and president of Telebelly Health and is a board-certified gastroenterologist who previously served as vice president of Puget Sound Gastroenterology and a vice president of clinical affairs for GastroHealth. He currently serves on the American Gastroenterological Association (AGA) Practice Management and Economics Committee. He has no conflicts. He is on LinkedIn and Twitter (@RussArjalMD).

References

1. Koonin LM et al. Trends in the use of telehealth during the emergence of the COVID-19 pandemic – United States, January-March 2020. MMWR Morb Mortal Wkly Rep. 2020. Oct 30;69(43):1595-9.

2. “Telehealth: A quarter-trillion-dollar post-COVID-19 reality?” McKinsey & Company, July 9, 2021.

3. The telehealth era is just beginning, Robert Pearl and Brian Wayling, Harvard Business Review, May-June, 2022.

4. Peery et al. Burden and cost of gastrointestinal, liver, and pancreatic diseases in the United States: Update 2018. Gastroenterology. 2019. Jan;156(1):254-72.

5. See id.

6. See id.

7. Sieh, K. Post-COVID-19 functional gastrointestinal disorders: Prepare for a GI aftershock. J Gastroenterol Hepatol. 2022 March;37(3):413-4.

8. Newitt, P. Gastroenterology’s biggest threats. Becker’s, GI & Endoscopy, 2021 Oct 8, and Physician Compensation Report, 2022. Physicians Thrive (projecting a shortage of over 1,600 Gastroenterologists by 2025).

9. Dobrusin et al. Gastroenterologists and patients report high satisfaction rates with Telehealth services during the novel coronavirus 2019 pandemic. Clin Gastroenterol Hepatol. 2020;8(11):2393-7.

10. Dobrusin et al. Patients with gastrointestinal conditions consider telehealth equivalent to in-person care. Gastroenterology. 2022 Oct 4. doi: 10.1053/j.gastro.2022.09.035.

11. Demaerschalk et al. Assessment of clinician diagnostic concordance with video telemedicine in the integrated multispecialty practice at Mayo Clinic during the beginning of COVID-19 pandemic from March to June, 2020. JAMA Netw Open. 2022 Sep;5(9):e2229958.

12. Tang et al. A model for the pandemic and beyond: Telemedicine for all gastroenterology referrals reduces unnecessary clinic visits. J Telemed Telecare. 2022 Sep 28(8):577-82.

13. Dills A. Policy brief: Telehealth payment parity laws at the state level. Mercatus Center, George Mason University.

14. H.R.4040 – Advancing Telehealth Beyond COVID-19 Act of 2021. Congress.gov.

15. Brand et al. Association of distance, region, and insurance with advanced colon cancer at initial diagnosis. JAMA Netw Open. 2022 Sep 1;5(9):e2229954.

The first time I considered telehealth as a viable option for care delivery was in February 2020. I had just heard that one of my patients had been diagnosed with COVID-19 and admitted to Evergreen Health, a hospital our practice covered just outside of Seattle. The news was jarring. Suddenly, it became crystal clear that patient access to care and the economic survival of our business would require another approach. Seemingly overnight, we built a telehealth program and began seeing patients virtually from the comfort and safety of home.

We certainly weren’t alone. From January to March 2020, the Centers for Disease Control and Prevention showed a 154% increase in telehealth visits.¹ Even as the postpandemic era settles in, the use of telehealth today is 38 times greater than the pre-COVID baseline, creating a market valued at $250 billion per year.² What value might gastroenterologists gain from the use of telehealth going forward? Data are emerging that virtual care can reduce expensive and unnecessary emergency room visits, help effectively manage chronic disease, address disparities in care, and increase access to specialty care.³ For today’s overburdened GI practices, telehealth can improve patient access to care, alleviate the clinician shortage with work-from-home options for practitioners, and present innovative methods of increasing revenue streams – all while improving quality of care.
 

As GI demand outpaces supply, it’s time to consider alternative channels of care

The prevalence of gastrointestinal illness, the size of the market, and the growing difficulty in gaining access to care makes it natural to consider whether virtual care may benefit patients and GI practices alike. Approximately 70 million Americans, or 1 in 5, live with chronic GI symptoms.⁴ On an annual basis, more than 50 million primary care visits and 15 million ER visits in the United States have a primary diagnostic code for GI disease.⁵ Annual expenditures to address GI conditions, valued at $136 billion, outpace those of other high-cost conditions such as heart disease or mental health.⁶ And with the recent addition of 21 million patients between 45 and 49 years of age who now require colon cancer screening, plus the expected postpandemic increase in GI illness, those numbers are likely to grow.⁷

Compounding matters is a shortage of clinicians. Between early physician retirements and a limited number of GI fellowships, gastroenterology was recently identified by a Merritt Hawkins survey as the “most in-demand” specialty.⁸ Patients are already waiting months, and even up to a year in some parts of the country, to see a gastroenterologist. GI physicians, likewise, are running ragged trying to keep up and are burning out in the process.
 

The case for virtual GI care

Until the pandemic, many of us would not have seriously considered a significant role for virtual care in GI. When necessity demanded it, however, we used this channel effectively with both patients and providers reporting high rates of satisfaction with telehealth for GI clinic visits.⁹

In a recent published study with a sizable cohort of GI patients across a wide spectrum of conditions, only 17% required a physical exam following a telehealth visit. Over 50% said they were very likely or likely to continue using telehealth in the future. Interestingly, it was not only a young or tech-savvy population that ranked telehealth highly. In fact, Net Promoter Scores (a proven measure of customer experience) were consistently high for employed patients aged 60 or younger.¹⁰

Recent research also has demonstrated that telehealth visits meet quality standards and do so efficiently. A Mayo Clinic study demonstrated that telehealth visits in GI were delivered with a similar level of quality based on diagnostic concordance,¹¹ and a recent study by Tang et al. found that 98% of visits for routine GI issues were completed within 20 minutes.¹²

Finally, establishing a virtual channel allows a clinic to increase its staffing radius by using geographically dispersed GI providers, including appropriately licensed physicians or advanced practice providers who may reside in other states. The use of remote providers opens up the possibility for “time zone arbitrage” to allow for more flexible staffing that’s similar to urgent care with wraparound and weekend hours – all without adding office space or overhead.
 

Financial implications

Given the long tail of demand in GI, increasing capacity will increase revenue. Telehealth increases capacity by allowing for the efficient use of resources and expanding the reach of practices in engaging potential providers.

The majority of telehealth visits are reimbursable. Since 1995, 40 states and the District of Columbia have enacted mandatory telehealth coverage laws, and 20 states require that telehealth visits be paid on par with in-person visits.¹³ With the pandemic Medicare waivers, parity was extended through government programs and is expected by many insiders to continue in some form going forward. By an overwhelming bipartisan majority, the House of Representatives recently passed the Advancing Telehealth Beyond COVID-19 Act, which would extend most temporary telemedicine policies through 2024. This legislation would affect only Medicare reimbursement, but changes in Medicare policy often influence the policies of commercial payers.¹⁴

While reimbursement for clinic visits is important, the larger financial implication for extending clinics virtually is in the endoscopy suite. Most revenue (70%-80%) in community GI practices is generated from endoscopic services and related ancillary streams. For an endoscopist, spending time in the clinic is effectively a loss leader. Adding capacity with a virtual clinic and geographically dispersed providers can open up GI physicians to spend more time in the endoscopy suite, thereby generating additional revenue.

Given the rapid consolidation of the GI space, income repair post private equity transaction is top of mind for both established physicians and young physicians entering the labor market. Having a virtual ancillary differentiates practices and may prove useful for recruitment. Increasing access by using remote providers during evenings and weekends may “unclog the pipes,” improve the patient and provider experience, and increase revenue.
 

Overcoming obstacles

Creating a telehealth platform – particularly one that crosses state lines – requires an understanding of a complex and evolving regulatory environment. Licensing is one example. When telehealth is used, it is considered to be rendered at the location of the patient. A provider typically has to be licensed in the state where the patient is located at the time of the clinical encounter. So, if providers cross jurisdictional boundaries to provide care, multiple state licenses may be required.

In addition, medical malpractice and cyber insurance for telemedicine providers are niche products. And as with the use of any technology, risks of a data breach or other unauthorized disclosure of protected health information make it vital to ensure data are fully encrypted, networks are secure, and all safeguards are followed according to the Health Information and Portability and Accountability Act (HIPAA).

Perhaps most challenging are payers, both commercial and governmental. The location of a distant site provider can affect network participation for some but not all payers. Understanding payer reimbursement policies is time-intensive, and building relationships within these organizations is crucial in today’s rapidly changing environment.
 

The ultimate aim: Better patient outcomes

Of course, the main goal is to take care of patients well and in a timely fashion. Better access will lead to an improved patient experience and a greater emphasis on the important cognitive aspects of GI care. Moreover, efficient use of physician time will also improve clinician satisfaction while increasing revenue and downstream value. Most importantly, increased access via a virtual channel may positively impact patient outcomes. For instance, data show that distance from an endoscopy center is negatively associated with the stage of colon cancer diagnosis.¹⁵ Providing a virtual channel to reach these distant patients will likely increase the opportunity for high-impact procedures like colonoscopy.

Change can be hard, but it will come

The old saying is that change comes slowly, then all at once. Access is a chronic pain point for GI practices that has now reached a critical level.

The GI market is enormous and rapidly evolving; it will continue to attract disruptive interest and several early-stage digital first GI companies have entered the ecosystem. There is a risk for disintermediation as well as opportunities for collaboration. The next few years will be interesting.

As we transition to a postpandemic environment, telehealth can continue to improve patient access and present new revenue streams for GI practices – all while improving quality of care. Seeing around the corner likely means expanding the reach of your clinic and offering multiple channels of care. There is likely a significant opportunity for those who choose to adapt.
 

Dr. Arjal is cofounder, chief medical officer, and president of Telebelly Health and is a board-certified gastroenterologist who previously served as vice president of Puget Sound Gastroenterology and a vice president of clinical affairs for GastroHealth. He currently serves on the American Gastroenterological Association (AGA) Practice Management and Economics Committee. He has no conflicts. He is on LinkedIn and Twitter (@RussArjalMD).

References

1. Koonin LM et al. Trends in the use of telehealth during the emergence of the COVID-19 pandemic – United States, January-March 2020. MMWR Morb Mortal Wkly Rep. 2020. Oct 30;69(43):1595-9.

2. “Telehealth: A quarter-trillion-dollar post-COVID-19 reality?” McKinsey & Company, July 9, 2021.

3. The telehealth era is just beginning, Robert Pearl and Brian Wayling, Harvard Business Review, May-June, 2022.

4. Peery et al. Burden and cost of gastrointestinal, liver, and pancreatic diseases in the United States: Update 2018. Gastroenterology. 2019. Jan;156(1):254-72.

5. See id.

6. See id.

7. Sieh, K. Post-COVID-19 functional gastrointestinal disorders: Prepare for a GI aftershock. J Gastroenterol Hepatol. 2022 March;37(3):413-4.

8. Newitt, P. Gastroenterology’s biggest threats. Becker’s, GI & Endoscopy, 2021 Oct 8, and Physician Compensation Report, 2022. Physicians Thrive (projecting a shortage of over 1,600 Gastroenterologists by 2025).

9. Dobrusin et al. Gastroenterologists and patients report high satisfaction rates with Telehealth services during the novel coronavirus 2019 pandemic. Clin Gastroenterol Hepatol. 2020;8(11):2393-7.

10. Dobrusin et al. Patients with gastrointestinal conditions consider telehealth equivalent to in-person care. Gastroenterology. 2022 Oct 4. doi: 10.1053/j.gastro.2022.09.035.

11. Demaerschalk et al. Assessment of clinician diagnostic concordance with video telemedicine in the integrated multispecialty practice at Mayo Clinic during the beginning of COVID-19 pandemic from March to June, 2020. JAMA Netw Open. 2022 Sep;5(9):e2229958.

12. Tang et al. A model for the pandemic and beyond: Telemedicine for all gastroenterology referrals reduces unnecessary clinic visits. J Telemed Telecare. 2022 Sep 28(8):577-82.

13. Dills A. Policy brief: Telehealth payment parity laws at the state level. Mercatus Center, George Mason University.

14. H.R.4040 – Advancing Telehealth Beyond COVID-19 Act of 2021. Congress.gov.

15. Brand et al. Association of distance, region, and insurance with advanced colon cancer at initial diagnosis. JAMA Netw Open. 2022 Sep 1;5(9):e2229954.

The first time I considered telehealth as a viable option for care delivery was in February 2020. I had just heard that one of my patients had been diagnosed with COVID-19 and admitted to Evergreen Health, a hospital our practice covered just outside of Seattle. The news was jarring. Suddenly, it became crystal clear that patient access to care and the economic survival of our business would require another approach. Seemingly overnight, we built a telehealth program and began seeing patients virtually from the comfort and safety of home.

We certainly weren’t alone. From January to March 2020, the Centers for Disease Control and Prevention showed a 154% increase in telehealth visits.¹ Even as the postpandemic era settles in, the use of telehealth today is 38 times greater than the pre-COVID baseline, creating a market valued at $250 billion per year.² What value might gastroenterologists gain from the use of telehealth going forward? Data are emerging that virtual care can reduce expensive and unnecessary emergency room visits, help effectively manage chronic disease, address disparities in care, and increase access to specialty care.³ For today’s overburdened GI practices, telehealth can improve patient access to care, alleviate the clinician shortage with work-from-home options for practitioners, and present innovative methods of increasing revenue streams – all while improving quality of care.
 

As GI demand outpaces supply, it’s time to consider alternative channels of care

The prevalence of gastrointestinal illness, the size of the market, and the growing difficulty in gaining access to care makes it natural to consider whether virtual care may benefit patients and GI practices alike. Approximately 70 million Americans, or 1 in 5, live with chronic GI symptoms.⁴ On an annual basis, more than 50 million primary care visits and 15 million ER visits in the United States have a primary diagnostic code for GI disease.⁵ Annual expenditures to address GI conditions, valued at $136 billion, outpace those of other high-cost conditions such as heart disease or mental health.⁶ And with the recent addition of 21 million patients between 45 and 49 years of age who now require colon cancer screening, plus the expected postpandemic increase in GI illness, those numbers are likely to grow.⁷

Compounding matters is a shortage of clinicians. Between early physician retirements and a limited number of GI fellowships, gastroenterology was recently identified by a Merritt Hawkins survey as the “most in-demand” specialty.⁸ Patients are already waiting months, and even up to a year in some parts of the country, to see a gastroenterologist. GI physicians, likewise, are running ragged trying to keep up and are burning out in the process.
 

The case for virtual GI care

Until the pandemic, many of us would not have seriously considered a significant role for virtual care in GI. When necessity demanded it, however, we used this channel effectively with both patients and providers reporting high rates of satisfaction with telehealth for GI clinic visits.⁹

In a recent published study with a sizable cohort of GI patients across a wide spectrum of conditions, only 17% required a physical exam following a telehealth visit. Over 50% said they were very likely or likely to continue using telehealth in the future. Interestingly, it was not only a young or tech-savvy population that ranked telehealth highly. In fact, Net Promoter Scores (a proven measure of customer experience) were consistently high for employed patients aged 60 or younger.¹⁰

Recent research also has demonstrated that telehealth visits meet quality standards and do so efficiently. A Mayo Clinic study demonstrated that telehealth visits in GI were delivered with a similar level of quality based on diagnostic concordance,¹¹ and a recent study by Tang et al. found that 98% of visits for routine GI issues were completed within 20 minutes.¹²

Finally, establishing a virtual channel allows a clinic to increase its staffing radius by using geographically dispersed GI providers, including appropriately licensed physicians or advanced practice providers who may reside in other states. The use of remote providers opens up the possibility for “time zone arbitrage” to allow for more flexible staffing that’s similar to urgent care with wraparound and weekend hours – all without adding office space or overhead.
 

Financial implications

Given the long tail of demand in GI, increasing capacity will increase revenue. Telehealth increases capacity by allowing for the efficient use of resources and expanding the reach of practices in engaging potential providers.

The majority of telehealth visits are reimbursable. Since 1995, 40 states and the District of Columbia have enacted mandatory telehealth coverage laws, and 20 states require that telehealth visits be paid on par with in-person visits.¹³ With the pandemic Medicare waivers, parity was extended through government programs and is expected by many insiders to continue in some form going forward. By an overwhelming bipartisan majority, the House of Representatives recently passed the Advancing Telehealth Beyond COVID-19 Act, which would extend most temporary telemedicine policies through 2024. This legislation would affect only Medicare reimbursement, but changes in Medicare policy often influence the policies of commercial payers.¹⁴

While reimbursement for clinic visits is important, the larger financial implication for extending clinics virtually is in the endoscopy suite. Most revenue (70%-80%) in community GI practices is generated from endoscopic services and related ancillary streams. For an endoscopist, spending time in the clinic is effectively a loss leader. Adding capacity with a virtual clinic and geographically dispersed providers can open up GI physicians to spend more time in the endoscopy suite, thereby generating additional revenue.

Given the rapid consolidation of the GI space, income repair post private equity transaction is top of mind for both established physicians and young physicians entering the labor market. Having a virtual ancillary differentiates practices and may prove useful for recruitment. Increasing access by using remote providers during evenings and weekends may “unclog the pipes,” improve the patient and provider experience, and increase revenue.
 

Overcoming obstacles

Creating a telehealth platform – particularly one that crosses state lines – requires an understanding of a complex and evolving regulatory environment. Licensing is one example. When telehealth is used, it is considered to be rendered at the location of the patient. A provider typically has to be licensed in the state where the patient is located at the time of the clinical encounter. So, if providers cross jurisdictional boundaries to provide care, multiple state licenses may be required.

In addition, medical malpractice and cyber insurance for telemedicine providers are niche products. And as with the use of any technology, risks of a data breach or other unauthorized disclosure of protected health information make it vital to ensure data are fully encrypted, networks are secure, and all safeguards are followed according to the Health Information and Portability and Accountability Act (HIPAA).

Perhaps most challenging are payers, both commercial and governmental. The location of a distant site provider can affect network participation for some but not all payers. Understanding payer reimbursement policies is time-intensive, and building relationships within these organizations is crucial in today’s rapidly changing environment.
 

The ultimate aim: Better patient outcomes

Of course, the main goal is to take care of patients well and in a timely fashion. Better access will lead to an improved patient experience and a greater emphasis on the important cognitive aspects of GI care. Moreover, efficient use of physician time will also improve clinician satisfaction while increasing revenue and downstream value. Most importantly, increased access via a virtual channel may positively impact patient outcomes. For instance, data show that distance from an endoscopy center is negatively associated with the stage of colon cancer diagnosis.¹⁵ Providing a virtual channel to reach these distant patients will likely increase the opportunity for high-impact procedures like colonoscopy.

Change can be hard, but it will come

The old saying is that change comes slowly, then all at once. Access is a chronic pain point for GI practices that has now reached a critical level.

The GI market is enormous and rapidly evolving; it will continue to attract disruptive interest and several early-stage digital first GI companies have entered the ecosystem. There is a risk for disintermediation as well as opportunities for collaboration. The next few years will be interesting.

As we transition to a postpandemic environment, telehealth can continue to improve patient access and present new revenue streams for GI practices – all while improving quality of care. Seeing around the corner likely means expanding the reach of your clinic and offering multiple channels of care. There is likely a significant opportunity for those who choose to adapt.
 

Dr. Arjal is cofounder, chief medical officer, and president of Telebelly Health and is a board-certified gastroenterologist who previously served as vice president of Puget Sound Gastroenterology and a vice president of clinical affairs for GastroHealth. He currently serves on the American Gastroenterological Association (AGA) Practice Management and Economics Committee. He has no conflicts. He is on LinkedIn and Twitter (@RussArjalMD).

References

1. Koonin LM et al. Trends in the use of telehealth during the emergence of the COVID-19 pandemic – United States, January-March 2020. MMWR Morb Mortal Wkly Rep. 2020. Oct 30;69(43):1595-9.

2. “Telehealth: A quarter-trillion-dollar post-COVID-19 reality?” McKinsey & Company, July 9, 2021.

3. The telehealth era is just beginning, Robert Pearl and Brian Wayling, Harvard Business Review, May-June, 2022.

4. Peery et al. Burden and cost of gastrointestinal, liver, and pancreatic diseases in the United States: Update 2018. Gastroenterology. 2019. Jan;156(1):254-72.

5. See id.

6. See id.

7. Sieh, K. Post-COVID-19 functional gastrointestinal disorders: Prepare for a GI aftershock. J Gastroenterol Hepatol. 2022 March;37(3):413-4.

8. Newitt, P. Gastroenterology’s biggest threats. Becker’s, GI & Endoscopy, 2021 Oct 8, and Physician Compensation Report, 2022. Physicians Thrive (projecting a shortage of over 1,600 Gastroenterologists by 2025).

9. Dobrusin et al. Gastroenterologists and patients report high satisfaction rates with Telehealth services during the novel coronavirus 2019 pandemic. Clin Gastroenterol Hepatol. 2020;8(11):2393-7.

10. Dobrusin et al. Patients with gastrointestinal conditions consider telehealth equivalent to in-person care. Gastroenterology. 2022 Oct 4. doi: 10.1053/j.gastro.2022.09.035.

11. Demaerschalk et al. Assessment of clinician diagnostic concordance with video telemedicine in the integrated multispecialty practice at Mayo Clinic during the beginning of COVID-19 pandemic from March to June, 2020. JAMA Netw Open. 2022 Sep;5(9):e2229958.

12. Tang et al. A model for the pandemic and beyond: Telemedicine for all gastroenterology referrals reduces unnecessary clinic visits. J Telemed Telecare. 2022 Sep 28(8):577-82.

13. Dills A. Policy brief: Telehealth payment parity laws at the state level. Mercatus Center, George Mason University.

14. H.R.4040 – Advancing Telehealth Beyond COVID-19 Act of 2021. Congress.gov.

15. Brand et al. Association of distance, region, and insurance with advanced colon cancer at initial diagnosis. JAMA Netw Open. 2022 Sep 1;5(9):e2229954.

I don’t think I heard the term “passive income” until I was already an attending gastroenterologist.

That was no surprise. Why would I as a gastroenterologist with a focus in inflammatory bowel diseases be even remotely interested in that term?

Like most physicians, I went into medicine to take care of patients. That was my entire dream. It was a pleasant surprise to hear that gastroenterologists were relatively well paid compared to many other internal medicine specialties.

That was a bonus. I was not practicing medicine for the money. I was here to do good, only. Money was the evil one. It’s no surprise money remained a taboo topic amongst physicians.

This is reflected in the lack of financial education in our training.

I went through all my medical training without getting any financial education. In my last year of training, I wondered how I was going to not end up being a burned out, overworked physician mom. I knew I was going to work in a large hospital-based practice or academic center. I was already aware that employed physicians had a higher burnout rate compared to independent physicians. My desperation to avoid what looked like the natural history of most physicians in medicine was what led me to my financial awakening, as you could call it.

I became curious about where my money was going as it hit my bank account. Where was I investing? How was I going to ensure that I wasn’t putting all my financial eggs in one basket by relying solely on my clinical income? This road led me into a world that I didn’t know existed. It was the world of physician entrepreneurs.

I began thinking more critically of how I was spending my time outside of the hospital. As a busy physician mom, there already were a lot of competing needs and demands on the 24 hours that I was limited to within a day. How could I get things done and increase my earnability without needing to exchange more time for money in a one-to-one ratio?

Passive income!

First of all, what exactly is passive income?

It refers to money earned that does not require you to physically and actively pump in time in order to get money out. For instance, seeing patients clinically is not passive. Performing procedures is not passive.
 

What are some examples of passive income?

• Dividend paying stocks or funds

• Investing through retirement accounts

• Passive real estate investment through syndications, crowdfunding, REITs

• Book writing

• Business partnership or ownership such as surgery center co-ownership

• Peer-to-peer lending

• Affiliate marketing

• House hacking

• Rent out your car

• Rent out your backyard/ swimming pool

• Invention with royalty payment

• Podcasting

There are some myths about passive income that are worth exploring

1. Passive income is completely passive: This is relative passivity, meaning that for every investment, there is a phase of learning, acquiring knowledge, vetting, and possibly researching that is not passive. After the initial phase of set up, most passive sources of income may require some monitoring or checking in. However, what makes an investment passive is the absence of that one-to-one ratio of input to output that would normally exist in a more active income source.

2. Making passive income is lazy: If you are a physician, you are probably not lazy. Yes, we have a high standard of expectation for ourselves, but anyone that is able to withstand the rigors of medical training, residency, and fellowship is not lazy in my books. Burnout can present in various ways, including apathy. Let’s not confuse that as lazy because, if we do, that would qualify as gaslighting and self-splaining. As someone that teaches physicians how to have money, here is my opinion: In order to make money ethically, there has to be exchange in value. One person gives value, the other gives money as a thank you. Value can be physical as seen in clinical work. Value can also be monetary. For example, I could give $100,000 to a start-up company that needs that money to execute their brilliant idea, and, in return for my investment, they could give me a 15% return per year. Is that lazy? Without this, their brilliant idea may not see daylight. Value exchange is the key. Giving value comes in different ways.

3. Finding ideas for passive income is hard: Many of us are invested in the stock market, most commonly through retirement accounts. This would qualify as passive income. Typically, we have simply elected that the growth in our investment or dividends be reinvested as we are choosing to use this money long term. In other words, if you have a retirement account, you already have passive income. The question now is how you can find additional passive ways to invest.

What are the benefits to passive income as a gastroenterologist?

1. Changing landscape of medicine: Over the last few decades, we have seen a growing shift in the landscape of medicine. There has been an increase in administrations surpassing the increase in physicians. There seem to be more and more growing bodies that are wedging between physicians and patients. This has led to increasing dissatisfaction for patients and physicians alike. In order to respond to these changes and create lasting changes, there is a need for a change in the leadership. It is fair to say that when you have a more diversified source of income, there is less pressure on a single source of income to provide “food and shelter” for your family. Physician leaders that are liberated have to have a sense of financial liberation.

2. Not putting eggs in one basket: At the beginning of the COVID-19 pandemic, there was significant fear of the unknown. Elective procedures were canceled, leading to financial strain for physicians. Gastroenterologists were not spared. When your income source is diverse, it provides more peace of mind.

3. Mental resourcefulness: This is an understated benefit of passive income and diversified income. As physicians, we went through a lot of hard work to get to where we are today. An average incoming medical student has had extensive demonstration of activity, volunteerism, and problem solving. Yet, as attending physicians, because of the burden of everyday clinical responsibilities and endless paperwork, as well as the platform and “warehouse” and “administrative-type involvement” in medicine, the average physician isn’t creating avenues to expend their cognitive abilities in a way that is diverse outside of the clinical setting. Having passive income opportunities creates a gym for mental resourcefulness that increases work satisfaction and may positively impact burnout.

4. Relationship building: As physicians, we tend to stick with our own. After working 60-80 hours per week, it is no surprise that most of your social network may end up being those that you work with. Passive income opportunities expose physicians to networking and social opportunities that may be critical for relationship building. This may improve mental wellness and overall sense of well-being.

5. Longevity in medicine: As more physicians elect to be employed by larger organizations outside of academics, sabbaticals are becoming less and less available. Having passive sources of income may permit a physician who would otherwise not be able to suffer loss of income the opportunity to take a leave of absence in the short term that may provide long-term longevity in medicine, while promoting wellness.

6. Wealth building: Wealth has had a negative reputation in the world. We seem to equate wealth as bad and being the source of evil. We forget that money is simply a tool that takes the shape of the container you place it in. If you are good, money becomes a tool for more good. Having passive income can help accelerate the journey to wealth building. This can be a great resource as physicians can support unique lifesaving, community-building, and environment-protecting initiatives, as well as support political candidates who will have a positive effect on patient care and the future of medicine.

I hope you are convinced that, with weighing the benefits and the myths associated with passive income, it is of value for gastroenterologists to equip themselves financially so we can be positioned to be a critical part of the changing platform in medicine. Gastroenterologists have to do their due diligence to ensure that their finances are future proof to the best of their abilities.
 

Dr. Alli-Akintade, a gastroenterologist with Kaiser Permanente South Sacramento (Calif.) Medical Center, is founder of The MoneyFitMD and creator of The MoneyFitMD podcast (www.moneyfitmd.com).

I don’t think I heard the term “passive income” until I was already an attending gastroenterologist.

That was no surprise. Why would I as a gastroenterologist with a focus in inflammatory bowel diseases be even remotely interested in that term?

Like most physicians, I went into medicine to take care of patients. That was my entire dream. It was a pleasant surprise to hear that gastroenterologists were relatively well paid compared to many other internal medicine specialties.

That was a bonus. I was not practicing medicine for the money. I was here to do good, only. Money was the evil one. It’s no surprise money remained a taboo topic amongst physicians.

This is reflected in the lack of financial education in our training.

I went through all my medical training without getting any financial education. In my last year of training, I wondered how I was going to not end up being a burned out, overworked physician mom. I knew I was going to work in a large hospital-based practice or academic center. I was already aware that employed physicians had a higher burnout rate compared to independent physicians. My desperation to avoid what looked like the natural history of most physicians in medicine was what led me to my financial awakening, as you could call it.

I became curious about where my money was going as it hit my bank account. Where was I investing? How was I going to ensure that I wasn’t putting all my financial eggs in one basket by relying solely on my clinical income? This road led me into a world that I didn’t know existed. It was the world of physician entrepreneurs.

I began thinking more critically of how I was spending my time outside of the hospital. As a busy physician mom, there already were a lot of competing needs and demands on the 24 hours that I was limited to within a day. How could I get things done and increase my earnability without needing to exchange more time for money in a one-to-one ratio?

Passive income!

First of all, what exactly is passive income?

It refers to money earned that does not require you to physically and actively pump in time in order to get money out. For instance, seeing patients clinically is not passive. Performing procedures is not passive.
 

What are some examples of passive income?

• Dividend paying stocks or funds

• Investing through retirement accounts

• Passive real estate investment through syndications, crowdfunding, REITs

• Book writing

• Business partnership or ownership such as surgery center co-ownership

• Peer-to-peer lending

• Affiliate marketing

• House hacking

• Rent out your car

• Rent out your backyard/ swimming pool

• Invention with royalty payment

• Podcasting

There are some myths about passive income that are worth exploring

1. Passive income is completely passive: This is relative passivity, meaning that for every investment, there is a phase of learning, acquiring knowledge, vetting, and possibly researching that is not passive. After the initial phase of set up, most passive sources of income may require some monitoring or checking in. However, what makes an investment passive is the absence of that one-to-one ratio of input to output that would normally exist in a more active income source.

2. Making passive income is lazy: If you are a physician, you are probably not lazy. Yes, we have a high standard of expectation for ourselves, but anyone that is able to withstand the rigors of medical training, residency, and fellowship is not lazy in my books. Burnout can present in various ways, including apathy. Let’s not confuse that as lazy because, if we do, that would qualify as gaslighting and self-splaining. As someone that teaches physicians how to have money, here is my opinion: In order to make money ethically, there has to be exchange in value. One person gives value, the other gives money as a thank you. Value can be physical as seen in clinical work. Value can also be monetary. For example, I could give $100,000 to a start-up company that needs that money to execute their brilliant idea, and, in return for my investment, they could give me a 15% return per year. Is that lazy? Without this, their brilliant idea may not see daylight. Value exchange is the key. Giving value comes in different ways.

3. Finding ideas for passive income is hard: Many of us are invested in the stock market, most commonly through retirement accounts. This would qualify as passive income. Typically, we have simply elected that the growth in our investment or dividends be reinvested as we are choosing to use this money long term. In other words, if you have a retirement account, you already have passive income. The question now is how you can find additional passive ways to invest.

What are the benefits to passive income as a gastroenterologist?

1. Changing landscape of medicine: Over the last few decades, we have seen a growing shift in the landscape of medicine. There has been an increase in administrations surpassing the increase in physicians. There seem to be more and more growing bodies that are wedging between physicians and patients. This has led to increasing dissatisfaction for patients and physicians alike. In order to respond to these changes and create lasting changes, there is a need for a change in the leadership. It is fair to say that when you have a more diversified source of income, there is less pressure on a single source of income to provide “food and shelter” for your family. Physician leaders that are liberated have to have a sense of financial liberation.

2. Not putting eggs in one basket: At the beginning of the COVID-19 pandemic, there was significant fear of the unknown. Elective procedures were canceled, leading to financial strain for physicians. Gastroenterologists were not spared. When your income source is diverse, it provides more peace of mind.

3. Mental resourcefulness: This is an understated benefit of passive income and diversified income. As physicians, we went through a lot of hard work to get to where we are today. An average incoming medical student has had extensive demonstration of activity, volunteerism, and problem solving. Yet, as attending physicians, because of the burden of everyday clinical responsibilities and endless paperwork, as well as the platform and “warehouse” and “administrative-type involvement” in medicine, the average physician isn’t creating avenues to expend their cognitive abilities in a way that is diverse outside of the clinical setting. Having passive income opportunities creates a gym for mental resourcefulness that increases work satisfaction and may positively impact burnout.

4. Relationship building: As physicians, we tend to stick with our own. After working 60-80 hours per week, it is no surprise that most of your social network may end up being those that you work with. Passive income opportunities expose physicians to networking and social opportunities that may be critical for relationship building. This may improve mental wellness and overall sense of well-being.

5. Longevity in medicine: As more physicians elect to be employed by larger organizations outside of academics, sabbaticals are becoming less and less available. Having passive sources of income may permit a physician who would otherwise not be able to suffer loss of income the opportunity to take a leave of absence in the short term that may provide long-term longevity in medicine, while promoting wellness.

6. Wealth building: Wealth has had a negative reputation in the world. We seem to equate wealth as bad and being the source of evil. We forget that money is simply a tool that takes the shape of the container you place it in. If you are good, money becomes a tool for more good. Having passive income can help accelerate the journey to wealth building. This can be a great resource as physicians can support unique lifesaving, community-building, and environment-protecting initiatives, as well as support political candidates who will have a positive effect on patient care and the future of medicine.

I hope you are convinced that, with weighing the benefits and the myths associated with passive income, it is of value for gastroenterologists to equip themselves financially so we can be positioned to be a critical part of the changing platform in medicine. Gastroenterologists have to do their due diligence to ensure that their finances are future proof to the best of their abilities.
 

Dr. Alli-Akintade, a gastroenterologist with Kaiser Permanente South Sacramento (Calif.) Medical Center, is founder of The MoneyFitMD and creator of The MoneyFitMD podcast (www.moneyfitmd.com).

I don’t think I heard the term “passive income” until I was already an attending gastroenterologist.

That was no surprise. Why would I as a gastroenterologist with a focus in inflammatory bowel diseases be even remotely interested in that term?

Like most physicians, I went into medicine to take care of patients. That was my entire dream. It was a pleasant surprise to hear that gastroenterologists were relatively well paid compared to many other internal medicine specialties.

That was a bonus. I was not practicing medicine for the money. I was here to do good, only. Money was the evil one. It’s no surprise money remained a taboo topic amongst physicians.

This is reflected in the lack of financial education in our training.

I went through all my medical training without getting any financial education. In my last year of training, I wondered how I was going to not end up being a burned out, overworked physician mom. I knew I was going to work in a large hospital-based practice or academic center. I was already aware that employed physicians had a higher burnout rate compared to independent physicians. My desperation to avoid what looked like the natural history of most physicians in medicine was what led me to my financial awakening, as you could call it.

I became curious about where my money was going as it hit my bank account. Where was I investing? How was I going to ensure that I wasn’t putting all my financial eggs in one basket by relying solely on my clinical income? This road led me into a world that I didn’t know existed. It was the world of physician entrepreneurs.

I began thinking more critically of how I was spending my time outside of the hospital. As a busy physician mom, there already were a lot of competing needs and demands on the 24 hours that I was limited to within a day. How could I get things done and increase my earnability without needing to exchange more time for money in a one-to-one ratio?

Passive income!

First of all, what exactly is passive income?

It refers to money earned that does not require you to physically and actively pump in time in order to get money out. For instance, seeing patients clinically is not passive. Performing procedures is not passive.
 

What are some examples of passive income?

• Dividend paying stocks or funds

• Investing through retirement accounts

• Passive real estate investment through syndications, crowdfunding, REITs

• Book writing

• Business partnership or ownership such as surgery center co-ownership

• Peer-to-peer lending

• Affiliate marketing

• House hacking

• Rent out your car

• Rent out your backyard/ swimming pool

• Invention with royalty payment

• Podcasting

There are some myths about passive income that are worth exploring

1. Passive income is completely passive: This is relative passivity, meaning that for every investment, there is a phase of learning, acquiring knowledge, vetting, and possibly researching that is not passive. After the initial phase of set up, most passive sources of income may require some monitoring or checking in. However, what makes an investment passive is the absence of that one-to-one ratio of input to output that would normally exist in a more active income source.

2. Making passive income is lazy: If you are a physician, you are probably not lazy. Yes, we have a high standard of expectation for ourselves, but anyone that is able to withstand the rigors of medical training, residency, and fellowship is not lazy in my books. Burnout can present in various ways, including apathy. Let’s not confuse that as lazy because, if we do, that would qualify as gaslighting and self-splaining. As someone that teaches physicians how to have money, here is my opinion: In order to make money ethically, there has to be exchange in value. One person gives value, the other gives money as a thank you. Value can be physical as seen in clinical work. Value can also be monetary. For example, I could give $100,000 to a start-up company that needs that money to execute their brilliant idea, and, in return for my investment, they could give me a 15% return per year. Is that lazy? Without this, their brilliant idea may not see daylight. Value exchange is the key. Giving value comes in different ways.

3. Finding ideas for passive income is hard: Many of us are invested in the stock market, most commonly through retirement accounts. This would qualify as passive income. Typically, we have simply elected that the growth in our investment or dividends be reinvested as we are choosing to use this money long term. In other words, if you have a retirement account, you already have passive income. The question now is how you can find additional passive ways to invest.

What are the benefits to passive income as a gastroenterologist?

1. Changing landscape of medicine: Over the last few decades, we have seen a growing shift in the landscape of medicine. There has been an increase in administrations surpassing the increase in physicians. There seem to be more and more growing bodies that are wedging between physicians and patients. This has led to increasing dissatisfaction for patients and physicians alike. In order to respond to these changes and create lasting changes, there is a need for a change in the leadership. It is fair to say that when you have a more diversified source of income, there is less pressure on a single source of income to provide “food and shelter” for your family. Physician leaders that are liberated have to have a sense of financial liberation.

2. Not putting eggs in one basket: At the beginning of the COVID-19 pandemic, there was significant fear of the unknown. Elective procedures were canceled, leading to financial strain for physicians. Gastroenterologists were not spared. When your income source is diverse, it provides more peace of mind.

3. Mental resourcefulness: This is an understated benefit of passive income and diversified income. As physicians, we went through a lot of hard work to get to where we are today. An average incoming medical student has had extensive demonstration of activity, volunteerism, and problem solving. Yet, as attending physicians, because of the burden of everyday clinical responsibilities and endless paperwork, as well as the platform and “warehouse” and “administrative-type involvement” in medicine, the average physician isn’t creating avenues to expend their cognitive abilities in a way that is diverse outside of the clinical setting. Having passive income opportunities creates a gym for mental resourcefulness that increases work satisfaction and may positively impact burnout.

4. Relationship building: As physicians, we tend to stick with our own. After working 60-80 hours per week, it is no surprise that most of your social network may end up being those that you work with. Passive income opportunities expose physicians to networking and social opportunities that may be critical for relationship building. This may improve mental wellness and overall sense of well-being.

5. Longevity in medicine: As more physicians elect to be employed by larger organizations outside of academics, sabbaticals are becoming less and less available. Having passive sources of income may permit a physician who would otherwise not be able to suffer loss of income the opportunity to take a leave of absence in the short term that may provide long-term longevity in medicine, while promoting wellness.

6. Wealth building: Wealth has had a negative reputation in the world. We seem to equate wealth as bad and being the source of evil. We forget that money is simply a tool that takes the shape of the container you place it in. If you are good, money becomes a tool for more good. Having passive income can help accelerate the journey to wealth building. This can be a great resource as physicians can support unique lifesaving, community-building, and environment-protecting initiatives, as well as support political candidates who will have a positive effect on patient care and the future of medicine.

I hope you are convinced that, with weighing the benefits and the myths associated with passive income, it is of value for gastroenterologists to equip themselves financially so we can be positioned to be a critical part of the changing platform in medicine. Gastroenterologists have to do their due diligence to ensure that their finances are future proof to the best of their abilities.
 

Dr. Alli-Akintade, a gastroenterologist with Kaiser Permanente South Sacramento (Calif.) Medical Center, is founder of The MoneyFitMD and creator of The MoneyFitMD podcast (www.moneyfitmd.com).

If you already have disability insurance, keep reading as well. I have a great tip for you from personal experience that made a difference in the job I selected.

Let’s start with an important rebrand for “disability insurance.” What does it protect? Income! Car insurance is not called crash insurance. House insurance is not called burnt house insurance. And unlike a car or a house, it protects an asset with 10-20 times as much value as a million-dollar house.

So, let’s call it what it is: “income protection insurance.” 

It’s always a bit nerdy when I talk about how much I appreciate insurance that protects lifelong income. I often make an argument that it is simply one of the best products that exists, especially for high-income earners with lots of debt. Many of us doctors are in that category and are not even slightly jealous of our friends whose parents paid for school (I’m looking at you not-her-real-name-Mary).

Disability is not the catchiest name for a product, but it is more pronounceable than “ophthalmology” and way easier to spell. This is my specialty, and I can’t believe we still haven’t gone with “eye surgeon,” but I digress.

So, let’s rebrand “disability insurance” for the sake of clarity:

I personally like to think of it as a monthly subscription for a soft landing in a worst-case scenario. Call me a millennial, but it just goes down smoother in my mind as a subscription a la Netflix ... and the four other streaming services that someone gave me a password to – if you’re a 55-year-old GI specialist, I know you’re on the Spotify family plan, too. No judgment from me. 

So, for $15, you get a bunch of movies with Netflix, and, for $150-$300, you cover a lifetime of income. That’s a pretty decent service even without “The Office.” 

Disability insurance often covers at least $15-$20 million dollars over a lifetime of earnings for only 1%-2% of your salary per year.

But I’ll pause here. The numbers are irrelevant if you never get the insurance. 

I have one goal for this article, and it is simply to try to help you break down that procrastination habit we all have. I will have added immense value to at least one family’s life if you go and get a policy this week that saves your family from substantial loss of income. This is why I love insurance.

Doctors sacrifice essential life steps to get through training. But we are not alone in that. 

Tim Kasser, PhD, puts it well when he said: “We live in a machine that is designed to get us to neglect what is important about life.” Here he is talking about relationships, but securing financial protection is loving to those closest to us.

So, what holds us back from taking a seemingly easy step like locking in disability insurance early in training?

Is it the stress of residency? Studying for Step 1? Moving cities and finding a home during a housing crisis? Job change during COVID? Is it because we have already put it off so long that we don’t want to think about it?

Totally fair.

The reason to not put off the important things in life

I will give you a few reasons of “the why of” how we can all benefit from disability insurance and the reason there is no benefit in waiting to get a policy.

But, most importantly, I want to talk to you about your life and why you are putting off a lot of important things.
 
That diet you’ve been wanting to start? Yep.

That ring you haven’t purchased? Maybe that!

That article you’ve been meaning to write for the GI journal? Yes, especially that.

Remember: Take a deep breath in and exhaaaaale. 

So, why do we put off the important?

First, even though the “why” of purchasing income protection is a bit basic, I do find it helpful to have discrete reasons for accomplishing an important task. 

Why get disability insurance at all?

Let’s look at the value we get out of covering our income. 

Reason No. 1. It softens the landing in the event you have an illness. The stats on disability claims are heavily on the side of illness over accidents or trauma. As you know, many autoimmune conditions show up in the 20’s and 30’s, so those are the things your friends will have first. 

Unfortunately, if you have a medical issue before you have a disability policy, you will either not have coverage for that specific condition or you will not be approved for insurance. Unlike health insurance, the company can afford to pay out policies because it is picky on who it is willing to cover. It tries to select healthy people, so apply when you are most healthy, if possible. 

Reason No. 2. It’s cheap. When you compare with a $2 million policy for life insurance, it might cost $1,000-$2,000 or so per year for a term policy covering about 25 years. With disability insurance, you can cover about 10x as much for the same annual payment. One could easily make a case that if you do not have dependents, disability insurance should be your first stop even before life insurance. You are more likely to be disabled than to die when you’re in your thirties. Act accordingly.

(Please note for obvious reasons they don’t call life insurance “death insurance.” Disability insurance needs that same rebrand – I’m telling you!)

Reason No. 3. Unless you are independently wealthy, it will be nearly impossible to replace your income and live a similar lifestyle. Lock in the benefits of the work you have already accomplished, and lock in the coverage of ALL of your health while you are healthy.

Time to take action

As Elvis famously sang: “A little less conversation, a little more action please.”

Alright, so how do we get ourselves to ACT and get a policy to protect our income?

Tip No. 1. As doctors we often shoot for perfection. It’s no surprise, therefore, that we have an illusion that we need to find the “perfect policy.” 

One of my friends is a great financial adviser, and he often tells me about first meetings with clients to create a long-lasting plan. Often, somewhere along the way when discussing risks of stocks going down and up, someone will ask, “Why don’t we pick one that is low risk but tends to go up in value?” Of course, the reality is that if it were that easy ... everyone would do it!

Fortunately, with disability insurance, the policies are fairly straight forward. You can skip the analysis paralysis with disability insurance by talking with an agent who consistently works with physicians. I enjoy talking policies and helping doctors protect their financial health, so I started selling policies shortly after residency because so many of my co-residents were making me nervous putting it off. Some I helped, and some put it off and are unable to get policies after health issues even just 3 years after residency. 

Tip No. 2. Having a policy is better than not having one, and if you’re worried about getting the wrong one, just get two! Seriously, some companies let you split coverage between two and this can even increase the maximum coverage you can get later in life, too. Does it add cost? Surprisingly, it typically does not, and it does not make the agent more money either. In most cases it’s actually more work for them for the same amount of commission. Don’t be afraid to ask about this.

Tip No. 3. This is my hot tip for current policy owners: ask for the full version of your policy, and read the entire policy. I recently asked for my policy because I was doing some international work abroad and wanted to know if I could reside abroad if I made a disability claim. My policy stated that I would need to reside in the United States within 12 months of disability. I likely would do this in the event of disability, but it is quite important to know these aspects. 

While reading the fine print, I found that a minimum number of work-hours per week (35 for my policy) was required to qualify for my physician-specific coverage. This was an important part of my job criteria when looking for a new position and is worth investigating for anyone considering part-time employment.

Tip No. 4. The obvious tip: The fear of failure gets a lot of perfectionists from even starting a task unless they know everything about it.

Just start. 

That’s my go-to for overcoming fear of failure. You won’t fail. You just won’t. You will learn!

Pretend you are curious about it and try with any of these actionable steps:

• Google disability insurance. 
• Email me at [email protected]. 
• Read an article on a doctor-based blog.

I personally geeked out on insurance so much in residency that I became an insurance agent. I am an independent broker, so I have no bias toward any particular policies (email me anytime even if just with questions). Personally, I believe in this product and the value of this type of insurance, and I would hate for anyone to not have coverage of their most valuable asset: lifelong income!

The steps of applying for disability insurance

Now you know all the great reasons to get going! What are the next steps?

No matter where you get your policy, you can expect the process to be fairly simple. If it’s not then shoot me an email and I’m happy to help chat and discuss further. 

The general process is:

Step 1. Initial phone call or email: Chat with an agent to discuss your needs and situation. Immediately after, you can sign initial application documents with DocuSign. (20 minutes). 

Step 2. Complete health questionnaire on the phone with the insurance company. (20-40 minutes).

Step 3. Sign the final documents and confirm physician-specific language in their policies. (20 minutes).

The whole application period typically lasts only 2-4 weeks from start to finish and, if you pay up front, you are covered from the moment you send in the check. If you don’t accept the policy, you even get the money back. 

I genuinely enjoy talking with my colleagues from all over the world and learning about their lives and plans, so, if you have any questions, please do not hesitate to email me at [email protected]. Also, feel free to check out my mini-blog at curiousmd.com or listen to me chat with Jon Solitro, CFP, on his FinancialMD.com podcast. Similar to this article, it is fairly informal and covers real life, tough career decisions, and actionable financial planning tips. 

If you made it to the end of this article, you are a perfectionist and should go back and read Tip No. 1. 

Reference

The Context of Things. “We live in a machine that is designed to get us to neglect what’s important about life,” 2021 Aug 24. 

Dr. Smith is an ophthalmologist and consultant with Advanced Eyecare Professionals, Grand Rapids, Mich., and founder of DigitalGlaucoma.com. He is cohost of The FinancialMD Show podcast. He is an insurance producer and assists clients with advising and decision-making related to disability insurance at FinancialMD. 

If you already have disability insurance, keep reading as well. I have a great tip for you from personal experience that made a difference in the job I selected.

Let’s start with an important rebrand for “disability insurance.” What does it protect? Income! Car insurance is not called crash insurance. House insurance is not called burnt house insurance. And unlike a car or a house, it protects an asset with 10-20 times as much value as a million-dollar house.

So, let’s call it what it is: “income protection insurance.” 

It’s always a bit nerdy when I talk about how much I appreciate insurance that protects lifelong income. I often make an argument that it is simply one of the best products that exists, especially for high-income earners with lots of debt. Many of us doctors are in that category and are not even slightly jealous of our friends whose parents paid for school (I’m looking at you not-her-real-name-Mary).

Disability is not the catchiest name for a product, but it is more pronounceable than “ophthalmology” and way easier to spell. This is my specialty, and I can’t believe we still haven’t gone with “eye surgeon,” but I digress.

So, let’s rebrand “disability insurance” for the sake of clarity:

I personally like to think of it as a monthly subscription for a soft landing in a worst-case scenario. Call me a millennial, but it just goes down smoother in my mind as a subscription a la Netflix ... and the four other streaming services that someone gave me a password to – if you’re a 55-year-old GI specialist, I know you’re on the Spotify family plan, too. No judgment from me. 

So, for $15, you get a bunch of movies with Netflix, and, for $150-$300, you cover a lifetime of income. That’s a pretty decent service even without “The Office.” 

Disability insurance often covers at least $15-$20 million dollars over a lifetime of earnings for only 1%-2% of your salary per year.

But I’ll pause here. The numbers are irrelevant if you never get the insurance. 

I have one goal for this article, and it is simply to try to help you break down that procrastination habit we all have. I will have added immense value to at least one family’s life if you go and get a policy this week that saves your family from substantial loss of income. This is why I love insurance.

Doctors sacrifice essential life steps to get through training. But we are not alone in that. 

Tim Kasser, PhD, puts it well when he said: “We live in a machine that is designed to get us to neglect what is important about life.” Here he is talking about relationships, but securing financial protection is loving to those closest to us.

So, what holds us back from taking a seemingly easy step like locking in disability insurance early in training?

Is it the stress of residency? Studying for Step 1? Moving cities and finding a home during a housing crisis? Job change during COVID? Is it because we have already put it off so long that we don’t want to think about it?

Totally fair.

The reason to not put off the important things in life

I will give you a few reasons of “the why of” how we can all benefit from disability insurance and the reason there is no benefit in waiting to get a policy.

But, most importantly, I want to talk to you about your life and why you are putting off a lot of important things.
 
That diet you’ve been wanting to start? Yep.

That ring you haven’t purchased? Maybe that!

That article you’ve been meaning to write for the GI journal? Yes, especially that.

Remember: Take a deep breath in and exhaaaaale. 

So, why do we put off the important?

First, even though the “why” of purchasing income protection is a bit basic, I do find it helpful to have discrete reasons for accomplishing an important task. 

Why get disability insurance at all?

Let’s look at the value we get out of covering our income. 

Reason No. 1. It softens the landing in the event you have an illness. The stats on disability claims are heavily on the side of illness over accidents or trauma. As you know, many autoimmune conditions show up in the 20’s and 30’s, so those are the things your friends will have first. 

Unfortunately, if you have a medical issue before you have a disability policy, you will either not have coverage for that specific condition or you will not be approved for insurance. Unlike health insurance, the company can afford to pay out policies because it is picky on who it is willing to cover. It tries to select healthy people, so apply when you are most healthy, if possible. 

Reason No. 2. It’s cheap. When you compare with a $2 million policy for life insurance, it might cost $1,000-$2,000 or so per year for a term policy covering about 25 years. With disability insurance, you can cover about 10x as much for the same annual payment. One could easily make a case that if you do not have dependents, disability insurance should be your first stop even before life insurance. You are more likely to be disabled than to die when you’re in your thirties. Act accordingly.

(Please note for obvious reasons they don’t call life insurance “death insurance.” Disability insurance needs that same rebrand – I’m telling you!)

Reason No. 3. Unless you are independently wealthy, it will be nearly impossible to replace your income and live a similar lifestyle. Lock in the benefits of the work you have already accomplished, and lock in the coverage of ALL of your health while you are healthy.

Time to take action

As Elvis famously sang: “A little less conversation, a little more action please.”

Alright, so how do we get ourselves to ACT and get a policy to protect our income?

Tip No. 1. As doctors we often shoot for perfection. It’s no surprise, therefore, that we have an illusion that we need to find the “perfect policy.” 

One of my friends is a great financial adviser, and he often tells me about first meetings with clients to create a long-lasting plan. Often, somewhere along the way when discussing risks of stocks going down and up, someone will ask, “Why don’t we pick one that is low risk but tends to go up in value?” Of course, the reality is that if it were that easy ... everyone would do it!

Fortunately, with disability insurance, the policies are fairly straight forward. You can skip the analysis paralysis with disability insurance by talking with an agent who consistently works with physicians. I enjoy talking policies and helping doctors protect their financial health, so I started selling policies shortly after residency because so many of my co-residents were making me nervous putting it off. Some I helped, and some put it off and are unable to get policies after health issues even just 3 years after residency. 

Tip No. 2. Having a policy is better than not having one, and if you’re worried about getting the wrong one, just get two! Seriously, some companies let you split coverage between two and this can even increase the maximum coverage you can get later in life, too. Does it add cost? Surprisingly, it typically does not, and it does not make the agent more money either. In most cases it’s actually more work for them for the same amount of commission. Don’t be afraid to ask about this.

Tip No. 3. This is my hot tip for current policy owners: ask for the full version of your policy, and read the entire policy. I recently asked for my policy because I was doing some international work abroad and wanted to know if I could reside abroad if I made a disability claim. My policy stated that I would need to reside in the United States within 12 months of disability. I likely would do this in the event of disability, but it is quite important to know these aspects. 

While reading the fine print, I found that a minimum number of work-hours per week (35 for my policy) was required to qualify for my physician-specific coverage. This was an important part of my job criteria when looking for a new position and is worth investigating for anyone considering part-time employment.

Tip No. 4. The obvious tip: The fear of failure gets a lot of perfectionists from even starting a task unless they know everything about it.

Just start. 

That’s my go-to for overcoming fear of failure. You won’t fail. You just won’t. You will learn!

Pretend you are curious about it and try with any of these actionable steps:

• Google disability insurance. 
• Email me at [email protected]. 
• Read an article on a doctor-based blog.

I personally geeked out on insurance so much in residency that I became an insurance agent. I am an independent broker, so I have no bias toward any particular policies (email me anytime even if just with questions). Personally, I believe in this product and the value of this type of insurance, and I would hate for anyone to not have coverage of their most valuable asset: lifelong income!

The steps of applying for disability insurance

Now you know all the great reasons to get going! What are the next steps?

No matter where you get your policy, you can expect the process to be fairly simple. If it’s not then shoot me an email and I’m happy to help chat and discuss further. 

The general process is:

Step 1. Initial phone call or email: Chat with an agent to discuss your needs and situation. Immediately after, you can sign initial application documents with DocuSign. (20 minutes). 

Step 2. Complete health questionnaire on the phone with the insurance company. (20-40 minutes).

Step 3. Sign the final documents and confirm physician-specific language in their policies. (20 minutes).

The whole application period typically lasts only 2-4 weeks from start to finish and, if you pay up front, you are covered from the moment you send in the check. If you don’t accept the policy, you even get the money back. 

I genuinely enjoy talking with my colleagues from all over the world and learning about their lives and plans, so, if you have any questions, please do not hesitate to email me at [email protected]. Also, feel free to check out my mini-blog at curiousmd.com or listen to me chat with Jon Solitro, CFP, on his FinancialMD.com podcast. Similar to this article, it is fairly informal and covers real life, tough career decisions, and actionable financial planning tips. 

If you made it to the end of this article, you are a perfectionist and should go back and read Tip No. 1. 

Reference

The Context of Things. “We live in a machine that is designed to get us to neglect what’s important about life,” 2021 Aug 24. 

Dr. Smith is an ophthalmologist and consultant with Advanced Eyecare Professionals, Grand Rapids, Mich., and founder of DigitalGlaucoma.com. He is cohost of The FinancialMD Show podcast. He is an insurance producer and assists clients with advising and decision-making related to disability insurance at FinancialMD. 

If you already have disability insurance, keep reading as well. I have a great tip for you from personal experience that made a difference in the job I selected.

Let’s start with an important rebrand for “disability insurance.” What does it protect? Income! Car insurance is not called crash insurance. House insurance is not called burnt house insurance. And unlike a car or a house, it protects an asset with 10-20 times as much value as a million-dollar house.

So, let’s call it what it is: “income protection insurance.” 

It’s always a bit nerdy when I talk about how much I appreciate insurance that protects lifelong income. I often make an argument that it is simply one of the best products that exists, especially for high-income earners with lots of debt. Many of us doctors are in that category and are not even slightly jealous of our friends whose parents paid for school (I’m looking at you not-her-real-name-Mary).

Disability is not the catchiest name for a product, but it is more pronounceable than “ophthalmology” and way easier to spell. This is my specialty, and I can’t believe we still haven’t gone with “eye surgeon,” but I digress.

So, let’s rebrand “disability insurance” for the sake of clarity:

I personally like to think of it as a monthly subscription for a soft landing in a worst-case scenario. Call me a millennial, but it just goes down smoother in my mind as a subscription a la Netflix ... and the four other streaming services that someone gave me a password to – if you’re a 55-year-old GI specialist, I know you’re on the Spotify family plan, too. No judgment from me. 

So, for $15, you get a bunch of movies with Netflix, and, for $150-$300, you cover a lifetime of income. That’s a pretty decent service even without “The Office.” 

Disability insurance often covers at least $15-$20 million dollars over a lifetime of earnings for only 1%-2% of your salary per year.

But I’ll pause here. The numbers are irrelevant if you never get the insurance. 

I have one goal for this article, and it is simply to try to help you break down that procrastination habit we all have. I will have added immense value to at least one family’s life if you go and get a policy this week that saves your family from substantial loss of income. This is why I love insurance.

Doctors sacrifice essential life steps to get through training. But we are not alone in that. 

Tim Kasser, PhD, puts it well when he said: “We live in a machine that is designed to get us to neglect what is important about life.” Here he is talking about relationships, but securing financial protection is loving to those closest to us.

So, what holds us back from taking a seemingly easy step like locking in disability insurance early in training?

Is it the stress of residency? Studying for Step 1? Moving cities and finding a home during a housing crisis? Job change during COVID? Is it because we have already put it off so long that we don’t want to think about it?

Totally fair.

The reason to not put off the important things in life

I will give you a few reasons of “the why of” how we can all benefit from disability insurance and the reason there is no benefit in waiting to get a policy.

But, most importantly, I want to talk to you about your life and why you are putting off a lot of important things.
 
That diet you’ve been wanting to start? Yep.

That ring you haven’t purchased? Maybe that!

That article you’ve been meaning to write for the GI journal? Yes, especially that.

Remember: Take a deep breath in and exhaaaaale. 

So, why do we put off the important?

First, even though the “why” of purchasing income protection is a bit basic, I do find it helpful to have discrete reasons for accomplishing an important task. 

Why get disability insurance at all?

Let’s look at the value we get out of covering our income. 

Reason No. 1. It softens the landing in the event you have an illness. The stats on disability claims are heavily on the side of illness over accidents or trauma. As you know, many autoimmune conditions show up in the 20’s and 30’s, so those are the things your friends will have first. 

Unfortunately, if you have a medical issue before you have a disability policy, you will either not have coverage for that specific condition or you will not be approved for insurance. Unlike health insurance, the company can afford to pay out policies because it is picky on who it is willing to cover. It tries to select healthy people, so apply when you are most healthy, if possible. 

Reason No. 2. It’s cheap. When you compare with a $2 million policy for life insurance, it might cost $1,000-$2,000 or so per year for a term policy covering about 25 years. With disability insurance, you can cover about 10x as much for the same annual payment. One could easily make a case that if you do not have dependents, disability insurance should be your first stop even before life insurance. You are more likely to be disabled than to die when you’re in your thirties. Act accordingly.

(Please note for obvious reasons they don’t call life insurance “death insurance.” Disability insurance needs that same rebrand – I’m telling you!)

Reason No. 3. Unless you are independently wealthy, it will be nearly impossible to replace your income and live a similar lifestyle. Lock in the benefits of the work you have already accomplished, and lock in the coverage of ALL of your health while you are healthy.

Time to take action

As Elvis famously sang: “A little less conversation, a little more action please.”

Alright, so how do we get ourselves to ACT and get a policy to protect our income?

Tip No. 1. As doctors we often shoot for perfection. It’s no surprise, therefore, that we have an illusion that we need to find the “perfect policy.” 

One of my friends is a great financial adviser, and he often tells me about first meetings with clients to create a long-lasting plan. Often, somewhere along the way when discussing risks of stocks going down and up, someone will ask, “Why don’t we pick one that is low risk but tends to go up in value?” Of course, the reality is that if it were that easy ... everyone would do it!

Fortunately, with disability insurance, the policies are fairly straight forward. You can skip the analysis paralysis with disability insurance by talking with an agent who consistently works with physicians. I enjoy talking policies and helping doctors protect their financial health, so I started selling policies shortly after residency because so many of my co-residents were making me nervous putting it off. Some I helped, and some put it off and are unable to get policies after health issues even just 3 years after residency. 

Tip No. 2. Having a policy is better than not having one, and if you’re worried about getting the wrong one, just get two! Seriously, some companies let you split coverage between two and this can even increase the maximum coverage you can get later in life, too. Does it add cost? Surprisingly, it typically does not, and it does not make the agent more money either. In most cases it’s actually more work for them for the same amount of commission. Don’t be afraid to ask about this.

Tip No. 3. This is my hot tip for current policy owners: ask for the full version of your policy, and read the entire policy. I recently asked for my policy because I was doing some international work abroad and wanted to know if I could reside abroad if I made a disability claim. My policy stated that I would need to reside in the United States within 12 months of disability. I likely would do this in the event of disability, but it is quite important to know these aspects. 

While reading the fine print, I found that a minimum number of work-hours per week (35 for my policy) was required to qualify for my physician-specific coverage. This was an important part of my job criteria when looking for a new position and is worth investigating for anyone considering part-time employment.

Tip No. 4. The obvious tip: The fear of failure gets a lot of perfectionists from even starting a task unless they know everything about it.

Just start. 

That’s my go-to for overcoming fear of failure. You won’t fail. You just won’t. You will learn!

Pretend you are curious about it and try with any of these actionable steps:

• Google disability insurance. 
• Email me at [email protected]. 
• Read an article on a doctor-based blog.

I personally geeked out on insurance so much in residency that I became an insurance agent. I am an independent broker, so I have no bias toward any particular policies (email me anytime even if just with questions). Personally, I believe in this product and the value of this type of insurance, and I would hate for anyone to not have coverage of their most valuable asset: lifelong income!

The steps of applying for disability insurance

Now you know all the great reasons to get going! What are the next steps?

No matter where you get your policy, you can expect the process to be fairly simple. If it’s not then shoot me an email and I’m happy to help chat and discuss further. 

The general process is:

Step 1. Initial phone call or email: Chat with an agent to discuss your needs and situation. Immediately after, you can sign initial application documents with DocuSign. (20 minutes). 

Step 2. Complete health questionnaire on the phone with the insurance company. (20-40 minutes).

Step 3. Sign the final documents and confirm physician-specific language in their policies. (20 minutes).

The whole application period typically lasts only 2-4 weeks from start to finish and, if you pay up front, you are covered from the moment you send in the check. If you don’t accept the policy, you even get the money back. 

I genuinely enjoy talking with my colleagues from all over the world and learning about their lives and plans, so, if you have any questions, please do not hesitate to email me at [email protected]. Also, feel free to check out my mini-blog at curiousmd.com or listen to me chat with Jon Solitro, CFP, on his FinancialMD.com podcast. Similar to this article, it is fairly informal and covers real life, tough career decisions, and actionable financial planning tips. 

If you made it to the end of this article, you are a perfectionist and should go back and read Tip No. 1. 

Reference

The Context of Things. “We live in a machine that is designed to get us to neglect what’s important about life,” 2021 Aug 24. 

Dr. Smith is an ophthalmologist and consultant with Advanced Eyecare Professionals, Grand Rapids, Mich., and founder of DigitalGlaucoma.com. He is cohost of The FinancialMD Show podcast. He is an insurance producer and assists clients with advising and decision-making related to disability insurance at FinancialMD.