10 things residents should do when transitioning to practice
So you’re almost finished your medical training. Congratulations! It’s been a long road — and now you find yourself on the verge of a professional medical career. The leap from residency to practice is a big one, and there’s a lot to do. It can feel overwhelming, so we’ve broken down this overview of the most important tasks ahead of you into manageable steps.
1. Determine the type of practice you want
Do you prefer the stability and shared expenses of a group practice, or the freedom of being your own boss? Do you want to be based in a hospital, an academic setting or a community clinic?
Each business model has pros and cons, depending on your financial situation and appetite for risk, your short-term and long-term goals, where you want to live and your personality.
It's a big decision. To help you think it through, check out our article: Should I join a practice or start my own?
2. Decide whether or not to incorporate
When you incorporate your medical practice, you create a separate legal entity that owns your medical practice; you then become both a shareholder and an employee of the corporation.
Whether the pros of incorporation outweigh the cons depends on your unique circumstances. Incorporating your medical practice comes with added costs and complexities, but can help you take advantage of tax deferral benefits, build retirement savings faster, and pay off large purchases (such as medical equipment) more efficiently.
Unsure whether incorporation is right for you at this stage of your career? Take our 5-question self-assessment.
3. Evaluate incentives as you choose the right job and location
Many programs offer financial incentives aimed at attracting new physicians to particular provinces or regions. These programs can help you cover the costs of tuition, relocation or setting up a practice — some even offer cash bonuses for remaining in the community for a certain number of years or servicing a certain number of patients.
When choosing a practice location, it’s important to choose a place that offers what you want for you and your family. Will you be able to have a work/life balance? What supports are available in terms of things like schools, childcare, proximity to family? Will you be able to pursue your hobbies and interests there? Once you've taken all those factors into consideration, incentive programs can help you choose among equally appealing options.
4. Navigate the financial decisions of setting up a practice
While your income will increase as you transition to practice, your expenses will go up as well. If you decide on a solo practice you’ll face higher startup costs than if you join an existing practice: operating expenses such as office space and staff salaries as well as capital expenses such as purchasing office equipment and renovating your space.
Let us help you budget for your transition: Here are 6 expenses you need to prepare for when transitioning to practice.
5. Set up medical billing
Medical billing can be complicated — but you need to tackle it before you start seeing patients. Most physicians in Canada are paid using the traditional fee-for-service (FFS) model, which involves seeing patients and then submitting invoices to your province’s ministry of health, which then reimburse you.
6. Arrange your move
If your practice involves a move, you’ll need to decide whether to rent or buy a home, find a rental agent or realtor, budget for moving costs, change the address on all your accounts and documents, and more. Keep your receipts — some moving expenses may be tax deductible.
7. Fill out all your applications
Here are some of the things you might have to apply for in the final year of your residency:
- hospital privileges
- fellowship in the Royal College of Physicians and Surgeons of Canada
- the Maintenance of Certification (MOC) Program
- certification in the College of Family Physicians of Canada
- licensure in your province or territory
- your provincial or territorial medical association
- a billing number
Requirements differ from province to province or territory, so be sure to check with your provincial or territorial governing body as well.
8. Plan to pay off medical school debt
If you borrowed funds to pay for medical school, whether it be through a government student loan or a student line of credit through a bank, you will have to start paying that back – if you haven’t started doing so already – once you start to practice.
9. Get professional advice about your finances
- Financial advisor. Speaking with a financial advisor will help you plan for the costs of setting up your practice, figure out how to manage your student loans and lines of credit once you’re no longer a resident, and come up with strategies to start investing your income while repaying your debts.
- Accountants and lawyers. Accountants and lawyers who are familiar with the unique issues that medical professionals face can help you separate your personal and professional finances, set up your business, negotiate contracts, buy insurance and understand and prepare for all the legal and financial obligations you’re undertaking whether you’re joining or establishing a practice.
10. Get insurance to protect your career and family
Before you begin practising you must have malpractice insurance in place. This is provided by the Canadian Medical Protective Association (CMPA). Many residents have their CMPA dues fully or partially paid by their employers, but once you finish residency, it’s your responsibility to make your own payments and get reimbursed from your provincial/territorial medical association (PTMA). Apply online at least a few weeks before completing your residency.
Check out other types of insurance that can help you protect your lifestyle and family as you transition to practice. Physicians can get lifestyle protection insurance through their provincial or territorial medical association. MD Advisors* work together with the insurance advisors from PTMAs to provide advice and solutions for physicians.
If you have any questions about how to manage your transition from residency to practice, about developing a solid financial plan that will help you cover the costs of setting up a business or about getting through those first few months — an MD Advisor* is always available to help.
* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.
The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.