Every Physician Needs To Know About Employment Lite

A similar article, Physician employment 2.0: Unveiling the secret world of employment lite from me can be found on KevinMD here.

As a physician, you’ve dedicated years to your medical training, honing your skills and expertise. But what if there’s a way to leverage that knowledge beyond traditional employment? Enter employment lite, a progressive employment model that offers an alternative to full integration. In this blog post, I want to explore and expose you to what employment lite is, its benefits, and how it can empower physicians like you to take control of your professional life.

What Is Employment Lite?

Employment lite is a hybrid employment model that mirrors most of the components of traditional employment but without full integration. While full employment represents the maximum alignment between hospitals and physicians, employment lite signifies a high level of physician-hospital alignment that falls just short of full employment. It is formalized by a professional services agreement (PSA) that is specific to this arrangement. It is considered a business to business contract in contrast to traditional employment which is considered an individual to business contract.

Under a PSA, a physician organized as a micro-corporation remains independently self-employed (i.e., not employed by the hospital) and provides professional services in the hospital or at a hospital clinic. This structure allows for many of the same benefits and elements of employment, while the physician remains an independent contractor rather than an employee. Corporate citizenship and organizational governance can be built into the PSA, allowing the doctor to function in nearly the same manner as fully employed peers.

This can be organized as a short-term contracting relationship, commonly known as locum tenens, or it can be organized as a long term independent contracting relationship called employment lite. Both job structures use PSA agreements.

Since you are doing your work as a self-employed independent contractor, you will be responsible to source your own benefit plan, including malpractice insurance. Although this may be daunting, it is actually an opportunity to personalize your fringe benefits to only those you need, incorporate fringe benefits into your business expenses—which can reduce your taxes, and it can powerfully accelerate your tax advantaged retirement savings. Check out my blog post The Self-Employment Advantage: Personalized Benefits to learn more.

The Hidden Menu

I was recently working with an OB/GYN who was contemplating changing jobs and signing with a new employer. After speaking to him and sharing about the employment lite option, we wondered why no one had ever explained this option—especially the hospital. As I explained to him, contracts are all about control and the maximum control over you is going to found in a traditional employment contract. Thus this is the default contract you will be presented. But just like when I go to the Dairy Queen, there is a “hidden menu” that you don’t see on the big board. In order to get the PB Parfait with peanut butter sauce rather than hot fudge, you have to ask for it.

The same goes for an employment lite contract. Nearly every employer has these available—because they use them for locums. But for you to use it in as a long term independent contractor, you have to ask for it.

After I coached the OB/GYN on this, he reached to the C-Suite about this, and boom—the offered up an employment life option for him. He was both elated that I could help him do this, but he was also dumbfounded that no had ever told him about this “hidden option”.

Now that you know about this option, I invite you to check into with your next contract. It is a whole lot better for you than traditional employment. Let me explain why.

Benefits of Employment Lite for Doctors

1. Enhanced Autonomy: Employment lite allows you to maintain control over your professional life through your own professional micro-business. You can shape your practice and make decisions that align with your values and goals.

2. Tax Advantages: By operating through a small business structure, you can reduce your taxes by as much as half. Employment lite provides a framework for maximizing tax benefits while maintaining flexibility.

3. Diversified Income: Stacking primary and side jobs as an independent contractor, diversifies your professional income channels. This approach allows you to create a lifestyle that suits your preferences.

4. Location Independence: Employment lite enables you to work remotely, giving you the freedom to choose where you practice. Whether you prefer a bustling city or a quiet rural area, you have more flexibility.

5. Customized Benefits: Personalize your fringe benefit plan to maximize benefits for you and your household. Take advantage of retirement savings opportunities for small business owners.

6. Retire Early: Employment lite allows you to retire early without sacrificing the comforts you’ve worked hard for. Achieve financial freedom while maintaining a fulfilling professional life. By the way, reaching financial independence does mean that you have to stop working as I explain in my post From FIRE to ICE: Balancing Retirement Dreams with Meaningful Work

My Personal Journey with Employment Lite

As a physician, I faced burnout and loss of autonomy in traditional clinical practice. I discovered the power of forming my own micro-corporation and using an employment lite contract. This shift allowed me to regain control over my professional future and create a sustainable, fulfilling career. You can read the long version of my story in my best-selling book here: “Doctor Incorporated: Stop The Insanity of Traditional Employment and Preserve Your Professional Autonomy”

To learn more about employment lite, explore the products and resources available on SimpliMD, a physician-led business community. Whether you’re considering teaching, writing, consulting, or other non-clinical paths, employment lite can be a game-changer for your career.

Remember, you are not alone in seeking a better way to practice medicine. Employment lite offers hope and a path toward a more balanced, rewarding professional life. Start your self-employment journey today!

Key Products Available on SimpliMD:

1. Doctor, You Are A Business Course: A comprehensive guide to help you navigate the intricacies of establishing and managing your micro-corporations. This will be available at the end of spring.

2. Business Coaching Services: Tailored coaching sessions to provide personalized guidance on micro-business competency, ensuring you thrive in both your healing and entrepreneurial roles.

3. SimpliMD Community Membership: Join our vibrant community of like-minded physicians, fostering collaboration, networking, and shared insights. Our goal is to unite 10,000 physicians under the SimpliMD banner, creating a powerful support system.

Personal Reflections

Let me wrap up by sharing some transparent thoughts from my own journey, I found solace and fulfillment in embracing the micro-corporation model. My employment lite contract allowed me the freedom to shape my professional destiny while maintaining the security and benefits of traditional employment. The paradigm shift not only redefined my career but also ignited a passion for guiding fellow physicians on a similar path.

As the healthcare landscape continues to evolve, many of you are embracing new models that empower you as both healers and entrepreneurs. "Employment Lite" and self-employment through micro-corporations stand at the forefront of this revolution, and SimpliMD is here to guide you through this transformative journey. Join me in redefining the future of medical practice, where empowerment and autonomy are the cornerstones of professional fulfillment.