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    Dr. Marcinko is originally from Loyola University MD, Temple University in Philadelphia and the Milton S. Hershey Medical Center in PA; as well as Oglethorpe University and Emory University in Georgia, the Atlanta Hospital & Medical Center; Kellogg-Keller Graduate School of Business and Management in Chicago, and the Aachen City University Hospital, Koln-Germany. He became one of the most innovative global thought leaders in medical business entrepreneurship today by leveraging and adding value with strategies to grow revenues and EBITDA while reducing non-essential expenditures and improving dated operational in-efficiencies.

    Professor David Marcinko was a board certified surgical fellow, hospital medical staff President, public and population health advocate, and Chief Executive & Education Officer with more than 425 published papers; 5,150 op-ed pieces and over 135+ domestic / international presentations to his credit; including the top ten [10] biggest drug, DME and pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published academic text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

    Dr. David E. Marcinko is past Editor-in-Chief of the prestigious “Journal of Health Care Finance”, and a former Certified Financial Planner® who was named “Health Economist of the Year” in 2010. He is a Federal and State court approved expert witness featured in hundreds of peer reviewed medical, business, economics trade journals and publications [AMA, ADA, APMA, AAOS, Physicians Practice, Investment Advisor, Physician’s Money Digest and MD News] etc.

    Later, Dr. Marcinko was a vital and recruited BOD  member of several innovative companies like Physicians Nexus, First Global Financial Advisors and the Physician Services Group Inc; as well as mentor and coach for Deloitte-Touche and other start-up firms in Silicon Valley, CA.

    As a state licensed life, P&C and health insurance agent; and dual SEC registered investment advisor and representative, Marcinko was Founding Dean of the fiduciary and niche focused CERTIFIED MEDICAL PLANNER® chartered professional designation education program; as well as Chief Editor of the three print format HEALTH DICTIONARY SERIES® and online Wiki Project.

    Dr. David E. Marcinko’s professional memberships included: ASHE, AHIMA, ACHE, ACME, ACPE, MGMA, FMMA, FPA and HIMSS. He was a MSFT Beta tester, Google Scholar, “H” Index favorite and one of LinkedIn’s “Top Cited Voices”.

    Marcinko is “ex-officio” and R&D Scholar-on-Sabbatical for iMBA, Inc. who was recently appointed to the MedBlob® [military encrypted medical data warehouse and health information exchange] Advisory Board.

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On Physicians’ Responses to Payment Changes‏

Expect the Unexpected?

By Nancy Chockley, PhD
President & CEO
National Institute for Health Care Management

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Across the Blogosphere – Expert Voices

Reducing unit prices is one possible weapon in the battle to stem rising health care spending, but this approach can have unintended consequences if utilization increases by more than prices have fallen.

Current Essay on Medicare Drug Payment Reductions

In his essay, Dr. Jacobson and Dr. Newhouse present findings from their recent research on how physicians have responded to reductions in Medicare payments for chemotherapy drugs. Their work documents an increase in chemotherapy use rates and a switch from the drugs whose reimbursement declined to a drug that offered a higher profit for physicians. These findings serve as a reminder to policymakers that unanticipated behavioral responses can undermine their ability to achieve savings simply through fee reductions.

Assessment

I hope you enjoy reading the essay and others on the NIHCM website.

http://www.nihcm.org/pdf/EV-JacobsonNewhouseFINAL.pdf

Contact Information:

phone:202-296-4426
email: nihcm@nihcm.org
website: www.nihcm.org

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Will the PPACA be Repealed [A Poll]?

Will Obama Care, or the Affordable Care Act [ACA], be repealed before 2014?

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About the Mortgage Electronic Registry System

Loan Help or Hindrance?

By Dr. David Edward Marcinko MBA, CMP™

[Editor-in-Chief]

According to their website, Mortgage Electronic Registry System [MERS] is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans www.MERSInc.org Sounds good, right?

State Laws

Unfortunately, property law is handled on a state-by-state basis and digital MERS may not be a legal replacement for paper. In fact, MERS use may devalue the physical paper trail and lead to lost or misplaced loan documents [aka: admissible evidence].

Assessment

As a financial advisor for more than 15 years, and a former certified financial planner for more than a decade, who resigned due to the industry’s lack of fiduciary accountability, I appreciated this issue deeply

www.MedicalBusinessAdvisors.com

Full Disclosure:

I am also the Founder and CEO of www.CertifiedMedicalPlanner.com; an online certification, licensure and educational program for financial advisors and medical management consultants working in the healthcare space; who are always fiduciary advisors.

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Understanding Patient [Client] Satisfaction

The Fine Art of Exceeding Expectations

By Dr. David E. Marcinko MBA, CMP™

By Dr. Gary L. Bode CPA

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Patient [client] satisfaction occurs when patient perceptions exceed their expectations. They get an intangible “something extra” from the visit, above what they paid for.  We’ll concentrate on managing patient perceptions of their physicians in this ME-P.  It is applicable to financial advisors [FAs], as well.

Note that when patient expectations match their perceptions, mutual obligations are fulfilled, making both practitioner and patient “even”.

Clinical Results

The clinical result, within a relevant range, is only part of the patient’s perceptions.  Numerous unconscious impressions comprise the remainder.  We’ve all had patients love us despite a less than optimal result.  We’ve all had patients angrily leave the practice over some non-clinical matter like a trivial billing dispute. A patient’s perception of any health care service is colored by a vast array of prior experiences that set up current expectations.  The patient is pleased to the extent that his current perceptions exceed his pre existing expectations.  This encompasses far more than the clinical result (within a relevant range), and includes such non-treatment issues as the demeanor of the staff, condition of the physical premises, psychological comfort during the visit, etc.

Patients Talk

Remember, all patients talk about you anyway. In the past, a happy patient told four others about what a nice doctor you are. Today, patients post website comments or blogs immediately after their visits. They are more likely to complete treatment and follow instructions, thus obtaining a better medical outcome, and, generating additional fees for the practice. They pay quicker, cause less bad-debt and help create a pleasant environment for us to work in.

Un-Happy Patients [Clients]

An unhappy patient vehemently tells nine others, onground or online, what a nasty greedy rip-off artist you are. Sad, but true!  They are not as likely to complete treatment, thus incurring a less than optimal result, and generate fewer fees.  They pay slower, if at all, create a stressed environment and detrimentally affect the attitude of other patients in the office.

Try to eliminate problems that might cause negative perceptions (i.e., a filthy restroom) and implement controls that help assure positive perceptions.

A Soft Science

Patient satisfaction is a soft managerial science.  It is a numbers game.  Most patients don’t pre- define what would be “acceptable” from this encounter, but have vaguely defined ranges of prior expectations anyway, gleaned from a lifetime of health care related experience.  Any variance between these this “acceptable” range of expectations and each trivial encounter invokes some degree positive or negative feeling in the patient.

Total Perceptions

The total perception of the office experience is an aggregate of multiple trivial, often subliminal, observations. Patient satisfaction is an intangible and amorphous process complicated by:

  • Inter patient variables:  Significant differences between patients in their “expectations”. 
  • Intra patient variables: A single patient can perceive the same thing or situation differently at different times, depending on uncontrollable variables like mood, or, context of occurrence which may (sometimes and/or partially) be controllable by the practice.
  • Luck of the draw” in physical variables: Does Sally or Mary escort the patient to the exam room?  Was it the blue or green exam room?  Did the last patient to use the rest room, five minutes ago, leave a disgusting mess?
  • Heterogeneous staff variables: Even with appropriate training, people are not machines and have their own quirks.

A Multi-Faceted Amorphous Subject

By proactively anticipating the entire visit, from the patient’s perspective, the practitioner can structure and arrange things such that most patients have, mostly positive perceptions, most of the time.  This can be done despite all the potential heterogenicity of the above factors. Patient satisfaction can be improved in any office, and can be done by anyone.

Because patient satisfaction is a multi-faceted amorphous subject, there are multiple correct approaches to the subject and no “cook book” recipe on how to proceed.  Try and get the big picture.  Identify the worst areas and fix them.  Identify the best areas and reinforce them.  Proceed slowly.  It can be done one facet at a time.  Adapt things to your own managerial style and personality.  Be completely open to suggestion and change.  Be aware that patient relationship and satisfaction implementation strategies frequently overlap.

Assessment

The tone of this post is equally applicable to financial advisors and medical management consultants.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. How do you define patient [medical professionals] or client [FAs] satisfaction? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Do Passwords Protect the Identity of Patients?

Essay on eDR and eHR Data Integrity

By D. Kellus Pruitt DDS

“ADA Tip: Password protection is the responsibility of each workforce member. Strong alphanumeric passwords provide a strong defense against unauthorized electronic system intrusion. Passwords that cannot be guessed, that are not publicly posted, and that are changed on a regular basis will help your practice avoid the occurrence of security incidents.”

– 2010 ADA Practical Guide to HIPAA Compliance, Chapter 4, page 26.

Not So Fast, ADA 

I read a recent article on lifehacker.com titled “How to Break into a Windows PC (And Prevent It from Happening to You).” The unnamed author tells a different story.

http://lifehacker.com/5674972/how-to-break-into-a-windows-pc-and-prevent-it-from-happening-to-you

Running on Windows®  

Apparently, if a healthcare provider’s office computer runs on Windows and it is not encrypted, password protection is worse than ineffective security. Passwords are false security. If lifehacker.com is correct, all a dishonest employee needs to download thousands of patient identities to sell for a few hundred bucks is a Linux CD and 10 minutes of snuggle-time with an office terminal.

What’s more, it is unlikely that if the thief will ever be caught if he or she sports common sense. Months or years following the silent heist, the doctor could learn of a rash of neighborhood identity thefts from a federal investigator with a badge – waiting in the reception room for the doc’s next break between patients. Please remember this gaping hole in security the next time a HIT stakeholder like the ADA assures Americans that HIPAA is swell protection from identity theft. HIPAA empowers identity theft. The amendments to the 1996 Rule in 2002 gave too much away to campaign contributors, in my opinion.

About De-identification 

Now then; since you’ve made it this far, is anyone ready to consider a different path to the benefits of electronic dental records? It’s called de-identification. My goal has always been to stimulate open discussion of de-identifying dental records because it is so common sense to remove fuses from bombs. In 5 years, I’ve had very little success attracting sincere discussion about de-identification other than privately. Nevertheless, over the years I entertained an adequate amount of ridicule that stopped a few months ago. Like Charlie Brown and his persevering faith in the Great Pumpkin, I’m resolute.

HIPPA Data-Breach Liability 

Physicians might not be able to get away with sidestepping HIPAA and data-breach liability using de-identification because it is so easy to re-identify owners of medical records. And insurance company CEOs who don’t know the difference between cost control and quality control will fight de-identification of dental records before giving up the exclusive right to bend proprietary algorithms toward bonuses.

Here Comes the Pitch!  

Is America interested in better dental care through a transparent 2.0 platform that incentivizes value-based competition for dental patients instead of paid ads? I have a better solution than HIPAA: Drop the PHI identifiers from dental records and store volatile health histories on one or two well-guarded flash drives. It’s that simple. Want to see miracle discoveries in dentistry? Offer the boring but safe raw, de-identified dental data to anyone who cares to perform Evidence-Based Dental research. Interoperability will still be incredibly tedious and expensive, but at least the effort won’t be doomed by dangerous and expensive HIPAA regulations.

Assessment

So how about it? Imagine the incentives for self-improvement if dentists could privately compare their treatment results with competitors’ – without risk of harming their patients or practices – on an “opt-in” basis rather than a mandated fantasy of a “pay-for-performance” [P4P] model run by stakeholders with investors to answer to. If our grandchildren are to benefit from unbiased Evidence-Based Dental research mined from facts rather than manicured dental claims, passwords won’t allow them a return on ARRA investment and encryption is just one more layer of expensive and futile complication.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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What is Universal Life Insurance and How Does it Work?

Insurance Basics for Medical Professionals

By Jeffrey H. Rattiner, CPA, CFP®, MBA

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After determining the need for insurance and the amount to purchase, the doctor-client and financial planner’s next task is to match those needs to the doctor-client’s objectives to determine what type of policy the client should purchase. The life insurance industry features more products today than ever before. One reason for this change is that, clearly, the insurance industry has expanded its product base to become more competitive. Another reason is that clients’ needs are constantly changing and the insurance companies must keep up with those needs or run the risk of having funds withdrawn from their companies. New and different types of life insurance products are here to stay. Since life insurance represents a significant part of a client’s risk-management program, planners have to be versed in the specifics of the varied product base.

Universal Life Insurance

Universal life is a flexible premium life insurance policy that permits the policyholder to change the death benefit periodically (with satisfactory evidence of insurability for increases) or change the amount or frequency of the premium level (decreasing the amount as long as a sufficient cash value exists that would be used to pay current premiums). A fixed percentage of the gross premium is allocated to the insurer’s operating expenses and to mortality charges for the insured’s classification that changes constantly on the basis of net amount at risk and age. The remainder is credited to the policy’s cash value. Each month, the reserve fund is credited with monthly interest in a manner similar to that for whole life products. Universal life policies guarantee a minimum rate equal to that of whole life products but will credit the fund if the current rate is higher than the guaranteed rate. The excess return is accrued to the policyholder like a dividend.

Policyholders earn a fixed rate for the first year only and then a variable rate on a monthly basis thereafter on investment earnings. Interest credited to the policy depends on the insurer’s investment results. It is not possible for the insurer to predict the exact amount of cash value the insured will have down the road. The risk is that if interest rates are lower than anticipated, the insured may be required to make additional payments into the policy. Also, the insured can withdraw money without terminating the contract or can borrow money (as opposed to withdrawing or surrendering) in order to avoid tax consequences. A good rule of thumb is never to borrow more than 95% of the cash surrender value, since the remaining 5% is used to pay mortality and operating costs for the policy in the future. In the first year, the charges are unusually high because the costs of underwriting, policy issuance, and agents’ commissions are high. If the insurance company has lower expenses and passes them on to its policyholders, however, policyholders will benefit from the lower charge.

  • Required Premiums

Universal life policies usually have a minimum required premium in the first year that all insureds must pay. After that, the insured can change the premium amount and run it as an expensive term policy (i.e., pay a smaller amount) by using the cash surrender value to pay premiums. This works as an artificially paid-up policy by paying more premiums in a shorter period of time. Federal law, however, limits the amounts the insured may pay into a policy. Amounts in excess of the maximum will turn the policy into a modified endowment contract (MEC).

Death Benefit Options

There are two death benefit options under a universal life policy: option A and option B. Option A pays the face amount of the policy. Option B pays the face amount plus the cash surrender value of the policy. For example, let’s say a nonsmoking 30-year-old male wants to purchase a $200,000 universal life policy. For this, he pays an annual premium of $1,200. If the cash value at age 35 is $3,000, under option A the beneficiary would receive $200,000. Under option B, however, the beneficiary would receive a combined $203,000, which represents the death benefit plus the cash value. There is a higher cost for option B, which reflects the higher mortality charge based on the higher death benefit. Further, as in all cash value policies, if a policy loan is outstanding at the time of the insured’s death, that amount is ultimately subtracted from the death benefit.

No Flexibility

The insurance company retains the right to change the charges that it makes for mortality, and also for expenses (a maximum mortality chart will be found in the policy). This right makes it possible to know the changes being made for mortality at various ages. The insured has the ability to change the face amount or premium level. The insured has to pay only the charges for expenses and mortality to keep the policy in force. There is no flexibility within the investment, however, because universal life policies are invested in short- to medium-term money markets. The safety of cash value is high and the potential rate of return is moderate to high.

Advantages and Dis-Advantages

Advantages of universal life include policy flexibility, higher stated rate of return, and full disclosure of fees, loads, and proportion of premium invested. Disadvantages include the lack of a forced savings element if run as an expensive term policy, a potential drop in the rate of return, and lack of the most competitive investment vehicle.

  • Assessment

Historically, because the universal life product had not been tested for an entire business cycle, an adverse selection of insureds could affect the profitability of the product and, subsequently, the amount received by the policyholder. Therefore, actuaries couldn’t predict with reasonable certainty whether their mortality predictions were realistic. Also, the policy was introduced at the top of the interest rate cycle. Therefore, insureds are now learning the effects of lower current and future interest rates in this decade. Policyholders may find that the earnings in their accounts are not sufficient to cover the mortality and expense charges incurred in their policies, in some cases. If the cash value goes too low, policyholders will receive a call on their account, similar to a margin call on a leveraged stock portfolio. If a universal life policy is underfunded, there is little in the way of investment characteristics. The key to analyzing universal life policies is to have the monthly breakdown of (a) state premium taxes, (b) expenses, (c) amount at risk, (d) mortality charges, (e) account values, (f) interest earnings, and (g) surrender values. This policy is most appropriate for people who want choice and flexibility.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. What kind of life insurance do you have doctor; and is it enough? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Doctors Will Replace App Stores as Main Distribution Channels for Mobile Health Apps

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In the Year 2015?

By Markus Pohl

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Dear Publisher Dr. David Edward Marcinko

Please review this brief survey and press release. We think it is of some interest to you and your ME-P readers.

Berlin, 24 November 2010A global survey by research2guidance amongst leading mHealth developers and healthcare companies shows that mHealth apps will predominantly be distributed through traditional healthcare channels by 2015.

mHealth

In the years to come mHealth applications will cease to be distributed primarily through the app stores survey participants anticipate. At the moment app stores are still the distribution channels of choice but in the future it is expected that traditional healthcare distribution channels like hospitals and specialized healthcare product vendors will become the predominant distribution channels. This would represent a significant shift when compared to the market today, as the smartphone app store model has been the key driver behind the initial success of mHealth applications over the last two years.

The Survey Results

More than half of all respondents (53%) believe that currently app stores are the best distribution channels followed only by healthcare websites (49%). Traditional health distribution channels like doctors (34%), hospitals (31%) and pharmacies (16%) are ranked as second and third tier distribution channels today. Despite the fact that mobile operators are regarded as players who will help the mHealth market to grow, they are not seen as appropriate distribution channels either now or in the future.

In 5 years’ time survey participants anticipate that the traditional distribution channels like hospitals (68%), doctors (65%) and traditional healthcare websites (56%) will become the main platforms on which to sell mHealth solutions. Generally speaking all distribution channels will grow in importance, but developers envision that in just 5 years’ time the major distribution channel will be doctors prescribing or suggesting applications to patients as a component of treatment.

About the Survey

The survey was conducted by research2guidance to identify emerging trends demonstrated by common thinking amongst early adopters in this new market. It is part of the comprehensive “Mobile Health Market Report 2010-2015“ (http://www.research2guidance.com/shop/index.php/mhealth-report).

About research2guidance:

research2guidance is a Berlin-based market research company specialized in the mobile industry. The company’s service offerings include comprehensive market studies, as well as bespoke research and consultancy.

Contact:

Robert Kuersten

Conclusion

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Celebrating National “Opt-Out” Day with Video

Wednesday – November 24, 2010

From the Electronic Privacy Information Center

National Opt Out of the Airport Scanners Day

Today is the day that ordinary citizens stand up for their rights, stand up for liberty, and protest the federal government’s desire to virtually strip us naked or submit to an “enhanced pat down” that touches people’s breasts and genitals. You should never have to explain to your children, “Remember that no stranger can touch or see your private area, unless it’s a government employee, then it’s OK.”  

Goals and Objectives

The goal of National Opt-Out Day is to send a message to our lawmakers that we demand change.  No naked body scanners, no government-approved groping. We have a right to privacy and buying a plane ticket should not mean that we’re guilty until proven innocent. This day is needed because many people do not understand what they consent to when choosing to fly.

The Details

Here are the details:

Who?

You, your family and friends traveling by air on Wednesday, November 24th 2010 

What?

National Opt-Out Day.  While the government doesn’t always like to advertise this, you have the ability to opt-out of the naked body scanner machines (AIT, or Advanced Imaging Technology, as the government calls it). All you have to do is say “I opt out” when they tell you to go through one of the machines.  You will then be given a pat down.

Where?

At an air-port near you.  

When?

Wednesday, November 24, 2010.  That’s right: November 24 – one of the busiest travel days of the year! We want families to sit around the dinner table, eating turkey, talking about how a government employee molested them at the airport.  We hope the outrageous experience then propels people to write their Member of Congress and the airlines to demand change.  

Why?

We are sick of “security-theater.”  These naked body scanners do not make us a more secure nation. In fact, the scanners, which use radiation, may not even be safe for our long-term health. The government should not have the ability to virtually strip search anyone it wants. Why should a government employee get to see a naked scan of a passenger, and do who knows what in the back room while viewing that image?   We have already heard stories of TSA officials laughing at small genitals and making certain women go through the machines or taking off extra clothes, reducing them to tears. This is absolutely sick behavior. If you don’t like it and don’t want to be virtually strip searched, then too bad says the government. To try and make everyone comply with the naked body scanners, the government has made the alternative worse! With their enhanced pat downs, TSA now touches the genitals and private areas of men, women and children with the front of the hand! We do not believe the government has a right to see you naked or feel you up just because you bought an airline ticket. There are better, less invasive security measures that can be taken.

How?

By saying “I opt out” when told to go through the bodying imaging machines and submitting to a pat down. Also, be sure to have your pat down by TSA in full public – do not go to the back room when asked.  Every citizen must see for themselves how the government treats law-abiding citizens.

More info:

For more information on these machines and to read stories of what happens when you use the naked body scanners or opt out, please visit:

Assessment

To file an incident report, use the Electronic Privacy Information Center’s site: http://www.optoutday.com/

Editor’s Note: The ME-P staff, and our team of medical and nursing professionals, believe that there is no safe threshold for ionizing radiation; including flat plate medical and dental X-rays, CT scans and AIT, etc. The epidemic of diagnostic radiation pollution must stop!

Conclusion

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Should Doctors Make the Patient Internet Portal Leap?

An ME-P Readers Survey

By Staff Reporters

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Patient Portals

In healthcare, for example, the use of patient website portals is a hotly debated topic. These are [should be]  sophisticated HIPPA compliant and secure Web sites offered by medical practices to help engage patients electronically, with the promise of better service and care for patients — and less hassle for the medical practice, doctors and nurses. Often clinical, insurance and financial data gathering and scheduling functions are included, along with separate patient log-in, e-prescribing, and laboratory result features, etc. The promise of eMRs only increases the sophistication of these burgeoning sites.

Use Still in Infancy

But, according to www.MedicalBusinessAdvisors.com unscientific sampling of our clients and technically sophisticated practices [skewed cohort], physicians note that the uptake of portal use by patients outside of tech savvy urban centers is still small, although use by senior citizens is rapidly increasingly. And, tech savvy youngsters are typically not in need of healthcare.

The Survey Question

So, this raises the question, unanswered by other professionally focused websites like Physicians Practice, should you make the patient portal leap?

Definitions

Before we answer that question, let’s provide a bit more historical detail on this technology. In contrast to a traditional [first generation – health 1.0] practice Web site, which provides smiling pictures of the physicians, directions, hours of operation, policies, and maybe a smattering of educational materials, a patient portal is designed for active interaction between patient and practice [second generation – health 2.0].

Example:

As an example, a patient portal typically provides secure e-mail, allowing the patient to make a quick query of the physician (and presumably receive a reasonably quick response) without the delay and inconvenience of attempting to catch the physician on the phone between visits or after hours. Patient portals can also be used for open-source scheduling, allowing patients to make requests for particular times and days.

Assessment

Finally, the newest and most sophisticated patient e-MR engaged portals will allow patients to take a peek inside their patient record, giving them online (and secure) access to their medication list, recent labs, and other data that might be useful in self management, or if the patient is seeing another provider, etc. 

Conclusion

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What is the Role of a Physician-Focused Financial Advisor?

Changing Times – Demand Changing Roles

By Dr. David Edward Marcinko MBA, CMP™

Editor-in-Chief

www.HealthcareFinancials.com

As a financial advisor for more than 15 years, it has been my experience that many doctors who require assistance in developing a comprehensive personal financial plan also need help with implementing any investment planning recommendations. While perhaps not so true before the “flash-crash” of 2008-09, the issue seems especially true today as retirement portfolios have been decimated, and the specter of healthcare reform is no longer just a threat but a political reality. The mindset of hubris has been replaced by a tone of fear in many medical colleagues.

The Financial Advisors

Physician investors who develop an investment plan may use a competent financial advisor [FA] or other specialist in the investment area. A financial advisor can help clients understand their current financial situations and develop strategies for achieving their goals. Other FAs are specialists that help clients design and implement plans for investing. Still others use a more comprehensive approach to the entire financial planning process with extreme degrees of healthcare specificity

www.CertifiedMedicalPlanner.com

These Certified Medical Planners™ are fiduciaries at all times and put client needs first as registered investment advisors [RIAs], not commissioned sales agents or mere stock-brokers despite often confusing monikers.

Implementation

Implementation may be accomplished using professionally managed portfolios and mutual funds. The following shows how a plan may be implemented with an advisor assisting the physician-investor. The process may include:

• Developing investment policy and strategies

• Selecting and implementing managed portfolios and mutual funds

• Evaluating performance on a periodic basis

• Periodically reviewing and adjusting the investment plan as required

Note: The advisor may provide all of the investment services, or the physician investor may use other advisors in the process.

Example: 

A financial planner has developed a number of financial planning recommendations for a client. One recommendation is to develop a written investment plan, review current investments, and implement changes. The planner has recommended an investment advisor experienced in selecting and monitoring managed portfolios and mutual funds. The financial planner will meet with the client and advisor initially and once each year to monitor the plan.

Example: 

A financial planner has developed a financial plan for a client. The financial planner specializes in developing investment policy but not in implementing investments. The financial planner will use asset allocation software and develop a written long-term plan for the client. The doctor-client will work with a major brokerage firm to implement the plan using managed portfolios and mutual funds. The financial planner will monitor the brokerage firm and help the client evaluate performance.

Example:

A financial planner has developed a financial plan for a physician-client and will assist the client in developing asset allocation strategies. The planner has extensive knowledge in implementing the asset allocation strategies using managed portfolios and mutual funds. The planner will select and monitor the choices. The planner will provide the client with a quarterly performance report and meet with the client every six months to review the plan and strategies.

Assessment

Understanding the above is more critical than ever as physician-income continues to shrink going forward in the era of healthcare reform.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Do you seek professional assistance with your investing needs, or do you go-it-alone; why or why not? Then, subscribe to the ME-P. It is fast, free and secure.

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On Dental Economics and Truth in Advertising

About Dentistry iQ

D. Kellus Pruitt DDS

I just read a misleading press release on Dental Economics subsidiary Dentistry iQ that is presented as a credible article titled “Guardian Recognized as One of the Nation’s Leading Dental Carriers by Benefits Selling Magazine Readers” (no byline).

http://www.dentistryiq.com/index/display/news-display/1307102704.html

“NEW YORK, Nov. 19, 2010 (GLOBE NEWSWIRE) — The Guardian Life Insurance Company of America (Guardian), one of the largest mutual life insurers and a leading provider of employee benefits, today announced that it has been recognized by the readers of Benefits Selling magazine as one of the nation’s leading dental insurance carriers for the second consecutive year…”

My Research 

I did some quick research on Guardian’s discount dentistry plans and I have some questions for Dental Economics Vice President Lyle Hoyt – the official who approved the advertisement deal (as far as anyone can tell). First of all, how come at least 19 out of the 25 Austin, Texas dentists listed in their DentalGuard Preferred Provider list work for “clinics”? 12 of them work for Castle Dental.

http://www.geoaccess.com/guardian/po56/DisplayResults.asp

It took me 3 minutes to come up with this information. I ask you, Lyle, did you do any fact checking before you took Guardian’s money? I also glanced at Guardian’s PPO lists from other cities with the same result – If one purchases DentalGuard, one should be prepared for McDentist.

My Bias 

But maybe I judge Castle Dental too harshly. After all, I am admittedly biased. To me, a name on the door of a business connotes accountability backed up by transparency and a suggestion of permanence. Guardian officials should know that their clients don’t like to change dentists, so why are so many of them sent to Castle – 12 months per contract period? And how good of a job is Castle doing? So, I checked the Austin Better Business Bureau to see if Castle Dental has a history with them. Indeed they do! Of the 5 encounters Castle Dental has had with the Austin BBB, they were awarded grades of 3 Bs and 2 Fs.

http://austin.bbb.org/Find-Business-Reviews/

If Castle Dental’s dentists had college grades like that, they would have never made it to dental school. Although, if they lived in New Mexico, I hear one can do discount dentistry as a dental therapists with little more than a high school education … sorry. I digress.

The Advertisement 

The ad for Guardian’s discount dentistry continues: “Benefit Selling’s readership of 55,000 benefits brokers voted Guardian as one of the top dental carriers in the 2010 Readers’ Choice Awards, which were announced in the magazine’s November issue. With more than 70,000 dentists, Guardian boasts one of the largest dental networks in the country and was cited by one participant as ‘the most innovative carrier for dental and a great partner for all ancillary products from life to DI and vision.’”

So Guardian is both “Innovative” and “a great partner” in dentistry? Really-Lyle? Those who stand to profit from dental therapists in New Mexico say the same things – based on an experiment in Alaska that involved 5 therapists and 300 patients … Sorry. There I go again.

My Business Policy Interpretation  

Please allow me to share my interpretation of Dental Economics business policy: If it’s a paid ad with no byline and no opportunity for troublemakers to comment – thus protecting Dental Economics VP Lyle Hoyt – nobody spends any effort checking for misleading and harmful information their bosses promote. After all, even if someone were to demand personal accountability from an online publisher like Dental Economics, what harm could they possibly do to such a well-established news outlet’s credibility? Let’s just see.

Assessment 

I know Dental Economics has to make money somehow, but you should show more respect to dentists and more compassion for dental patients, Lyle Hoyt.

Conclusion

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What is Variable Life Insurance and How Does it Work?

Insurance Basics for Medical Professionals

By Jeffrey H. Rattiner, CPA, CFP®, MBA

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After determining the need for insurance and the amount to purchase, the doctor-client and financial planner’s next task is to match those needs to the doctor-client’s objectives to determine what type of policy the client should purchase. The life insurance industry features more products today than ever before. One reason for this change is that, clearly, the insurance industry has expanded its product base to become more competitive. Another reason is that clients’ needs are constantly changing and the insurance companies must keep up with those needs or run the risk of having funds withdrawn from their companies. New and different types of life insurance products are here to stay. Since life insurance represents a significant part of a client’s risk-management program, planners have to be versed in the specifics of the varied product base.

Variable Life Insurance

A variable life insurance policy is similar to a whole life policy. It was designed as a solution to the problem of the decline in purchasing power that accompanies inflation. The premium is fixed, and the face amount of the policy varies with the type of investment. For example, the cash value within a variable life policy may increase substantially due to the types of investment selected for that policy. Further, because IRC regulations require that the cash value not exceed a specified percentage of the death benefit, an increase in cash value may also increase the face amount of the policy so that it is in compliance.

Cash Value Not Guaranteed

The cash value of the policy is not guaranteed. The death benefit never goes below the original face amount. In other words, there is a built-in guaranteed death benefit. Variable life policy funds are in a separate account of the company. If the company should go into receivership, insureds who have their policies in a separate account are unaffected by what happens to the general account of the insurance company. When the insured takes out a loan, the equity from the account becomes collateralized. The insurance company then transfers an amount equal to the loan to the general account. The collateralized equity stays in the general account until the loan is paid off.

Advantages of Direction

The ability to direct the account value to the investment of the policyholder’s choice is the key advantage of variable life insurance policies. The sale of one fund and the purchase of another within the contract is not a taxable event. The premium can never be raised, no matter how poor the investment is. The policy must be registered under the Securities Act of 1933 as a security and sold with a prospectus. The agent selling the policy must be licensed under the Securities Exchange Act of 1934 and in most states must pass the National Association of Securities Dealers (NASD-FINRA) series 6 and 63 examination. Because of the uncertain nature of the investments in variable life policies, policyholders sometimes are given a limited option to return to a fixed life type of policy (called the 6E-2 Rule). A disadvantage to variable life policies is the limited number of fund choices available to the policyholder.

Assessment

Variable life insurance is most appropriate for younger individuals, people with moderate-to-high risk tolerance, people who want to control their investment account over the long term, and people who do not necessarily have to rely on their account balance.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. What kind of life insurance do you have doctor, and is it enough? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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A Brief History of the ME-P

Enhancing Health 2.0 Connectivity for Physicians and their Financial Advisors

By Staff Reporters

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The Medical Executive-Post [ME-P] was launched in 2006, and was a resounding success. We first went online in October 2006 with an overwhelmingly positive response. Readers and subscribers alike reported finding it a credible source of information with more than half saying the information was far new to them. Our parent company remains: www.MedicalBusinessAdvisors.com

Our Research

In additional, our internal research revealed:

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  • 68% felt a journal or newspaper presentation as increasingly irrelevant.

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Inviting Debate with eDR Stakeholders

An ME-P Exclusive – Almost

By D. Kellus Pruitt DDS

I really, really love being provocative in my neighborhood that I know so well. It just doesn’t seem fair. In fact, for five years, I’ve watched the electronic dental record [eDR] market very closely, and I tell you, something big is moving under the radar. If you recall, in the last couple of weeks I brought your attention to unexplained interest blips appearing on the Medical Executive-Post www.MedicalExecutivePost.com concerning eDRs. I suggested that Internet interest in the topic following years of silence from even the ADA, could be a sign that important news about electronic health records in dentistry may be breaking soon.

CCHIT Seeking Comments 

Just a couple of hours ago, Andis Robeznieks posted “CCHIT seeks comments on specialized EHRs” on ModernHealthcare.com.

http://www.modernhealthcare.com/article/20101119/NEWS/311199996/#

Robeznieks writes: “The Certification Commission for Health Information Technology has opened a public comment period for its proposed oncology and women’s-health electronic health-record certification criteria and test scripts. The comment period will end December 10th at 5 pm CT.”

Meaningful Dental Use 

Is it possible that following the establishment of “meaningful use” guidelines for these specialists, dentistry could be next in line? The nature of the approaching bolus of news concerning eDRs is pure speculation, but rest assured I’ll be right in the middle of it – which brings me to the next sign that eDR stakeholders are getting restless: An almost unheard of conversation about eDRs appeared today on the Internet. Since the only news about eDRs on the Internet are press releases from Dentrix – the largest vendor in the nation – conversations about value of electronic dental records only rarely break out. But, when they appear, I always try my best to be provocative – just to tease out new rationalizations I might have otherwise missed.

I think I found promising opportunity this morning following an article by “John” titled, “EMR Stimulus Q and A: EMR Stimulus Money and Dentists.” It was posted yesterday on the EMR and HIPAA blog.

http://www.emrandhipaa.com/emr-and-hipaa/2010/11/18/emr-stimulus-q-and-a-emr-stimulus-money-and-dentists/comment-page-1/#comment-126257

My Comments

I’ve looked into whether stimulus money will be available to dentists. Many in your audience won’t like it, but here’s your answer: 

Dentists will not receive any ARRA stimulus to help pay for electronic dental records – even if a practice is 30% Medicaid as required. For one thing, it’s already too late to collect on the biggest portion of our grandchildren’s money unless the practice can prove utilization of an ONC-certified eDR in a “meaningful” way by this time next year. And, that’s simply impossible because there are no ONC-certified eDRs, and meaningful use has still not been defined by HHS – with help from the ADA. Eventually, someone from the ADA will either have to promote computer busywork as meaningful use, or concede that meaningful use of eHRs in dentistry simply does not exist.

Example

For example, do you want to log on to a password-protected, HIPAA-compliant computer just to notify the lab that you have a pick-up? For dental practices, speed-dial on the telephone – or fax machine – is much more meaningful, and neither requires the dentist to be a HIPAA-covered entity. In addition, none of the conventional ways of communicating put patients’ identities at risk like digital records on a stolen or hacked computer. That’s Hippocratic meaningful.

Digital Drawbacks 

Here’s another drawback to digitalization: Even though electronic dental records are cutting-edge cool, they have yet to show a return on investment for dental practices, and data breaches will continue to make them more and more expensive. Without ROI, paperless is a hobby paid for by clueless patients in higher fees. Bet you haven’t heard that chunk of honesty very often. Honesty about hi-tech non-solutions is repressed even in the ADA because it is so politically incorrect to admit that our dental leaders who misled members were misled themselves by HIT stakeholders and Newt Gingrich. It’s really difficult for high officials inside and outside dentistry to stand up and say, “Oops! We were wrong.”

See: “Is ARRA Stimulus Money for Dentists?”

https://medicalexecutivepost.com/2010/11/16/is-arra-stimulus-money-for-dentists/

Assessment

I happened to post the article on the Medical Executive-Post two days before John’s article was posted here on the EMR and HIPAA forum. I invite you to read it, and tell me what you think. Other than here, nobody talks about these issues. That can’t be good for dental patients.

Conclusion

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A Funny [Poignant] Video about Health Insurance

What Exactly Do Patients Know and Understand?

By Staff Reporters

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This video illustrates the current state-of-the-art regarding patient understanding of health insurance reimbursement and physician income. But, should it be played in all doctors offices’ and waiting rooms?

Title

It is titled: “What the public does not know about doctors and insurance.”

Link: http://www.youtube.com/watch?v=Y00kxCn7m0s

Assessment

The movie was made and uploaded with Xtranormal’s State. To make your own movie just visit: http://xtranormal.com

Source: Dr. Jon Purdy

Conclusion

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The Fiscal Commission Publishes A Draft Report

National Commission on Fiscal Responsibility and Reform

By the Children’s Home Society of Florida Foundation

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In a surprise press conference on November 10, 2010, Co-Chairs Erskine Bowles and Alan Simpson of the National Commission on Fiscal Responsibility and Reform decided to release a preliminary report. Bowles is a Democrat who served as the Chief of Staff for President Bill Clinton. Simpson is a Republican who previously was a Senator from the state of Wyoming. They indicated that in their view a joint presentation that explained the current positions of the Fiscal Commission would be preferable to leaks by staff members of various provisions. In order to discuss the full range of tax and budget provisions, they released the initial report.

There are 10 guiding principles for the first phase of the report:

1. Patriotic Duty – The “American people are counting on us to put politics aside, pull together not pull apart, and agree on a plan to live within our means and make America strong for the long haul.”

2. Washington Leads the Way – The national government must lead the nation in shared sacrifice and “tighten its belt.”

3. Truth in Promises – The federal government must be truthful and explain the tough budget choices. Washington must be sure to avoid promises that cannot be kept.

4. Gradual Implementation – The economy is still recovering. Budget cuts would not start until 2012 to allow the economic recovery to continue.

5. Protecting Those In Need – There must be an “affordable and sustainable safety net.”

6. Promoting Growth – Government spending will need to continue to support education, infrastructure and research and development.

7. Spending Reductions – All areas of government including defense, domestic spending, entitlements and tax expenditures are up for consideration. Total government spending will be changed initially to 22% of Gross Domestic Product (GDP) and later to 21% of GDP.

8. Government Productivity – The government must also become more efficient and set a target goal of 3% annual increase in productivity for all employees.

9. Simplify the Tax Code – The tax code should be reformed to broaden the base and bring down the deficit. There will be a cap of 21% of GDP for tax receipts.

10. Sound US Finances – Protect Social Security finances, support healthcare and stabilize the federal debt.

Now, based on those ten guiding principles, the Fiscal Commission then established four specific goals:

1. Deficit Reduction – A total of $4 trillion of deficit reduction by the year 2020. Two-thirds or more of that reduction is accomplished through reduced spending, while the balance is through increased taxes.

2. Deficit Level – Reduce the deficit to 2.2% of GDP by the year 2015.

3. Federal Debt – Stabilize the federal debt by 2014. Reduce debt to 60% of GDP by 2024 and 40% of GDP by 2037.

4. Social Security Solvency – Make changes to avoid a potential 22% cut in benefits in 2037.

Co-Chair Erskine Bowles acknowledged that the plan is very comprehensive and will produce strong debate. He noted, “What we have done is laid out a strong predicate for how the nation faces up to a very critical problem.” And, Senator Cranston noted that there will be opposition to most parts of the plan. In his view, the bipartisan Co-Chairs had “harpooned every whale in the ocean.”

Assessment

The final draft of the Fiscal Commission report is due December 1st. Fiscal Commission members will debate the many provisions of the draft report. The hope of the Co-Chairs is that 14 of the 18 members will be willing to vote in favor of the final report. If that happens, the report will then be considered for further action by the House and Senate.

Editors Note: Your editor and this organization take no specific position on these proposals. This information is offered as a service to readers because it has potential impact on all Americans. Because the support transferred to philanthropy depends upon a solid economy in the nation, it is in the interest of all charitable organizations that a bipartisan agreement be achieved. Hopefully, a bipartisan agreement will stabilize the federal fiscal position and restore economic growth that will lead to greater support of philanthropy.

Conclusion

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eHRs by 2014?

How’s the $19-B eHR Mandate Going?

By D. Kellus Pruitt DDS

In 2004, President Bush declared that all Americans’ health records will be digital by 2014. Upon taking the office 2 years ago, President Obama also adopted the popular, HIT industry-supported bi-partisan goal. Will the mandate make a difference – even if we kick in our grandchildren’s money?

Not without the cooperation of doctors and patients. What were you thinking, Mr. Presidents?

Looking Pretty Doubtful

Yesterday, even FierceHealthIT editor Neil Versel declared,

“It’s looking pretty doubtful that the Bush/Obama goal of 2014 will happen, whether you’re shooting for ‘most’ or ‘all’ Americans.”

http://www.fiercehealthit.com/story/amia-2010-five-10-years-away-always-seems-five-10-years-away/2010-11-15#ixzz15TianByl

My Two Cents

In my opinion, the eHR mandate was doomed on delivery when the consumer-friendly 1996 HIPAA Rule was amended in 2003 – taking control of healthcare from patients and doctors and granting it to reckless healthcare stakeholders who cannot be held accountable for harming Americans.

Assessment

In 2003, our privacy was sold for bi-partisan contributions. If Americans don’t trust digital health records, they’ll be worse than worthless. They’ll be dangerous.

Conclusion

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1 in 7 Hospitalized Medicare Beneficiaries Harmed by their Health Care?

According to a New Government Report

By Marian Wang

ProPublica, Nov: 16, 2010, 3:30 pm

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One out of every seven hospitalized Medicare beneficiaries experiences an “adverse event,” which means the patient is harmed as a result of medical care. That’s according to a study released today [1] by the Department of Health and Human Services’ inspector general. The “adverse events” contribute to an estimated 15,000 patient deaths [2] each month and add at least $4.4 billion [3] to the government’s annual Medicare expenses, the report projected. These findings were based on a nationally representative random sample taken from the nearly 1 million Medicare beneficiaries discharged from hospitals in October 2008.

The report’s findings were “consistent with previous studies” but “nonetheless disturbing [4],” Carolyn Clancy, director of the Agency for Healthcare Research and Quality, said in a written response to the report.

Medicare and Medicaid chief Donald Berwick, in a separate response, said that his agency is working to improve care not only for hospitalized patients, but is also trying to address “issues in dialysis centers and ambulatory and long term care settings.”

Inspector General Report

It’s interesting that he mentions this. Because the inspector general report only covered hospital care, the statistics it contains don’t include many of the adverse events we’ve reported on in a particular subset of Medicare beneficiaries—patients receiving care in dialysis clinics [5].

Examples:

But, the report did highlight the story of one hospitalized dialysis patient who almost died when the tube feeding blood back into his body dislodged—an incident that as we’ve noted, is potentially deadly but also preventable [6]: [O]ne beneficiary had excessive bleeding after his kidney dialysis needle was inadvertently removed, which resulted in circulatory shock, a transfer to the intensive care unit, and emergency insertion of a tube into the trachea (windpipe) to ease breathing. When the tube was removed the following day, the patient aspirated (inhaled foreign material into his lungs), which required a life-sustaining intervention.

Assessment

Of the adverse events it identified, the inspector general’s report judged about 44 percent to be preventable. The inspector general called on both the Centers for Medicare and Medicaid Services and the Agency for Healthcare Research and Quality to broaden the definition of adverse events and better measure such incidents, noting that “to date, no adverse event reporting system exists, and there are no Federal standards regarding State systems.”

Link: http://www.propublica.org/blog/item/read-govt-report-showing-1-in-7-hospitalized-medicare-beneficiaries-harmed-

Conclusion

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Is ARRA Stimulus Money for Dentists?

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Now is the Time to Say “No Thank You” to the ADA

[By D. Kellus Pruitt DDS]

A few days ago on Twitter, @techguy said: “@Dentrix, Are you guys helping dentists get access to the ARRA EHR Stimulus money?” This morning I “retweeted” his question to the electronic dental record giant: “That’s a great question, @Dentrix. What are you doing to help dentists receive stimulus money?

Of Faded Promises  

Dentrix officials no longer shop faded promises of free stimulus money to help dentists purchase their software. The truth is, without taxpayer help, Dentrix’s product offers dentists no return on investment, and it’s unlikely that the profession will ever see a cent of stimulus money. In fact, if American Dental Association President Raymond Gist wants to be a national hero, now would be the time to purchase a press release to tell the nation, “American dentists graciously decline your offer of stimulus money, taxpayers. We say, let our grandchildren keep it for themselves.” The deficit-weary public is very interested in that kind of good news these days. But, the ADA’s PR opportunity has a shelf life. The sooner they jump on this minor deception the more generous American dentists will appear. A year from now, the chunk of faux-generosity won’t work.

Too Late for Cash Give-Aways 

For one thing, it’s simply too late for dentists to take part in the cash giveaway. And even if there was time for a significant number of dentists to convert from paper to digital before September 2011, to receive promised stimulus money, a dentist’s practice has to be 30% Medicaid. That qualification rules out almost all dental practices right off, and here in Texas last week, Governor Perry threatened to opt my state out of Medicaid (and stimulus money) completely. A year ago, Perry threatened secession from the Union. It sounds to me like you are softening him up, Washington.

Meaningful Use Requirements 

That’s not all. Before a dentist can qualify to be reimbursed up to $44,000 dollars, the practice must show “meaningful use” of certified electronic dental records. However, meaningful use of digital records in dentistry has not yet been determined and perhaps does not actually exist. Nevertheless, the best minds in the ADA and HHS are searching for the next best thing – humorous rationalizations. For example, imagine the convenience of the speed-dial on the telephone compared to logging on to a highly secure, password-protected, HIPAA-compliant, encrypted computer just to tell the lab you have a pick up – just to show the Department of Health and Human Services that you are making “meaningful use” of your Dentrix product and spending taxpayer money wisely.

Assessment 

Do you know what is scary about the leadership in my profession? I’m apparently the only dentist in the nation who dares admit that as far as ARRA stimulus money goes, American dentists are out of luck and clueless. Even @techguy is in the dark for crying out loud!

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An Emerging Values-Based Healthcare Payment Model

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Understanding Non-Traditional Physician Reimbursement Paradigms

[By Staff Reporters]

www.BusinessofMedicalPractice.com

According to Brian Knabe MD, Mark Fendrick, MD and Michael E. Chernew, PhD, instead of the one size fits all approach of traditional health insurance reimbursement, a “clinically-sensitive” cost-sharing system that supports co-payments related to evidence-based value for targeted patients seems plausible.

The New Model

In this model, out-of-pocket costs are based on price and a cost/quality tradeoff in clinical circumstances: low co-payments for interventions of highest value, and higher co-payments for interventions with little proven health benefit. Smarter benefit packages are designed to combine disease management with cost sharing to address spending growth.

Assessment

Today, whether independent or employed, physicians can pursue creative compensation models not like the one briefly described above and unknown just a decade ago.

Conclusion

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Understanding Hospital Denial Management

An Essay on Rejected Medical Claims and Invoices

By Ross Fidler

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Typically, denied and rejected hospital claims quickly surface as a source of multi-millions  of dollars in revenue leakage and unnecessary expense.

Struggling Payers

Payers have been struggling for decades with increased hospital costs; and the Affordable Care Act of 2010 [ACA] will only increase the stress. Hospitals now thoroughly inspect claims for errors and have become adept at using their rules to deny and delay claims.

For example, Zimmerman reported the denied percentage of gross charges climbed from 4% in 1990 to 11% in 2001; even more by unaudited 2010. In contrast, providers typically lack the tools to aggressively manage current denied claims and prevent future ones.

Denial Tracking

Without denial tracking, an organization may not recognize the heavy financial impact of denied claims. One report www.HARA.com indicates that bad debt and gross days are declining. However, a majority of medical providers write off denials as contractual allowance, distorting the numbers but not the resulting lower margins and reduced cash. H*Works reports that the typical 350-bed hospital loses between $4 million and $9 million each year in earned revenue from denials and underpayments (assume $103 million annual gross revenue and 40% contractual allowance), thru 2009. Recouping lost revenue from denials and underpayments will, according to H*Works, increase an organization’s operating margin by 2.6% www.advisoryboardcompany.com

Industry Benchmarks

Industry estimates report that at least 50% of denials are recoverable and 90% are preventable with the appropriate workflow processes, management commitment, strong change leadership, and the correct technology. H*Works estimates that for a revenue capture of $3 million from denials and underpayments, the recovery infrastructure costs are only about 3%.

Assessment

With all this in mind, better management of rejections and denials, as well as the information necessary to resolve and prevent them, surfaces as probably the best strategy to improving hospital financials. By streamlining the revenue cycle, managing rejections and denials proves to be less expensive and to provide faster returns than initiating new services.

Conclusion

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What is Whole Life Insurance and How Does it Work?

Insurance Basics for Medical Professionals

By Jeffrey H. Rattiner, CPA, CFP®, MBA via iMBA, Inc.

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After determining the need for insurance and the amount to purchase, the doctor-client and financial planner’s next task is to match those needs to the client’s objectives to determine what type of policy the client should purchase. The life insurance industry features more products today than ever before. One reason for this change is that, clearly, the insurance industry has expanded its product base to become more competitive. Another reason is that clients’ needs are constantly changing and the insurance companies must keep up with those needs or run the risk of having funds withdrawn from their companies. New and different types of life insurance products are here to stay. Since life insurance represents a significant part of a client’s risk-management program, planners have to be versed in the specifics of the varied product base.

Term Insurance Alternative

Whole life insurance was introduced as an alternative to term insurance. Whole life is often called cash value insurance or permanent insurance to distinguish it from term insurance. The cash value in whole life insurance arises because of the level premium system and the need to account for prepaid premiums. Whole life insurance offers permanent protection at a level premium for the entire lifetime of the insured. Premiums remain fixed and are paid throughout the insured’s entire lifetime. The premium level can remain constant throughout the life of the policy because premiums are higher during the early years. The excess charge in the early years makes it possible to build up a reserve, which will be needed, together with interest earned, to keep premiums level throughout the life of the policy. Older clients then pay the same premium in later years as they did when they were younger.

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Cash Value

The cash value of a whole life policy serves a variety of purposes:

• It can be used for collateral for an insurance company loan.

• If the insured decides to terminate the policy, he or she can elect to receive the policy’s cash value at that time.

• The cash value balance can be remitted to the insurance company to purchase a reduced paid-up insurance policy. This will provide coverage until the funds are insufficient to pay the premiums. This cancellation feature is also referred to as a non-forfeiture value.

• If the policy is not canceled, the accumulated cash value becomes part of the death benefit paid upon the insured’s death (which makes this type of policy similar to a decreasing term policy). It can reduce cash flow by taking some of the investment results out of the contract either through dividends or through policy loans.

General Accounts

With a whole life policy, the insured does not control the investment vehicle. Policies are invested in the insurance company’s general account through the purchase of long-term bonds and mortgages. As a result, during a period of decreasing interest rates, whole life products can be expected to produce superior results since rates can be locked in when interest rates in general are higher. In contrast, rates in an increasing environment are locked in to their portfolios until maturity. There is no flexibility within a whole life policy. Premium payments, type of investment vehicle, and change in death benefit are all fixed. The safety of cash value is high, but the potential rate of return is low to moderate. If interest rates are rising, the price of the policy is declining, and you may want to suggest replacing the policy. (See Planning Issue 10.)

If the premiums paid to the insurance company turn out to be more than the company needs because expenses are lower than expected, the company’s portfolio investment return will be larger than the company expected. As a result, the company will then return some of the excess premium to the policyholder as a dividend or excess interest. Life insurance dividends are not taxable as income because they represent an excess of premium.

Premium Payments

The premium consists of mortality charge, policy expense, and a cash value. When the insured reaches 100 years of age, the policy endows with the face amount of the policy collectible by the insured. Since mortality tables end at age 100, the insurer considers the client dead and pays the face amount of the policy.

Whole life policies are packaged in a variety of ways. One policy, a limited-pay whole life policy, is a whole life policy with a death benefit continuing through age 100. The only difference between this and the traditional whole life policy is that premiums are paid only for a specified period, for example, seven years. In other words, the policyholder prepays the policy. A policy is considered to be fully paid up when the cash value of the basic contract plus the value of the dividend additions or deposits equals the net single premium for the policy in question at the insured’s attained age. The premium-paying period influences the cash value buildup in the policy. This is accomplished by using part of the investment return or dividends from long-term bonds and mortgages to pay the mortality and the expense charges on the policy for the rest of the policyholder’s life.

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Advantages and DisAdvantages

Advantages of a whole life policy include lifetime coverage for the insured, a forced savings element, loan privileges, and a variety of premium payment plans. Over time, the cost is lower than term, the rate of return if the policy is kept until death is quite reasonable, and the policy will do a better job than universal life in keeping up with inflation. Disadvantages include a higher cost of death protection, a low rate of return, lack of flexibility, and incompatibility with inflation.

Assessment

Whole life policies are most appropriate for people who want or need a forced savings arrangement and for people who want lifetime coverage. As interest rates increased during the late 1970s, the returns received from insurance companies on long-term bonds and mortgage portfolios of whole life portfolios declined. As a result, in order to prevent policyholders from borrowing their cash reserves and investing these funds in other financial products, the insurance industry offered the following incentives:

• Existing policyholders were given the option to have their policies upgraded to reflect current market rates. Policies were upgraded through higher interest rates on cash values and higher future dividends and rates on policy loans.

• New types of policies were introduced—such as universal life, which tied cash value to short-term money market rates.

• Variable life insurance and universal variable life insurance were introduced, which segregated policy assets into a separate account.

Conclusion

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Autumn 2010 Update from the ME-P Editors

What We Are Up To – Now

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

By Prof. Hope R. Hetico; RN, MHA, CMP™

[Managing Editor]

To All ME-P Readers and Subscribers

Gosh, it’s been an incredibly busy summer and last few weeks.

So much for a fall-break!

Our Latest Textbook Release

For example, the Institute of Medical Business Advisors team www.MedicalBusinessAdvisors.com, and our related author-partners, have been fully occupied finishing up the third edition our newest book The Business of Medical Practice [Transformational Health 2.0 Skills for Doctors] www.BusinessofMedicalPractice.com 

Frontmatter: Front Matter BoMP – 3

After a decade since first release, some are even calling it a “classic”. And, it will be most useful for our personalized and unique www.CertifiedMedicalPlanner.com online educational program for all financial advisors interested in the “red-hot” healthcare consulting space. 

Of course, we’ve also been helping existing clients realize the benefits of our financial advice, practice management experience, and crowd-sourced knowledge.

Back to Basics

One of the fascinating things about enabling financial advisors, medical management consultants and their physician-clients to harness the power of health 2.0 modernity is how rapidly it, and we, have become as an essential tool and powerful ecosystem affecting so much of what they do – and how they do it – from “office to hospital and home” and from “practice inception to succession and retirement planning”.  

This is an exciting and satisfying time for us all – sort of like letting the textbook and consulting genie out of the bottle – but with every one winning – not just the person who gets to make the wish!

Assessment

And, to all those who are passionate about integrating personal financial planning for physicians – with medical practice management – you will be delighted by our renewed focus on our individual and institutional clients; both old and new.  This shift is long overdue and – and if done properly – will benefit every single ME-P user, iMBA Inc client, and all those empowered by same [doctor-patients and FA-clients].

Conclusion

So, give us a “shout-out” the next time we meet and look for us on the speaking circuit in 2011. Exciting times, indeed!

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Integration as a Competitive Strategy in Healthcare Reform

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Understanding Horizontal and Vertical Integration

[By Robert James Cimasi MHA, AVA, CMP™]

Health Capital Consultants, LLC

St. Louis MO

Several potential benefits are associated with the integration of companies in the same or related industries. These synergistic benefits depend upon the type of companies and their integration strategies, as well as whether the anticipated transaction is a manifestation of horizontal consolidation or vertical integration.

Horizontal consolidation is “the acquisition and consolidation of like organizations or business ventures under a single corporate management, in order to produce synergy, reduce redundancies and duplication of efforts or products, and achieve economies of scale while increasing market share.”

Vertical integration involves the joining of organizations that are fundamentally different in their product and/or services offerings, i.e., “the aggregation of dissimilar but related business units, companies, or organizations under a single ownership or management in order to provide a full range of related products and services.”

Healthcare Locality

As healthcare is essentially a local business, horizontal integration within the local market has been limited by antitrust laws. Therefore, in order to control greater market share, a hospital’s strategy has required vertical integration. Healthcare providers and organizations have placed much emphasis on the benefits of vertical system integration in the last 10 or more years, whereby a single healthcare organization owns all of the elements needed to provide a continuum of care for all the needs of a given patient population. Much of this effect has stemmed from the desire to be able provide a “continuum of care,” i.e., to be able to single source contract for the healthcare needs of a patient population and to profit from implementing preventative healthcare and utilization management measures. The relative economic benefits of this type of vertical integration versus horizontal integration strategies remain the subject of great debate in academia and among the strategic managers of other industries. One lesson that may be drawn from other industries is that neither of these forms of integration is universally applicable or beneficial to every organization and market. There are also great costs to integration, which must be outweighed by the benefits. Each specific benefit should be identified and researched when examining the probable effects of integration, consolidation, mergers or divestitures as a competitive strategy.

Rapid Consolidation Periods

During the rapid consolidation and integration of healthcare providers, insurers, and purchasers, in recent years, there was much discussion of a concept termed “managed competition.” This term appears to have been an outgrowth of the term “managed care” and was viewed by many as the logical result of the integration of healthcare markets nationally. The concept of “managed competition” apparently related to an idealized vision of competition between very large, integrated providers (organized into integrated delivery systems), large, national managed care payors, and purchasing group coalitions that could achieve a balance of power between these interacting groups. However, many believe that the result of such an arrangement would more likely be a reduction in competition between members of each of these three groups and the creation of powerful bureaucratic and intractable organizations. Further, this scenario does not appear to effectively remove any of the existing barriers to competition and therefore doesn’t introduce any additional incentives for innovation to produce value for consumers which, of course, is the “sine qua non” of competition.

Disadvantages

The disadvantages of integration are becoming apparent, including:

  • the loss of autonomy;
  • increased bureaucracy;
  • difficulty in aligning incentives; and
  • other failed expectations.

Many organizations that sought strategic advantage through integration are ending those arrangements and now divesting acquired organizations.

Other Industries

In other industries, specialized providers of goods and services are increasingly able to offer customers a full range of services through affiliation and affinity with other independent specialists, made more seamless through the use of increasingly sophisticated communications and computing technologies. However, this move to “dis-integration” must also be carefully considered if organizations are not to make further costly organizational changes inspired by a rushed judgment of general market trends.

Porter Speaks

Michael Porter (et al.) wrote in the Harvard Business Review that,

In industry after industry, the underlying dynamic is the same: competition compels companies to deliver increasing value to customers. The fundamental driver of this continuous quality improvement and cost reduction is innovation. Without incentives to sustain innovation in health care, short-term cost savings will soon be overwhelmed by the desire to widen access, the growing health needs of an aging population, and the unwillingness of Americans to settle for anything less than the best treatments available. Inevitably, the failure to promote innovation will lead to lower quality or more rationing of care — two equally undesirable results.

Assessment

Therefore, if the emerging healthcare industry is to respond successfully to the Affordable Care Act [ACA] and related market pressures to reduce costs, then the healthcare market must first create incentives for innovation. The barriers to competition cannot include barriers to innovation as many do now. Physicians, nurses, healthcare purchasers, managers, and legislators must ensure innovation takes the forefront of any reform, if it is to be effective.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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The Testamentary Letter?

More Emotional than a Will or Trust

By Staff Reporters

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Many doctors and medical professionals, on drafting their wills or trust documents, feel that these legal documents do not adequately convey the emotional qualities that may be important when assets are passed after death. A testamentary letter can be used to convey such concerns, as they are impacted by the passage of assets. When unequal distributions of estate assets are given to children, a testamentary letter can outline the reasons.

Example:

The oldest daughter may be an established attorney who does not have the financial need for a large bequest, whereas the youngest son is a struggling artist. A testamentary letter might convey a parent’s wishes that the children use a portion of the assets received to continue the charitable giving programs that the parent has started—a desire that may not be a legally enforceable condition through the will.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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About the Healthcare Blue Book Consumer Website

Establishing Price Transparency for Medical Goods and Services

By Staff Reporters

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The website Healthcare Blue Book http://www.healthcarebluebook.com is provided free to consumers. The site presents a reported fair price to pay for a healthcare service or medical product when the patient is paying cash at the time of treatment; adjusted for geography and zip codes. It reports to represent a payment amount that many high-quality providers accept from insurance companies as payment in full, and it is usually less than the stated “billed charges” amount.

Comparison Shopping

Unfortunately, it is difficult for consumers to determine fair pricing for healthcare. Prices are not generally published and the list prices (or billed charges) are higher than providers typically charge most of their patients with insurance. The Healthcare Blue Book is a free resource that shows a fair price for healthcare products and services to consumers.

The Consumer Need to Know

Consumers with traditional health insurance frequently need to know how much healthcare services will cost. Average deductibles are increasing and can be $1,000 or higher. Coinsurance rates, which are the percentage of the bill that the consumer must pay, range from 20 to 40%. Many consumers would prefer to use the doctor of their choice, instead of the one selected as “in-network” by their insurance company, as long as they knew they wouldn’t have to pay higher prices.

Assessment

There are also “non-covered services” that may not be covered by insurance. As health insurance companies shift more of the cost to consumers, consumers need to be able to choose healthcare services at fair prices.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Give em’ a click http://www.healthcarebluebook.com and tell us what you think? As a physician or medical provider are you intimidated by this site and resulting price transparency? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Subscribe Now: Did you like this Medical Executive-Post, or find it helpful, interesting and informative? Want to get the latest ME-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

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On the Texas Health and Human Services Commission’s Legislative Appropriation for Dental Plans

Fair Warning – Texans

By Darrell K. Pruitt DDS

Just like capitation dental plans, in the long run, poor, sick children in hospitals don’t save Texans money

THHS Commission’s Legislative Appropriation

As part of the Texas Health and Human Services Commission’s legislative appropriation request, the Agency is quietly pushing for approval of a short-sighted proposal to change the state’s current Medicaid/CHIP (discounted) fee-for-service delivery model to multiple corporate-run capitation plans – where executives who fund political campaigns get bonuses but cannot be held accountable for the slow lines or the fast dental work.

Expedient Deception?

If HHSC succeeds in their politically-expedient deception, not only will it be even more difficult for poor parents to find dentists who accept Medicaid or CHIP payment, but the communities’ charity dental clinics – the default hope of relief for far too many of the state’s poor already – will be unable to keep up with the surge of basic dental needs in the community. Many free dental clinics already need donations of dentists’ free time more than money.

Current Programs Marginally Acceptable 

Even though the state’s current Medicaid/CHIP program is only marginally acceptable to dentists because of next to charity fees plus aggravating and costly bureaucracy, nothing is more disgusting with dentists and patients than dental managed health organizations (DMHO). If naïve people in Austin have their way, the long waits for dentists’ time – state-paid or volunteer – will increasingly cause children to end up in hospital emergency rooms with painful, life-threatening oral infections that are expensive and preventable.

Assessment 

Your local dentist’s capacity to give back to your community by volunteering in neighborhood free clinics is not limitless. Let’s not make a bad situation worse with capitation. It’s a lie.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. The time is NOW to contact YOUR TEXAS LEGISLATOR http://www.fyi.legis.state.tx.us/ and tell them a capitated dental managed care delivery model is not in the best interest of Texas children or Texas dentists! Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Subscribe Now: Did you like this Medical Executive-Post, or find it helpful, interesting and informative? Want to get the latest ME-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

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What is Term Life Insurance and How Does it Work?

Insurance Basics for Medical Professionals

By Jeffrey H. Rattiner, CPA, CFP®, MBA

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After determining the need for insurance and the amount to purchase, the doctor-client and financial planner’s next task is to match those needs to the client’s objectives to determine what type of policy the client should purchase. The life insurance industry features more products today than ever before. One reason for this change is that, clearly, the insurance industry has expanded its product base to become more competitive. Another reason is that clients’ needs are constantly changing and the insurance companies must keep up with those needs or run the risk of having funds withdrawn from their companies. New and different types of life insurance products are here to stay. Since life insurance represents a significant part of a client’s risk-management program, planners have to be versed in the specifics of the varied product base.

Term Insurance

Term insurance provides protection against financial loss resulting from death during a specified time. Term insurance is often characterized as providing “pure” protection because it pays only death benefits and does not contain any cash value features. Coverage stops at the end of the policy period. Term insurance comes in two forms: nonrenewable term and annual renewable term.

Nonrenewable Term Insurance

Nonrenewable term insurance offers the client the poorest quality because the insured has to requalify or prove evidence of insurability for coverage every year. As a result, its cost is the lowest since the insurance company annually re-underwrites the individual applying for coverage. This allows the insurance company to be selective and avoid adverse risks.

Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8

Annual Renewable Term Insurance

Annual renewable term insurance is a quality term product. Under this type of term insurance, the policyholder may continue coverage on an annual basis. The rates are higher than nonrenewable term since the insurance company must continue to renew the policy at the insured’s option. The premiums generally increase as the policy matures, and the policy offers no flexibility. Coverage automatically stops if the premiums are not paid.

Conversion Provisions

Term insurance may offer a conversion provision that allows the insured to convert the term policy into a cash value policy without evidence of insurability, providing the insured with a guaranteed hedge against future un-insurability. The insured can convert the policy to a whole life policy at a later date. This can be done in one of two ways:

1. The insured can go back to the original policy date of issue and pay premiums on the basis of the younger age. All back premiums, including interest, must be paid to date.

2. The insured can pay premiums at the attained age (or at the age of the insured at the time of conversion).

Advantages of term insurance policies include a lower initial cost, allowing dollars to be invested elsewhere, and pure death protection. Disadvantages include the lack of permanence, the absence of a savings element, the expiration of the policy after a specified period, and a periodic increase in cost. The increasing premium structure of term insurance results from the decreased life expectancies of an individual’s later years.

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

Assessment

Term insurance is most appropriate for young couples who have children or who otherwise may need a large amount of insurance. It is also appropriate for people who do not want to invest in a cash value insurance vehicle, who cannot afford the higher premiums of cash surrender policies, whose insurance needs will decrease over time, or who have temporary needs. Term insurance consists of mortality charges and policy expense. Because term insurance is quite expensive at the older ages, an alternative product was developed.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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On Medical Practice [Business] Succession Planning

A Process of Financial Steps

By Dr. David Edward Marcinko, MBA CMP™

[Editor-in-Chief]

http://www.CertifiedMedicalPlanner.org

Succession planning is a dynamic process requiring current ownership and management to plan the medical practice or company’s future, and then implement the resulting plan. As a financial planner and advisor myself, I see many doctors and clients approach business [practice] succession planning initially through retirement planning. Once they understand the issues and realities of the tax laws, they are much more amenable to working out a viable succession plan. Many doctors and other clients have not clearly articulated their goals, but have many pieces of the plan that need to be organized and analyzed by the financial planner to meet their objectives, including both personal and financial issues.

A Step-Wise Process

The steps necessary for successful succession planning are as follows:

• Gathering and analyzing data and personal information

• Contacting the doctor [client’s] other advisors

• Valuing the medical practice or business

• Projecting estate and transfer taxes

• Presenting liquidity needs

• Gathering additional corporate information

• Identifying dispositive and financial goals

• Analyzing the needs and desires of nonfamily key employees

• Identifying potential ownership, physician-executive and/or management successors

• Making recommendations, modifying goals, and providing methodologies

• Assisting the doctor-client in implementation

Gathering and Analyzing Data and Personal Information

The first step in data collection is talking to the doctor or client, and explaining the process of gathering data. Most successful financial planners use a questionnaire to be sure to address all important information. The planner should gain an understanding of the interrelationships between the practice, family and the business and address each of these areas as separate parts of the same equation. Finding out how the practice or business operates and why it operates that way can help the planner determine whether change is necessary and how to go about implementing it. Other important elements to address include the environment in which the practice [business] operates, potential flaws in the current structure and operations, appropriate levels of key-person life insurance coverage, investment asset diversification, prior estate planning efforts, and existing legal contracts that may need modification.

A Timely Process

It may take some time, from weeks to months, for the client to gather the required information. The planner should be encouraging and should periodically check on the doctor-client’s progress. If it appears that the client may not be motivated to complete the questionnaires independently, the planner should schedule an appointment to help the doctor-client finish. The client may create obstacles because he or she does not want to talk about death or relinquish control of the practice or business. These are delicate topics, and the financial planner cannot force the client to face them. Still, the consequences of not carrying out personal financial and estate planning can be explained.

Understanding the Practice or Business

To be most helpful to the doctor-client, the financial planner must understand the client’s medical practice or business. Reviewing the history of the company, getting acquainted with its current operations, and becoming familiar with the industry is important. By reviewing financial statements, income tax returns, business plans, and all pertinent legal documents, the planner will be able to identify key areas to focus on during the engagement. Understanding the patient or customer base of the business is also important. For example, exploring the impact of the principal’s death on the patient [customer] base helps the financial planner understand what changes could occur in the business after the physician-owner’s death.

Fair Market Valuation

Next, the planner must translate the balance sheet to current fair market values and analyze the debt, capital structure, and cash flows. A review of accounts receivable, inventory, and any fixed assets should be included to determine whether there is sufficient collateral for a leveraged buy-out or other estate planning technique for succession planning. Also, the cash flow should be reviewed to see if new fixed payments such as debt repayments or dividend distributions could be made.

Contacting the Doctor-Client’s Other Advisors

After gathering the documents, it’s a good idea for the planner to contact the client’s attorney, accountant or tax advisor, bank or trust officer, insurance advisor, investment advisor, stockbroker, and other business advisors. As many key advisers as possible should be contacted early in the engagement to create a spirit of cooperation. A planner will benefit by creating team harmony and establishing himself or herself as the team leader. Additionally, a planner could be engaged by these professionals in the future, and a planner is a valuable source of referrals.

Valuing the Medical practice of Business

The next step in the succession planning process is computing the value of the practice or business. It may surprise the planner to hear what the doctor or client perceives as the value of the [practice] business at the beginning of the engagement. Likewise, the client may be surprised to hear what value could be placed on the business for estate tax purposes. The goal in valuation is determining the price at which the business would change hands between a willing buyer and a willing seller, assuming:

• The buyer is not under any compulsion to buy.

• The seller is not under any compulsion to sell.

• Both parties have reasonable knowledge of the relevant facts.

Revenue Ruling 59-60 (1959-1, CB 237

The IRS issued Revenue Ruling 59-60 (1959-1, CB 237), which lists several factors to be used in valuing a business:

• Nature and history of the practice or business

• Economic outlook and condition of the healthcare industry

• Book value and financial condition of the practice or business

• Earning capacity of the practice or business

• Dividend-paying capacity of the practice or business

• Value of any goodwill or other intangibles

• Value of similar stocks traded on open markets

• Degree of control represented by the size of the block of stock interest

Highest and Best Use

The IRS computes a value based on the “highest and best use” of the practice or business. This means that the business will be valued by the IRS at the highest possible value that can be reasonably justified. Valuation methods include the asset approach, income approaches, and market approach.

• Asset approach:  This is primarily used for a business that is worth more if it is sold in pieces rather than as a whole. The tangible asset value is added to the intangible goodwill value.

• Income approaches:  A business as a going concern has value in its ability to produce profits in the future. These profits represent a return on the investment. The value of the business is a function of expected profits and desired rate of return.

— Discounted future earnings method:  Projected future earnings are discounted to present value.

— Discounted cash flow method:  Cash that the owner can withdraw from the business is discounted to present value.

— Capitalization of earnings method: Expected earnings are divided by the capitalization rate.

— Capitalization of excess earnings method.  Expected earnings that are not needed in the business are divided by the capitalization rate.

• Market approach: A business is worth what similar businesses sell for. Referred to as the comparable method of business valuation, this method should be used only when the comparable business is truly comparable.

Each of these primary methods has numerous variations that may provide a more desirable or justifiable value.

Assessment

When reviewing potentially taxable estates, the planner should analyze the opportunity to use favorable valuation discounts for loss of a key employee, lack of marketability, or possibly a minority discount for lack of control. Alternatively, planning recommendations can be made to avoid exposure to valuation premiums for control. The physician-owner may avail himself or herself of many of these discounts by reducing holdings to less than 50% prior to death.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

DICTIONARIES: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
BLOG: www.MedicalExecutivePost.com
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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The Asset Allocation Decision for Physician Investors

A Historical Perspective for all Lay and Medical Professionals

By Manning & Napier, Inc.

http://www.manning-napier.com/

Introduction

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To a large extent, your investment objectives are driven by your investment time horizon and the needs for cash that may arise from now until then.  Once these objectives have been set, you must decide how to allocate assets in pursuit of your goals.  Establishing the appropriate asset allocation for your portfolio is widely considered the most important factor in determining whether or not you meet your investment objectives.  In fact, academic studies have determined that more than 90% of a portfolio’s return can be attributed to the asset allocation decision.  The following will provide a historical perspective on the risks which need to be balanced when making the asset allocation decision, and the resulting implications regarding the way this important decision is made by investors today.

The Balance between Growth and Preservation of Capital

The asset allocation decision (i.e., identifying an appropriate mix between different types of investments, such as stocks, bonds and cash) is the primary tool available to manage risk for your portfolio.  The goal of any asset allocation should be to provide a level of diversification for the portfolio, while also balancing the goals of growth and preservation of capital required to meet your objectives.

How do investment professionals make asset allocation decisions?  One way is a passive approach, in which a set mix of stocks, bonds and cash is maintained based on a historical risk/return tradeoff.  The alternative is an active approach, in which the expected tradeoff between risk and return for the asset classes is based upon the current market and economic environment.

Can any single mix of stocks, bonds and cash achieve your needs in every market environment that may arise over your investment time frame?  If such a mix exists, then it is reasonable for you to maintain that particular passive asset allocation.  On the other hand, if no single mix exists that will certainly meet your objectives over your time frame, and then some judgment must be made regarding the best mix for you on a forward-looking basis.  This case implies that some form of active decision making is required when determining your portfolio’s asset allocation.  To answer this question, let’s consider the historical tradeoff between the pursuit of growth and the need to preserve capital over various investment time frames.

[picapp align=”none” wrap=”false” link=”term=stock+market&iid=163135″ src=”http://view1.picapp.com/pictures.photo/image/163135/foreign-money-newspaper/foreign-money-newspaper.jpg?size=500&imageId=163135″ width=”337″ height=”506″ /]

The Need for Growth

Our first conclusion is that you have to be willing to commit a majority of your assets to stocks to pursue capital growth, but even an equity-oriented portfolio is not guaranteed to meet your growth goals over a long-term time period.  To provide some historical perspective using Ibbotson data, a mix of 50% stocks and 50% bonds provided an 8.9% annualized return from 1926-1998, but failed to surpass what many consider to be a modest return of 8.0% in approximately 49% of the rolling ten and twenty year periods over this time.  In fact, a portfolio of 100% stocks provided an 11.2% annualized return, but failed to surpass 8.0% in almost 1 of every 3 ten-year periods and more than 1 of every 4 twenty-year periods.

This data also reflects the difficulty through history of consistently achieving an 8.0% rate even with an aggressive mix of stocks and bonds.  In this time of high flying stock markets, it is important to keep in mind that taking more risk is no guarantee of higher returns.  However, what is clear from this data is the importance of allowing a manager the flexibility to achieve meaningful exposure to stocks in attractive market environments to pursue the goal of long-term capital growth.

The Need for Capital Preservation

Of course, there is a clear risk of long-term declines in an equity-oriented investment approach, especially for a portfolio dealing with interim cash needs (e.g., a defined benefit plan with ongoing benefit payments, a defined contribution plan with participants having different dates until retirement, or an endowment with ongoing withdrawal needs).  An illustration of the sustained losses that may result from heavy allocations to stocks is the fact that 1 of every 4 one year periods and 1 of every 10 five-year periods resulted in a loss for a portfolio of 100% stocks.  Even the 50% stock and 50% bond portfolio has seen losses in almost 1 of every 5 one-year periods and more than 1 of every 25 five-year periods over the past 73 years of available data.  Thus, it is clear that no single mix of investments is likely to meet all of the needs for a portfolio in every market environment.

The Need for Active Management of Risk

The analysis to this point has discussed the need to balance long-term growth and preservation of capital, and it has summarized the tradeoff between these conflicting goals.  There remains, however, an important issue regarding the appropriate stock exposure for you in the current environment.  Even though returns over the long-term may have been strong for an all-stock portfolio, your returns will be very much dependent on the market conditions at the start of the investment period.

To set up this discussion, consider the risk of failing to achieve a target return of 5%, 8% or 10% in the S&P 500 over the last 44 years.

FAILURE RATES OF TARGET RETURNS IN STOCKS [1955-1998]

 

   1 Year  3 Years  5 Years  10 Years
 % Periods with Less Than a 5% Return:   32%   15%   17%   13%
 % Periods with Less Than an 8% Return   38%   29%   27%   32%
 % Periods with Less Than a 10% Return   41%   41%   41%   44%

 

Taking the risk of failing to achieve your return goals one step further, does this risk increase with an expensive stock market?  Looking at several different stock valuation measures, the U.S. stock market is currently at historically extreme levels.  As an example, the S&P Industrials price-to-sales ratio was 2.0 at the end of 1998.  High valuation measures are often associated with periods of high volatility in stocks, and a price-to-sales ratio greater than 1.0 (i.e., ½ of current level) has historically been considered high.

FAILURE OF STOCKS TO MEET GOALS WHEN S&P INDUSTRIALS PRICE-TO-SALES RATIO IS GREATER THAN 1.0 [1955-1998]

 

   1 Year  3 Years  5 Years  10 Years
 % Periods with Less Than a 5% Return:   42%   26%   24%   45%
 % Periods with Less Than an 8% Return   47%   55%   55%   79%
 % Periods with Less Than a 10% Return   49%   71%   71%   97%

 

Understanding the Data

The data in the table above indicates that high market valuations significantly increase the risk of failing to achieve even moderate return goals.  In all, there were 50 quarters from 1955 to 1998 in which the S&P Industrials price-to-sales ratio was over the 1.0.  During these periods, strong returns were possible, but less likely to be sustained than when there are less optimistic valuations in the market.  While this does not mean that a major correction or bear market will necessarily occur, the risk of failing to meet your goals is clearly higher than average based upon this data.  Because the market is a discounting mechanism, the positive economic environment we see today may become over discounted, resulting in moderate returns until fundamentals catch up with the optimism.

Assessment

Clearly, history tells us that no single mix of assets may provide both long-term capital growth and stability of market values in all market and economic conditions.  Far too often, investment professionals take a passive approach to asset allocation, relying on past average returns and correlations to determine asset allocation without a full understanding of the long periods of time in history over which there are significant deviations from long-term averages. This data confirms that a more active approach to asset allocation based on the risk faced in today’s market and economic environment is key to lowering the risk to your portfolio failing to meet its investment objectives.

Conclusion

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A Physician Query on “Used” eMR Billing System Value?

Understanding Residual Worth

“Ask an Advisor”

Submitted by an Anonymous, MD

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Greetings!

I am in a three man Neurology practice. Five years ago we invested in an all inclusive EMR / billing system with A4 Health Systems and Allscripts. The system cost close to $60,000 and has been constantly upgraded (for “free”). There are also yearly “maintenance” fees of about $7,000. Each physician also had to get a license at a cost of $7,000 each. A license now per physician is $13,000!  

Buy-Out Value

I am going to be leaving the practice in one year and would like to know how I go about getting the EMR appraised for my buy-out. I am not about to turn this very valuable system over to my partners as a “going away gift”. The system has been upgraded several times a year and the practice obviously could not run without it (i.e.: it is a tangible asset and has continued value in use). 

Assessment

PCs, printers, etc. may have depreciated in value but the system has not especially since it has been upgraded on a regular basis. Can you refer me to someone who is familiar with appraising EMR systems?

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. How do you appraise a “used or second-hand” eMR system? Does it have any residual value at all! Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Financial Planning and Risk Management Handbooks from iMBA, Inc

For Doctors and their Financial Advisors

[By Staff Reporters]

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Useful Managed Care Provider, Staffing, Activity and Financial Trends

Part Two

By Dr. David Edward Marcinko MBA

[Publisher-in-Chief]

Dr. DEMIf you read this ME-P regularly or have read my earlier blogs, you know that I am writing a book on practice management for the private medical practitioner.

The Business of Medical Practice [Transformational Health 2.0 Skills for Doctors]; third edition: www.BusinessofMedicalPractice.com

Link: Front Matter BoMP – 3

A recent story in the Chicago Tribune on the difficult business life of private practitioners today reminds me that I need to keep my nose to the grindstone.

For example, according to the sanofi-aventis Pharmaceutical Company Managed Care Digest Series, for 2008-10, the following patterns and comparative trend information has been empirically determined and may provide a basic starting point for medical practitioners to share business management, facilities, personnel, and records information for enhanced success www.managedcaredigest.com

Mid-Level Provider and Staffing Trends

  • Mid-level provider use increased among multi-specialty groups, especially in those with more than half of their revenue from capitated contracts. Use also rose with the size of the practice and was highest with OB/GYN groups.
  • Medical support staff for all multi-specialty groups fell and was lowest in medical groups with less than 10 full-time equivalent (FTE) physicians. However, groups with a large amount of capitated revenue actually added support staff. Smaller groups limited support staff.
  • Compensation costs of support staff increased and the percentages of total operating costs associated with laboratories, professional liability insurance, IT services, and imaging also increased. Support staff costs increase with capitation levels and more than half of all operating costs are tied to support staff endeavors.

Managed Care Activity and Contracting Trends

  • More medical group practices are likely to own interests in preferred provider organizations (PPOs) than in HMOs and the percentages of groups with managed care revenue continues to rise. Multi-specialty and large groups also derive more revenue from MCOs than single specialty or smaller groups.
  • Managed care has little effect on physician payment methods that are still predominantly based on productivity. Physicians were paid differently for at-risk managed care contracts in only a small percentage of cases.
  • Most medical groups (75%) participating in managed care medicine have PPO contracts. Group practices contract with network HMOs more often than solo practices. Single-specialty groups more often have PPO contracts.
  • Capitated lives often raise capitation revenues in large group practices. Group practices are more highly capitated than smaller groups or solo practices. Almost 30% of highly capitated medical groups have more than 15 contracts and 22% have globally capitated contracts.
  • Higher capitation is linked with increased risk contracting. Larger groups have more risk contracting than smaller groups.

Physician Health

Financial Profile Trends

  • Medicare fee-for-service reimbursement is decreasing. Highly capitated groups incur high consulting fees.
  • The share of total gross charges for OB/GYN groups associated with managed care at-risk contracts is rising while non-managed care, or not-at-risk charges are declining.
  • Capitated contracts have little effect on the amount of on-site office non-surgical work. Off-site surgeries are most common for surgery groups, not medical groups.
  • Half of all charges are for on-site non-surgical procedures.
  • Highly capitated medical groups have higher operating costs and lower net profits.
  • Groups without capitation have higher laboratory expenses than those who do.
  • Physician costs are highest in orthopedic surgery group practices. Generally, median costs at most specialty levels are rising and profits shrinking.

Assessment

Obviously, the above information is only a gauge since regional differences, and certain medical sub-specialty practices and carve-outs, do exist.

Part One: Useful Managed Care Patterns and Procedural Utilization Trends

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Mental and Physical Well-Being for [Physician] Boomers and Their Retirement Plans

By Somnath Basu PhD MBA

President – AgeBander
Thousand Oaks, CA

A  Pew Research Center study[1] on the effects of financial stress on health finds 42.4% of respondents in a survey on the subject indicated that their health had been affect by financial problems. The study also found that 1 in 8 baby boomers were raising children, planning for retirement and at the same time caring for their elderly parents. This is the unfortunate reality for many baby boomers who face the implications of being a sandwich generation.

The Boomer Spectrum

For boomers across the spectrum of age (1945-64) financial stress has also contributed significantly to relational strife and has exacerbated many medical conditions. It has been linked to depression and sleep disorders and has been known to negatively affect the autoimmune and digestive system. For retirees who find themselves on a limited income with few options for augmenting that income the additional stress of financial problems has certainly  been detrimental to their mental, emotional and physical well being.  For such retirees who had an improper perception of their retirement needs the realization of the truth is definitely overwhelming. For others, who had thought they had planned ahead and were diligent, are now wrestling with guilt and remorse over their failure to provide for their retirement years. These individuals too are likely also facing fairly severe mental health conditions related to retirement security. Additionally these retirees will likely look back on the sacrifices they did make and feel these were in vain further exacerbating the state of their mental health. This in turn leads them also to resist reasonable advice because their fears make them more suspecting of any advice including the reasonable ones.

The Emotional Culprits

Two of the chief culprits have been the tendency of boomers (as a solace, all other generations suffer from these same problems though boomers have been most affected) to overestimate and have overconfidence about their financial knowledge and understanding of key financial concepts. Their lack of knowledge about overestimating themselves and being overconfident about their understanding of key financial concepts has proved to be detrimental to many a boomer’s health and well being in retirement. This is mainly due to these weaknesses leading them to not having enough funds for their retirement expense needs. A national collaborative strategy initiative on this problem has identified five action areas needed to help alleviate this problem – the need to educate consumers on the areas of financial policy, education, practice, research, and coordination. The reality is that when retirees are affected mentally, physically and emotionally (leading to overconfidence and over optimism), their financial decisions become faulty due to acting on their perceptions of retirement risk. This makes them tend to drastically under-estimate their retirement expenses. In such cases they experience or will experience significant reductions in their quality of retirement life. To ensure that expectations of retired life are realistic and risk perceptions are aligned to realistic and achievable goals are the first steps for boomers to ascend in order to improve the quality of their overall mental and physical health in retirement.

Objective Retirement Planning

An objective of planning for retirement thus becomes the need to find some kinds of lifelong guaranteed pensions since it is well known and understood that retirees who have such luxuries are many times more satisfied in retirement than their peers. The more satisfied in retirement the better mental and financial well-being one has. The main thrust in achieving such a mental state is to understand the importance of a secure and assured income that arrives in the bank consistently every period (such as monthly or bi-weekly).  

Perception too plays a big role in mental health as does the security of regular income. However, those receiving Social Security as their regular income are known to be less satisfied than others. Studies show that Social Security benefits carry a “hand-out stigma” for those who rely on them for their well being. From the boomers perspective, living a simpler life but funding retirement from a disciplined pension fund approach (using 401(k) funds, IRAs, personal financial portfolios, etc.) ensures the chances that their mental and physical well-being in retirement will not be reduced in any way by their financial well-being. Now is the time for boomers to exact such a lifestyle and bring in a certain semblance of stability in the vision for the rest of their lives.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. What are your retirement plans and how does this essay impact on them; if at all? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Notes: [1] http://personalfinancefoundation.org/research/efd/Negative-Health-Effects-of-Financial-Stress.pdf

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On the Election Results of November 2010

Gauging the Impact of the Affordable Care Act?

Question:

ME-P readers and others have been asking us – what does the election outcome mean for health care and the ACA?

Answer:

In short, not as much as many think, according to Steve Pizer JD and Austin Frakt PhD of the Incidental Economist.

Link:

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Conclusion

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Survey for Primary Care Physicians and Specialists

For Sales and Services Activities

By Michele von Dambrowski
Strategic Health Care Marketing
(V) 914-967-6741

Dear ME-P Colleagues

To better understand how hospitals and healthcare systems are pursuing sales and service activities directed to primary care physicians and specialists, Corporate Health Group is conducting its Third Benchmarking Survey.

The national survey will help spot new trends and analysis will include comparisons and a gap analysis of data captured in the 2005 and 2008 surveys.

The Survey 

The survey should take about 10 minutes and can be accessed by going to this link: http://www.surveymonkey.com/s.aspx?sm=0MVXYZ5pvsjjonCzmmsDUEFZqyWxhucX9YSuawcKtcY%3d.

All individual information from the survey will be kept in the strictest confidence.  In return, you will receive an executive summary of the results.

Assessment 

The survey should be completed by someone very familiar with the sales and service activities at your organization; please forward to the appropriate person. It would be appreciated if you would complete the survey by November 11.Thank you in advance for your valuable assistance.

Conclusion

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Smartphone Apps Market Model Takes mHealth Market to New Level

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Will mobile apps become the killer application of the mHealth market?

By Markus Pohl                                                                                   

research2guidance / The Mobile Research Specialists

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Dear Dr. Marcinko,  

New research by research2guidance concludes that mobile applications and the new smartphone market model will help the mHealth market to reach a new level. The mHealth market will develop from a trial market to a global market, which is about to realize its full potential.

A Long Time Topic 

mHealth solutions have been discussed since the end of the 90s. There were very positive market projections indicating that the mHealth market would soon become a billion Dollar market at that time. But the market never really took off. What stopped the early mHealth market from being successful?

In the last years a new market model has been created by Apple: The mobile applications eco-system. Can this new system ignite the market development that everybody has been expecting for the last years? Will smartphone apps become the killer application of the mHealth market?

Barriers to Entry

The following list shows the main barriers which prevented the mHealth market from growing in the past and the changes the new model will bring:

1. Devices: Early solution providers had to live with limited device capabilities and in order to achieve successful market entry and profitability had to find hardware partners to develop the mobile device. Furthermore, reach was very limited for any kind of smarter phone. Many of the features that early solutions providers had to find special solutions for are now included as standard on smartphones (e.g. GPS or sensors). Reach of smartphones, although limited today, won’t be in 2 years time with the number of smartphone users projected to be 1 in 2013.

2. Distribution: In the early days mHealth solutions providers had to seek partnerships with MNOs in order to gain some support with the distribution of the service or had to do it on their own. The new market model offers global reach without having to deal with an MNO.  Still, traditional distribution channels like doctors, hospitals and health insurance providers are not being affected by the new model.

3. Patients and doctors: The awareness of mHealth solutions was very limited. The new market model offers a better user experience along the entire value chain: discovery and access, billing and usage. The hype for smartphone apps also brings mHealth apps into the spotlight of its potential users. Still, one of the biggest target groups for mHealth solutions, the elderly, will have the biggest issues with technology adoption, although they would benefit most from mHealth application usage. This mismatch will not be changed by the new market model in the near future.

4. Regulations: The new market model has only limited impact on one of the key barriers regulation. As long as mHealth solutions and services don’t get clearance from national regulators and are thus not reimbursable by health insurance providers, patients must pay expenses them-selves. Doctors won’t prescribe e.g. a pill reminder application and will have no financial incentive to propose such solutions to the majority of their patients. The market will remain a consumer driven market, which means that the full potential will remain untapped.  Another barrier remains the discussion around security and confidentiality of data. Major projects like electronic health records have been mandated a decade ago in some countries but implementation has been delayed until now mainly because of security and confidentiality reasons.

The findings are a part of a new report by market research institute research2guidance about the global mHealth market. The report analyzes in detail the impact of the new market model, the business opportunities for mHealth app publishers, and how the market will look like in 2015 and will be published at the end of October 2010

Assessment 

Link to related blog post: http://www.research2guidance.com/will-smartphone-apps-become-the-killer-application-of-the-mhealth-market/

Link to graph: http://www.research2guidance.com/wp-content/uploads/2010/10/Barriers.jpg

For more information please contact:

Robert Krsten,

email: rk@research2guidance.com

phone: +49 30 60 989 3366

web: www.research2guidance.com

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US Budget Deficits Require Both Spending Cuts and Tax Increases

The CRFB Speaks

By Children’s Home Society of Florida Foundation

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The nonpartisan Committee for a Responsible Federal Budget (CRFB) has published a release on October 20 that discusses some of the options to tackle the federal deficit. According to a Bloomberg News poll, there are two major issues that are foremost in the minds of voters as they go to the polls on November 2nd. The first is jobs and the US economy. The second issue focuses on federal finances and the budget deficit.

CFRB Suggestions

The CFRB suggests that there are four potential options for reducing expenditures and one for increasing revenue.

1. Fraud, Waste and Abuse – A favorite comment of all political candidates is that he or she will reduce fraud, waste and abuse. While there may be some savings, this historically has been a fairly modest part of actual deficit reduction.

2. Strengthen Social Security – Congress will need to address methods for strengthening Social Security. The Social Security program used to run a substantial surplus each year. However, in 2010 the federal deficit will total approximately $40 billion. That is, the amounts received by Social Security will be $40 billion lower than the amounts distributed for benefits.

Social Security

By 2020, Social Security could be running a $100 billion deficit. Social Security Trustees have stated, “The projected trust fund shortfalls should be addressed in a timely way so that necessary changes can be phased in gradually and workers can be given time to plan for them.”

3. Healthcare – The Congressional Budget Office notes that the current healthcare programs could require nearly one-half of the federal budget by 2030 or 2040. Therefore, there will need to be further changes in healthcare in order to make the program fiscally sustainable.

4. Defense – Defense expenditures in 2010 were 4.7% of Gross Domestic Product (GDP). This amounted to $692 billion. Defense Secretary Gates has acknowledged that there may be opportunities to eliminate some weapons systems and reduce expenditures.

5. Increased Taxes – The CFRB release states, “It is very difficult to lay out a credible deficit plan that would not increase taxes. It is also very difficult to develop a comprehensive plan that would not raise taxes on families making less than $250,000 per year.” The potential for increased taxes has focused on income taxes, capital gains taxes, estate taxes and a consumption tax such as a gas tax or a value added tax.

Assessment

The Fiscal Commission appointed by President Obama is expected to issue a report in December that discusses these issues.

Editor’s Note: Your editor and this organization take no position with respect to the many financial and tax options that are available to Congress. This information is offered as a public service to our readers.

Conclusion

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Events Planner: November 2010

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Events-Planner: NOVEMBER 2010

By Staff Writers

“Keeping track of important health economics and financial industry meetings, conferences and summits”

Welcome to this issue of the Medical Executive-Post and our Events-Planner. It contains the latest information on conferences, news, and relevant resources in healthcare finance, economics, research and development, business management, pharmaceutical pricing, and physician/entity reimbursement!  Watch for a new Events-Planner each month.

First, a little about us! The Medical Executive-Post is still a relative newcomer. But today, we have almost 175,000 visitors and readers each month from all over the country, in addition to our growing subscriber base. We have been a successful collaborative effort, thanks to your contributions.  As a result, we are adding new resources daily. And, we hope the website continues to provide the best place to go for journals, books, conferences, educational resources, tools, and other things you need to establish the value your healthcare consulting and financial advisory intervention.

So, enjoy the Medical Executive-Post and this monthly Events-Planner with our compliments. 

A Look Ahead this Month: Now, the important dates:

November 07: World Congress Health Innovation Meeting. Alexandra, VA

November 08: Patient Centered Medical Homes and ACOs, Hartford, CT

November 08: Medical Compliance Meeting in a Post Reform World, Baltimore, MD

November 11: Conducting Effective internal Medical Investigations, HCCA, Orlando, FL

Please send in your meetings and dates for listing in the next issue of our Events-Planner.

MarcinkoAdvisors@msn.com

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