Episode 18 Doctor Money Matters.

This transcription was obtained via Google voice recognition. Please excuse any transcription errors.

On this episode, my guests are Drs. Steven and Jenny Bepko, 2 retired Air Force Physicians who are now traveling around the world with their children. In this episode we talk about their careers in the military, the nuances of the military medical system, their experience with finances and deployment. Finally we talked about their world tour with their children this year. I hope this episode gives you an insight and appreciation of military medicine. I also hope that more of us use the Bepkos example to do something interesting and unique while you are young. It’s not just about saving to reach higher and higher net worth. Thanks for listening to this episode. I want to thank the Bepkos for talking with me and I wish them continued safe travels. At the time of recording, they were in Argentina, but have since gone to Africa, the middle east, India, and are now in New Zealand, I believe. They are now slightly more than half way through the trip. The Bepkos have a blog documenting their travel at bepkosgoglobal.blog. Please let your friends know about this podcast by sharing it on text, whatsapp or whatever social media platform you are on. More episodes of this podcast are available at www.doctormoneymatters.com and Apple Podcasts, Google Play, Stitcher, etc. All episodes are also now on YouTube (Audio only) and Facebook. You can follow me on twitter @drmoneymatters Please consider joining the Doctor Money Matters Facebook group. Thanks for listening and please leave us positive reviews and continue to share this podcast with your colleagues. Some other physician hosted podcasts that I recommend are: Docs Outside The Box The Hippocratic Hustle The Happy Doc Doctors Unbound The White Coat Investor There are many others, so please support your physician colleagues.

Transcript

Main Intro 

Intro Outro: 
[0:16] Okay welcome back on this episode my guests are doctors Jenny and Stephen bepko to retired Air Force Physicians who are now traveling around the world with their children.

[0:26] In this episode we talk about their careers in the military and nuances of the military medical system.

[0:32] Their experience with finances and deployment and finally we talk about their world tour with their children I hope this episode.

[0:40] Gives you insight and appreciation of military medicine I also hope that more of us use the bepko example to do something interesting and unique while you’re still young it’s not just about saving to reach higher and higher net worth.

Patel, Jenny Bepko, Stephen Bepko: 
[0:54] Welcome to another episode of the doctor Money Matters podcast I guess today are dr. Steven and Jen bepko recently retired lieutenant colonel from the Air Force.
Stephen is a radiologist and Jenny is a family medicine physician and they recently retired back in July I think and now they’re traveling the globe for a year with their children,
a bit of background I work with Steven he was my commanding officer at Nellis Air Force Base in Las Vegas and Jenny was one of the founders.

[1:23] And teaching attendings of the Family Medicine Residency at Dallas welcome to the podcast.
From Buenos Aires Argentina you are my second International yes and this is the first South American one that I had so jobs are not South American obviously.
So tell me a little bit about your background and how you guys got into medicine.
And then a little bit about your military experience.
And the Air Force finding School.
I was one of those.
Apply for the scholarship for medical school.
And I went on to medical school and residency with the Air Force.
Search retirement considered choice.
Yeah I was a little different I wasn’t that somebody was going to be.

[2:43] Fact I was going to create like genetic dinosaurs inside biomedical engineering was actually,
artificial hearts in genetically modified dinosaurs.
I actually wanted for the Air Force but I couldn’t cuz my eyesight and my dad told me about the white surgeon route to fight surgeons are medical doctors,
I get to wear a flight suit and basically they get to fly or Ride Along.
As a kind of a roundabout way of getting into the career field of the Air Force so I applied.
Got accepted for the scholarship they pay for my medical school.
1 years a journal intern as a Surgical Intern in order to get your license and then I went off in,
medicine for five years before deciding to go back to residency as a radiologist so,
route for the two of you come in and then the medicine specifically in the Air Force,
let’s let’s talk a little bit about practicing in the military so you you get out of med school,
Jenny you did your residency through the air force Okay and like Steven you said that you did a year of general surgery so,
are you guys married at the time where were you stationed.

[4:20] Three or four hours at internship.
Before any other work restrictions duty hours any of that so.
First year and then after seeing her last two years of residency I was actually quit,
staff position although you know I was only barely able to practice because I had my one year of internship out of the way.
But certainly wasn’t the board certified or board eligible roller or residency train,
that particular time,
Family Medicine will to work on your medication.
And then how do I treat you know you are predominantly working with the Flyers and the crew is that correct.
So basically I would usually have three and a half days of Clinic a week,
the flight surgeon had to go inspect the various occupational medicine shops we also had to do like Health inspections of.

[5:56] The golf course snack bar nuts,
three and a half about a half a day of work.
And we were supposed to fly with our Squad not only to establish camaraderie with pilot so that they would trust you with their medical problems and concerns but also so that you,
understood some of the physiology of flight or,
altitude making cost in pretty significant problem so it was a pretty nice lifestyle,
so that’s obviously that experience is pretty unique to the military so let’s talk a little bit about that looks like a little bit about the pros,
and cons of practicing in the military so what are some of the pros that you so obviously flight medicine being kind of a unique Avenue what it what else would you say is a pro.

[6:57] Your arm.
Health insurance company are taking care of.
Service before self.
Surly careers.

[7:47] I would do minor surgery on these guys and find out they were at Normandy Beach.
Really really good stories.
Medicine.
What are the other prizes that you really didn’t have to worry about.
Basically socialized medicine.
What are you supposed to.
Generating of practice and making sure the people,
but you didn’t,
Healthcare systems.

[9:25] Last year.

[9:28] My Air Force doesn’t make its money from.

[9:38] Just got absolutely the the people who wore the uniform the camaraderie I think that’s very you need to military medicine I think a little bit people work at the VA get that,
being part of the military is a unique experience and,
the camaraderie that people share their and I think it elevates the purpose that you are therefore already in medicine so let’s talk about some of the cons now so,
I’m sure there are some negatives that you you’ve experienced.

[10:11] Jenny I was going to be a family medicine physician.
The Air Force would not allow her to do her.
You’re chosen feel I decided to become a,
a couple years before a couple years after it might not have been possible to become a radiologist and certainly if you had your heart set on being a Pediatric Cardiologist.
You know that’s not going to happen for the Air Force wasn’t going to train you in a field that they didn’t feel was necessary.
Write as a bat or some of your listeners who are the doctors and stuff.
Because the Air Force already had three pediatric surgeons.

[11:14] Definition for citations two undesirable locations,
listeners are probably you know I’m familiar with,
the frequency of deployments especially during the peak of the wars that we had any 2000s still have,
even at the time while I was in the military.
You felt like you you were in a part of it and then you talk to civilian colleagues and and they really weren’t aware so to Dad degree it’s even become more of an issue now that people don’t really know what’s happening your experience specifically during that time.

[12:04] Stan.
I had trouble training missions in Desert location,
the last four years my last four years at Travis.
And I was undeployable so that was actually,
20% of the top.
Replacement The Temple at Travis the last 4 years.
Was definitely there it wasn’t a question of if someone is going to die.
Out of out of how many would you say.

[13:19] You are. You would have.
Have any chance.

[13:37] Right and there’s no overtime in the military and no bonuses for that level of oryx so.

[13:43] Pay the same.
Teaching staff at someone who was a clinic PC.
Where is radiology at the most.
Started being able to use teleradiology in theater actually so you could actually,
various various locations,
resetting ear training.
So I mean these are these are some of the sacrifices I think you know when you’re a medical student looking at the financial benefits of getting your school paid for,
you don’t always think about its and yeah I know I really can think 20 years or 15 years into the future but but something to definitely consider.
Before just making this trip financial decision it’s not just a financial decision obviously like we said there is there is some,
benefits that you can’t really put a price on for working for people who’ve worn the uniform and and and being one of those people but it is a it is something definitely think about.
So let’s let’s talk a little bit specifically about you guys mentioned it.

[15:17] About the financial aspects of military medicine versus your civilian colleagues in both you know the primary care field and then also the specialty.

[15:27] For starters I mean.
And if you are really set on Primary Care.

[15:39] Very beneficial because one your salaries will probably they still may be a little bit lower right off the bat.
But certainly after a couple years from my understanding.

[16:10] For five years I was making more than most parts,
but they don’t feel they can afford you coming out with 60 a hundred a hundred and $40,000 a day you know that’s why a lot of people aren’t going into Primary Care.
I don’t know but I remember,
under a hundred thousand it’s just seems ridiculous.
Heard with some of my colleagues are making a mean it’s maybe 50% 60% depending on.
But I think I’m what I’m what I’ve heard.
The Specialists specialist aren’t going to be very close to the civilian counterparts right the ology anesthesia.
Some of the surgical Specialties the workload.
You you you could have been at a a small peripheral Clinic where you didn’t see that many patients and you would have got paid the same as you are a dream your intense teaching time.

[17:46] You know Wiz tons of patients and do we know,
inpatient alcohol.
You know Mommy called,
to go to a teaching program,
you traveling the world let’s talk a little bit about the golden parachute of the military,
everything that we know about our multi your bonuses about the retirement it’s totally totally changed so what little we know.
Play right now and we were on the old school you needed to have 20 years minimum or it was nothing you know 19 years get you nothing 20 years. Everything is 50% of your base salary,
full bird colonel.

[19:17] How much is probably no 5 brandy or something like that but certain types of.
Then so she separated 8 years you separated 12 years you have something in the bank I’ll know and certainly you know,
nothing hyperbole to what you have,
Play services,
can decide what you want to do.
That’s one of the sweetest before we talk about your your travel you also get health benefits correct.
Is it to join the Tricare program in Tricare.
I think the whole entire family was,
530 year.

[20:50] Basis.
Diseases you have your system.
Navigate,
Hayden Springfield insurance,
is
yes yes I should one one other thing that I wanted to talk about financially and I don’t know if it’s still there but I think you guys qualify for this is the GI bill so that’s let’s talk about that for a little bit.
You need to be on for 4 years.
Military to go to school,
Weatherby Lauren to be a civilian pilot what do you want to go to cooking school,
positions none of us.

[22:22] Church it’s so right now basically both of our kids can use.
Rgi benefit years of college at a state school usually IMO State schools all tuition.
Certain private schools.
There’s a certain.
You know we both looked we have a friend whose daughter is going to Vanderbilt for free.
Additionally they get a house based on your location.
And that can be anywhere from 12 to $2,400 a month while they’re in school for about 10 months out of the year.
4 years of school.
Putting money aside in to 529 plans excetera because.
About how they were using curd.

[24:03] Wow we are not dead.

[24:12] Rice which is,
California state of California,
oldest daughter,
how to how to use the GI Bill for for some of the culinary schools,
San Francisco State University San Francisco.
Feeling rolling in some place in New York City for 2 years,
maybe we take photography and Spanish supplement actually,
so I wasn’t able to I didn’t stay in long enough to be able to transfer it to my kids but I did use it the one year that I did Fellowship as a supplement.

[25:45] To know for my housing allowance so that was.

[25:51] I may use it in the future cuz I still have the three years of MBA programs.

[26:01] Really adds a lot of the Financial Security.

[26:11] At least you don’t have to put a side.

[26:17] Well okay so we got the financial part out of the way here so now you guys are traveling around the world this year.
And you’ve been doing it since the middle of July or so so where are you where have you been let’s talk about that.

[26:35] Panama City.
Argentina.

[26:50] Ice nice one of my favorite cities in the world so give you the inspiration to do this and what are you what are you wanting to do this year.

[27:09] 66 years ago.

[27:17] We wanted to.
So we started basically putting money aside,
a good portion of our salary were lump-sum bonuses so we were able to use the lump sums as.
Not your typical,
could you know $25,000.

[28:23] Big expenses throughout the year anniversary trip for five years.
The bulk of our savings and then of course we have not a lot of expenses.
For our retirement salary for the year for traveling and so we’re kind of supplementing at church,
property that has right now so you guys are almost covered the the Western Hemisphere so where are you off to after when a sarees.
Another week here.

[29:27] We just stopped in there for 3 days,
rather than just flying through with that we stay for a couple of,
we’re going to spend three nights in South Paulo have dinner at this restaurant and then,
fly out to Africa I believe 5 week or so 5 or 6 weeks or so before moving on how old are your kids.

[30:10] Homeschooling.
And how I mean obviously the experience of traveling around the world is invaluable but how how are you doing that’s cool why do you set aside dedicated time or how does that work.
Can we have some down time,
for 6 hours worth of school work done,
exploring.
Hours of sleep I’m sure they’re enjoying it any tips for traveling with kids for longer Journey than you know a few days or a week.

[31:22] Just just do it just in time for us we’ve had this on the books or 5 years.

[31:31] Who is she,
upset about how many years High School.
You know when it is actually time.
No way they would not want to come on the trip but don’t hesitate.
They’ve actually done quite a bit much more so.
Easy to travel but this just do it,
don’t don’t let the kids hold you back you can homeschool them like you mentioned it’s just seeing other people.
Of course you know what world,
for the kids,
Taxi Driver Joe find cheap gas stations.
It’s hard to put a price tag on on that type of experience.

[33:01] You taking me to do something,
you have to take the bunch she just absolutely now so now that you’ve been out of country for a decent amount of time.
What are you missing about the US.
I wish we spoke the language.
Everything was bottled water,
is there something.
On the flip side,
you mentioned you know that the number of people speaking English that was a surprise to you is there anything else that you seeing a broad that you wish Americans that was more of an America attitudes food whatever,
when you’re Stateside all you see is the way that we live in America.
And only one small country of the world the world is completely different.

[34:39] Close down.
Appreciation when you’re outside of the United States.

[34:57] Other people act differently and it’s not different isn’t always bad.
Some ways it’s a great experience,
stripper from Travis you go someplace where we can you sort of like you mentioned we’re 6 weeks out from our normal home.

[35:22] And it’s not that bad.
Their way of doing things,
it works works out this is great wanting to go beyond your trip before you guys are even ate out a quarter way through it when you get back to the US.
Republic probably go back.
Next.
A high school experience in the United States and it allows breast.
Picking in what we choose to do next.
I did that for 20 years,
what he wants with a group right before I left.
Early next year.
Three days work options I think that would be my ideal solution.

[36:56] Remind you know one week.
Where I’m working in a 40 45 hours and just fly out there you know for those 5 or 6 days,
would certainly be more than enough retirement so I’m working 5 days a week,
places where we went to live which is mostly mostly Dallas.
There’s not a lot of 100% breast Imaging.
No breast body position I know you got a pretty good itinerary and travel plans but is your return open-ended or are you guys fixed on when you’ll be back.

[37:52] It’s not really don’t have any airline tickets after January we have plans.
But we also will probably be back in the States.
Cursed child play tickets for a show at least England in June.
But I will probably not spend the day.
Eastern Europe like we thought we may just try saving that for another year so we might be,
three or four months in Europe next summer.
Open ended and being out for an extended period gives you a little bit more flexibility so I think it’s joy that because that’s one of the best parts of travel as you guys already know,
is just a freedom in the flexibility to do things so let me ask you out there for a little while,
and you guys obviously had planned this really well and you set aside money like you said,
are the costs in line with what you had thought initially or they cheaper that is a more.
No know where we’re basically we’ve been fluctuating between.
What’s 100 – $100 over the course of the various locations.

[39:32] A lot of splurges,
there are free hotel stays so we have a lot of free hotels from you no credit card miles points and and all that sort of style.
Beginning in Africa will hopefully you know make some brown and then when we get to Dubai and Abu Dhabi.
Ontrac.
At the end of the end of the little the little,
weeks pretty much,
that’s that’s that’s a good point because basically you were having to take everything that you have in a very limited amount of space so,
nice and I’m sure I’m sure you guys have become if you weren’t already experts at packing and unpacking.

[40:55] Jenny is getting my parents have actually met us in a couple of places so as we finish up pretty much are gold.
6 weeks or so and of course it’s getting warm,
Australia New Zealand cell were able to,
every time we go back to the states with a couple of clothing,
if that’s great I am I enjoyed catching up with you guys after a few years and I want to thank you for participating in this.
Tell me about the blog you guys are doing.
Stephen and I are.
What else I’d posting on my run by,
Stevens Runner 2,
try to update a couple times a week,
we’re getting a little bit more into the groove of things.

[42:35] Okay alright sounds good we’ll put a link to an our show notes and will keep like checking in to see where you’re at and great catching up with you.

Intro Outro: 
[42:48] Thanks for listening to this episode I want to thank the best goes for talking with me and I wish them continued safe travels.

[42:55] At the time of recording they were in Argentina but have since gone to Africa the Middle East India Singapore and are now in New Zealand I believe.

[43:05] There now slightly more than halfway through their trip and you can follow along with their Journey on their travel blog the linkers in the show notes but you can Google bepko global.

[43:17] And that’ll also connect you.

[43:19] Once again thanks for listening please let your friends and colleagues know about this podcast by sharing it via text WhatsApp or whatever.

[43:28] Facebook or other social media platform you’re on.

[43:32] Are these episodes are also available at Doctor money matters.com and on Apple podcast Google play Stitcher and just remember to leave us positive reviews if you can.

[43:45] Helps other colleagues find this podcast and do that for any other podcasts to you listen to their many good physician podcasts out there now.

[43:55] And my colleagues who are doing shows at Doc’s outside the box, the Hippocratic hustle, Doctors Unbound, the happy Doc and white coat investor all physicians with good podcasts that

I recommend you listen to I’ll have a link for these podcast on the show notes as well.

[44:15] Finally I encourage all of you to join the Facebook. Doctor money matters group where you can ask questions of other community members in the group and discuss topics we talked about on the show.

[44:26] Once again thanks for listening and we’ll see you next time.

Main Intro 

Doctor Money Matters

Episode 11

Transcript automatically generated by Google Speech, please excuse transcription errors as this has not been corrected. Listen to the episode to hear what was said.

Transcript

Tarang Patel:
[0:51] Hi and welcome to another episode of the doctor Money Matters podcast.

[0:54] As Healthcare professionals we can all agree that the Health Care system in the u.s. is broken it’s too difficult to maneuver for patients and practitioners alike.

[1:04] Today’s episode we talked with dr. Keith Smith and anesthesiologist and a founder of the surgery center of Oklahoma.

[1:11] This practice is a Pioneer in cost transparency and as you’ll hear during our interview they charge a fixed price for many common outpatient surgeries.

[1:20] Dr. Smith and his Partners understood many years ago the challenges of dealing with insurance companies and decided to break free by switching to this model.

[1:29] This episode compliments the direct Primary Care Model episode that we had in episode six with dr. Josh umbehr of Atlas MD.

[1:37] Dr Smith was very straightforward.

[1:40] In regards to his feelings about the intervening parties involved in healthcare today such as government and insurance companies.

[1:48] I think many of you listening can relate to these frustrations.

[1:52] Difference is that he’s able to do something about it and I hope by listening to the challenges that he faced and his Partners face and then that the benefits they’ve gained and their patients have gained over the last few years.

[2:04] We Physicians are inspired to take back control of the health care that we deliver.

Dr. Tarang Patel:
[2:09] Okay welcome to another episode of the doctor Money Matters podcast I guess today is Dr Keith Smith and anesthesiologist of the surgery center of Oklahoma,
a fixed price Surgery Center where patients get transparent pricing information for a variety of different surgical procedure welcome dr. Smith.

Dr. Keith Smith:
[2:25] Thanks for having me.

Dr. Tarang Patel:
[2:25] We’re talking about your surgery center you’ve gotten a lot of press recently tell me first before we get into that about your background and then what made you go into medicine and anesthesia.

Dr. Keith Smith:
[2:35] Well my background I actually grew up kind of musician but my brother went off to medical school and then I started thinking about medicine and I realized I could be an amateur musician but,
not an amateur physician and I had a hard time deciding which one to do and so I thought the other way I could have both of those things sort of part of my life was,
did Percy medicine,
in another reason I was intrigued by medicine much more so than music was fitted so it’s such an obviously mutually beneficial Exchange,
the physician in the patient if everything is ethically organized and I both walk away better from having dealt with each other and I think that’s been ingrained,
in May Since I was since I was little.

Dr. Tarang Patel:
[3:20] So you went to you went to med school and residency at the University of Oklahoma and then you did your fellowship in Arkansas what’s the stock a little bit about your practice than the surgery center of Oklahoma when did you start and what made you decide to go to the fixed price Model.

Dr. Keith Smith:
[3:35] Well we started it seems incredible now but we started twenty years ago next month the surgery serve Oklahoma but I was in private practice like.
Every other anesthesiologist in the country for seven years working in the big hospitals long enough,
long enough to see that something wasn’t right the free market was not at work,
you know that someone did a great job for reasonable price didn’t seem to resonator have any value to the consumers and.
And after the the clintons had their way with Healthcare in the big scare they caused and Medicare,
incredibly heavy-handed in over involved in the pricing of care then.
Dr Steve Monti and I both of who founded this facility we found everything that was wrong with Healthcare with seem to just be getting worse and our fees were dropping and so we we basically walked away from very busy.
Diana seizure practices and thought,
you know we can either complain about this the rest of our careers or do something about it and we started the service of Oklahoma we we just walked out but found this old burnout,
facility that had been mismanaged assume the lease some really good surgeons and Friends followed us we started very small.
And now we’re in this very large very busy facility with a with a business model that is consistent with and really an extension of our free market philosophy with prices online real competitive sort of spirit in a monks.

[5:06] Partners here and with other facilities.

Dr. Tarang Patel:
[5:10] When you started about 20 years ago now talk about some of the the difficulties you face when you first started up.

Dr. Keith Smith:
[5:16] Well when we started the facility we did not know enough,
about how sick the cartel like healthcare system was to be truly as scared of it.
As we should have been and it was our ignorance and naivety going into this that probably allowed us to continue but we found out,
very shortly after we open when we were attacked by various legislative attempts that had obviously been orchestrated by local hospitals and then we were targeted in singled out by insurance carriers initially day you know they wouldn’t contract with us at all and then they began tinkering with,
in and out of network deductible scenarios that ultimately about 2003 that made it almost impossible for patients to.
To come through our doors so,
we we battle at the legislature we battled our own health department and we actually had to sue our own health State Health Department at one point we were we were victimized by the.
Classic typical cronies in healthcare the folks who cannot stand up start kind of Underdog competitors in,
we were able to we were able to win every one of those battles really at the legislature because our message was so pure and free market and I stop,
accepting money from the government in 1993.
I just did Medicare Medicaid cases free I wouldn’t even file a client and in so when I looked across the legislators desk and told him no I don’t want anything from you I don’t take any money from you now and I don’t want anything from you.

[6:53] Except for you not to,
latch onto this legislation that hamstrings us you know please allow us just leave us alone and please allow us to show you that the market can provide better pricing and better quality simultaneously and that was a message that resonated across both sides of the aisle you know the Democrats thank God for the Democrats,
in the early 1990s in Oklahoma because without them we would be closed the Republicans were very in bed with the.
Corporate Healthcare cronies and we’re part of what,
the force that was trying to close us the Democrats us as underdogs as friends of the poor in the uninsured they appreciated our honesty and our,
you know taking care of people who could pay and who couldn’t pay but being honest about our pricing and now,
now it’s really a bipartisan support of what we’ve done at on both sides of the aisle and everybody thinks you know that it’s good too.
You know what’s good for honest people not price gougers to be in the Healthcare System most of the challenges that we Face early on were political legislative challenges there were also some kind of insurance games that the carriers played with us in those became vicious in in the early 2000s,
but our cure for that rather than to continue to fight them was was to really secede basically just to walk away and say you know what we,
we are tired of this fight we’re tired of spending our our time is physicians in the silly fights we’re just going to put our prices online and shove the insurance companies aside in.

[8:31] What’s interesting is even at our prices which are less than what Medicaid pays these local hospitals none of the insurance carriers want anything to do with us.

Dr. Tarang Patel:
[8:40] Interest even though that it would be cheaper for them to work with you guy they still don’t want work with that’s that’s crazy.

Dr. Keith Smith:
[8:46] It is crazy until you realize it’s not crazy the only possible explanation for an insurance company to not want part of cheaper and better is if the insurance company somehow makes more money off,
not cheaper and better and you I mean intuitively you would think okay they collect premiums they pay claims they keep the difference and that’s the profit and it’s actually much more complex than that.
Insurance companies as insane as the sounds they don’t really care what anything cause what they care about is the initial charge,
because then they go to work selling discount.

[9:22] So they basically sell their discounting service in the higher the initial bill the more opportunity there is for them to make money off of that.
Discounting repricing service so you’ll hear one PPO or another say yeah but we get 60% discount and somewhere down the line there’s an employer group who is paying a commission on the discount,
if the actual spend of the insurance company goes up in one year they just raise premiums the next year to make up for it,
in the brokerage houses are a big problem too because they get paid based on how high their conditions are based on how high the premiums are so they don’t want any part of cheaper and better so it’s a very sick set up the insurance company’s is crazy at it sounds they,
all they care about is that initial charge and with my prices online there’s no opportunity for them to sell a discount because the price is transparent to the buyer.

Dr. Tarang Patel:
[10:18] Right so now so you no longer take insurance like you were saying when did you go to that mall.

Dr. Keith Smith:
[10:23] We went to that will we have tapered off in to be perfectly honest we actually have one insurance contract remaining we had a,
the insurance company come to us because it in large employer in Oklahoma City had a gun in the back of their head and said put surgery serve Oklahoma.
In your network or your fired and we signed up with them is biggest mistake we ever met.
I wish we’d never signed up and we still have that contract but.
It’s we probably won’t have the contract for long we’ve been out of network as since we opened in 1997 for the main main reason for that is none of the insurance companies would sign up with us.

[11:04] I later found out that it’s commonplace in the industry for a hospital.
The hospital system to tell an insurance company that you know we will contract with you but only if you’ll explode you know the facilities on this list so really does act 3 much like a cartel.
It’s so we’ve been out of network with everybody and so when,
when we dealt with patients that had Insurance many times our cash price was less than their deductible so we’ve been dealing with people like that,
ever since we opened when we put our prices online the amount of business it started streaming through the door picked up so rapidly that,
we really were able to completely walk away from any notion of dealing with insurance.
Be there in in selling a lot of positions need to understand that the demand for honest transparently price Services is so large,
they cannot possibly be satisfied and the biggest part of that demand comes from the self-funded businesses that have the sticker shock,
on the actual cost of the care we’re at you know the big insurance companies don’t care how much things cost does self-funded company steel companies that typically have a hundred or more employees and,
you know they self insure they really do care what it cost and then that’s a huge part of what we’re doing here now.

Dr. Tarang Patel:
[12:26] Absolutely. Let’s talk about that a little bit you you’re based in Oklahoma which is you know kind of center of the US geographically and now with your practice model and you getting a lot of press National your patience sir,
coming I obviously coming from Oklahoma but you getting a lot of patients from companies Nationwide.

Dr. Keith Smith:
[12:42] Yeah they actually after we put our prices on line 9 years ago the first patients to arrive or Canadian.

Dr. Tarang Patel:
[12:48] Canadian interesting.

Dr. Keith Smith:
[12:50] And you know that these are people who have coverage you know they just don’t have access to the care many of them require.
Everybody who’s a big fan of single-payer in the Canadian Healthcare System needs to needs to really look in the mirror and ask themselves,
why are Canadians flying Oklahoma City you know to have surgery but yeah we treat patients and have seen patients from all 50 states except Hawaii I think the,
states that continue to send us the most patients are Alaska and Wisconsin part of the reason for that is that the market there is so cartelized and there are just a few monopolistic health systems that,
completely controlled the market that the pricing there is predictably much higher so yeah we see patients from all over the country,
you know their employers who will pay all of the travel expenses for a patient and a companion to come to Oklahoma and have their surgery and then fly them home because the Delta on what they would pay if they stayed home is so gigantic,
employer self-funded health plans still better off.

Dr. Tarang Patel:
[13:54] So let’s let’s talk a little bit about the patient experience so you have the price list online so someone wants to come in and you know what you do a fair amount of Orthopedics I think at your place so,
let’s say they want to come in and do you know I can rotator cuff repair how does it work from the patient’s perspective they see the price and that includes what.

Dr. Keith Smith:
[14:13] Everything includes the facility anesthesia and the surgeons fee and the patient can arrive and hand us their credit card they can hand us a cashier’s check.
Some people just pay with cash and we’ve had we’ve had people pay with gold and silver coins until I pay with Bitcoin.

[14:34] Try to accommodate the buyer yeah and they pay us and we do the surgery and they don’t receive any bills later.

[14:40] And if the patient is an employee of a self-funded health plan.

[14:45] Then we treat those self headed Health Plans basically 30 days same as cash so will they’ll receive a series of invoices and pay us at the end of the month.

Dr. Tarang Patel:
[14:55] And so and then if you have a complication or what then that is part of the included cost is that right.

Dr. Keith Smith:
[15:02] No we gave that some thought when we first launched these prices in,
we thought well we could pad these prices by certain percentage and guarantee no guarantee the results and guard against complications but our complication rate here is so small that didn’t seem right to overcharge.
Everyone who came through the door as if a complication was possibility.

[15:26] So we put all of our infection rates online and complications are just very rare so.
What we decided to do was treat any sort of complicated situation individually and.
No one here is attempting unlike the so-called not-for-profit hospitals no one here is attempting to make a profit off of a complication so worst case scenario is that patient might pay the cost of the supplies.

[15:53] As somebody who somebody who runs and surgery center and a large Surgery Center I can tell you that is not that significant but we.
We seek well when all the dust settles we still want patients to feel like,
even if something goes wrong that they’ve had a value experience here but the complications have been so rare we’ve been able to just treat those individually and we had a,
we had an employer in Texas that had a patient come up here in the patient really wasn’t compliant in his wound dehisced and he had to come back and have a couple things done and all I did was invoice for the cost of the supplies which I think was less than $500 for the whole darn thing.

[16:37] And when it was all over with this employer called me and said you need to add more complications.

[16:43] And I said what are you talking about with your we don’t want any complications that he said you know,
there’s such skepticism attached to this idea still this you know too good to be true thing you said you could not have you could not have killed our skepticism in a more powerful way than how you don’t with this problem so he said that the value delivery,
he witnessed as result of marching through this complicated setup,
made a real believer out of him and everyone in his company so that was the nature of his sarcasm.

Dr. Tarang Patel:
[17:12] Bright.

Dr. Keith Smith:
[17:14] We should do this more often to convince people.

Dr. Tarang Patel:
[17:17] That’s true because like you said when you dealing with it with just,
Supply casa mean that that’s that’s a big difference in what we traditionally see which is basically the charge of the you know that the full charge of the procedure and everything else that it entails at other facilities so that’s that’s really good now let’s the price list that you guys have how did you come up with that,
how did you come up with the price of.

Dr. Keith Smith:
[17:38] Well in that and that’s the only thing more radical than our prices being online and I’ll tell you how we did it is that they’re actually bundle debt.
Everyone’s,
prices in that mix so we part of the problem that I had with my practice before we open the surgery center was that,
I had to adhere to prices that were forced on me I had to endure what.
Some insurance company determine my time was were in no other Market works that way in every other Market the supplier of the service or the product,
what is the source of the price and that price changes due to whatever competitive activity is that that,
producer is subjected to so it shouldn’t surprise you then.
the way we started was with a roomful of surgeon so I grabbed a subgroup of my ear nose and throat and Orthopedic partners and sat down and said how much do you want for tonsillectomy how much do you want for Creative instruction.
They had no idea.

Dr. Tarang Patel:
[18:41] That’s true because most of us still outside of the people who are entrepreneur like yourself most of us still don’t know what we are paid on an individual case space.

Dr. Keith Smith:
[18:50] That’s why they didn’t have any concept of you know what is my time Worth or what is my expertise were in so I that’s when,
we kind of had our first philosophical lesson when I said okay you’re either tired of somebody else telling you what your words or you’re not and you guys can bring me prices or I will in flick them on you.

[19:10] But I don’t but that’s the whole purpose of this exercise and so they all came back with this pricing that frankly was pathetic and I padded most of them.
They did not value themselves nearly as highly as they should have keep in mind we,
operate on all the division 1 athletes in the state of Oklahoma the Oklahoma City Thunder players three of us are Pediatric,
Fellowship trained anesthesia so we do a lot of pediatric surgery and all the pricing I was getting frankly was just too low so I padded it and I’m doing all of this dinovo I mean I’ve nothing to compare I just thought that’s not enough.
Where this guy who is a world-class in a surgeon that’s just not enough for a New York to be your cruciate ligament so they gave me these numbers which I could.
Ignored and added to all of them and then it’s an anesthesiologist.
Not basically I basically bill for my time there’s some modifications like before doing a surgery that requires of a regional nerve block in addition to everything else going on but,
we basically built for time,
at the surgery center it’s time and materials so it’d be just like a building contractor you have time in materials so we had to ascertain what,
say 30 minutes in an operating room actually cost and then,
have a marginal profit on that and it’s not even Algebra I mean you just add those things up it’s simple math and we came up with these prices prices that I put on the website 9 years ago have been changed every single case.

[20:43] I’ve lowered so so much for the spiraling cost of healthcare.

[20:47] In nine years we have lowered prices for times I’ve never raise them the only other changes I’ve made are adding additional procedures and I don’t know how many we have online now but I know it’s over.

Dr. Tarang Patel:
[21:00] Okay so let’s let’s talk about it so you you started with it with a small group of surgeons and you’ve over the over the years expanded your scope of the procedures like you were saying how are you guys doing you know without getting into specific numbers financially versus you’re employed colleagues or your colleagues in traditional private prep.

Dr. Keith Smith:
[21:19] Well keeping in mind my just immediately prior comments know this that what a surgeon receives here for any given surgery that they perform in terms of their professional is higher.
Mini X multiples of what they receive from their favorite Insurance carry so even though are bundled fee.
Say $3,740 for a knee arthroscopy even though that is less than what Medicaid would pay one of these local hospitals the portion of that fee that goes to the surgeon here is.
Is that it’s large and so as a result of that.
You know arcgis ility actually operates a bit like a not-for-profit there’s really not much much more so than these so-called hospitals that claimed that status so we’re really not trying to make,
a marginal profit to any degree off of the facility we just want to pay the people doing the work.

[22:15] A very healthy fee so the answer your question is the surgeons who in their 65 of them here now we started with 10 but the surgeons are working here are doing extremely well and if they’re not it’s their own fault.

[22:28] They are the source of their own pricing that’s that is the truth.
Innovation and actually to be truthful it’s not even Innovative that’s the way.
It always was before the government got involved and just messed everything up particularly with the resource-based relative value scale in the early nineties.
Fire that time positions were the source of their own price and so this is really it’s really Innovative in that it’s a throwback,
to the way things used to be done and then you know I’ve started along with a friend of mine J Kempton who runs a third-party administrator that free market Medical Association and we are helping other,
Physicians and Facilities copy what we’ve done in so sprouting up all over the country are these you know these copies or even.

[23:17] Different in some cases in many ways more Innovative models than what we’ve done until I got competitors all over the country that we’ve helped inspire.
Who we collaborate with in if somebody calls me from Virginia and wants to come here for surgery I just point them to Monticello Surgery Center in Charlottesville they don’t need to come all the way here,
so there are these facilities all over the country now and we work together and try to you know get patients to the right place where they need to go so it’s it’s.
Very exciting everybody that’s involved in this loves it there transformed they come to work with a smile on their face they they are the source of their own pricing and value and so it feels like,
the mutually beneficial exchange sort of practice that Physicians used to have before Uncle Sam came in and you know God,
bribed by all the cronies and took off with them in the getaway car it’s just it’s criminal what government is done to Medicine.

Dr. Tarang Patel:
[24:18] Let’s talk about you mentioned the free market Medical Association that you helped start and obviously this is something that costs of medicine or something that are on everyone’s mind regardless of party affiliation this movement is growing I had a guest on a few episodes ago with this type of model in Primary Care,
but honestly I wasn’t really that familiar until we started looking and I saw your Center come up with that being available for all this variety of special,
but do you see that now I mean you’re obviously helping people expand this model,
where do you see this in five to ten years do you think this will be kind of the default type of Health Care that the average person will get for the,
the basic most common procedures that they do.

Dr. Keith Smith:
[25:00] Yes in it it would be the natural order of things for human beings to act in Cooperative ways to wear the exchange is to their Mutual benefit the thing that always gets in the way is some goon in Washington DC,
and then he’s Pals with some Hospital CEO and then they scheme up ways to make sure the market is sported and so the,
yeah you always see this legislation come out that is ostensibly is all for our own good but really is protectionist and a protectionist.

[25:36] And helps the bad guys you know the black hats the price gougers if things if the government will just get out of the way in the natural order will be for.
Massive amounts of price transparency and competition to emerge from this new Marketplace and for prices to simultaneously fall while quality sores.
And that’s the natural order of things I am shocked I’m actually astonished at how fast this movement has already grown in,
and we are not alone there are many facilities in the United States that are embracing this model partly because they have embraced the notion that what happening currently is unsustainable in there has to be.
I’m more stable and better way you can buy heart surgery in Oklahoma City you can buy a bypass surgery for $34,000.

[26:32] Is there oncologist who are charging a flat fee to administer the drug in and lateraling the drug without a Marca.
A lot of the cost and chemotherapy are or hospitals that multiply the cost of the drug by 7/8 or 12 times.
So there’s a lot of very excited,
we have an understanding and agreement with a local full service hospital so whenever I receive a request online for a procedure that cannot appropriately be done on an outpatient basis we can’t keep a more than the one overnight we’re licensed for all,
email the CFO of Deaconess Hospital across town they have got somebody that needs a bowel resection for a signal cancer and next thing I know I’ve got a price that is all in for an anesthesia in the facility,
not find a surgeon you know negotiate price throw him into the mix and.
Now we got you know somebody from Idaho that needs a colon resection that was going to be bankrupted by some so-called not-for-profit hospital and.
He’s bought his entire procedure maybe for 19000 so this is wonderful the free market Medical Association is a vibrant,
growing getting to be a huge organization and we we’ve captured the interest of you know the buyers and in the sellers.
Don’t want to be left out and they’re beginning to understand the extent of the demand and so there’s there is some,
kind of healthy competitive fear that is driving this as well either.

[28:03] Facilities that are sick and tired of patients leaving their Hometown in flying to Oklahoma City and having their surgery and that that’s very creepy for in a hospital to have someone come home that’s had surgery at my place and bragged to everyone in town about how wonderful it was that that’s not a good setup for that hospital if they’re not,
give me a business in slide.

Dr. Tarang Patel:
[28:23] Absolutely so let’s you know so we mentioned your the physicians at that work at your surgery center,
obviously doing well financially even though the costs are low,
how is their overall quality of life I mean you know most docks in in private practice or or even employed models nowadays are.

[28:41] Are just under the under the gun to a procedure after procedure without as much control of the the Ole our time or turn around things like that I’m assuming that the quality of life of the physicians in your practice is much higher than then the traditional model.

Dr. Keith Smith:
[28:55] It it is it’s much higher because,
no one feels controlled or a slave when they have established their own value and their own pricing the other thing is that Dr launch and I run the service of Oklahoma very efficient way where we we basically provide every surgeon.
Tea brands in to cruise to Anesthesia staff and so the surgeons can get here and get a lot of work,
done in all of a sudden just have half a day created out of nothing and they can either go back to their office and see more patients or they can go.
Be with her family or white golf and so their quality of life given that they’re paid a fair amount,
for every case they do and they have extra time on their hands due to our efficiency measures here that’s a recipe for lots of smiling faces and you won’t see anybody he’s not smiling here.

Dr. Tarang Patel:
[29:47] Well that it sounds it sounds fantastic and I think most of my listeners would agree that this is the kind of medicine that.

[29:54] When they first thought about going into medicine they thought that he would be practicing not necessary just to financial part but just happy to work,
and enjoying what they do and not just enjoying the patients but enjoying the whole the other part and that’s the part that is slowly been deteriorating for most Physicians you you read it all about Physicians burnout and stuff like people wanting to retire early,
added it’s when you hear positive experiences like.

[30:19] Like people having your surgery center I think that that bodes well for the future medicine even though there’s all this negativity now.

Dr. Keith Smith:
[30:25] Yeah we we have patience that will walk into a surgeon’s office,
and they can’t afford our website fee and the surgeon will call and say I’ve got this child here and they know they need their tonsils out this is really bad and they don’t they can’t really afford the fee and so I said well what are you going to charge and the surgeon may say well.
You know I didn’t think maybe I would charge him at all.
I said well you know our anesthesia team here always follows the surgeons lead so we don’t charge him either and then I say can they cover the cost of the supply room cost hardly anything to do with me.

[30:59] You know these patients will come and they’ll pay you know some amount that may cover the supplies and then off we go and because we own and control the facility,
because we own and control every aspect of the finances of the facility were able.
We’re able to really practice medicine in the old time way where we could not we’re not just medical Advocates of the patients were also their financial advocates in the absence of.
Some hospital administrator Overlord profit Seeker price gouge or bankrupt or in the organization allows us to.
To work in that way it’s very gratifying it’s wonderful.

Dr. Tarang Patel:
[31:39] Great I’ll let me ask you what advice would you have four younger positions are interested in trying learning more about this model or just as they start their career and want to get involved in some of the changes in medicine like you guys have done.

Dr. Keith Smith:
[31:52] Will the advice that I give I like to give medical students one piece of advice because there they got so much on their mind they can’t,
remember much more than one piece and the one piece of advice I give to Young medical students is never,
under any circumstances go to work for a hospital system and the reason for that is the inevitable dilemma that will emerge where the young physician is in a position having to decide.
What is best for their employer and their job or what is best,
the patient it’s just a matter of time before that conflict emerges whether there’s pressure to order more tests you know to increase their RV use,
it’s just a matter of time before that dilemma emerges if if young medical students are considering primary care which I would strongly consider them.
I strongly advise them to consider then they need to investigate Josh Amber and Atlas MD,
I need to look at my friendly gross and Epiphany Health in Sarasota Florida nice guys are giants they are leaders in the free market movement in and in the direct Primary Care movement,
and there is there’s a real possibility now for someone to walk out of medical school and have really no capital or very insignificant Capital outlay to get their practice started and.
And even serve maybe as an apprentice under an existing direct primary care doctor who would take them under their wing and so the really is less and less reason for a medical student to go to work for one of these.

[33:26] Price gouging Hospital Systems in that that’s that’s the one piece of advice I think that I would drill into a medical student if they would if they would hear it.

Dr. Tarang Patel:
[33:35] No that’s that’s really good I think the counter unfortunately did that part is just most of them are just burdened by so much in loans that I don’t think they actually had to lay anything for their own practice I don’t think they could do it but.
Even without that they’re just you know they have such high loans but they could like you said they could go work for someone else and you know ultimately in the long run I think that would pay off.

Dr. Keith Smith:
[33:57] Yeah I know,
I was in that situation when I finished I think it’s worse now than it was when I finished but I I went to the bank and I borrowed money to buy an anesthesia machine and I had to buy all of my monitors and I had to borrow money for living expenses until I had some cash flow and.
And I lived like a Spartan until you know those things were paid off that with the direct Primary Care movement.
It’s really possible to not have to spend a lot of money to get started and that is really something.
I don’t know a lot of positions who are hospital employees there really glad they made that decision 10 or 15 years later,
most of them wish they could undo it but by then your the hospitals have their hooks in them there they’ve syno competes they have to buy a tail that they,
can’t afford on their practice coverage there’s all sorts of sticky little hooks that you know we’re hard to escape once you make that poor decision.

Dr. Tarang Patel:
[34:52] Well hey thank you dr. Smith I appreciate you coming on or on our show and really really good information really interesting it’s so unique time and medicine I think there’s a lot of build up against the cost and I think that like you said there’s definitely opportunities now that weren’t available 10-15 years ago,
maybe do something different and doctors like you dr. ombre.

[35:14] You leading the way in these in these models so I want to thank you and we look forward to seeing what what comes new from the surgery center of Oklahoma.

Dr. Keith Smith:
[35:21] My pleasure thanks for having me on your show.

Tarang Patel:
[35:32] I want to thank Dr Keith Smith of the surgery center of Oklahoma for being our guest today.

[35:37] He definitely gets you fired up about empowering Physicians to take charge of their own destinies.

[35:42] Ultimately the cost in the US Healthcare System will be reduced and it is imperative that Physicians lead this change rather than have it dictated to us.

[35:53] The Oklahoma Surgery Center model is one type that is producing the decrease price costs that.

[36:01] Patience and all components of the healthcare system are looking for.

[36:07] For price decreases in the last nine years with no increase in Surgical cost and yet the doctors remain well compensated and more importantly are independent decision-makers.

[36:20] Where where else do you in medicine are you seeing that Trend it’s almost always going in the opposite direction pretty much everywhere else in medicine.

[36:31] Anyway great show today please visit our website www.onlinemedicalcard.

[36:41] Twitter at Dr Money Matters and our Facebook page dr. Money Matters.

[36:49] Please subscribe to our podcast on Apple podcast Google play or Stitcher and leave us a positive review on iTunes if you’re so inclined as this really helps boost the.

[37:02] Popularity of this show if you have any suggestions for guests or comments you can.

[37:08] Send an email to comments at dr. money matters.com all spelled out.

[37:13] Look for another episode of the doctor Money Matters podcast coming soon thanks again for listening.

Tarang

Episode 10. Kenyon Meadows, Md–Investing In Real Estate

http://www.doctormoneymatters.com

Transcript (From Google speech. Please excuse any transcription errors)

Doctor Money Matters Intro

Tarang Patel:

[0:44] Are you looking for passive income are you afraid of putting all your investment eggs in the stock market.

[0:49] Have you ever thought about buying real estate as an investment my guest today had those thoughts when he decided to get into real estate investing after the economic downturn of 2008-2009.

[1:00] Dr. Kenyon Meadows is a radiation oncologist in Southeast Georgia branched out his Investments to include real estate in the form of single family homes hard money lending and crowdfunding.

[1:12] Many working Healthcare professionals think that it’s probably too difficult and too time-consuming to get into real estate.

[1:19] Listen to dr. Meadows today and you’ll be inspired to Branch out of the traditional investing Minds.

Tarang Patel, Do:

[1:25] Alright welcome to another episode of the doctor Money Matters podcast Our Guest today is Kenyon Meadows MD dr. Meadows,

is radiation oncologist in Georgia he went to undergrad and medical school at Case Western University in Cleveland and then did his radiation oncology residency at the University of Florida practice is currently at South East Georgia Cancer Care Center and is also the president of Meadows Enterprises which is his own investment for Meadows welcome to the show.

Kenyon Meadows, Md:

[1:50] Thanks for having me Frank appreciate it.

Tarang Patel, Do:

[1:52] So I heard,

1. Meadows on a another podcast to real estate podcast and I thought he’d be great for ours so the reason we brought him on his because he has a lot of experience with real estate so dr. Meadows let me ask you investing important to you as a physician General.

Kenyon Meadows, Md:

[2:06] Well well first of all and I think we’re on a very advantageous position in that you know Physicians earn well.

And so we generally have some extra Capital around to invest and and so I thought it was just a good idea to educate myself on some more options than what are traditionally,

taught us and I will say this to up until about 2010.

I was a fairly traditional investor in terms of the various asset classes I participated in you know stocks mutual funds tax-free bonds things of that nature but honestly.

After the 2008 downturn and then some other downturns in my portfolio it got me thinking about learning about other assets Alternatives as they call it and so that’s what I’ve been into in a big way including Real Estate Wichita big part of that.

Tarang Patel, Do:

[2:57] Okay so good let’s talk about that so you you mentioned that before 2010 you were conventional investor like most physician or dentist or and you got into real estate and then other assets so talk about real estate specifically I’ve been doing that since 2010 what what kind of Investments are you doing.

Kenyon Meadows, Md:

[3:13] Yeah so when I when I first got involved I was very but my goal was to participate.

But to be able to do it in a relatively passive way I think most of us when we think about investing in real estate probably owning,

income-producing property is the first thing that most of us think of and that certainly was my thinking but I didn’t want to be involved any potential hassle of managing a property so actually my first foray into real estate investing with private,

mortgage lending and what that is basically is when in an individual as opposed to a financial institution provides the capital to,

another real estate entrepreneur to acquire a property potentially renovated sell it you know Fix and Flip as we say so that Dad actually was my first,

entry into real estate doing that.

Tarang Patel, Do:

[3:59] And how did you I mean that doesn’t sound like an easy thing to do how did you find the people to loan to how did you set up the infrastructure to do that.

Kenyon Meadows, Md:

[4:07] What will you write there’s not really a standard in a way to get into it I mean basically I began to ask around anybody in my network that I knew like Hey how do you invest in real estate how do you,

how do you deploy your money in a way that’s different than than the traditional ways that we’ve been taught and honestly was really sort of a chance encounter with somebody at church of all places and told me today,

loaned money to a rehab as it were of fixing flipper and he told me the basics about the process and then I wanted up meeting with that person,

learning what private mortgage lending was about but in and also importantly learning about other people that I participated in deals with them and had a and had a good,

a good outcome also track record is key you know anybody that you’re going to be providing.

Private mortgage money to they really should be experienced and have done several projects with good outcomes that can be verified just as a starting point yeah definitely.

Tarang Patel, Do:

[5:03] Okay and so you so this is someone you met like you said to church so obviously that generally a good a good starting point.

But so you started with loaning to a rehab what what did you do next how did you get one from there how did you evaluate the performance there and then how did you go on invest.

Kenyon Meadows, Md:

[5:22] Yeah you know when it comes to the private lending I think many people in the audience may be familiar with a lot of the the flip this house type shows that really proliferated prior to the mortgage crisis,

when it seems like everybody was doing that stuff so I think people understand the basics you know you won’t you buy a property that’s that’s undervalued you renovate it to varying degrees and then you sell it usually 2 to a retail buyer at the end.

Obviously finding a property that’s very undervalued and in pain,

make making an aggressive offer where where does a lot of meat on the bones or profit potential when you judge how much you can sell it for so you know that that person’s got to be have a good eye.

To know what’s a good buying price number to what the amount of renovations,

are needed and what that cost will be and then ultimately with that sales price will be afterwards too that’ll be attractive where it’ll track a lot of interest but they’ll still be sufficient profit to pay your private lender,

I just so people know you know when you make a private loan to somebody it’s very very different than a bank loan right so these these loans are like 6 to 18 months duration so that’s relatively short.

In the in the interest rates you charge on them can routinely be double digits,

tattoo mid-teens also personally myself I loan money out at anywhere from 10 to 15% interest so the person’s got to be able to satisfy that you know your requirements and still make a profit on their end so be able to judge all that stuff accurately is key.

Tarang Patel, Do:

[6:53] Okay and so so you said you started doing that do you still do you still do that as well.

Kenyon Meadows, Md:

[6:59] Oh yes I absolutely do as I continue to evolve and in my real estate knowledge investing knowledge you’ll eventually I got comfortable with the notion of being able to own the actual property now.

Doing the private mortgage lending is good in terms of you know getting a nice high heeled on your money that’s well above the rate of inflation but you started.

Think about things like well there’s no there’s no inherent tax advantage to it safe from for say so you’re going to get taxed at you know what your regular income rates and as I begin to consider that,

and I’m looking at the again the tax advantage position of,

owning the actual property I got comfortable with that too and in the way that I got into it was one of the people that I was loaning money to they were actually building up a rental portfolio,

and they said to me hey you ought to consider this as well and then when they really showed to me how with a very good property manager,

emphasize good property manager and with Well Screen tenants you can actually own rental property and have it be a relatively hassle-free you Nolo time intensity investment,

and they call it a Turn-Key rental investing and basically what it is or these companies out there they specialize in know they they Market to folks like Physicians and dr. Physicians dentist other high-income professionals they want to own real estate,

but they don’t want to get caught up in the minutiae of having to manage it and so.

LinkedIn linked up with a good TurnKey provider and started building a portfolio that weighs well that was kind of the next evolution.

Tarang Patel, Do:

[8:31] Thank you said there’s a lot of these kind of companies have you known you hear horror stories about these things have you had any negative experiences.

Kenyon Meadows, Md:

[8:38] Thus far no,

I mean I’ve had some some some of the typical things that are going to occur when you own property over number of years of me of course,

it’s going to be some some repairs there was a couple tenants who left a little earlier than their lease said they should that kind of thing but again,

the property manager has done a really good job and over one communicating with you and basically you just kind of give an executive make an executive decision and it kind of execute on it so you don’t have to really delve into it terms of you being on the,

you know the boots on the ground dealing with it.

Tarang Patel, Do:

[9:11] And so getting back to something you mentioned a little bit earlier like you said the initial private mortgage lending obviously you get taxed on that as your regular income which for most of the audience once they’re attendings or practicing in their field is one of the higher tax bracket.

And so as you said you the other aspects of real estate have have some additional benefits including the tack can you go into a little bit more about that.

Kenyon Meadows, Md:

[9:35] Which was sure so you don’t rental income generally speaking you know any of the expenses that are associated with owning the rental property such as taxes insurance,

Debt Service really,

anything you can write that off as an expense so that goes right against the rental income bringing down your actual basis on which your tax and then if something I didn’t really appreciate but as you start to build a portfolio is starts to become a significant thing as this depreciation fact,

and basically what this is,

is this is essentially I guess you called free money in a way because you don’t actually even have to you don’t have to out lay any money to get this basically the government allows you to depreciate,

your rental property on a schedule over a number of years and you get to take that amount off as well,

so that’s a nice that’s a nice savings every year so that’s a pretty big.

So when you take that into account and and also the account leverage you can borrow 20% down to control the asset as well and then and then all the debt Services is something you can write off,

there’s some tremendous tax advantages go on what actual ownership of property for sure.

Tarang Patel, Do:

[10:41] Does Oscar a little bit more into that the leverage part so I can say for investment properties you generally putting you know a certain percentage down whether it’s 25 30 whatever whatever,

turn it is that magnifies you returns because obviously you’re getting the appreciation of the full full asset.

And and your income I like you said you’ve basically whatever you your net income is is after all your expenses in would depreciation you might even have a negative.

Kenyon Meadows, Md:

[11:07] Exactly exactly.

Tarang Patel, Do:

[11:09] Okay so that those are the things I want to get crust of the audience because those factors together with the leverage and with the tax benefits make make real estate a much more powerful asset than what you normally think when you’re thinking well.

5% or 6% on the on the return as opposed to lending money out like you were talking about double digits or stock market may be getting 9% or something like that I think like you said though those are very under-appreciated aspects of invent in real.

Kenyon Meadows, Md:

[11:35] And of course that we think about our 401 K’s and other,

tax-deferred Accounts at as being the way to beat the taxman but you don’t again with the ownership of a physical property you can get a lot of those tax advantages and also have access to the money right now and do something.

Tarang Patel, Do:

[11:53] Like you said you still doing the private lending you doing single family homes are you doing other multi-family units as well or.

Kenyon Meadows, Md:

[12:00] No I started with single-family honestly mainly because my my mentor as it were.

That that’s what they were doing and so that that got my comfort level two to go there now as I’ve studied.

The the day bandages the pros and cons of single vs. multi-family I’m content right now to continue to build the single-family portfolio now.

When it comes to teuta multifamily there are certainly economies of scale and another advantage that go along with it but for me the thing that I found.

And it’s been verified when I talk to people who owned both asset classes what you find is it the single-family renter is it a lot of times it’s a different.

It is it’s a different profile of renter than then somebody was going to rent an apartment we do.

Three bathroom for three bedroom two bathroom homes and we we tend to attract a small Families 2 are the. That’s our typical Runner profile and number one they stay for a lot longer in place then a typical Apartment renter,

okay it’s I’ve had I’m coming up right on about my 3-year anniversary of buying my first rental and the same tenant is in that first rental property.

It’s nothing to have somebody rent a single-family home from multiple years like to the vacancy rate is definitely lower when you do single family homes and vacancy and turnover can be your biggest expense it can be if you don’t have any big repairs.

So I like that and and also the the the the single-family home renter they tend to take better care of the property because although there are renter just like an apartment person they tend to feel.

[13:40] Psychologically more of a sense of ownership over it and so they tend to take care of it better so the maintenance.

Things tend to be less to so for somebody like myself who again you know I want the benefits of real estate ownership but I don’t want a lot of hassle.

I’m content to continue to build the single-family portfolio to be honest at this point.

Tarang Patel, Do:

[14:00] You said you started at 3 years ago so do you mind me asking you said that was your first one through years ago how many do you have and what are your goal.

Kenyon Meadows, Md:

[14:09] Just an couple months ago we got our 7th property.

And as far as goals goats kind of arbitrary I’m thinking it 15 to 20 would be nice to Bill slowly over time and and and have them eventually be paid off and and have that represent a nice chunk of,

of my retirement income coming in from from that in addition to of course the traditional vehicles through work you know the 401K and that kind of thing.

Tarang Patel, Do:

[14:34] Okay okay and today is your portfolio pretty much in in the Southeast Georgia area where you live.

Kenyon Meadows, Md:

[14:41] Yeah so you know I’m um tell people I’m on the coast of Georgia,

hour south of Savannah and an hour north of Jacksonville in Brunswick St Simons area and my my investing in terms of owning,

the rental property is all been in Jacksonville and that was largely due to the fact that again my my mentor and person showed me the ropes that’s where they were building their portfolio and so an internet,

inventory of the type of properties we target there so that’s a.

Tarang Patel, Do:

[15:09] One of the other things that remember you mentioned when I was when I heard you on the big,

your Pockets podcast was the other aspects of real estate investing such as crowdfunding and things like that but you know relatively new talk about your experiences with that.

Kenyon Meadows, Md:

[15:24] Yes sold the crowdfunding.

Basically represents in an online way to do the private mortgage lending and in all fundamental aspects one of the barriers to do in private mortgage lending is that you know you’re supplying usually the whole amount.

Of the loan to acquire and potentially renovate a property so you know you going to write.

A high-five figure six-figure check to do that and obviously.

Even amongst us position that there may not be you may not have that amount of capital.

Liquid to do that kind of thing so the crowdfunding I think that’s kind of cool about it is that it allows you to participate in a.

In a private mortgage loan for a Fix and Flip projects a for instance but you can only you can contribute a fraction of that,

you know you are typical investment minimum on a crowdfunding site is like $5,000 and I’ve seen them start to creep down right now to like $1,000 and receiving one side I saw with a minimums $100 so.

Yeah so what it’s done is it’s taking the the barrier of Entry to private mortgage lending it’s taking it online and it’s lowered the amount,

tremendously where you can pull your money in with other folks and participate you still get the same high interest rates you know 9:49 to 14% it is is not as a common range and saw an in fundamental it’s all the same thing.

Tarang Patel, Do:

[16:47] As far as I go there any downsides I mean to these crowdfunding sites that you can see as opposed to going yourself I mean obviously the upside is you get a much better distribution of risk.

Kenyon Meadows, Md:

[16:58] Correct correct well the downside well when I when I do my private lending in the offline world.

You know you are able and I was doing this a beginning I would when I would meet at one of my partners I actually go and see the actual property we were going to acquire I would look at the,

the neighborhood look at the comparables and and kind of get comfortable with the notion that the ultimate sales price was going to be accurate,

you can come do your own due diligence when you’re doing it in the offline world one of the things you have to be comfortable with is that the crowdfunding platform is doing that for you now they provide.

All of the digital documentation for you to do a digital version of that you know they’ll show the they’ll show up raisels they’ll show comparables they’ll tell you what the track record of the developer is and all that but ultimately,

it’s a computer screen you know what I mean eat and you have to be comfortable that the platform is doing their due diligence and that’s the that’s the value proposition they bring to it.

Tarang Patel, Do:

[17:56] What are the things that you know I think maybe a problem and I’m not sure if it was I myself have not done the real estate crowdfunding sites but it is it if you’re investing in multiple States for that is that become an issue in terms of just,

if you’re investing $100 here or $1,000 here you may have 12 States worth of returns tax returns is that is that an issue or is that just me think.

Kenyon Meadows, Md:

[18:18] Well it it it is so for each project you do get it you get a separate statement and,

bet that the site I think recognize and if they do a good job of of packaging the statements for you when it’s tax reporting time and they make it pretty easy to forward on to your account and and and everything but yes the tax Rima can get a little complicated.

And that’s yeah no doubt.

Tarang Patel, Do:

[18:41] So just just just if you’re if you’re down to the $100 per per investment it may be a little bit of a considerations.

Kenyon Meadows, Md:

[18:48] Exactly.

Tarang Patel, Do:

[18:49] One of the things that I think many of us are you know we’re very reluctant about real estate because like I said before we’ve all heard the horror stories you I’m sure we’re aware of these things beforehand but but what what made you just,

decide to go for it what was that thing that you know drove you that said you know what I’m going to take that.

Kenyon Meadows, Md:

[19:06] Well honestly some some some Battle Scars on the traditional investing front so you know I think everybody you know the market downturn the wait was pretty severe something everybody got hit pretty hard there.

Okay now after that happened I I did what I thought.

Was a conservative rebalancing of my portfolio I said hey what can I what should I invest in that that’s just solid and you know,

should ship reduce nice steady returns maybe not spectacular but but you know something steady and it may not be subjected to such a severe downturn Wesson oil and gas right,

so on the heels of all wait I went pretty heavy into oil and gas and we see what happened there right so.

When you have when you have some experiences like that all of a sudden some of the other unfamiliar things they start to look a little less scary.

Went when the when the stuff when the conventional stuff that you’ve kind of been to Ben Sheppard it towards when you get burned that way it gives you a little courage to try the other stuff.

Is what I say yeah.

Tarang Patel, Do:

[20:11] Good good you’re still I mean but you still are investing in the stock market in things like eyes not like you’ve gone totally away from.

Kenyon Meadows, Md:

[20:17] No I haven’t but what I will say this.

Most of my exposure now to the traditional equities Market it’s it’s almost pretty much exclusively through the 401K at work I used to dye used to invest a fair amount of,

you know discretionary money above and beyond that and most of that now has gone to these alternatives.

Tarang Patel, Do:

[20:36] The end and I’m assuming that it’s going well for you because you as you said you’ve you know you you you’re going more and more towards that so any any concerns about the real estate market in the in the short run.

Kenyon Meadows, Md:

[20:48] Well you know timing,

timing plays a big role in everything and so did the 2008 Market downturn you know that that brought prices down that that that eliminated a lot of I mean a lot of people went belly-up and and its of the real estate market was at its down point and again I didn’t really start participating in any meaningful way till 2010-2011 and we’ve been in a pretty benign,

cycle as far as the real estate market is going because it really had it really only had one direction to go for a while which was up.

And now I’m starting to see things like well the volume of house flips is starting to approach what it was before the crisis and some other things so I’m starting to know maybe we’re getting a little bit of,

a little Frosty at the top of the real estate market is well so eat out at that that’s that’s a cause for some concern yes.

Tarang Patel, Do:

[21:36] Although you know what they talking about generally as real estate is more local than then the national Setauket by your area what do you think you know is that the same thing you’re seeing in your area like Jacksonville area or I need to.

Kenyon Meadows, Md:

[21:49] Yeah I see I have seen some and so what will we target are basically modestly-priced single family homes and what we call b-level neighborhoods and what we mean by that is the a-level neighborhoods.

Those are the very expensive properties you know the beachfront stuff for,

the stuff in the very best school districts of the mcmansion kind of thing and then on the other end of the spectrum you’ve got you know very,

inexpensive properties in you know kind of maybe crime-ridden or or dilapidated areas on the other end of the spectrum so we target we target these these these middle of the road.

Type of neighborhoods that have a nice balance of renter’s homeowners working-class folks that kind of deal and in the since 2014 when I’ve been buying I certainly have seen the prices that were paying go up over time,

and there’s definitely a lot more activity going on there so I’m seeing that okay I wouldn’t say it’s.

It’s it’s overly heated but it certainly is trending upward so yes.

Tarang Patel, Do:

[22:47] Are you seeing that your cap rates and things like that are trending down or have you been able to adjust your rental amounts to kind of go with that.

Kenyon Meadows, Md:

[22:57] Yet I would actually say in my personal experience it if it’s been able to balance out either you may pay a few more thousand.

Dollars to acquire the property but yes like the rental rate might be a hundred or $150 more per month and so you know I think it’s balanced out because there’s definitely a demand for rentals there’s no doubt about that.

Tarang Patel, Do:

[23:18] Talking to our audience here who may be invested and are wanting to start investing in real estate what are some resources that you would suggest to them to kind of get you know some knowledge.

Kenyon Meadows, Md:

[23:29] If there is there more book or audiobook type folks I think the the Robert Kiyosaki Rich Dad Poor Dad where he really.

I think reorients you in terms of your relationship to to Capital and money and and cash flow and time that kind of that kind of thing.

And that that’s more of a mindset booked in a real estate book of though there is there is some real estate stuff in it for sure and then there’s another great book by Jim and John shop,

call Building Wealth one house at a time was a big single-family portfolio holder I think that’s great,

and if folks are more in the the podcast online space of course I got to give a big shout-out to BiggerPockets.

Just tremendous amount of resources on there and I and I kid you not I mean if you really spend some time reading their forums,

there are some high-level people shows forums that they’re doing some great things and giving out a ton of good advice and resources there.

Tarang Patel, Do:

[24:28] Absolutely would you would also recommend if they want to just kind of get their feet wet a little bit maybe starting into these crowdfunding sites as well.

Kenyon Meadows, Md:

[24:35] Yeah absolutely there I mean you know throughout a few sites that I invest on.

But you know you definitely got to do your due diligence in and it just learn about private lending in general beforehand it just be sure you understand what exactly you’re doing.

Tarang Patel, Do:

[24:51] Right and I wanted to talk a little bit about your your investment company Meadows Enterprises tell me kind of what you know what how you formed or what you were what your goal with that is just a little bit about it.

Kenyon Meadows, Md:

[25:04] What ya so eat when you hold investment property that they say it’s you know it’s a good idea to to have it.

Separate from you because you know there there’s is liability thing where you know a tenant slip and fall that kind of thing so yeah so number one asset protection Thing 2,

push these rental properties into an in that regard and then number two could I have raised some of my own,

private money from initially friends and family and Indian and more recently a few colleagues as well to help me acquire some of the properties,

so just wanted to have a formal structure that again with separate from me for them to invest in I was really the main reason for setting it up.

Tarang Patel, Do:

[25:47] Well I think that’s very good overview of your your real estate that Creek to tell me a little bit about your radiation.

Kenyon Meadows, Md:

[25:57] Capital One More quick plug for an educational resource.

Tarang Patel, Do:

[26:00] Yeah yeah absolutely.

Kenyon Meadows, Md:

[26:01] If folks go to to my site which I know where we’ll talk about it in their alternative Financial medicine.com.

There is a free ebook where I talked about specifically the turkey.

Rental property I cover things like how I select a market and am I buying criteria for a property,

pitfalls things to look out for in an and also show the financial performance of of a property for a year as well so that’s that’s available for people to.

Tarang Patel, Do:

[26:28] Oh good okay one more time the website was.

Kenyon Meadows, Md:

[26:30] Alternative Financial medicine.com.

Tarang Patel, Do:

[26:33] Perfect perfect okay great so when you’re not busy with your your medical practice and your real estate what what else do you do.

Kenyon Meadows, Md:

[26:41] Um yeah I’ve got two girls at age 10 and eight and they keep me busy as ever particularly on the weekends.

I believe it or not I mean I still do some online gaming I’m a Call of Duty and Battlefield kind of guy.

Tarang Patel, Do:

[26:57] Very nice.

Kenyon Meadows, Md:

[26:57] Like to do that from time to time too.

And an in my wife bless her heart she forces me to travel I would probably work too much but she she she makes your wee wee get out and see some of this great country and more recently the world is well.

Tarang Patel, Do:

[27:14] Very nice very nice what year a radiation oncologist so you do have a little more free time then.

Radiologist I can’t I can’t I can’t say too much either but.

Very very nice well I want to thank you for coming on the show today dr. Meadows and like you said alternative Financial medicine.com is your website and,

our listeners can go there and get your free ebook and you know I wish we wish you luck and I’m glad.

You gave us some positive information and strategies about real estate I will continue to follow and see how things go and let us know you know if there’s any updates that you want to give our audience as well.

Kenyon Meadows, Md:

[27:52] Absolutely anything I really appreciate you having me on.

Tarang Patel, Do:

[27:55] Thank you.

Tarang Patel:

[27:57] I want to thank dr. Meadows for being our guest today he gave us great information about starting in real estate.

[28:04] Real estate can be a great way to diversify your Investment Portfolio there are some real profits to be made if you invested the right time and the right location give me a great source of long-term passive income but it’s not very passive at the outset.

[28:18] Has a high income health care professional make sure you protect your assets before you begin buying individual real estate properties.

[28:26] As I said timing is key and we’ve had a long run a very low interest rate interest rate.

[28:32] I don’t know if the rates are going to go up anytime in the short-term say the next two or three years but they’re likely going to go up in the longer term.

[28:40] This low-interest-rate environment is pushed many asset classes the higher valuations as investors are looking.

[28:47] Everywhere for you I encourage you to be extra cautious and really do the due diligence before you put your money into any invest.

[28:56] If you’re interested in learning more about dr. Meadows and his company the website is alternative financial medicine.com and you can also get his book called alternative Financial medicine on Amazon there’s a link on our show notes.

[29:10] As it as I said before you can follow our show at Twitter @dr Money Matters.

[29:19] Our Facebook group dr. Money Matters all spelled out or on Instagram at dr. Money Matters all spelled out.

[29:27] Encourage Healthcare professionals to join our private Facebook group.

[29:31] And we’ll discuss some of the topics that we’ve discussed on the podcast in further detail.

[29:38] If you enjoyed this episode or any of our previous episodes please leave is positive reviews on Apple podcast Google play or Stitcher and any constructive criticism.

[29:50] I would appreciate at comments at dr. money matters.com all spelled out.

[29:55] As as usual please remember that what you’ve heard on this show is For Your Entertainment and education only please speak with the appropriate experts prior to making decisions regarding your own Financial.

Doctor Money Matters Intro

Tarang Patel:

[30:09] Thanks again and look for our next episode coming soon.