It is common knowledge that the primary cause for business failure during the first year as a Locum Tenens Physician is inadequate back office support. Although fear for lack of income stability is the most important reason for hesitance in making the Big Step to independence, most Locum Tenens know how to generate income once they are in business for themselves. Estimates of what percentage of Locums and freelancers in general fail as a result of insufficient support and lack of controls range from 25 – 50%. Whatever the exact number is, it is unnecessarily high.

Not knowing the unknown

When contemplating a future as a Locum Tenens, often physicians don’t know where to start in terms of building a support infrastructure, nor what to include. There also seems to be an almost automatic propensity toward self-help, combined with a tendency to postpone action steps when it comes to setting up an operational infrastructure and financial controls. As a consequence, the Locum Tenens ‘business’ is likely to get into uncharted waters soon after start-up, which may result in unpleasant surprises, such as tax claims and unexpected financial and/or legal obligations. Ironically, the more successful the Locum Tenens is, the sooner problems are likely to surface. Early stage confrontations with such hiccups can lead to an abortion of the start-up that could have been avoided. Of course, later stage growth will also stress test the back bone of the mini enterprise. Ergo, it is never too early to ensure that your Locum Tenens practice has an appropriate foundation and has it’s ‘back of the house’ in order.

Key building blocks

1 - IT Infrastructure

An IT infrastructure is a fundamental portion of any business foundation. Getting the right equipment and software – however simple it may be, deserves careful planning and forethought. Consider what the contemplated ‘Front of the House’ and ‘Back of the House’ functions are. The ‘Front of the House’ is obvi-ously externally oriented toward acquiring and maintaining client relationships and could include sales, marketing, CRM,website, etc. The ‘Back of the House’ has support functions ranging from basic office tools to billing and collections, book-keeping, tax support ,time sheet, SOW tracking. A rule of thumb is not to use anything but dedicated hardware and software. In other words, don’t use your home computer. Another rule is making sure that you install data back-up devices and disciplines. Lining up professional support right from the start is important, too, so that you don’t have to scramble when – not if – IT problems arise. Of course, completely hosted environments – ‘cloud’ computing – are available and represent an ideal solution, also for the Locum Tenens. Using Software as a Service (SaaS) and secure - HIPAA compliant - remote storage facilities is convenient (your Personal Virtual Office is always available, from anywhere; all you need is access to a browser) and can prevent quite a few headaches, because you do not have to operate or maintain any hardware or software other than the device you use to access the Internet.

2 - Self Incorporation

Should you incorporate?  LLC or S-Corp?  These are frequently asked questions among independent professionals and Locum Tenens. The answer to the first question is yes. It would be best to establish a legal entity. Reasons are liability protection, tax advantages, business status/legitimacy and keeping personal and business finances separate.

The primary reasons to elect an S-Corp would be related to multiple shareholders and high income. For a Locum Tenens with anticipated billings of less than $250k per year, an LLC is the legal entity of choice. An LLC is simple to establish and provides the same liability protection as an S-Corp.  Further, the LLC can qualify as a ‘disregarded’ entity for income tax purposes, assuming it is appropriately configured. In that case, the net of revenues and business expenses flow directly to the LLC’s owner and should be reported in his or her personal tax return; in other words, no corporate tax returns are filed. Of course, as the owner / operator of an LLC, the Locum Tenens will have to pay self-employment taxes.

Setting up a professionally configured LLC and ensuring proper tax treatment does require expert guidance. In today’s ‘self-help’ environment, many ads suggest that you ‘simply go on line’ and ‘click’ your way to a low cost solution. For something as important as establishing a business, professional legal, tax and accounting guidance is a must.

3 – Financial controls

As a Locum Tenens, very important is - besides establishing the right IT infrastructure - to have a simple set of accounting books. You can’t fly the plane without a dashboard. Quick in-sight into payables, receivables and cash balance plus a basic invoicing system are prerequisites for the health of your business. Also here, simple accounting software is available for ‘do it yourself’ purposes, but you may want to briefly involve an accounting expert to make sure that your chart of accounts has been set up right from day one.  After that, absolute discipline in keeping the financial records up to date should never fade.

4 – Health Plan

Navigating the world of health insurance can be challenging. Not only is this a topic that has been in the socio-political limelight for a long time, it is also a subject that is a source of confusion and misunderstandings.

The first misconception is that ‘group’ plans reduce cost. Although economies of scale may save some administrative costs, joining a group doesn’t make someone healthier or sicker. The group merely averages demographics. In other words, if you are young and healthy you overpay as a group member, whereas older, less healthy members benefit from group membership. Groups may offer advantages for people with ‘pre-existing’ conditions, while on the other hand, the group plan determines what benefits the members get, leaving little personal choice and options.

Fortunately, the market for individually underwritten plans has become a lot more robust over the last several years; more plans are offered by more carriers. There has been a trend toward ‘consumer driven’ product design. ‘High deductable’ arrangements and HSA’s are examples of an orientation toward the individual in product design.

The Locum Tenens Physician in search of health coverage can expect to be confronted by simple market realities; if you are a 26 year old marathon runner, your premiums will be lower than when you are 60 years old and overweight. That is not the system’s fault, but the result of a difference in cost of health care between the two examples.

The best way to navigate the market is:

A) By working with best of class brokers. Compare what independent brokers offer to quotes from agents who represent a carrier;

b) By combining products. For example, a combination of a Defined Benefit Plan and a High Deductable, ‘catastrophic coverage’ layer of insurance may offer what you need.

5 - Retirement Plan

As a business owner, it can be possible to make pre-tax retirement contributions as an employer AND employee. Also here is an example where expert advice should be used to ensure that the plan design is in compliance with the tax code.

Growing your business

When success as a Locum Tenens reaches a point where growth triggers the need for help, it can be advantageous to contract with another self-incorporated independent professional and establish a B2B relationship between the two LLC’s, rather than hiring the person as an employee or 1099.

For more information contact BackoftheHouse.com at 888.226.8499

See Video:  http://goo.gl/cJwPQ

ACO this and ACO that, it seems very confusing.  Yet I know that practicing

physicians are concerned because the ACO  system affects reimbursements, therefore being an

incentive to grasp it in some form.  With all the stirring about ACO's and

the guidelines isuued in March, CMS came out with adaptation on October 20. AMEDnews.com

stated it this way:

After criticism about its March 31 proposed rule, the Centers for Medicare & Medicaid Services

released an Oct. 20 final rule that gives physicians the option to join an ACO without being

exposed to financial penalties if saving targets are not achieved. CMS also softened program

requirements by reducing the number of quality measures physicians must report and removing

a condition that at least 50% of participants must satisfy meaningful use standards for electronic medical records.

A survey of the American Medical Group Association in April revealed the sentiment of most physicians in no

uncertain terms, "93% of respondents said they would not participate unless the proposed rule underwent major revisions". 

The jury is still out as to how the ACO model will play out in practice.  Certainly an efffort has been made

to make it easier on physicians in adjusting to the changes.  The article from AMEDnews.com goes on

to address "6 changes that make ACO's doable for physicians".

A common line you see written when discussing healthcare costs is that we need to use emergency rooms less.  According to an article on www.fiercehealthcare.com  this is not the trend. 

Based on data from the Centers for Disease Control and Prevention,  "visits to the ED jumped 10 percent in one year".

It's a new high of more than 136 million visits in 2009 the data suggest.  So this raises questions as to why the trend is moving north when all the efforts being promoted in heathcare support a decrease in ED volume. The article then shares info with quotes from those speculating as to the cause of the trend. It certainly will get the attention of many healthcare futurists.

It seems that everyone has experienced the frustration of sitting in a waiting room for several hours.  As you are sitting there you are thinking why does it have to be this way?  Why didn't the office call me to delay me from coming so I wouldn't have missed so long from work?

According to the American Medical News Health and Human Services is going to look into this matter.  The approack that is planned is by using "mystery shoppers" much like are used in retail stores.  The shoppers would visit the waiting rooms of physicians discovering the times patients are having to wait and document the findings.

According to www.amednews.com: The department has proposed using people posing as potential new patients to help gauge the availability of primary care physicians, according to an April 28 notice in the Federal Register.

HHS is planning on ascertaining information related to a physicians willingness to accept medicare patients.  It is becoming increasingly difficult for medicare patients to find a primary care physician. The article goes on to state: 67% of practices say they might limit new Medicare patients if scheduled pay cuts occur.

Obviously, the availability of healthcare is extremely important.  HHS is seemingly trying to track and be proactive in the cause.

PhysicianJobs.com announced today the launching of a new website for locum tenens. The site is www.LocumTenens123.com. The site is designed to help locum tenens professionals find jobs, and to help facilities find physicians for locum tenens coverage. Job seekers can view thousands of jobs online nationwide in all specialites and respond directly to each employer, or they have the option on the site for signing up as a locums provider for PhysicianJobs.com, LLC.

For more information on this site, go to www.LocumTenens123.com.

When the topic of healthcare costs comes up in a conversation,

almost always "physician's salaries" are brought up.  With the obvious

salaries many physicians make, it's understandable how

this happens. However is it a major factor in healthcare costs?

Physicians are in the uniques position of being revenue generating

providers in and of themselves.  Also many livelihoods are

dependent on physicians in supporting roles to their practice.

A recent article from Kevin Pho, MD from KevinMD.com, addresses

this subject as he takes a look at a study from Health Affairs. Dr. Pho

compares primary care and orthopedic surgeon salaries to other comparable

countries.  For primary care the difference isn't that great. 

Dr. Pho adresses the question is targeting the physician salaries better in the long term?

This is a subject that everyone seems to have an opinion on.  Time will tell how it plays out.

Costs, costs, costs...it seems to dominate conversation in healthcare business.

Recent survey information showed "Medical groups cut spending by 2.2% in 2010, despite the fact that

general operating costs have risen by more than 52.6% since 2001".   This is according to the Medical Group

Management Association.

According to MGMA President and CEO Dr. William Jessee, "This means practices are not spending as much money

as they were last year which isn't necessarily a good thing". 

The MGMA's Cost Survey for Multispecialty Practices:2011 Report based on 2010 Data, was based on information

gathered from 44,000 providers and 1994 groups.

Apparently these numbers are going the wrong way for success in business.  Needless to say it's a challenge

for everyone trying to contain costs while expanding revenue.

PhysicianJobs.com is a physician recruiting firm with years of experience in physician recruiting both locum tenens and permanent placement.  

Nearing the expiration of a contract without the next contract in your pocket can be quite distressing for anyone. But if you are a physician whose typical day comprises of thousands of life and death matters, taking time out to search for next job can be rather difficult. Whether you are semi-retired or a full time physician looking to take charge of your life with flexible working schedule, locum tenens physician jobs offered by reputable physician recruiting firms is a great option.

Once you decide to sign up with a physician recruiting firm, you will be expected to provide some basic information about yourself along with your contact information including your permanent address. You will fill in a form stating your field of expertise, names of states where you hold medical license, and your dates of availability. A good recruiting company does all the tedious leg work for you as it will match your qualification, experience, preferred locations and dates you are willing to work with the jobs available in their database.  However, the job of recruiting companies is not restricted to locating a suitable job for you. In fact, that’s the point where the real work starts for them.

Most people would agree that the most tedious, time consuming and dreaded aspects of taking up a new job and moving to a new place is making travel arrangements and arranging appropriate accommodation. But the companies that offer locum tenens physician jobs take care of such details along with helping you with other formalities such as obtaining the appropriate state licenses (for those who move away from their permanent state of residence) and providing medical malpractice liability insurance to cover you during your tenure as locum tenens physician.

For those who believe in working smart, locum tenens physician recruiting firms offer an excellent option for easy and hassle free job search and transition.

PhysicianJobs.com is a well known physician recruiting firm with years of experience in healthcare staffing and locum tenens physician jobs. To find more about their innovative approach based on integrity, creativity and towards staffing and services above and beyond the traditional concept of physician recruitment and placement, logon to, www.physicianjobs.com

Many physicians are free-lancers and/or independent contractors.  Usually this is the case for locum tenens physicians.  From a business perspective one can be out there alone, unsure of how to handle questions that arise.  Fortunately, there is assistance that is of great benefit and affordable.  It's from Back Of The House (BOTH), and they are prepared to set you up with your own virtual business as you travel around doing locum tenens or practicing independently in the community you live in.  Below is an interview with the CEO of Back Of The House, Erik Vonk, as he explains their process and system.

"Today’s reality…just makes it more logical to attach support functions like health and retirement to an individual and not to a place of work."

Back Of The House provides support services for self-employed professionals, free-lancers and independent contractors. This includes bookkeeping, tax services, financial reporting, health insurance, retirement options and more. BOTH handles all of the administrative hassles that consume the valuable time of independent professionals, allowing them to focus on what they do best. BOTH simply and cost-effectively transforms self-employment into a professionally configured "Company of One" by setting up and/or maintaining an LLC for each client, assigning a Personal Business Advisor, establishing, hosting and supporting an individual I.T. infrastructure, the Personal Virtual Office and beyond.

Erik: Right! BOTH is indeed a "business in a box‟! Back Of The House is a 1 stop, turnkey pathway to an exciting and rewarding future as an autonomous, professionally configured and fully supported Company of One. Whether you currently work as a consultant, a freelancer, or on a 1099 basis, (self) incorporation offers a host of advantages and benefits. However, the perceived burdens of business ownership and fear of the unknown are either seen as ob-stacles or lead to unnecessary mistakes by many independent professionals.

Years ago, when I ran Randstad Staffing Services, there was a growing cadre of Freelancers, who told me that Randstad had replaced "Job Security‟ by "Income Security‟ for them. That was a fantastic compliment! "But‟, they said, "can't you put all the support you provide as our temporary employer, in a "rucksack", so that our lives aren't interrupted every time when we move from project to project?‟. Self-incorporation was technically the answer, but that essentially moved the support burden from us to them. So, the challenge was to find a way to let someone enjoy the advantages of business ownership, but without the burdens. It wasn't until 2007, long after leaving Randstad, that the answers were found. That's when the "Company of One‟ concept was developed – a completely unburdened and fully resourced solo business with Fortune 500 support.

MO: Obviously most entrpreneurs are not professionals in areas of HR, taxes, Business Structures, Health Benefits and the other areas you support.  How much time and money do you estimate the average solo professional specnds trying to get his or her arms around these things when they should be focusing on delivering for their customers?

 Erik: We estimate that on average 12 to 15 hours per month are "sunk‟ into non-core support activities. For professionals who serve multiple clients, that number is higher. Overall, approximately 8% – 10% of valuable time that could otherwise be billed, evaporates! That is a terrible opportunity cost! Plus, while doing all this "non core‟ work, lots of money is spent on advisors – tax, legal, accounting, health, retirement, liability insurance, etc. – that don‟t know of each other what they know about you. Expensive, inefficient and risky. Our services have been designed to a) reduce or eliminate direct expenses and opportunity cost, b) improve efficiency through a single point of contact approach and c) eliminate risk by providing support AND oversight.

MO: One service among the many offered by Back Of The House is a Personal Office Manager. Explain how this works.

Erik: Our Personal Business Advisor is core to our concept. An experienced, educated (CPA, Law degree, etc.) dedicated professional is assigned to each client as a single point of contact. This pro-active, tailored 1 stop service has been designed as the antithesis of "self help‟. The Personal Business Advisor runs your back office, manages your IT support and monitors receivables, bank balances, due dates, filings, taxes, insurances, etc. No help desks or call centers to hassle with; just one number in your cell phone for any question about any aspect of your business. Personal "Chief Operating Officer‟ would be a better title.

MO: Your website, backofthehouse.com, encourages independent professionals to sign the BOTH Declaration of Independence. Just what is this declaration and what does it represent?

Erik: By signing the Declaration of IndependenTS, you join a rapidly growing pool of freelancers and independent professionals. You‟ll receive a newsletter called the "Un-Job Post". Once the community is large enough, we will offer communication and collaboration facilities, free of charge.

MO: Is there a threshold where it makes sense for a freelancer to leverage BOTH? That is, is there a minimum amount of revenue a person should be generating before considering your service?

Erik: Yes, there is, and it is fairly low. A bill rate of $20,- to $25,- per hour or annual billings of $40,000.- to $50,000. begin to justify the use our services. Our fees range from around $150,- per month for a basic support package to only around $500,- a month for our all-in, full service level. When I say "only‟, it is because the sum of the components, if bought individually, represents a market value of triple that amount. Further, the Company of One status make our fees tax deductible. The full service level is by far the most used option because it covers all the common needs of a business owner, including billing, collections, bookkeeping, banking, a hosted IT environment; the Personal Virtual Office, a website, wellness benefits and the Personal Business Advisor.

The only expenses not included in this amount are premiums for individually underwritten health & retirement plans and liability insurance – which are also tax deducti-ble, by the way.

The Personal Virtual Office - our hosted IT environment -is a turnkey, fully supported, cloud computing service. Clients access all their applications, files, email, calendar, contacts and collaboration tools through our Portal Desktop. Whether working at the client‟s office, a remote office, at home or on the road, all you need is Internet access. PC, Mac, Blackberry, iPhone it doesn‟t matter, the PVO is hardware, OS and browser agnostic. Work from anywhere - at anytime- on any device.  This is a uniqie composite of Software as a Service (SaaS) and genuine, personal support.

With BOTH you can be in business for yourself, not by yourself.

MO: You have an impressive history with your time and accomplishments at Randstad and Gevity, not to mention authoring a book, "Don't Get a Job, Get a Life!"  What has been the most important lesson you have learned in business?

Erik: Thank you! The most important lesson is that work needs a new platform. An employment contract is no longer an efficient instrument to connect people with work. Today's reality is that the dynamism in the employment market just makes it more logical to attach support facilities like health and retirement to an individual and not to a place of work. That is what is now accomplished through Back Of the House: being employer and employee at the same time. As your own employer you provide yourself with benefits, retirement plans, protection and support. Perhaps we should call that the employou instead of employee!  And, your legal status as a Company allows you to sell your talent or services as a Vendor, not as a Worker.  As a Vendor you are subjected to different, more attractive legal and tax regimes than as a worker.  The lesson is that work needs a new platform and it is very gratifying to be providing the solution!

Erik Vonk is Founder & CEO of Back Of The House. He is an internationally recognized thought leader and expert in the field of flexible work arrangements, contingent workforce strategies and HR outsourcing. Erik has profitably grown the operations of Randstad Staffing Services in North America from a green field start to reach $1.5 billion in 8 years. As Chairman & CEO of Gevity HR, he has strategically repositioned the company from a traditional PEO insurance arbitrage business to a recurring fee based HR outsourcing market leader, substantially increasing revenues and profitability in the process.

From www.MO.com/erik-vonk Interview January, 2011

For more information:  941.328.8708 | bridgette@BackoftheHouse.com | www.BackOf TheHouse.com

YouTube:  Be The Boss Of You

Back Of The House (BOTH) provides Freelancer Total Support ™ including self incorporation, health & retirement benefits and 1 stop back office services.

It seems like everyday there is another healthcare fraud charge being made and I'm not looking for them.  Appaently there are two types that actually take place, unintentional and intentional.  The court system then has the challenge to determine the motive. 

The Feds are increasing their crackdown on healthcare fraud according to FierceHealthcare.com.  According to a recent article, the "federal prosecutions of healthcare fraud are soaring, set to rise 85 percent". That is certainly a significant increase over recent years.

In some cases the fraud amounts can mount up in the hundreds of thousands dollars.  Certalinly these need to be a priority than the low dollar mistakes in billing that are sometimes brought up as criminal offenses.  According to the USA Today, $4 billion was recovered in health fraud cases in 2010.