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EP85 - ER Doc Triages Personal Financial Health for Clinicians with Vu Kiet Tran, M.D.

Trisha’s guest this week is Dr. Vu Kiet Tran, an emergency room physician who now also consults with, advises, and mentors other physicians on personal financial health and investments to help them grow their wealth. They discuss the differences in healthcare systems between Canada and the United States, his entrepreneurial path, as well as his medical career.

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In this episode, we talk about…

[3:17] Being in geriatric medicine during the COVID-19 pandemic

Dr. Vu Kiet Tran started off as an emergency and family doctor, and fell into geriatric care about six years ago. He currently also works in long-term care medicine, so he practices three types of front line care medicine.

As it was in the United States during the first wave of the COVID-19 pandemic, in Canada most of the mortalities were in the elderly population. Vu Kiet was working in the nursing home with the highest death rate in Canada. It came on very suddenly, and they didn’t know how to deal with it. They weren’t given a lot of PPE, as PPE was going to acute care hospitals and not long-term care facilities. Now that they are in the fifth wave in Canada, long-term care is faring much better than it did in the early days of the pandemic.

 

[5:00] Differences in the healthcare systems between Canada and the United States

About 95% of physicians in Canada work for the public system. Their paychecks come from the government single payer system. Around 5% have elected to go “private”. These physicians are compensated by the patients themselves.

The 95% that are public are working within a system that is similar to Medicaid in the United States. Although they are paid by the government, they are still considered self-employed and independent. This distinction is very important, and it’s different from physicians in the United States who primarily work with practices and are employees of the group.  

Vu Kiet speaks with colleagues in the U.S. and he thinks that they have “similar horror stories, but in a different way”. He can’t say that one system is better than the other, but he does appreciate having a payment system where the government pays 100% of the time. He doesn’t have to go through billing agents, and he doesn’t have to fight to prove that he saw the patient or did various levels of care in the event of an audit. It is more of an honor system in Canada.  When they submit the billing, they get paid. He also doesn’t have to chase thousands of different insurance carriers down to get payment.

A problem that he notes with the single payer system is that the system dictates how much he gets. There are downsides to that, but overall he appreciates the honor system and the good working relationship with the government.

With the single payer system, there can be long wait times. If Vu Kiet wants an MRI for his patient, it could take somewhere between one day to six months, depending on the urgency of the case. That being said, he doesn’t need approval from insurance carriers and he doesn’t need anyone to pre-approve his order. No one turns down his request. The hardest part is depending on access.

Everyone is trying to figure out how to deliver health care in an efficient and cost-effective way to a large population, and that is a very complex question. Canada and the United States both have high quality healthcare systems, despite the troubles we see.

 

[12:38] Physician ownership in Canada

Canadian physicians are not technically employees of the state. They are self-employed, and contracted to the state. In Canada, you can create a small business corporation. For example, Vu Kiet’s small business corporation contracts with the government and he is the employee of his corporation. His corporation, therefore, can actually own the real estate in which he sets up his practice.

Physicians are also able to buy a bigger building and become a landlord to other tenants and bring in income from those tenants. Any small business corporation can own a piece of real estate and rent out the units. For the corporation to own that piece of real estate, the practice site or environment of the physician needs to be in the same building. An investment building, or investment real estate, is not permitted inside a professional corporation. It is permitted for any small business corporation, but not a professional corporation. 

 

[15:09] Vu Kiet’s entrepreneurial path

When Vu Kiet first started practicing medicine, he moved to Toronto from Montreal. He had a bit of student debt, and when he started making money he went to the bank and asked what he should do with it. They connected him to a branch manager who did his “KYC” (Know Your Client). Doctors come out as conservative investors most of the time, so they put him in different mutual funds and told him to sign.  

For thirteen years, he worked his shifts and cared for his patients and didn’t pay much attention to his finances. This is a common mistake among healthcare professionals. At that point, he went back to the bank and asked about his account. They told him that he was doing great, having made around one percent since inception. His jaw dropped.  This was right after the 2008 crash, for context, but he was still shocked. He lost thirteen years of investment opportunity and compounding.  

Vu Kiet left the bank extremely angry, but not at the bank. He was angry with himself for letting that go on for thirteen years without paying attention to his finances. From then on, he started on a journey of learning. He started reading, speaking to people, joining CFP (certified financial planner), and talking to advisors. Instead of reading the New England Journal, Vu Kiet was reading financial books. He got such a kick out of it and wondered why he didn’t know these things. The more he learned, the more he realized that he hadn’t known anything.

Then he wondered if he was the only one, or if there were others like him. He started speaking to his colleagues, and found that many of them were unaware of these things as well. Vu Kiet decided to do something about it, and he wanted to partner up with a CFP and do some education on his own, and then COVID hit. When COVID hit, he couldn’t do anything. He decided that the best way to reach people was to do a podcast. In April 2020, he released his podcast. It now has over 70 episodes, and it is purely financial education.

Healthcare professionals are focused on their work, and they are lifelong learners when it comes to medicine and caring for their patients. They often neglect themselves, including their financial health. Vu Kiet explains that they exchange their life energy for paychecks, and they can accumulate a lot of debt over their working lives as well. They have student debt, then they have a house, a car, school payments for children, and more. Rather than having to work more and more to outrun their debt, Vu Kiet wants to teach physicians how to live within their means as well as how to use their time to make money efficiently. He recommends working the amount that you want to work, and then let your money make money. 

There is no personal finance curriculum in medical school, dental school, or nursing school. They don’t know what to do with their money, and the less they know the more uncomfortable they are and the less they pay attention. As human beings, we don’t want to be embarrassed about not knowing something. Healthcare professionals are often Type A people who don’t want to look like they don’t know things. They also focus on helping others, but personal finance is all about helping yourself. It seems dirty or taboo in healthcare professional circles, because they are devoted to bettering other people rather than themselves.

 

[25:46] Advising physicians on real estate investment as part of their financial plans

Vu Kiet promotes becoming a physician owner in several ways, and it often depends on others’ philosophies. In Canada, he finds that everybody seems to love real estate. Physicians do as well, but some are more adventurous than others. When speaking with physicians, he starts with talking about savings. You need to have savings in order to invest. Some people like index funds and think real estate is too risky, but they also have the option of getting into public or private REITs. Real estate has been a big driver of the Canadian economy, and a lot of people have jumped into it.

For Vu Kiet, real estate is another way to diversify. There are safe, stable investments such as ETFs and index funds, and then there are investments such as real estate and insurance. They have had a real estate boom in Canada over the last 25 years, so real estate has been really good to them.

 

[29:19] Vu Kiet’s first job

As a young boy, Vu Kiet worked at his mother’s hairdressing salon by sweeping the floors. He moved up to doing shampoo and then to perm, and finally he was able to cut hair. He eventually got a diploma in esthetics and facials, and manicures and pedicures, and then from there he went into medical school.

 

[29:59] What Vu Kiet would be doing for a living if he was not a physician

If he was not a physician, Vu Kiet would be a chef. He likes to innovate in the kitchen, and he sees himself as similar to Anthony Bordain. He would want to try new things and create new dishes.

 

[30:53] What Vu Kiet is reading for news, information, or inspiration

Right now, Vu Kiet enjoys reading finance books more than medical journals. He is tired of hearing about COVID.  He is currently reading a book called Noise by Daniel Kahneman, which he finds exciting. He is also reading another book called The Smith Manoeuvre. It’s a Canadian-focused book on how to use your real estate as good debt and leverage it. The book discusses different tax strategies. In the United States, you can deduct the interest for your primary residence but in Canada you cannot do that. 

 

[34:02] Vu Kiet’s healthy self-care

He sleeps a lot.  When his children were young, he would go to sleep around the same time as them at 7:30 and wake up at 5:00 or 6:00. Now, he tries to go to bed at 9:00 and wake up at 5:00. Good, refreshing sleep changes everything and helps you to focus. He finds he is more efficient at work when he has real, restful sleep.

 

[35:39] Vu Kiet’s thoughts on whether or not a person is born with the desire to heal

Vu Kiet believes we are born with a desire to heal. His nine-year-old daughter has always had a nurturing quality. She was not trained to be like that, but she likes to help. He thinks people are born that way. They can get training to be better healthcare professionals and other professionals, but he believes that deep down people like to help each other.

Links to resources:

Vu Kiet Tran, M.D., MHSc, MBA, CHE, ICD.D.
Physician, Consultant, Mentor
www.financialhealthdoc.com

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