My experience buying out a retiring podiatrist straight out of residency

[deleted1138023]

OP's last post was a couple months ago on this site advising someone not to choose podiatry because of the poor ROI

lmao, Welp…

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[GreenGreen]

Yes, yes. I'm alive. Sorry to necro the thread but I've been trying to catch up on the abpm drama and stopped by to drop a note.

Practice is going well. I'm only working about 30 to 35 clinic hours a week (including wound care) with only about 2 hours of ancillary office work weekly. 2 to 5 surgeries a month average. I take two full weeks off a year. I don't want more work.

I started working at a wound care clinic on Tuesdays a few months ago. I also have a satellite location I work out of twice a month on Fridays due to no nearby podiatrist. The satellite clinic was a mistake and is a real nail jail. Will drop this to one Friday a month starting September.

I didn't mean to just drop off. But it was wild and intense. Last year gross was 455k, this year is on track for 600k. I'm not even on UHC STILL.

I treated myself by buying a tesla. My teenager got the old clunker that I had been using since 2009. Love the Tesla model 3.

I've done it all now at one point. Did my own bookeeping and accounting for a year (awful and painful), had a marketing agency for 1st year then learned how to do SEO and website building myself. Learned good guerrilla marketing strategies and implemented them. Learned how to work Athena emr from the ground up and structure everything right. Learned tax code. Learned my accountant I hired to do my taxes is terrible and had to get a different one. Learned prior auths, coding, billing (knew lots of this but now have it down pat). Learned how manage time in clinic, how to fire patients. Fired my first employee last month. Learned how to make sure everything was HIPPA compliant from privacy screens to email... plus so many things.

So yes, its been a wonderful pain in the neck. I just took out a 1.25 million term life insurance policy and am now starting estate planning in earnest.

Financial goal this year is to pay down student loans to 150k.

If all goes according to plan, I'll be able to continue this for the foreseeable future. I'm working on picking up a wound care consulting gig too - crossing fingers as this could be a great deal.

Feel free to PM. I feel like I just posted the initial thread I hadn't realized how time just flew by so fast!!

OH. To clarify something, since many thought it a humorous juxtaposition: I don't think podiatry is a good ROI for most. I'm doing well, but I know plenty of other recent grads struggling to make 100 or 150k because of terrible situations or contracts. For full transparency, I recently have started to advise interested premed students to avoid going into podiatry for the simple fact that it's far too saturated. This may seem contradictory but this thread was made to encourage residents and new grads but not to recruit students. Hopefully that puts the confusion to rest.

 

[Feli]

100% on basically everything said above. Big congrats. ^^

The math is good (actually low end, but that depends on payers). It does take almost your full attention for awhile. I am doing shopping and fine-tuning emr probably half of Saturday today. It's 6.5 or 7 days/wk for the first month until the basic physical office and system is adequate. I still do ~6d/wk over 2 months open, but ive done 5 or less a couple weeks. Most MDs or other pods tell me same... much work early, but enjoyable and totally worth it later.

2nd location is almost always a mistake (driving/staff/logistics) unless there is an associate/partner or its so saturated you can't get busy enough at single location. Sometimes, especially in/near metros, it's saturated and you need to "go where the action is" to have a full day of pts. That's actually rarer than most owners think, though. It's a lot easier to send a sad sack associate to a satellite location or to do a couple hospital consults than to go yourself.

Don't overshoot the mark. When you've basically won the game, despite the saturation of DPMs, it is a personal choice to expand, hire associates, etc. It's not necessary. I do not know one classmate, co-resident, etc who did solo and failed. Some thrive more than others, but it's a good way to go. You can easily pay down loans, fund or replace retirement accounts, etc.

Good biller and accountant and attorney and adequate scheduling/emr are key. I did fairly sloppy record keeping early (folders and emal folders of receipts), but you pay for it later. QuickBooks online or whatever the accountant/CFP advises is pretty easy to keep up.

...One thing that's also helpful to residents and ppl looking to do this (start up or buy out retiring DPM) is to show numbers of how much was needed to have saved/buffer. It's not as much as one thinks. I know this thread said 215k for buyout on pg1, but that's not all at once. For me or some of the startup ppl on SDN and everywhere, it was much less, but we were usually slower early, had to market more, or were underpaid in the area making a name/rep prior to opening, or all of those. I can give rough figures next tax time or whatever, but bottom line it's just not as much as ppl think. I would likely have gone solo years earlier if I knew that. I had planned on 150k +LOC - yet I needed less than half that before profitable, but it's always good to have buffer.

 

[Redsting]

@GreenGreen @Feli

What % is your overhead? I'm in a hospital so I can't compare. I've been told podiatry should be around 50%. I have a couple friends who are at 60 and 65% which sounds terrible. I know dentists that are around 70%+

 

[Feli]

@GreenGreen @Feli

What % is your overhead? I'm in a hospital so I can't compare. I've been told podiatry should be around 50%. I have a couple friends who are at 60 and 65% which sounds terrible. I know dentists that are around 70%+

I'm in a hospital also (renter).
I think you eaaasily get back the higher rent via visibility and having to spend less on marketing, but that's jmo. I also do a fair amount of surgery, so it just saves me time to be there.

My overhead $/mo is basically known (although I did add a 2nd employee after a few weeks... when I'd predicted maybe 3-6mo, lol), but the % is not able to be quantified since I'm only a few months in. Volume of pts and esp collections are growing. There still a couple plans I'm taking zeros, but they are tiny minority of pts.

The main reason I can't say what overhead % is that there were a lot of basically one-time purchases like computers, furniture, autoclave, instruments, ultrasound probe, etc etc that make it hard to get ahold of the % overhead right now. Some of those are fairly heavy hitters. Also, I bought a decent amount of consumables... eg: I would buy 2k in CAM boots or 1k in insoles or 1k in braces or 1k in injectables or whatever, but then that $ comes back and I don't really buy that stuff again unless I've sold (and profited) on prior buys. I can send rough end of year or tax time figures.

I will say that my monthly overhead with 1 small office + 2 employees is ~12k from what I calc. For the very first month (didn't even have a 2nd employee, so maybe overhead was $9k?... but I paid rent a few weeks prior to opening also). Regardless, I brought in about that ~12k in the first month open... and that's even though the first week or two of being open was basically zero insurance payments - just a few copays and OTC sales - due to the lag from treatments to getting paid. My situation is a bit oddball with mostly insurances that pay fast and well, though.

The overhead, for me, in rough order of weight, is basically:
staff (I overpay them, but then you get the best and they are happy and engaged) +
biller fee (should drop as per hour credentialing tapers) +
rent +
EMR +
malprac +
medical supplies +
web/marketing (this should drop later) +
payment processing POS fees +
insurance other (gen liab, work comp, etc) +
office supplies +
phone/internet/emails +
consult services (attorney/accountant/tech/etc) +
subscriptions (quickBooks, coding apma, payroll svc, etc etc)
cleaning svc +
answer svc +
charity contributions +
etc etc etc

I'm prob also a bit different than most as I have a high-earner partner and have more room for not pinching pennies to max my net income, but it works well. If I had to guess, I'd say my overhead is ~50%, but that's a total guess... and maybe I'd be at 60% if the payers were more national avg? I can report back in 9mo or so. once I'm maxed on volume (I seen ~12/day now, growing as new staff catches on, will prob max out ~20/day) and when I can do more accounting. I have to do the calcs around year end since my employees each get 1% net profits as an annual bonus and I'll have to prep for taxes; I also give them each 2% of OTC sales monthly to make them feel like they have input and are a real part of the office. That's a cool thing about putting them on salary; you have to pay them a bit more and have to avoid hiring slackers... but you can give incentive bonuses also.

 

[GreenGreen]

I'm in a hospital also (renter).
I think you eaaasily get back the higher rent via visibility and having to spend less on marketing, but that's jmo. I also do a fair amount of surgery, so it just saves me time to be there.

My overhead $/mo is basically known (although I did add a 2nd employee after a few weeks... when I'd predicted maybe 3-6mo, lol), but the % is not able to be quantified since I'm only a few months in. Volume of pts and esp collections are growing. There still a couple plans I'm taking zeros, but they are tiny minority of pts.

The main reason I can't say what overhead % is that there were a lot of basically one-time purchases like computers, furniture, autoclave, instruments, ultrasound probe, etc etc that make it hard to get ahold of the % overhead right now. Some of those are fairly heavy hitters. Also, I bought a decent amount of consumables... eg: I would buy 2k in CAM boots or 1k in insoles or 1k in braces or 1k in injectables or whatever, but then that $ comes back and I don't really buy that stuff again unless I've sold (and profited) on prior buys. I can send rough end of year or tax time figures.

I will say that my monthly overhead with 1 small office + 2 employees is ~12k from what I calc. For the very first month (didn't even have a 2nd employee, so maybe overhead was $9k?... but I paid rent a few weeks prior to opening also). Regardless, I brought in about that ~12k in the first month open... and that's even though the first week or two of being open was basically zero insurance payments - just a few copays and OTC sales - due to the lag from treatments to getting paid. My situation is a bit oddball with mostly insurances that pay fast and well, though.

The overhead, for me, in rough order of weight, is basically:
staff (I overpay them, but then you get the best and they are happy and engaged) +
biller fee (should drop as per hour credentialing tapers) +
rent +
EMR +
malprac +
medical supplies +
web/marketing (this should drop later) +
payment processing POS fees +
insurance other (gen liab, work comp, etc) +
office supplies +
phone/internet/emails +
consult services (attorney/accountant/tech/etc) +
subscriptions (quickBooks, coding apma, payroll svc, etc etc)
cleaning svc +
answer svc +
charity contributions +
etc etc etc

I'm prob also a bit different than most as I have a high-earner partner and have more room for not pinching pennies to max my net income, but it works well. If I had to guess, I'd say my overhead is ~50%, but that's a total guess... and maybe I'd be at 60% if the payers were more national avg? I can report back in 9mo or so. once I'm maxed on volume (I seen ~12/day now, growing as new staff catches on, will prob max out ~20/day) and when I can do more accounting. I have to do the calcs around year end since my employees each get 1% net profits as an annual bonus and I'll have to prep for taxes; I also give them each 2% of OTC sales monthly to make them feel like they have input and are a real part of the office. That's a cool thing about putting them on salary; you have to pay them a bit more and have to avoid hiring slackers... but you can give incentive bonuses also.

Nice. I'm a big believer in incentives. We have bonus system too. Also throw nice dinner party's each company year aniversary and Christmas. Everyone I talk to complains of employees but other than one mistake by my manager which lasted 1 week... my employees have all been solid gold. Can't say enough about them.

 

[GreenGreen]

@GreenGreen @Feli

What % is your overhead? I'm in a hospital so I can't compare. I've been told podiatry should be around 50%. I have a couple friends who are at 60 and 65% which sounds terrible. I know dentists that are around 70%+

My overhead is about 50%. But that's with loan and equipment payments. When that's done with it will be closer to 45 percent.

 

[Feli]

Nice. I'm a big believer in incentives. We have bonus system too. Also throw nice dinner party's each company year aniversary and Christmas. Everyone I talk to complains of employees but other than one mistake by my manager which lasted 1 week... my employees have all been solid gold. Can't say enough about them.

Good for you. Did you end up keeping most of the employees from prior owner, or just use them as a bridge to your own crew?

 

[bloxxeeey]

I have to do the calcs around year end since my employees each get 1% net profits as an annual bonus and I'll have to prep for taxes; I also give them each 2% of OTC sales monthly to make them feel like they have input and are a real part of the office. That's a cool thing about putting them on salary; you have to pay them a bit more and have to avoid hiring slackers... but you can give incentive bonuses also.

You're office staff has better bonus structures than most podiatry graduates

 

[GreenGreen]

Good for you. Did you end up keeping most of the employees from prior owner, or just use them as a bridge to your own crew?

The manager retired same day as doc and other employee didn't show up for work about 2 months in due to physical disabilities. Fun stuff.

It was complete hell until I found someone who ultimately became my manager and is fabulous. Since the initial upheaval I've had nothing but Rock star employees, but I also target hire those who are looking to go into nursing, med school, or PA programs so they are also invested in making sure they have a good reference source. Also, they don't care about benefits because they are usually on the parents insurance plan. There are two employees other than my manager who need to be replaced every 8 to 12 months or so but they are usually quick to learn and enjoy themselves. Definitely underrated sources of employees if you can handle high turnaround.

 

[DYK343]

I also target hire those who are looking to go into nursing, med school, or PA programs so they are also invested in making sure they have a good reference source.

Wise. Though probably not easy to find?

 

[heybrother]

Wise. Though probably not easy to find?

This is likely location dependent though I think you'd be surprised by how common nursing schools are.

 

[Redsting]

I have to do the calcs around year end since my employees each get 1% net profits as an annual bonus and I'll have to prep for taxes; I also give them each 2% of OTC sales monthly to make them feel like they have input and are a real part of the office. That's a cool thing about putting them on salary; you have to pay them a bit more and have to avoid hiring slackers... but you can give incentive bonuses also.

Thanks great. I wondered if people did that. I wanted to do 1% if I had my own office.
Even though I am hospital, I try and make the staff I work with feel engaged and apricated. They work for $/hour. What is there to make them want to squeeze two more in that day? They get paid the same regardless. So based off my wRVUs I will bonus them. I work with other docs and they have had a lot of turnover. I have had one leave for school. They take more on themselves than other staff do, not cause I asked either... Some of it is the people and some of it that they feel an ownership in the practice.
I had one office I rotated through were a staff member did so much, and found a place with CAM boots for like $2 cheaper, and something else for $0.50 cheaper and kept looking for better suppliers. She made a comment today about how much money they made/saved off her going even more above what she did and her paycheck stayed the same. I decided then that I would try and get staff to feel like they have input and ownership. Plus having people that stick around is invaluable. I would rather give up a little money every year but not have to train people constantly.

 

[HardRoadPaved]

I think the crazy part is disclosing the "net profits" to the employees. Getting a mustache pod to do that would require versed and/or waterboarding.

 

[DYK343]

Thanks great. I wondered if people did that. I wanted to do 1% if I had my own office.
Even though I am hospital, I try and make the staff I work with feel engaged and apricated. They work for $/hour. What is there to make them want to squeeze two more in that day? They get paid the same regardless. So based off my wRVUs I will bonus them. I work with other docs and they have had a lot of turnover. I have had one leave for school. They take more on themselves than other staff do, not cause I asked either... Some of it is the people and some of it that they feel an ownership in the practice.
I had one office I rotated through were a staff member did so much, and found a place with CAM boots for like $2 cheaper, and something else for $0.50 cheaper and kept looking for better suppliers. She made a comment today about how much money they made/saved off her going even more above what she did and her paycheck stayed the same. I decided then that I would try and get staff to feel like they have input and ownership. Plus having people that stick around is invaluable. I would rather give up a little money every year but not have to train people constantly.

I used to bonus my MAs too in my last MSG.
I had awesome support staff.
I plan to do it in my new job too

 

[Feli]

...Even though I am hospital, I try and make the staff I work with feel engaged and appreciated. They work for $/hour. What is there to make them want to squeeze two more in that day? ...
...I decided then that I would try and get staff to feel like they have input and ownership. Plus having people that stick around is invaluable. I would rather give up a little money every year but not have to train people constantly.

Precisely.

Anything you can do to make them feel valued is good.
I do candy, cash, scratcher lottery tix, make reservations for a nice holiday meal, holiday gift, birthdays on the calendar and birthday gift, buy them tennis shoes, take them out to lunch, buy coffee, etc. The more they enhance your productivity and job quality, the more they should get.

At that pay level, it's mostly all about $ for 95% of them, but it helps to make them feel engaged also. I schedule meetings for them to be heard a bit, task them with running notes to PCPs, dedicate time to showing them new skills, etc. I always did this stuff when I was associate/employee also, but as owner, the gifts/bonuses are tax deductible as owner and it just seems 10x more effective when you are the one signing their checks. I also just have much better ppl now, who will likely stay longer (or somebody will be very happy to take their spot). That is a definite strength of solo vs large group: much easier to find 2 or 3 or 4 awesome employees and pay and treat them well versus finding a dozen or more such people and doing events for staff in larger groups, supergroups, MSG, hospitals, etc.

...One thing I'd say is do NOT give any more than the minimum gifts to the bad and mediocre employees (buy them lunch if you buy all, token holiday gift because you gave holiday cards to all, etc). If you're owner, the bad ones are also known as "gone," but as an employee, you can't decide that. All you can do is tell the owner or whoever is in charge that they're not adding value or they're not dependable. The owner or senior doc might be oblivious to this as they get all of the best MAs. The ones who miss many days, show up late, do the minimum, aren't engaged at the job, aren't friendly to pts might still stay around awhile... and they won't improve (I've tried). As an employee, you do not want to encourage the slugs to stick around. Have no qualms about giving all of your staff "Thank you" cards, but having the contents of the cards drastically different.

 

[air bud]

Precisely.

Anything you can do to make them feel valued is good.
I do candy, cash, scratcher lottery tix, nice holiday meal, holiday gift, birthdays on the calendar and birthday gift, buy them tennis shoes, take them out to lunch, buy coffee, etc. The more they enhance your productivity and job quality, the more they should get.

At that pay level, it's mostly all about $ for 95% of them, but it helps to make them feel engaged also. I schedule meetings for them to be heard a bit, task them with running notes to PCPs, dedicate time to showing them new skills, etc. I always did this stuff when I was associate/employee also, but as owner, the gifts/bonuses are tax deductible and it just seems 10x more effective when you are signing their checks (and I also just have much better ppl now, who will likely stay longer).

...One thing I'd say is do NOT give any more than the minimum gifts to the bad and mediocre employees (buy them lunch if you buy all, token holiday gift because you gave holiday cards to all, etc). If you're owner, the bad ones are also known as "gone," but as an employee, you can't decide that. All you can do is tell the owner or whoever is in charge that they're not adding value or they're not dependable. The owner or senior doc might be oblivious to this as they get all of the best MAs. The ones who miss many days, show up late, do the minimum, aren't engaged at the job, aren't friendly to pts might still stay around awhile... and they won't improve (I've tried). As an employee, you do not want to encourage the slugs to stick around. Have no qualms about giving all of your staff "Thank you" cards, but having the contents of the cards drastically different.

Bye Felicia

 

[GreenGreen]

I believe this will be the final follow-up.

There's little more to add. Once again, my aim was to share my experiences along this journey, offering others a glimpse into what it's like. This isn't about showing off; it's an attempt to provide insights.

I'm going to hit my financial goals this year for the first time. Things are better and outlook continues to improve.

According to White Coat Investor, the average physician's salary sits around 300k gross annually. By the time I receive my end-of-year bonus, I should be close to that mark, all while working 30 hours a week. This encompasses clinic time, charting, surgery, coding, and billing. I’ve attached my paystub for today.

Podiatry in private practice is viable if you develop the skills and make the needed adjustments to make it so.

Wishing the best of luck to those striving toward their goals. Finishing residency can serve as a springboard to an ideal future. I hope you achieve that and even more. Feel free to PM me if you want to chat.

 

[Feli]

Congrats, man... doing well and growing.

I will try to post my figures in the future around tax time also (won't be a full year for 2023 with spring startup... 2024 numbers probably more representative for me).

It is definitely doable... running a PP or solo PP and doing well. Good work.

 

[GreenHousePub]

I believe this will be the final follow-up.

There's little more to add. Once again, my aim was to share my experiences along this journey, offering others a glimpse into what it's like. This isn't about showing off; it's an attempt to provide insights.

I'm going to hit my financial goals this year for the first time. Things are better and outlook continues to improve.

According to White Coat Investor, the average physician's salary sits around 300k gross annually. By the time I receive my end-of-year bonus, I should be close to that mark, all while working 30 hours a week. This encompasses clinic time, charting, surgery, coding, and billing. I’ve attached my paystub for today.

Podiatry in private practice is viable if you develop the skills and make the needed adjustments to make it so.

Wishing the best of luck to those striving toward their goals. Finishing residency can serve as a springboard to an ideal future. I hope you achieve that and even more. Feel free to PM me if you want to chat.

USAA....good company.

Congrats!

 

[billBOB213]

Congrats and thank you for posting your experience, this is great info