Unleashing Your Business Power as a Rural Doctor

Definition of Rural Doctor

To begin this blog post, I want to define what is considered a "rural doctor" in today’s medical marketplace. Over 30 years ago, I completed my family medicine training with the goal of becoming a full-spectrum rural family doctor, and I have fulfilled that mission over the past three decades.

With an evolving world, I have come to realize there are many ways to view the term "rural doctor," including the common method of considering the community's size. Does rural mean 5,000 people, 25,000, 100,000, or something else? Like many things in life, it depends on your perspective. For example, when I grew up in a town of 2,500 people, the county seat town where I currently practice was considered the "city" due to its commercial centrality and population of 10,000-15,000. Then there was the "big city" 30-45 minutes away, with 85,000 people and a mall with many entertainment options. In this context, which one is rural?

Young Doctor’s Views

Merely 1% of final-year medical students expressed a desire to work in communities with populations under 10,000, and only 2% were interested in towns with fewer than 25,000 residents.

The inclination of graduating medical residents to practice in smaller communities is notably limited as well. According to a 2023 survey by AMN Healthcare, only 4% of final-year medical residents expressed a preference for practicing in communities with populations of 25,000 or fewer, while 79% favored communities with populations of 100,000 or more.

The perspectives of these younger doctors highlight an important reality: practicing in rural areas can indeed be more challenging and isolating. Their professional outlook suggests a preference for a lifestyle that thrives in communities with populations exceeding 100,000, reflecting a desire for the support and opportunities such environments offer.

It's concerning to think about how this might impact rural communities over the next 30 years!

To ensure clarity in this post, I will provide a summary of the definition of a rural doctor from the viewpoints of various stakeholders. This topic has captured my interest significantly, and I intend to explore it further in a comprehensive blog post later this winter. For now, here is the summarized overview.

Summary of Stakeholder Definitions of Rural Doctor

• Federal-State Governments: A rural doctor is a healthcare provider serving populations in federally designated non-urbanized areas with limited access to care, often supported by rural health programs and incentives.

• Hospital: A medical provider crucial to sustaining access to care and services in underserved, low-population communities, often serving as a linchpin for hospital viability.

• Physician: A versatile healthcare professional who delivers comprehensive care across a broad skill set, often with limited specialist support, while balancing autonomy and professional responsibilities.

• Patient: A trusted, locally accessible provider who meets healthcare needs in areas with limited options and often acts as a primary or sole medical resource for the community.

If you are a rural doctor, you possess unique marketplace powers that you may not even realize. Today, I want to illuminate this power for you.

Many rural physicians begin their careers in employed positions after training, often lured by the financial benefits of a 3–5-year contract that pays fair market value (FMV) compensation and eliminates educational debt. It’s a great deal to start with: you’re paid well, debt-free, and have several years to refine how you want to practice medicine in your ideal setting.

However, there’s a significant hidden benefit during this period that most doctors overlook: the loyal following you build among your patients. In just a few years, your primary care patient panel can grow to include 2,000–4,000 individuals. This loyal patient base represents more than just meaningful relationships; it represents market share.

Combine this with the growing physician shortage, and you see how this trend contributes to the persistent lack of healthcare providers in rural areas, where access to medical services is already limited. The Association of American Medical Colleges (AAMC) projects a nationwide physician shortfall ranging from 37,800 to 124,000 by 2034, with rural regions expected to be disproportionately affected. Additionally, recruitment challenges for young doctors in rural hospitals highlight the importance of your physical presence as a retention priority for them. The cost of replacing a departing doctor ranges from $250,000 to $1 million, underscoring your business power.

The Hidden Power of Your Patient Panel

Hospitals recognize that you and your loyal patients are the cornerstone of their financial success. When your patient panel flows through their system, it drives financial gains. This is why hospitals go to great lengths to secure you—and your patients—through employment contracts, often including restrictive non-compete clauses to ensure you can’t take your market share elsewhere.

Here’s the good news: due to the physician shortage, many states, including my home state of Indiana, are eliminating non-competes for rural doctors. Additionally, the Federal Trade Commission (FTC) is considering banning them altogether. This shift means you have more freedom to leverage your market power to negotiate terms that benefit you, your patients, and your career.

The Tax Trap of W-2 Employment

Another reality for rural doctors in traditional employment is the tax burden. With generous compensation comes an average tax rate of 30% or more, meaning many physicians pay $85,000 or more annually in taxes. Unfortunately, as a W-2 employee, your options for reducing this tax burden are limited.

This is where your marketplace power becomes transformational because you don’t have to continue work as a W-2 employee. You have options. By transitioning from a W-2 employee to an independent contractor through a professional micro-corporation in an employment lite arrangement, you can unlock significant tax advantages while preserving your professional autonomy. Let me share three real-world examples that illustrate how this works.

My Story: Launching My Professional Micro-Corporation

Over a decade ago, I was an employed family physician with a full-spectrum practice and nearly 5,000 loyal patients after 15 years of service. Despite my extensive responsibilities, which included inpatient care, surgical OB, ER coverage, and a busy outpatient practice, the hospital asked me to take a pay cut because I was “making too much money.” After consulting with some healthcare business experts I realized I was in reality being underpaid, not over-paid! This all compelled me to make professional changes that dramatically changed my life.

I had no non-compete in my contract—which was a powerful asset. This allowed me to negotiate an employment-lite agreement, transitioning to an independent contractor under my newly created professional micro-corporation. This pivotal moment not only preserved my autonomy but also launched my entrepreneurial journey, including writing a best-selling book “Doctor Incorporated” and founding SimpliMD to help other doctors recognize their marketplace power.

Dr. AW: Overcoming a Non-Compete Clause

Dr. AW completed a 5-year rural FM-OB contract that paid off his educational debt. A SimpliMD subscriber, he knew about employment-lite agreements and approached his hospital to convert his position. The hospital declined, and his contract included a 30-mile non-compete clause.

Determined to stay in his community, Dr. AW started a professional micro-corporation under SimpliMD’s guidance and negotiated an employment-lite contract with a competing hospital just outside the 30-mile radius. His loyal patients, accustomed to rural travel, followed him. Today, he enjoys professional autonomy, reduced taxes, and greater financial freedom—all thanks to leveraging his marketplace power.

The Physician Couple: Doubling Down on Tax Savings

A married primary care physician couple, two of only four doctors in their rural hospital, reached out to me for a business consultation after reading my book and hearing a podcast about me. After nearly a decade of employment, their student loans were resolved, but their combined annual tax burden exceeded $200,000.

With coaching and guidance, they created a professional micro-corporation and transitioned to an employment-lite agreement. Their hospital, recognizing their critical role in the system, readily agreed to the new arrangement that transitioned them out of W-2 employment. By retaining their trusted providers, the hospital kept its market share, while the couple gained significant tax savings, autonomy, and enhanced wealth-building opportunities through their new 1099 income.

The Win-Win-Win Solution

In all three cases, transitioning to an employment-lite contract created a win-win-win situation.

• For the Doctors: They preserved their autonomy, reduced taxes, and unlocked wealth-building opportunities.

• For the Hospitals: They retained critical providers and maintained market share.

• For the Patients: They continued to receive care from trusted physicians.

This model works because it leverages the unique power of rural physicians: your loyal patient base, geographic significance, and the necessity for creative solutions during a nationwide physician shortage.

Your Marketplace Power and Next Steps

As a rural doctor, you have extraordinary marketplace power. Recognizing and harnessing this power allows you to:

1. Build a professional micro-corporation to transition to employment-lite contracts.

2. Leverage your loyal patient panel as a bargaining tool.

3. Utilize geographic arbitrage to negotiate favorable terms.

4. Reduce your tax burden and increase your wealth-building options.

Take Action Today

Are you ready to harness your marketplace power and take control of your professional future? SimpliMD is here to help.

• Sign up for a personalized micro-business consult for only $99. This one-time session includes a one-year SimpliMD membership, giving you access to $2,500 worth of business products designed specifically for doctors.

• Join my micro-business coaching program, where I meet with you quarterly to provide holistic business coaching tailored to your unique goals and challenges. Take the step to invest in yourself with this is a tax deductible business expense, and today only I am offering this at half price. Follow this link an save $1000!! Don’t miss out on this awesome deal!

Your journey to professional autonomy and financial empowerment starts today.