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The demands on medical practitioners today can seem overwhelming. It's no secret that healthcare delivery is changing, and those changes are reflected in the financial issues that healthcare professionals face every day. You must continually educate yourself about new research in your chosen specialty, stay current on the latest technology that is transforming healthcare, and pay attention to business considerations, including ever changing state and federal insurance regulations.

Unfortunately, substantial demands on your time can make it difficult for you to accurately evaluate your financial plan, or monitor changes that can affect it. Just as patients need periodic checkups, you may need to work with a financial professional to make sure your finances receive the proper care.

Maximizing your personal assets and making the most of your earning years requires a plan for addressing the following issues.

Retirement
Your years of advanced training and perhaps the additional costs of launching and building a practice may have put you behind your peers outside the healthcare field by a decade or more in starting to save and invest for retirement. You may have found yourself struggling with debt from years of college, internship, and residency. Because starting to save early is such a powerful ally when it comes to building a nest egg, you may face a real challenge in assuring your own retirement. A solid financial plan can help protect your assets.

Tax considerations
Once the lean years are behind you, your success means you probably need to pay more attention to tax-aware investing strategies that help you keep more of what you earn.

Using preventive care
The nature of your profession requires that you pay special attention to making sure you are protected both personally and professionally from the financial consequences of legal action, a medical emergency of your own, and business difficulties.

Having a well-defined protection plan can give you confidence that you can practice your chosen profession without putting your family or future in jeopardy. 2

Liability insurance
Remember that in addition to potential malpractice claims, you also face the same potential liabilities as other business owners. You might consider an umbrella policy as well as coverage that protects you against business-related exposures such as fire, theft, employee dishonesty, or business interruption.

Practice management and business planning
Is a group practice more advantageous than operating solo, taking in a junior colleague, or working for a managed-care network? If you have an independent practice, should you own or rent your office space? What are the pros and cons of taking over an existing practice compared to starting one from scratch? If you're part of a group practice, is the practice structured financially to accommodate the needs of all partners?

Questions like these are rarely simple and should be done in the context of an overall financial plan that takes into account both your personal and professional goals.

Many physicians have created processes and products for their own practices, and have then licensed their creations to a corporation. If you are among them, you may need help with legal and financial concerns related to patents, royalties, and the like.

And if you have your own practice, you may find that cash flow management, maximizing return on working capital, hiring and managing employees, and financing equipment purchases and maintenance become increasingly complex issues as your practice develops.

You've spent a long time acquiring and maintaining expertise in your field, and your patients rely on your specialized knowledge. Doesn't it make sense to treat your finances with the same level of care?


Prepared by Forefield Inc, Copyright 2009

Vera R. Feldman, CFP is Senior Financial Advisor for Ameriprise Financial, specializing in holistic financial planning for medical clients, other professionals and families.

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