The Ups and Downs of the 1099 Life.

Living la vida locum (tenens)

If you haven’t read much of my blog yet, in 2017 my wife and I had a daughter whom we took home on hospice after she was born unable to breathe or eat without mechanical assistance.  My partners and the health system that employed me were not particularly supportive of me carving out time to process and heal.

To create more space to heal, I ended up moving to my current gig as an itinerant critical access doctor.    I fill in when small, rural hospitals are short for 12-120 hours of continuous call coverage, depending on average volumes of the facilities.

Technically, I am a short-term locum tenens doctor or maybe more like a full-time moonlighter.  It also means that I am now 1099 independent contractor.

Either way, I have experienced some ups and downs with this lifestyle over the last 6 months.  I wanted to explore some of these, with a bent towards the financial.

positives of 1099 locums work
  1. I have complete veto power over my schedule. I can’t create work where work doesn’t exist.  However, if I don’t want to work somewhere or at a given time, I just don’t.  Back in June, I realized that if I wanted make faster progress on my loans, I would to work a bit more.  I didn’t have to find a moonlighting gig or start a side hustle, I just signed up for more shifts.
  2. The hourly wage is generally higher for the workload.  I was making more money in my previous job, but I was working my ass off in the process.  Per patient seen, I get paid much better now.
  3. I only take care of patients. No inbox coverage, no prior authorizations, no utilization reviews, no meetings, just pure patient care.
  4. Variety of work environments.  If I get tired of working somewhere or need a break from a given site’s particular brand of dysfunction, I just don’t schedule any work there for a month or two. Think of it as a burnout release valve.
  5. I work fewer calendar days.  I really only work 10-12 days/month.  Conversely, they are 24 hour days.
  6. I am now a business.  I get to deduct all sorts of things from my taxes.  Because my wife and I won’t make >$315,000, that includes the 199a 20% of qualified business income deduction.  So, w00t.
negatives of 1099 locums work
  1. My income is not guaranteed.  So far, I am still having to turn down work.  Rural America has more work than there are people to do it.  However, the possibility exists that it will just suddenly dry up.
  2. I get no benefits.  I carry my own disability insurance, life insurance, and have to fund my own SEP-IRA.  No 401k match for me.  Luckily, my wife likes having a regular job so health insurance comes through her job. But that is another big question mark.
  3. Limited opportunities for collegiality, unable to participate in system improvement. I have to just deal with whatever system is in place where I go.  The only bad feedback I have received was when I dared to have an opinion on a facility’s processes.
  4. I can’t build a team/workflow.  Because I am just a place-holder, opportunities to integrate and develop a team are limited.
  5. I work nights, travel, and am on call for long periods of time in a row.  It can be lonely and my wife doesn’t love it, but being around me is way more pleasant now, so I think it is a wash for her.  Also, no vacation time.
  6. I am now a business.  I have to keep  record all my expenses and track my income more closely.  My taxes got a lot more complicated and I suddenly care about tax policy in a way that I didn’t have to before.
the upshot: working as a 1099 isn’t that different from production-based reimbursement

In my first job out of residency, my contract would have eventually paid me 100% on production.  This an “eat what you kill” model for reimbursement.  Certainly not all compensation models are 100% production, but it is hardly rare.

Now that I have been an independent contractor and been a production-based employee, I don’t my financial stressors to be that different.

Before, I was basically a doctor paid on commission. The organization ONLY paid me to provide patient care. I had to track my RVUs closely, which are way more complicated to track than how many hours I work.

On the other hand, when I was employee, I constantly heard about the financial health of the organization and the organization expected me to give a shit.

The way the organization designed the system, the only power I had to help them financially was to see more patients.  I didn’t have the power to hire or fire staff, invest in training programs for staff, recruit new staff, or even choose to spend a half-day on system improvement.

Now, as a 1099, I pay a little more attention to my finances and workloads, but all of it directly affects me and I have complete control over it.

Hospitals only pay me to provide patient care and my responsibilities end there.  No one tries to sneak more duties onto my plate without carving out time or adding compensation.  Finally, an honest relationship between a physician and a healthcare institution.

honesty is a good policy

In the end, this is my favorite thing about locum tenens work.  The relationship between the physician and the institution is as honest as it gets. Seeing patients is the only way physicians produce income.  So, in an accountant’s mindset, that is the only time worth compensating us for.  It is immaterial that we could be adding value to the system in a myriad of ways.

Locum tenens work is the only situation I have found (at least for a family doc) where I get to work so honestly. I show up from X hour to X hour and receive Y in compensation, I take care of whatever patient care needs arise during that time as best as I am able and everyone leaves happy afterwards.

Honesty and transparency are worth a great deal in Medicine.  They are becoming harder and harder to come by (have you ever read a healthcare bill?).  If this is the only way to find a little of both and still practice medicine, life could be worse.

4 thoughts on “The Ups and Downs of the 1099 Life.”

  1. I went completely 1099 several years ago. You have done a nice job of listing the “pros and cons”.

    For me, the single largest factor was the ability to say “no”….”NO”….”HELL NO”. For most of my 30 plus year career I worked when they told me I *had* to work. No choice, no negotiation, no extra pay.

    Now, I am *asked* to work. Sometimes I say yes, sometimes I say no. Many times after being asked to work, and I decline, a better offer is tossed my way.

    Somehow, being able to say “nope, no thanks” makes the times when you do say “yes” much easier to do.

    1. You are totally correct. Saying yes without a sense of obligation totally changes the work. Everything becomes voluntary. If I don’t say yes, I don’t work. There is no assumed schedule. That makes every shift I work an active choice, which has totally changed the relationship.

  2. I can’t imagine how tough it must have been for you guys to deal with that event emotionally. Thank you for sharing it.

    The SEP IRA idea isn’t too bad but if you’re interested, you would be able to set aside far more and even offer “employer” matching through a solo 401k. I opened mine through vanguard and rather happy with it.

    If you still have more room then a cash balance plan might make sense, too.

    1. Thanks for reading. I have been funding a SEP-IRA since starting this gig. I too have one through Vanguard and am satisfied as well. Right now I am prioritizing my loans and so I don’t hit the maximum, but it will be a pretty good deal once I can do that.

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