Episode 16

Big Impact in Small Town Family Medicine with Dr. Tod Stillson

Episode Transcript

Dr. Randy Lehman: [00:00:07] Welcome to the Rural American Surgeon. I'm your host, Dr. Randy Lehman. On this show, you'll receive powerful insights and resources for rural surgeons. I'm a general surgeon in northwest Indiana, and this show is tailored around the nuts and bolts of rural general surgery practice. But you'll find topics ranging from practical surgical tips to a host of others, including rural lifestyle, finance, training, practice models, and more.

We'll have a segment called Classic Rural Surgery Stories where you'll get a feel for how practice in the country differs from the city. Whether you're a surgeon, other specialist, or primary care, or simply someone interested in healthcare for rural America, I'm glad you're here. Now let's get into the show. Welcome, listener, back to the Rural American Surgeon podcast. I'm joined today by my guest, Todd Stillson, MD, from the Simply MD Group. Thank you, Todd, for joining us today.

Dr. Todd Stillson: [00:00:57] Yeah, Randy, it's great to be with you. A fellow Hoosier and a fellow rural American taking care of people in medicine in rural America. Love it.

Dr. Randy Lehman: [00:01:07] Yes. So Dr. Stillson is a primary care doctor who is practicing in northwest Indiana, relatively close to where I grew up and where I'm practicing now. And he just ended a 30-year career in medicine. And he's pivoted out basically through some powerful changes that came from his own personal financial independence. I want to talk about that a little bit.

And now he's doing things, you know, he's not just sitting on a white sandy beach, you know, sipping drink of choice, he's instead changing the world even more when he's out of his day job. So there's lots of stuff that I like to unpack, and he's just added a lot of value to me as I've been receiving his emails, reading his book, and I know he changed one of my good buddies' lives for the better as well. And so I wanted to give him an opportunity to come and talk about what it's like to practice rural medicine as a family practitioner and then talk about some of the exciting things that he has coming on. So thanks so much for joining us.

Dr. Todd Stillson: [00:02:06] Yeah, Randy, it's great to be here. And again, I love rural doctors. We have a kindred spirit, right, because we're out here loving on people and connecting with the rest of the people in our small towns. And you know, it's a great privilege to do that. And so I share that passion with you and thanks for putting this podcast together and really sharing it with the world.

Dr. Randy Lehman: [00:02:26] Hey, it's my pleasure. So can you tell us any more about your background, your specialty training, and the practice that you had that I might have missed?

Dr. Todd Stillson: [00:02:35] Yeah, yeah, definitely. So I'm practicing in the county that I grew up in. So I grew up in Bremen, Indiana, and I now practice in the county seat of Plymouth. That's not a very big town of 10,000, but if you're in rural America, 10,000 is a pretty good size town. It's the county seat.

And so I did my training at Indiana University, did some additional training in Virginia, where I did an OB fellowship learning how to do surgical obstetrics, and ended up coming back home to my home county to practice medicine the past 30 years doing surgical obstetrics and a really full breadth primary care. In my stage two or my 2.0 version of my career, that's one of the things that I'm doing, is I'm trying to make a difference one week at a time by doing some FMOB locums in various places throughout the country who have desperate needs. And again, I have a tender place in my heart for rural people, especially rural women who need to safely have their babies in a local facility and not drive an hour or two away to have a baby.

Dr. Randy Lehman: [00:03:43] Yeah. So thank you very much and tell us some more. Let's move into the first segment of the show. Why is it important to you to practice in a small town?

Dr. Todd Stillson: [00:03:51] Yeah, because of relationships. Having grown up in a small town, I value relationships. I like knowing the people and the people knowing me. I live right on Main Street. I live a transparent life. People know me in my community, really all the county knows me because I grew up in the county, my wife's from the same county, and so we're just very interconnected to people, and I love those relationships.

And one, that's the part about family medicine I actually love the most, especially maternity care is, you know, you get a chance to really invest in people's lives for nine months, have a baby, be a part of that process with them, then take care of the mom, the baby, the dad, the whole family is really through and through care where you get to know people intimately because they trust you. You know, trust is truly the currency of medicine in the rural space. People trust you and you learn to trust them.

Dr. Randy Lehman: [00:04:42] Yeah, trust is the word that I was thinking as you were talking there. I've got an interesting anecdotal story. So when I feel like when you deliver a baby, you buy the family basically in medicine, and it's all about trust. It's also all about that good experience, generally. Having a baby is a wonderful experience that you never forget. And so then you have that trust. Why wouldn't you go back there for the rest of your care?

And one of the problems with shutting down the OB departments, besides the fact that I've got like my cousin, you know, going down to Lafayette on her second baby and has her baby in the emergency department, nobody knows her name yet, you know, and it's like precipitous delivery and, and those kind of problems, whether it's a 45-minute drive or whatever, or longer. The other problem is that the bottom line drastically. Everybody always loses money on OB. There's a problem there. I guess for rural hospitals that's the case.

Dr. Todd Stillson: [00:05:41] It's either cost neutral or losing money.

Dr. Randy Lehman: [00:05:43] Yeah. And it's probably has something to do with why pediatricians get paid generally less and where we also, why, you know, teachers get paid low. It's like, yeah, are we really thinking about investing in our future and are we putting our money where our mouth is? That's a whole nother ball of wax. Okay, yeah, sure. But your next year, your bottom line improves when you close your OB department. But the problem is 10, 15 years later, your hospital shuts down at the.

Dr. Todd Stillson: [00:06:16] Death knell of a hospital. There is no doubt about it. Okay? And I, I, that is the sequence that I've seen the road from you over the years. I've been here in 30 years, little Knox Hospital or Stout County Hospital, that made, they met, they made that decision.

And the cascade has been that basically that hospital is now just an emergency room, a freestanding emergency room. And it's what happens. And rural people deserve better, Randy. Rural people, the women of America, the children of America, deserve better care. We're literally in a perinatal crisis in this country.

And, you know, how can we improve delivering babies and maternal health by actually making the distance for that care greater? It is a tragedy. And so I feel like our policymakers, as well as our medical societies and hospitals who have kind of abandoned that important cornerstone of community care... It comes back to whether or not you're missionally driven to have a hospital in a community or if you're simply driven by profit, okay?

And at the end of the day, most of the little community hospitals that pepper our entire country are there because they're there to serve the community. There's mission, and yes, you know, if you've heard an administrator say that once, you've heard it a million times, "without margin, there's no mission." Well, you can have both. You don't have to make a gazillion dollars profit to be able to meet the mission of the hospital. Our rural people deserve better.

Dr. Randy Lehman: [00:07:51] Yeah. Have you ever seen a maternity line open back up, an OB unit open back up in rural America?

Dr. Todd Stillson: [00:07:59] It's very, very unusual. Once it gets closed down and the dominoes happen, it's very unusual for it to reopen. I can't say it's zero, but it's uncommon.

Dr. Randy Lehman: [00:08:10] How many deliveries do you think are needed per year to say, hey, we're going to provide good care? Obviously doesn't purely have to do with...

Dr. Todd Stillson: [00:08:20] The numbers, but there's a couple elements of this. Number one, there's the profit margin or the loss element to it, okay. And to staff a hospital with the OB nurses, with anesthesia, the OR coverage, all those sort of things, you really have to at least have probably 40, 50 deliveries.

As an example, I was just out in Oregon in a very rural place, three hours literally from nowhere, that did about 50 deliveries a year. And that was enough because there is enough in that margin for them to maintain that service line in that little community. But I would say, really the number is typically around 100, a little more than 100 that's needed to kind of make it make sense financially in the community and all the staffing that goes with it. And so that's kind of the number.

Dr. Randy Lehman: [00:09:12] That number and 150 I've heard thrown around by people that are in ACOG and things like that. And then also then I... I brought that up, but then to my hometown hospital where I was born, which is Rensselaer, so they closed their OB department in 2015. There was also kind of just staffing doctor, I think lack of interest as well. Couldn't get somebody that, you know, to do it. They... they sold to Franciscan. You know, Franciscans are like, all about the babies, but at the same time, like, you know, what are we talking about here? So I talked to the CMO, who's an OB-GYN, and I threw around 100, 150. And there's definitely... There's 30,000 people in my county. You would think you could get those... those kind of deliveries easily. And he said, "Whoa, whoa... or 250." And I'm like, I don't know where we're coming up with, you know, this information?

Dr. Todd Stillson: [00:10:03] So I can, I can... I can tell you that Marshall County, which is where I began practice, for 30 years, we did about 200 to 220 deliveries a year. Pretty consistently. That was with one to two OB-GYNs over the years. And four family doctors doing deliveries chose shared among them, among us.

But it's not for OB-GYNs. It's not just about the OB services. The OB services are what translates into surgical GYN services, okay. And so that's really where the money's made. To be honest with you, when it comes to the financial equation for little hospitals, it's not the OB, it's the GYN side.

But just to be able to support that gynecologist or OB doctor along with the call and the life, you know, the lifestyle and all those sort of things, usually have to have two of them rather than one. And there's really a lot of dominoes in place here. So a lot of these rural communities now are kind of rolling back to family doctors who do surgical obstetrics.

And so I'm getting ready to go to Kansas in the winter and spring to again work in a community that has four family doctors. One is leaving to go back to their home community. And so they needed somebody to fill that gap. But it's really fully led by family doctors who do surgical obstetrics. There's no OB-GYN in the community that's possible. It is possible for that. And even down the road from us in Rochester, Indiana, that's kind of the model they're using right now as well.

And so, you know, I love OB-GYNs. Don't get me wrong, any of your listeners are OB-GYNs. I welcome them to the table and welcome you to come to rural America. But the reality is, is that OB-GYNs are not going to rural America any longer because of the lifestyle and call elements that are difficult. So it's family doctors, again, that are going to stand in the gap and really provide the care that's needed. And that's been like that for me for 30 years. And it's going to be like that in the future. Yeah.

Dr. Randy Lehman: [00:11:58] And if you have a family doctor with a rural general surgeon that is able to do some more of the surgical, benign GYN stuff, that's everything that you need. So at Winnemac, we were down to 60, 60 some deliveries, and then, then they closed while I was there, you know, and I'm... This is my soapbox. You know, you buy the family when you deliver their baby and stuff like that. And... But I, I fell... I actually seconded the motion because there were, There were... There was nobody to do it, and it was like an unsafe situation. So we had to. But it's like the question of can, can any of these places ever open back up again.

Dr. Todd Stillson: [00:12:40] I hope they do, and I hope they will. Typically, it's going to in the little hospital, sometimes it's a new ownership that will bring that model back and they'll make, recruit and pay a little bit more to recruit somebody to come to a fam to a rural area and restart the service line. But it's a big uphill battle.

Dr. Randy Lehman: [00:12:59] All right, so let's move on to the next segment of the show. Now, one thing I really wanted to focus on with you is how to get to financial independence, because I think that people that are financially independent tend to become more of who they already are. It doesn't change you necessarily. And I think a lot of doctors went into it for the right reason, and they're great people. And if those people can be more, less tied to the hamster wheel and more free, they're going to go impact the world in ways that…

Okay, what I'm doing with my podcast, what you're doing with, you know, your new development, we'll talk about in a minute. Tell me how you obtained financial independence.

Dr. Todd Stillson: [00:13:41] Okay, so first of all, I want to just point out to people that financial independence doesn't mean you retire, okay. And I think that's a misconception among physicians because there's this whole FIRE movement. Okay? Financial Independence, Retire Early. And, you know, financial independence is just literally a plateau where you no longer have to work, but you can continue to work if you want to.

Dr. Randy Lehman: [00:14:03] So it's...

Dr. Todd Stillson: [00:14:04] There's difference between having to and getting to. And so that financial independence number is highly variable for every person, every doctor, every individual. And so that number, again, highly variable. But at the end of the day, for most doctors of the lifestyle they're used to living, there's some math metrics involved. Randy, I'm not going to go into the granular of that, but let me just say your net worth for most doctors of the lifestyle they're used to needs to be around $5 million to typically become financially independent.

Could be less than that, depending if you're willing to live lower lifestyle. Okay, but that's equivalent to about $200,000 of spending per year. And for doctors, that's the lifestyle they're often used to. Okay. So you can kind of use those round numbers in your mind.

Now, how did I arrive at financial independence? Fortunately, I arrived there several years ago. And the way that I arrived there were the following: A, I was a saver; B, my wife and I had a budget and had a defined personal financial plan that we followed every year; number three, we diversified our income choices from not just professional income, but also to add in passive income options. And then the third, the big kicker that happened to me about a decade ago is when I started my professional corporation and transitioned to an employment-like contract. That's when I began to unlock the third tier, the third part of that, which is retained income. That's when you're able to retain more of your income and put it in your household. And I was able to do that through my own micro corporation. And those three elements are all what has led to and converged to me reaching the point of financial independence.

Dr. Randy Lehman: [00:15:52] So the last thing you said with the retained income, what you mean is don't pay so much tax. Right?

Dr. Todd Stillson: [00:15:58] Well, for most physicians, high-income earners, retained income is really about tax optimization primarily. And so you're exactly right. So the average doctor gives the IRS about $85,000 to $150,000 a year. Okay. That's what the statistics show. Depends on how much you make.

In fact, I just got off the phone with another physician doing a consultation this morning with them, a micro business consultation. He and his wife are both orthopedic surgeons in the Midwest, and they pay almost $250,000 a year in taxes as W-2 employees. And the whole point of the conversation they had with me was they read my book. They were very interested in wanting to do the same thing I did because they wanted the tax optimization opportunities that come with micro incorporation and employment-light.

Dr. Randy Lehman: [00:16:51] Tell me the name of your book and where somebody could get it. We'll put it in the show notes as well.

Dr. Todd Stillson: [00:16:56] Yeah, the name of my book is "Dr. Incorporated: Stop the Insanity of Traditional Employment and Preserve Your Professional Autonomy." As my wife warned me when I wrote the book, that's a long title, but I wanted it to be descriptive of what the book was about. And you can find that at Amazon. It's for sale on Amazon.

Doctors read it on a regular basis and find it. And they reach out to me, not to toot my own horn, but if I've heard it once, I've heard it a thousand times in that book. And that is, they read it and they reach out to me and say, that is one of the best books I've ever read. And that's humbling to me. And it's not because I'm this outstanding writer, Randy. But here's what I can say: a doctor who reads that, they're not as concerned about the literary part of the book. They're very interested in the fact that I'm speaking to them directly. And when you read that book, it has a very clear message directed at doctors about how they can thrive in the maximum way in today's marketplace. And I give them a lot of secrets in the book. So it's worth going to download it or purchase it on Amazon. You can also go to my website at SimplyMD.com—I got a lot of resources there as well.

Dr. Randy Lehman: [00:18:08] Yep. Yeah, I love it. I've read the book too. I also think I agree strongly with what a lot of things you say in the book. There's a few more, like practical questions. Okay. Say somebody knows a little bit about investing and things. Let me tell me the details. So you said, number one, you're a saver; number two, you budget; number three, you diversified; number four, or, or three B, you did the employment-light. Okay.

Dr. Todd Stillson: [00:18:32] Yeah.

Dr. Randy Lehman: [00:18:33] Don't go into all of them. Okay. When you budgeted, what were your biggest budget expenses?

Dr. Todd Stillson: [00:18:41] Giving.

Dr. Randy Lehman: [00:18:42] Okay.

Dr. Todd Stillson: [00:18:43] And taxes. We come from a community of faith. My faith life's very important to me. Giving back to the community is a very important part of my wife and my life. And so we've tried to be very generous because we are fortunate people.

Listen, part of my background is I'm the first to go to college. I grew up in a blue-collar family. All my family members are fact workers. And you know, the life of a doctor is a very rich, luxurious life. I don't care if you're making, quote, you know, not doing great at $200,000 a year, you're making a million dollars a year. Okay. You make a good living. And I understand that. And I think it's important, especially in a rural place, to give back to the community.

So giving was a large part of our financial plan, but also unfortunately, taxes were as well. And as a, and as I worked for 15 years as a W-2 employee, you know that that number as I, I earned more and more went up and up. And so, you know, 30% or so of my income would go to taxes as well.

Dr. Randy Lehman: [00:19:46] Yeah, two questions about that. Number one is the mindset of giving. So I also agree we give a large amount of money. We also feel extremely blessed. We're both grew up like first generation, you know, college graduate kind of thing, you know.

Dr. Todd Stillson: [00:20:03] Yep.

Dr. Randy Lehman: [00:20:03] So I don't need all this to live, right? That's correct. And but the thing is when you give, there's… It does something to yourself, and then maybe it does something to the rest of the world or something else. But what is it? Because when you give, it seems like you also end up getting. And so what is it about that?

Dr. Todd Stillson: [00:20:30] Yeah, so that sort of abundant life, abundant living process. First of all, you get dopamine in the back of your brain when you do the right things, okay? And that is very a good feeling. And that's the main reason I do it, because it gives me a sense of purpose and it gives me a sense of self-value when I'm doing the right thing for the right reasons.

Right, listen, we can disconnect that and do the right things for the wrong reason—doesn't feel as good. You can do the wrong things for the right reason—doesn't feel as good. But when you do the right things for the right reason, it feels really good and it creates that dopamine effect in your brain. And so it really does have a circular motion to it in terms of what it does and giving back.

One of the things that—it just drove me crazy back in the day when I was a W2 employee working for somebody else, working for somebody else's corporation. I hated it when I would see a patient and I, you know, basically would say, "I want to give this, I want to make this free today." Right? I can tell you're hard on your luck, things are not going well for you. Listen, you're not—I'm not going to charge you for the visit today. And I did that on a couple occasions until my employer came to me and said, "You know, you can't do that because of blah, blah, blah," you know, and being like, "Okay, all right, I can't do it."

And that really frustrated me. But when you start becoming more of an independent provider, an independent doctor, you really have a lot more tools in your tool chest to be generous and to give things away at the right time and the right moment. I do operate a micro business. It's important for us as doctors to operate from a business mindset, and you do really have to have that mindset. But there's also those moments and times when you're provoked to be generous, and you need to do it, and it's the right thing to do. And so I love having the autonomy to do that when it's right.

Dr. Randy Lehman: [00:22:22] That brings me to the second question I had about this giving concept, which is, I want to know how you tax advantaged it, because I know that you probably did. But then at the same time, some of the—some of the things you can't tax advantage, and it still feels so good to pay for the person's meal behind you in the drive-thru and to give something direct, just a big tip. Those kind of—well, big tip if you're writing off the meal, I guess. But you know, it's still only 50%. But I think, you know, when you look at the overall picture, there's enough money and you can just give it and that's fine.

Dr. Todd Stillson: [00:23:00] Yeah.

Dr. Randy Lehman: [00:23:00] But at the same time, we're trying to be smart and we disagree generally with how the government spends our money anyway. So it's morally right to pay less taxes and we're trying not to. You know, I had a college professor that said that was an econ—tax evasion is federal crime, but tax avoidance is as much America's pastime as cherry pie and baseball. So we're talking about tax avoidance. How did you leverage the budgeting to be able to do that throughout your life?

Dr. Todd Stillson: [00:23:30] Okay, so first of all, I give not because of the tax advantages. So that's a philosophy that I have, right? Okay. However, when I give, I'm also going to leverage or maximize the tax efficiency of it in the process. And our government definitely has an incentivized process for the US tax code for you to give.

Now you can give as an individual tax person, okay, through your individual tax account, but you can also give corporately too. So in my case, like I own a micro corporation, I don't just personally give away my own personal income. I also make sure my business gives away a fair amount of its income as well. So it's dual purpose extra giving.

From my standpoint, as you own your own corporation, you know, this is true, Randy. So whether or not you label it as an advertising dollar and take it as a business expense, or whether you label it as a gift to a 501c3 charity, you can go either way. But the bottom line is you can give away money to the right places in the right way.

I learned over the years not to micromanage that though. If I'm compelled to give to something, it doesn't matter if it's taxable or not. It's not, doesn't have to be a taxable event. One of the things that I discovered, Ellen and I discovered about maybe five years ago or so was a donor advised fund when it comes to giving. And we really like—yeah, we really like the donor advised fund opportunity because in the old model we would make a budget, we'd give away, you know, plan on giving away to all those sources that we would give to, but it was kind of all contained in one tax year.

Okay. And the nice thing about our donor advised fund is there's times when I'm not quite sure what I want to do with that money that I've set aside to give, and sometimes there's bigger projects or sometimes things that don't come up this year, and donor advised fund allows me to know I'm going to give away like—let's say my wife and I are going to give away $70,000 this next year. If I didn't find $70,000 worth of things to contribute to, I can still put it in my donor advised fund for that tax year, get the tax benefits of that donor advised fund. But if I don't give it all away, it sets in that account and grows and then I can give it away the next year or the next year or the next year. And that's a pretty powerful idea. It's kind of like having a little mini foundation, if you will, that allows you to make distributions from. And I really like that.

Dr. Randy Lehman: [00:25:58] One last thought or question before we move on to diversification. Did you have an auto deduct or an auto transfer set up into like a separate account that was your giving account? That's what I do. But I was wondering if you did.

Dr. Todd Stillson: [00:26:12] No, we did not automate it. We—my wife ran our checkbook and she, she automated it, so to speak, but it, it was not automated. And that comes back to the kind of the concept of cash flow, right, when it comes to a budget? Like a budget is sort of a, an manual way of looking at where your money goes. But the reality is the money doesn't always flow through in an even way. So you can't be rigid about it. But at the end of the year it should fall into those categories. But that's the difference between cash flow and when you run a micro business particularly that's even more important to understand how cash and money lands in your home. It gets in there in different places than just the paycheck.

Dr. Randy Lehman: [00:26:50] Yeah, sure. So on your diversification, you said you have some passive income. I know there's some real estate in there. Stocks, bonds, anything besides those three things?

Dr. Todd Stillson: [00:27:01] No, those. I was a big fan of real estate, so we really did quite a bit of real estate. I would say, you know, Simply MD is a business that, that you know, we're going to talk about, but that is a business and it doesn't make a boatload of money. But it also is profitable. Okay, I, but mostly it's been real estate primarily. But I do have a new side venture we'll get to that. It's a new telehealth health tech company that I'm starting that's going to also be a bit different as well.

Dr. Randy Lehman: [00:27:29] Yeah. You know, there's... I don't know if so many doctors are saying this, but you know, investing is risky.

Dr. Todd Stillson: [00:27:36] Right.

Dr. Randy Lehman: [00:27:38] You told me in your pre-operative or pre-op interview, right, that there was an opportunity where you actually did sort of get hit on a real estate deal.

Dr. Todd Stillson: [00:27:50] Yep, that's exactly right.

Dr. Randy Lehman: [00:27:52] Tell me what you learned from that.

Dr. Todd Stillson: [00:27:54] Yeah. So what do I learn from that? What do I learn from that? Let me tell you, Randy. Here's what I learned about it. Number one, when I made the investment, my wife said to me, "I'm not sure this is the right thing to do." And I said, you know what? I really want to do it. So first lesson learned is listen to your spouse. They often are intuitive and they often know a lot. And so that was a mistake.

Number two is I did not do my homework on the leader of the investment. And if I would have done my homework and got to know the situation a little bit better, because he declared bankruptcy after the unscrupulous work that he did, then I might not have made the investment either. So that comes back to my wife's intuition about it.

But then, number three, you know, even if you make a mistake, you can pivot in the midst of the mistake and do something good with it. And when you're an entrepreneur like I am, not every venture you do is going to be money making. You're going to have some potential losses and mistakes that you make, and you have to learn from those.

Dr. Randy Lehman: [00:28:57] Yeah, those are great pieces of advice. I started this business. It was a big risk, but it was a risk I was able to take because I already was financially independent, essentially. And then I lost a ton of money starting my independent practice brick and mortar style. And I backed into the PC employment light, which is what your book talks about. I didn't really understand it, you know, but that's definitely the right model.

Dr. Todd Stillson: [00:29:23] Yeah.

Dr. Randy Lehman: [00:29:24] And, and that was the same deal. I actually lost more money doing that in a year and a half than my entire med school tuition.

Dr. Todd Stillson: [00:29:32] Oh, my gosh. Okay. Well, there you go. You learned.

Dr. Randy Lehman: [00:29:34] But now I'm going to make it back in six months.

Dr. Todd Stillson: [00:29:37] Yep. So in the right model. Yeah, in the right model. Yeah. And, well, life's full of learning experiences, right? Doctors are lifelong learners. And so we're never, you know, although we're also perfectionistic and like to get things right on the first time, we don't always get it right the first time.

Dr. Randy Lehman: [00:29:54] The employment employee, PC light, employment light, whatever you want to call it, tell me what that is.

Dr. Todd Stillson: [00:30:00] Yeah, so PC employment light is hybrid for the listener. If you're thinking about this, take traditional employment and fuse it to private practice. Okay. And basically, employment light is the combination of those two things together. So it's having a small corporation, a micro corporation, that's the private practice piece of it, if you will, that contracts with a hospital to provide professional services where they provide the clinic space, the clinic manager, the HR, everything you need to basically run the clinic, they provide all of it.

They do the billing, they do the collections, and they basically pay you either a salary or comp model for that to your micro corporation. And so think of it in a simple way. You don't have to manage a whole lot besides yourself and that corporation. They're doing all the heavy lifting when it comes to the patients and the practice management piece of it. But you get all the tax and financial benefits associated with being a micro corporation owner, much like you get in private practice.

And so again, it's kind of a fusion of those two ideas together. And I think it is the hidden third space that most doctors don't know about. There's this kind of dichotomy that doctors come out of training and they think, okay, I'm either going to go into private practice or I'm going to go become a traditional employee. By the way, 90% are choosing traditional employment nowadays. However, the third space that is hidden that most don't see as the opportunity is the employment light option through a micro corporation. And I think it's the best space.

Dr. Randy Lehman: [00:31:45] Well, you're talking to a surgeon about third spacing, so I mean, we can talk about this all day as well.

Dr. Todd Stillson: [00:31:50] Yeah, right, exactly. That's true. But the problem is that it's hidden. Most people don't know about it. That's one of the reasons I wrote the book. And when I made that transition to this model a decade ago, it did two things in my life that were so fantastic. Number one, it helped restore my professional autonomy and that really kept me from going into burnout. And then number two, it significantly improved my financial well being.

And the combination of those two things are huge things that help doctors thrive really the way we're meant to. And so over the past decade, I've used that model and has been fantastic on both elements from a wellbeing standpoint, personally and professionally.

Dr. Randy Lehman: [00:32:33] Would you expect someone on a PC employment light to actually get paid more dollars?

Dr. Todd Stillson: [00:32:38] No. So I, so I, again, I talk to doctors every week doing consultations through Simply MD about this. And here's the key, here's the key concept. I want a listener to understand this. This is not a make more money venture. Okay? So I like to look at it as apples. Apples, oranges. Oranges. All right, so you don't convert to PC employment light to make more money. It's possible you could make more money, and that was my experience, but that was some circumstances associated with it. But at the end of the day, it's cost neutral.

It's going to cost the employer not more money. It's going to not make you more money. But what it's going to do is open the doors to the tax advantages of small businesses that allow you to retain income, typically 10 to 15% of your earnings you're going to be able to now retain in your household. And so I like to tell doctors all the time, this is about working smarter, not harder, okay? And so a PC employment light model doesn't cost the employer any more money. And it's not going to put more money in your account by what you earn. It's going to make more money in your account by what you retain.

Dr. Randy Lehman: [00:33:47] Yeah. Well, I have three employment light contracts, okay. Two of them are a nice high daily rate and a nice high RVU kicker if I go over a certain number. The third one is a big organization, and that place is daily rate that's half. But then it pays on every RVU all the way through. So theoretically it would be roughly around the same. But the problem is it always ends up coming in low. And then I find out that it's the same rate that other general surgeons that are employed in their organization. It's, it's fair because it's the same rate that they're being paid (I'm using quotations here). So that's going to change or else I won't work there anymore.

Dr. Todd Stillson: [00:34:37] Absolutely.

Dr. Randy Lehman: [00:34:38] But because the thing is, they don't have to pay FICA tax. They don't have to pay all of the benefits, you know, workers', all the things that they have to, that they would have to do.

Dr. Todd Stillson: [00:34:51] Here's what I want to explain to you and your listeners because again, if they're used to traditional employment, they won't get this. Let's just say you are a physician who is working as traditional employee making $400,000 a year. Your employer is paying you $400,000. And then most doctors get about a 30 to $50,000 per year benefit package: life insurance, disability insurance, health insurance, malpractice, et cetera. That's on average.

So really your physician labor expense to that corporation is not $400,000. Your labor expense is $450,000, okay, so keep that number in mind. If you were to transition to an employment light contract that is not W2 but 1099 contract that they're paying you, I would say the apples to apples pay you should receive is not $400,000, it's $450,000 because that's what your labor expense is to them.

And if you make the mistake to transition to a PC employment light contract and you say, "Oh, apples to apples, I'll just get paid $400,000 just like I was as a W2," you don't understand how the dollar works and you've made a mistake. You should be getting paid the full labor expense. Now the micro of that labor expense is they also are paying those FICA taxes for you. And when you remove that as a 1099 contractor, they've now saved themselves $10,000, okay, so make sure you understand that big ball of wax.

Dr. Randy Lehman: [00:36:17] Yes, perfect. I was wondering if you had a classic rural practice or classic rural surgery story for us.

Dr. Todd Stillson: [00:36:24] Yeah, absolutely. So I have a lot of stories and I've loved rural medicine over the years, but so I worked as a team physician in Plymouth here for the years of my career. There was a trainer, a young lady who was one of the assistant trainers, you know, working as a student trainer along on the sidelines. I always went to the side, I was on the sidelines on the football games.

And so I got a call from her one fall afternoon, she needed an emergency, she needed to come see me. And anytime an 18-year-old girl calls you and says this is emergency, I got to come see you, typically that means that they're pregnant, okay. And so she came in with her mom crying and so forth and you know, really like what am I going to do? I'm pregnant.

You know, walked her through all that. They decided to keep the baby. I was able to deliver their baby, which is fantastic. But at the same time I was able to mentor, which is what we do in medicine, her and her boyfriend. And so outside of the clinic environment, my wife and I met with the two of them as a young couple and really walked them through what it meant to kind of have a baby together and to raise a baby together and to look at potentially getting married, which is what they wanted. That wasn't our idea. That was their idea.

So at the end of the day, we ended up really mentoring them in our home for many years. We did premarital counseling with them. At the end of the day, they got married. I actually got to do the marriage ceremony for them. So, and so I helped bring their life into the world. I helped mentor them as a young couple. I was actually able to marry them. And really they're both thriving as human beings in the community. She's now become a nurse, a surgical nurse. And he is very successful in his career. And they have, you know, two children. And, you know, that's what we do in family medicine. We invest in lives, we make a difference. And we don't just say, this is a mess. You really get down into the trenches and really try and help lift people up and make their lives better. And so that's an example of a story that I really enjoy all the elements of that, honestly.

Dr. Randy Lehman: [00:38:27] Yeah, it's hard to do that in the city. It's easier to do it in a small town. But you still have to be an amazing doctor to do it. That's so cool.

Dr. Todd Stillson: [00:38:35] Yeah.

Dr. Randy Lehman: [00:38:36] I would like to talk about coaching. This is maybe a little self-serving because your coach probably would be willing to take people as a coach, but you've never coached me and I've taken coaching from multiple other people. And now when I say coaching, I mean a person that I pay to sit down and talk to me. And it's not therapy, although there may be just little elements of like managing your emotions and things like that are in there. It's also not even really strategy. But what is the value of coaching to a doctor? I've heard of it coming more and more and then I want to hear what you do as well.

Dr. Todd Stillson: [00:39:11] Yeah. So first of all, there's coaching and there's mentoring. And so there are a little bit of different terms, different words, and I think we all need a little bit of both in our lives, to be honest with you. And then there's a sense of being a part of a community too. And so there's all those things that are rubbed together, but coaching is really about listening to the person that you're coaching and professionally coming along them and helping them to shift mindsets about who they are in terms of their identity and where they want to go. And it's an art to do it well. And it's a, it's holistic when it's done well. I believe it doesn't just, you know, have one single target.

It has multiple targets associated with it. My coaching personally is more on the micro business side of it. And so I really look at it through that keyhole because that's my area of expertise. And so I do holistic coaching.

But I think at the end of the day, it's helping doctors overcome one of their biggest fears, and that is that I can't run a business because they're not trained to do it. Okay. And when you kind of break it down and help them overcome those mindsets about their powers and abilities, they have to sort of run a micro corporation. They really do have it within them, and they just kind of have to uncork it and open it up and help them discover.

And one of the things I love about coaching, because when you do enough coaching, you begin to see people flourish and see themselves in different ways. And I love business coaching because once I help a doctor see that they are a little bit of a business person, they have it in them. They actually have the power. The light bulb goes off, and it's just amazing to see what happens in their lives when they begin to see the world through really a different lens and be able to thrive and really meet a lot of personal and professional goals that were all there, but they were being kind of tamped down by just being a drudgery old doctor who was trying to keep from getting burned out, you know.

And so coaching is very important, and that's where it's individualized. It's not one on one, and it is one on one, and it's getting to know you in the direction you want to go. So every doctor needs it, in my opinion...

Dr. Randy Lehman: [00:41:28] In order to be a financial advisor, there's regulations. Are there regulations with coaching or are there at least some certifications that you can know that your coach is taking it serious?

Dr. Todd Stillson: [00:41:39] There are true national certifications for coaching that doctors will often do, but there's no requirements for that. Okay. And so I tend to be much like, you know, in the rural space that I grew up in. I'm real practical.

So kind of like the business education I provide at SimplyMD, I always tell doctors, you need practical business education. You don't need an MBA. Okay? MBA is too much. You just need practical knowledge. Same thing with coaching. I am not certified as a coach, but I know my space and know what I do well.

Now, there are certain coaches that are certified and that's, you know, they've got qualifications that go with it. Not to disparage them. That's an important thing. Just like MBAs are important for the business knowledge too. They're valuable. But really, more practically, we just need a coach in our life professionally who understands your life and your world as a doctor.

So, number one, a doctor uniquely understands another doctor. We know each other's worlds. Okay. Number two, you want somebody who has expertise because of either their business that they run or their experience that can come alongside you and help you. Like, in my case, with practical micro business knowledge. And so it kind of varies depending on who you're getting coached from, whether it's a formal qualified coach or whether it's an informal coach. Okay. And I think both are important.

Dr. Randy Lehman: [00:43:05] Can a coach get into trouble by giving, like, investment advice and business advice?

Dr. Todd Stillson: [00:43:10] Oh, absolutely, that's correct. So you're right. Coaching is not about advising. I don't tell you what to do when I'm coaching. I might help craft some ideas that help break through some mindsets that you may have. I may expose some blind spots that you have about certain things. But at the end of the day, a good coach helps you discover what you have inside of you.

A good coach understands the person they're coaching and really just sort of gently nudges them along. But yeah, the distinction about advice, professional advice. Again, I'm not a psychiatrist either and all those sort of things, but holistically, I can tell you as a family doctor, I've been a coach all my life. Okay. But again, from the context of what I do with SimplyMD, it's more about business coaching.

Dr. Randy Lehman: [00:44:03] Yeah. So if somebody wants to get ahold of you or know more about you, we talked about your book. We'll put a link in the show notes. We'll put a link to SimplyMD. What would be the best way for them to get in touch with you?

Dr. Todd Stillson: [00:44:14] Best way for them to reach out to me is just really go to SimplyMD.com. That's SimplyMD.com. They can just start by signing up to receive my daily blog post. I send out a blog post every day, and it's very informative. That's simple and free.

You'll see at the banner at the top of the page, an opportunity. If you really want to do a micro business consultation with me, I meet with doctors one on one for $99. Not very expensive, less than the cost of a dinner to learn about their individual lives and how a micro business may be able to help them thrive. And that's usually an hour meeting with lots of notes and lots of resources involved.

I also do coaching and again, they can see that at the Banner. And I also do courses that they can purchase and really do on their own as well. That talks about the power of independent medicine and the power of being a micro business owner. So SimplyMD.com is the place to find all those resources and you can also contact me if you want to email me at that site as well.

Dr. Randy Lehman: [00:45:17] Dr. Stillson, thank you so much for your time. This has been a real pleasure. I'm so proud of the work that you're doing. We didn't even get to talk about your disruptive technology. We'll talk about that another time.

Dr. Todd Stillson: [00:45:29] Yeah, that's great. Thank you for joining us. Yeah, Randy, thank you for doing this again. It's so important that the world knows about doctors in rural places who are making a difference one person at a time. And Randy, thank you for your due. As a surgeon, it makes a huge difference and I'm so proud. The fact that I have been and continue to practice at making a difference in rural America, you just gave me chills.

Dr. Randy Lehman: [00:45:54] So our listener, thank you very much for being here and thanks for joining us for our talk. If you liked it, please share this with your fellow co-workers. Please like and subscribe. Please join us on our Facebook, find us on Facebook and interact with us and we will see you on the next episode of the Rural American Surgeon.