Tag: pandemic

Posted on by

Which Radiologists Will Have The Hardest Financial Impact From The Pandemic?

financial

Based on the individual circumstance, the pandemic has affected radiologists very differently. Financially speaking, some radiologists have barely felt any impact whatsoever from the epidemic. Maybe they practice farther from the pandemic epicenters. Or perhaps, they work directly for hospitals that have longer-term contracts and can weather the financial storm. Others are residents or V.A. employees that receive a fixed salary from the government. But that leaves out a good-sized chunk of the total radiologist population.

So, which subgroups has the Covid pandemic affected the most financially and will most likely have a lasting impact on their financial well-being? Let’s go through two clusters that I believe will have the most economic impact from the pandemic. Logically, these would be those newly-minted radiologists from their fellowships in hard-hit areas, just recently hired (or possibly furloughed!). Also, of course, those recent retirees that unluckily retired just as the pandemic hit. How significant will these losses be? How can they recover? And what are the critical lessons that we need to learn from this episode in our history?

New Radiologists Just Finishing Fellowship

New radiologists are getting hit by a double whammy. First, they are potentially losing out on initial income due to less than expected initial revenue. For some, this may come in the form of a leave or salary cut. For others, it may be a loss of a job. In many of these cases, this initial loss of income comes when loans are typically first due, and even worse, when debt loads from medical school are at their highest. For some, inevitably, this can cause a bit more financial suffering as these radiologists need to make ends meet.

Furthermore, the first few years of retirement savings are the most critical due to the geometric rate of return of invested savings. Think about it. If pensions and retirement contributions are delayed or canceled, these are the dollars that have the most power.

Suppose you are fortunate to have a 10 percent annual interest rate and work for thirty-five years. These initial dollars can be worth as much as 28 times what you put into it when you retire at 67 years old. If you delay merely one year, the same dollar only is worth 25.5 times what you put into it. Compare that to the same savings of a 50-year-old radiologist who has to delay savings by a year. If there are 15 years left in his career at 10 percent interest, each dollar will be worth 4.2 times the initial value. If this same radiologist delays their pension by a year, that same dollar will be worth 3.8 times what they put in. Those additional dollars have much less significance.

Newly Retired Radiologists

When you first begin retirement, you often need a wad of cash to pay for daily expenses. And, many of these radiologists may have cashed out their stash from the stock market. If you were unfortunate to cash out a large amount of your savings at the time of the crash and had not slowly converted your holding to less risky assets, you may have cashed out at the time of the twenty to thirty percent loss in the stock market in March. This loss could have severely decreased your overall net worth and the ability to have a comfortable retirement. Additionally, for those retiring radiologists who were planning to go part-time, many practices were unwilling to hire back some of these radiologists as the volumes had precipitously declined. Again, this could have made for the perfect financial storm!

How To Bounce Back From A Covid Economic Disaster

Keep Those Expenses Down

For many of us, this episode may have been the first time we have had to dip into an emergency fund. It goes to show you that radiologists are not immune from financial hardships (as lucky as we have been in the past!). So, make sure not to spend your savings quickly. Avoid old spending habits, and make sure to tighten your belts. Simple acts such as going through your credit card statements and reducing unneeded expenses can help enormously. And canceling luxury and unnecessary purchases can also assist. None of us can be sure when we will return to a more “normal” baseline.

Return To Work As Soon As Possible

For those younger radiologists that have been furloughed or let go, don’t stop searching for full-time employment as soon as possible. Time is of the essence as a dollar earned today is much more powerful.

And, for those radiologists that were about to retire, you may reconsider complete retirement. Part-time work allows you to make a reasonable salary, when available, and can help defray some of the financial hardship losses.

What Are The Take-Home Lessons About Radiologist Financial Well-Being?

Like any other profession, we are not immune to the whims of the economy and “black swan” events. All of us need emergency funds, regardless of our perceived safety nets at our jobs. And, all of us should continue to save and invest throughout our careers to prevent us from the potential losses of a sudden downfall. As the old boy scout motto reminds us, be prepared!

 

 

tomatoes

Posted on by

How To Mitigate The Next Pandemic: Encourage New Physicians To Get Business Training!

pandemic

Crises have a habit of magnifying gaps that we could not have imagined beforehand. And, this Covid pandemic reveals these large cracks in our healthcare system by the dozens. We have seen hospitals and imaging centers functioning without physicians receiving the appropriate personal protective equipment (PPE). We are witnessing a lack of ventilators for our sickest Covid patients. Moreover, we are beholding our healthcare system, reliant on lucrative elective procedures, go sour. Practices, hospitals, and imaging centers temporarily are almost empty (other than Covid patients) and dependent on our government to stay afloat. And, these issues are just the tip of the iceberg.

Did these misfires have to happen? Could leadership have prevented the dramatic shortfalls that we are experiencing now? How can we have known our future? Well, it’s a matter of ill-preparation.  And, this pandemic was not on the radar. But why? For years, many intelligent folks have been warning about preparations for pandemics. (check out this TED talk by Bill Gates) And, it is not just him. Other brilliant scientists and doctors have warned us about preparing for the next pandemic. No one listened.

Reason For Health Care’s Poor Preparation For The Current Pandemic

Why did hospitals and our healthcare system ignore prescient information sitting right in front of their noses? Well, it has to do with the model of healthcare that we follow in this country.  We have been treating healthcare as just a business for years.  And if you think about it only in these terms, the situation that we are in makes sense. Why would you prepare for calamity if it’s going to decrease your short-term and intermediate-term profits? Preparations reduce your bottom line.

But herein lies the crux of the problem. We can’t just think of healthcare as a business, but also as a way to protect and serve people. To accomplish this task, we have charged the wrong leaders with the responsibilities of running our healthcare system. Having only a JD or MBA, although helpful for understanding the business of medicine in the short term, is not enough. We need leaders in charge who have also been in the trenches and understand what our physicians and patients need in the long run. They need to understand the science and art of medicine. For these reasons, I would argue that we need more MDs and MD/MBA types in administrative leadership positions. With physicians in charge, hospitals could have prevented many of these issues.

Examples Of Why Physician-Hospital Administrators Would Make Better Health Care Administrators/Leaders

Let’s take some of the examples I provided above. PPE and ventilators are examples of two expenses that make no sense for a hospital to buy if you are thinking only about the business of medicine. First of all, buying such equipment would attract patients with infectious diseases to your institution because you have the equipment to manage only the sickest of patients. These patients cost more to the hospital. Additionally, why buy ventilators or PPE if you don’t need them now?. For-profit and non-profit institutions lose money off of their balance sheets, thereby decreasing bonuses given to their leaders. We can no longer think in these terms.

Or, let’s think about elective procedures as a way for hospitals to make money. Does it make sense? No. In a pandemic, the profit centers of a hospital shut down, causing the government to have to bail them out. Instead, healthcare profits should be made based on treating patients for sickness and making them well. Who better than a physician with some business sense to change this system so that we begin to treat patients and not just increase short term hospital cash flow?

The Answer: Encourage More Physicians/Radiologists To Receive Business Training

I want to underscore that we do need folks with business minds in charge of our healthcare institutions. However, these folks should be the doctors as leaders who can understand both business and medicine. To know how to run a healthcare system, you need experience in the trenches, both in the corporate world and medicine.

So, we, as program directors, mentors, and faculty, should encourage our residents to learn more about hospital administration. Instead of dismissing those residents that are not following our clinical footsteps, we should guide these new physicians on how they can begin this new pathway. Business courses should not be just an afterthought or tack-on to the radiology curriculum.

We need to start thinking differently about what and how we teach about the business of medicine. Let’s start taking more seriously some of the excellent curricula that the ACR or other physician societies offer and create mandatory externships to learn more about healthcare administration. Or maybe, just like informatics or MSK, all specialties should have fellowships dedicated to hospital administration. Now is the time to create easy-to-follow health care administrative pathways for our residents. It’s more than just creating another silly specialty pathway; it’s the future and viability of the entire healthcare system at stake!