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    As a former Dean and appointed University Professor and Endowed Department Chair, Dr. David Edward Marcinko MBA was a NYSE broker and investment banker for a decade who was respected for his unique perspectives, balanced contrarian thinking and measured judgment to influence key decision makers in strategic education, health economics, finance, investing and public policy management.

    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”.

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What are Exempt Securities?

Exemptions from the SEC Act of 1933

By Dr. David Edward Marcinko MBA CMP™

[Publisher-in-Chief]

Historical Definition

The SEC Act was landmark legislation that established the SEC and gives it authority over proxy solicitation and registration of organized stock exchanges. In addition, the Act sets disclosure requirements for securities in the secondary market, regulates insider trading, and gives the Federal Reserve authority over credit purchases of securities. When established, the Act reflected an effort to extend and overcome shortcomings of the Securities Act of 1933. These two pieces of legislation are the basis of securities regulation in the twentieth century.

Exemptions

Today, there are many securities which are exempt from the Securities Exchange Commission [SAC] Act of 1933, its’ registration and resuting prospectus requirements.

They include the following securities and types:

  • US Government and Federal Agency issues.
  • Municipal, State issues and commercial paper with a maturity not in excess of 270 days.
  • Intra-state offerings (Rule 147) because they are blue-sky chartered within the state.
  • Small Public offerings (Regulation A) if the value of the securities issued does not exceed $5,000,000 in any 12 month period. An issuer using the Regulation A exemption does not make the normal filings with the SEC in Washington. Instead, they file a simplified disclosure document with their SEC Regional Office, known as an Offering Statement. It must be file at least 10 business days prior to the initial offering of the securities.  No securities may be sold unless issuer has furnished an offering circular (full disclosure document) to the purchaser at least 48 hours prior to the mailing of confirmation of the sale, and, if not completed within 9 months from the date of the offering circular, a revised circular must be filed. Every 6 months, issuers must file a report with the SEC of sales made under the Regulation A exemption until offering is completed.
  • Traditional insurance policies are considered to be securities and are exempt, as are fixed annuities. However, some of the newer forms of life insurance, like variable life, as well as variable annuities, have investment characteristics and, therefore are not exempt from registration.
  • Commercial paper and banker’s acceptances (9 month or shorter maturity), since they are money market instruments.

Assessment

What did we miss?

Here is a guide to help understand how to raise capital and comply with federal securities laws.

Link: http://www.sec.gov/info/smallbus/qasbsec.htm

Conclusion

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About the Mobile Health Market

Sensor-Based Mobile Apps Show How M-Health Business Models Could Work

By Markus Pohl

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Making money with mobile healthcare applications takes much more effort than most developers expected. M-Health apps normally do not get into the app stores’ top ranking lists and thus do not receive high download numbers.

m-Health Applications Business Models

But, there are working business models for the mHealth applications. Within the mobile health app category revenue won’t be generated through app stores. More and more mHealth app publishers have understood that they have to adapt their business model accordingly. Turning away from the “normal” pay-per-download models to practices like charging for medical service (call a doc) or sensor based models.

Sensor Based Models

Sensor based business models seem to have particularly caught the attention of mHealth app publishers over the last 6 months. The idea behind this model is not to sell an app but to use the app to promote the sales of a sensor. Revenue will be generated outside the app store.

Trend Examples: 

Here are some examples to highlight this trend.

  • Health and Wellness Monitoring tools combine fitness-related equipment to track pulse, calories, running speed, heart rate, or use sensor-devices to monitor weight control, fetus observation and eye testing. Target groups for these products are fitness and health-conscious users aged mainly between 35 and 45 years.
  • Chronic Condition Monitoring tools monitor health conditions like heart disease, hypertension, diabetes, asthma and obesity. They generate revenue from selling a sensor-device with a free application. Target groups are healthcare providers, medical personnel and chronically ill people between 30 and 50 years.
  • Diagnosis Tools are mainly targeted at professionals, who increasingly demand more portable and easy-to-use devices for easier communication with patients and peers.
  • Educational and Motivational Tools monitor habit patterns (e.g. sleep monitoring via app/device) or serve as useful didactic instruments for science education (e.g. portable microscopes).

Traditional health care service providers and especially medical device manufacturers should be aware of these trends and start to connect to the smartphone world.

To find a detailed overview of mHealth business models – please see the Mobile Health Market Report 2010-2015. Or, take a look at more mobile healthcare research from research2guidance.

Assessment

Outside app store revenue will drive the market. Sensor-based business models prove how to actually make money with mobile applications.

Conclusion

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Treatment for Plantar Fasciitis is Expensive and Ineffective

Plantar Fasciitis Truth

By Angry Orthopod, MD

There are nearly 2 million cases of plantar fasciitis in the United States every year. As an orthopaedic surgeon, I’m quite familiar with this issue since nearly 20 percent of my patients come to me about plantar fasciitis.

Although there is a surefire way to fix the problem, the current treatments aren’t really addressing the issue, and they are costing millions for those who suffer from the heel pain. Many are quick to blame the chosen treatments on profit, but I’m here to set the record straight.

Two Factors

There are two main factors that are contributors to mistreatment, neither of which is profit. Many doctors dealing with plantar fasciitis think their treatment plans are the right course of action. That is, expensive surgeries, useless orthotics, and temporary relief through medicine. The other factor leading to the mistreatment is that patients are demanding these treatments; despite how medical studies have shown they are ineffective. Many believe that a surgery will fix their plantar fasciitis problems; it’s a misconception that surgery is what they need.

Expensive Treatments

Honestly, I don’t think the patients or the doctors know how expensive these treatments end up. In 2007 alone, there was an estimated $376 million in expenses for third parties. But what about the patient costs?

The authors of this study revealed that this estimate is low, and I have to agree; it’s definitely a conservative number since the patient’s expenses aren’t part of the study. The study doesn’t take into account lost time from work, OTC items, chiropractic visits, acupuncture, night splints, diagnostic studies, among other costs.

Study: 2010_American_Journal_of_Orthopedics

Assessment

So what should we learn from this? An exorbitant amount of money is spent on these treatments every year, but the real issue isn’t just the expense, it’s that most treatments are unnecessary and ineffective.

How much have you paid to relieve your plantar fasciitis problems? Were the treatments effective?

Link: http://www.plantarfasciitistruth.com/

Conclusion: The “Angry Orthopod” is an orthopedic surgeon who blogs at his self-titled site, The Angry Orthopod. 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.

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Understanding Over the Counter (OTC) Markets

A Decentralized, Dealer-2-Dealer Market

By Dr. David Edward Marcinko MBA

[Publisher-in-Chief]       

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Securities are bought and sold every day by physicians and other investors who never meet each other. The market impersonally enables transfer (or sale) of securities from individuals who are selling to those who are buying. These trades may occur on an organized exchange such as the New York Stock Exchange, or, a decentralized, dealer to dealer market, which is called the over-the-counter (OTC).  Any transaction that does not take place on the floor of an exchange, takes place over-the-counter.

A Negotiated Market

The over-the-counter market is a national negotiated market, without a central market place, without a trading floor, composed of a network of thousands of brokers and dealers who make securities transactions for themselves and their customers. Professional buyers and sellers seek each other out electronically and by telephone and negotiate prices on the most favorable basis that can be achieved. Often, these negotiations are accomplished in a matter of seconds, there is no auction procedure comparable to that on the floor of an exchange.

The over-the-counter market is far the largest market in terms of numbers of securities issues traded. There are over 40,000 issues on which regular quotations are published OTC, while there are less than 5,000 stocks listed on all securities exchanges. There are frequently days when the reported volume of over-the-counter trades exceeds that of the NYSE. What really is the over-the-counter market? Is it where securities of inferior quality trade? Here is a list to remember of the types of securities traded exclusively over-the-counter:

  • All Government bonds .
  • All municipal bonds.
  • All mutual funds.
  • All new issues (primary distributions).
  • All variable annuities.
  • All tax shelter programs.
  • All equipment trust certificates.

Of course, the OTC market is also where all of the “unseasoned” issues are traded and most of them are quite speculative, but there certainly are many high quality issues available over-the- counter. Now, let’s take a look at how this over-the-counter market works.

The Market Maker

Whereas, the “main player” on the exchange is the specialist, his OTC counter part, in terms of importance, is the market maker. In the over-the-counter market, many securities firms act as dealers by creating and maintaining markets in selected securities. Dealers act as principals in a securities transaction and buy and sell securities for their own account and risk. Since they do not act as agents or brokers but instead as principals or dealers in securities transactions, they do not receive any commission for their services but instead buy at one price and sell at a higher price making a profit from “mark-up” on the security price. A dealer is said to have a position in a stock when he purchases and holds a security in his inventory. He, of course takes a risk that the market price of the security he holds may decline in value. This is how dealers make money; they buy wholesale and sell it retail, and the physician investor pays retail.

The OTC market bears little resemblance to the one of the mid-sixties. The major difference has been the electronic technological advances as embodied by the NASDAQ system. NASDAQ stands for National Association of Securities Dealers Automated Quotation system. Back in 1966, if you wanted to find out who was the market maker in the particular security you would go to a brightly colored stack of papers called the pink sheets, containing a listing, alphabetically, of over-the-counter stocks and underneath each issue is listed the name of one or more market makers, securities firms willing to trade that stock. After each firm name is the firm’s telephone number and a ‘bid and ask price”, that is, an approximate price representing what the dealer is asking for the stock and is bidding for the stock. 

Back 35-40 years ago, the only way of locating a market maker was by using the pink sheets, while O-T-C traded corporate bonds are quoted on yellow sheets. Under certain conditions, it could take a good deal of effort to try to get the best deal. Today, with the computer that sits on doctor’s desks, or a mobile device or smart-phone, you can push a few buttons and instantaneously see the best bid and the best offer that exists right now on over 5,000 of the most active over-the- counter stocks. Not only that, you can pull up the names of every market maker in that particular stock and the actual (firm) quotes on those securities right now.

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Electronic Sources of Securities Information

Level 1 service, available on the stock broker’s desk top, provides price information only on the highest bid and the lowest offer (the inside market). No market makers are identified, and since this is an inside quote, it may not be used by the registered representative (stock broker) for giving firm quotes. 

Level 2 service provides a doctor subscriber with price information and quotation sizes of all participating registered market makers. When a trader, or medical investor, looks at his computer screen on Level 2, he sees who’s making a market, their firm bid – or – ask; and the size of the market. One can get firm calls from level 2 information.

Level 3 service takes it one step further; and allows registered market makers to enter bid and ask prices (quotes) and quotation sizes into the NASDAQ system and to report their trades. This is the level of service maintained by market makers.

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

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Next Generation Physician Recruitment

Filling the Funnel with Candidates

By Susan L. Theuns; PA-C, CPC, CHC

The best-kept secret about physician recruiting is to keep the funnel filled with a pool of candidates. With the dearth of primary care physicians – and some specialists for example – modern healthcare organizations can’t afford to wait for doctors to beat a path to their door; they have to go after the physicians they want.  That means generating a sizeable list of prospects on the front end to narrow it down to the 100 or so doctors who will be called for an initial conversation.  From there, the team may do some 50 telephone screening interviews to generate five site visits in order to select the one perfectly matched prospect who will sign on the dotted line.

The Prospect List

Depending upon the opportunity, there are a number of ways to generate a list of prospects:

  • Direct mail using a purchased list of physicians culled from criteria such as medical specialty and current geographical location.  The American Board of Medical Specialties, the American Medical Association [AMA], and licensure boards can supply these lists.  The organization sends direct mail announcing the opportunity and then has a team member follow-up with outbound calling.  If the physician is not interested, the caller should ask if s/he knows someone who is.
  • Personal calls following recruitment fairs and specialty meetings.
  • Advertising in medical and specialty journals and on the web, Twitter, etc.
  • Resident campaign using posted flyers and announcements.
  • Physician networking based on group member recommendations.
  • Medical Staff Office contacts at the local hospital.
  • Networking through specialty or group management organizations. Some organizations offer free on-line job postings for members.
  • Affiliations with residency programs.

Screenings and Interviews

From the initial pool of candidates, the internal recruiter must call prospects and conduct preliminary screenings to verify licensure status and board certification, gather professional and personal details about the candidate, and answer his or her questions about the opportunity. Whenever possible, research should be done to secure the prospect’s home or cell telephone number. Calling prospects in the evening at home gives them more time and privacy to talk freely.

www.BusinessofMedicalPractice.com

Assessment

Although this screening step generates a smaller list of credible prospects that meet the search criteria generated at the beginning of the recruitment process, it is a more viable one.

Front Matter: Front Matter BoMP – 3

About the Author: Susan Theuns has an extensive background in healthcare, business management, facilities/operations and compliance that spans three decades. She holds degrees in Allied Health and Business Management and has been a Certified Physician Assistant for 32 years. She is also a Certified Professional Coder and is certified in Healthcare Compliance. Susan has published a variety of articles for Coding Edge, Healthcare Compliance Today, and the Group Practice Journal and serves on the Advisory Board for Ingenix.  Her professional memberships and affiliations include the American Medical Group Association, National Honor Society in Business Administration (Delta Mu Delta), Health Care Compliance Association, American Academy of Professional Coders, and the National Commission on Certification of Physician Assistants. She was MedStar Health’s Compliance Director of the Year in 2003 and is currently Administrative Director of Physician Practices for Union Memorial Hospital in Baltimore, Maryland. 

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

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

Healthcare Organizations: www.HealthcareFinancials.com

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Assessing the Affordable Care Act

Comment Period of Solicitation

By Staff Reporters

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Last week marked the first anniversary of the Affordable Care Act (ACA) being signed into law by President Obama, and one year into the new era of health care reform it’s clear that Americans remain divided in their views on the ACA.

Depending on the source, polls show the public remains confused about many aspects of the law, with mixed support for several provisions and strong opposition to the individual mandate and other parts of the ACA.

Legal Challenges

With several lawsuits challenging the constitutionality of the ACA, governors and state legislators vowing to refuse funding to implement certain ACA programs, and Congress poised to revise or repeal some or all of the law, opponents of the ACA are hopeful that they will have the chance to go back to the drawing board to craft reform legislation more to their liking.

Supporters

Meanwhile, supporters are pointing to widespread public approval of many of the insurance reforms in the law and claiming that once the health exchanges and other major components of the ACA take effect, public support will continue to grow.

The ME-P Wants to Know:

  • Has your support for the ACA changed at all in the year since it was signed into law?
  • Are you pleased with the outcomes to date of the Affordable Care Act?
  • Will the major provisions that have not yet been implemented be able to fulfill the stated goal of covering more patients while reducing overall health care costs?
  • If you are not a supporter of this law, which sections are in most need of revision? Or are you in favor of complete repeal of this law?
  • If you prefer repeal, what alternative approach to health care reform do you favor?

Assessment

Please opine in the comment box below.

Conclusion

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

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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About Physician Executive Bonus Plans

A Primer for Physicians

By Dr. David Edward Marcinko MBA

[Publisher-in-Chief]

An executive bonus plan (or § 162 plan) is an effective way for a medical practice, clinic or other healthcare company to provide valued, select physician or other employees an additional employment benefit.  One of the main advantages to an executive bonus plan, when compared to other benefits, is its simplicity. In a typical executive bonus plan, an agreement is made between the employer and employee, whereby the employer agrees to pay for the cost of a life insurance policy, in the form of a bonus, on the life of the employee.

Benefits

The major benefits of such a plan to the employee are that he or she is the immediate owner of the cash values and the death benefit provided.  The only cost to the employee is the payment of income tax on any bonus received.  The employer receives a tax deduction for providing the benefit, improves the moral of its selected employees, and can use the plan as a tool to attract additional talent.

Example Dr. Stern is a sole practitioner in rural West Virginia.  Among his employees is Nurse Jackson, who has been with him for over ten years.  She is the single parent for two boys.   Although he pays well, and provides additional benefits, he has been looking for a way to selectively reward Nurse Jackson for her years of service and hard work.  Recently Nurse Jackson has expressed a concern for her children if she were to die prematurely.

Dr. Stern chooses to provide an executive bonus plan by allowing Nurse Jackson to purchase a life insurance policy on her life.  Dr. Stern will provide the premium payments in the form of a bonus to her.  Nurse Jackson must simply pay the tax on this additional income.  Dr. Stern’s practice will get a tax deduction for the premium and improve the morale of an important employee.  Nurse Jackson will get needed protection for her family.

Assessment

More info: http://www.jblearning.com/catalog/9780763733421/

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.

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Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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The Truth about Frivolous Tax Arguments

An IRS Warning Report for Doctors and All Citizens

[No Lame Excuses]

By Staff Reporters

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This IRS report responds to some of the more common frivolous “legal” arguments made by individuals and groups who oppose compliance with the federal tax laws.

Three Parts

The first section groups these arguments under six general categories, with variations within each category. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention.

The second section responds to some of the more common frivolous arguments made in collection due process cases brought pursuant to sections 6320 or 6330. These arguments are grouped under ten general categories and contain a brief description of each contention followed by a discussion of the correct legal authority.

A final section explains the penalties that the courts may impose on those who pursue tax cases on frivolous grounds. It should be noted that the cases cited as relevant legal authority are illustrative and are not intended to provide an all-inclusive list relating to frivolous tax arguments.

Link: http://www.irs.gov/taxpros/article/0,,id=159853,00.html

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

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

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Walking Doctors Through a Stock Exchange Trade

Understanding the Traditional Process

 By Dr. David Edward Marcinko MBA, and ME-P Staff Reporters

http://www.CertifiedMedicalPlanner.org

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To see how the transactions are actually handled on the floor of an exchange, let us assume that an order to buy 100 shares of General Electric has been given by a doctor customer to the registered representative (stock broker), of a member firm in Atlanta. The order is a market order (an order to buy at the lowest possible price at the time the order reaches the floor of the exchange). This order is telephoned by direct wire, or computer, to the New York office of the member firm, which in turn telephones its order to its clerk on the floor of the exchange.

Each member firm has at least one member of the exchange representing them making trades on the floor. Each one of these members is assigned a number for identification. When the floor clerk receives the order to purchase the General Electric, he causes his member’s call number to appear on 3 large boards situated so that one is always in view. These boards are constantly watched brokers so that they will know when wanted at the phone, since there’s too much noise on the floor to use a paging system. Seeing his number on the board, the broker hurries to his telephone station or cell phone and receives the order to buy 100 shares of G.E. “at the market”. Acting as a commission broker, he immediately goes to the post where G.E. is traded and asks “how’s G.E”, of the specialist?

Order and Position Types

At this point, it is important to understand the different types of orders and positions that can be used to buy and sell securities from the specialist.

Market Order:

A market order is an order to be executed at the best possible price at the time the order reaches the floor. Market orders are the most common of all orders. The greatest advantage of the market order is speed. The doctor specifies no price in this type of order, he merely orders his broker to sell or buy at the best possible price, regardless of what it may be. The best possible price on a buy is the lowest possible price. The best possible price on a sell is the highest possible price. In other words, if a medical professional customer is buying, he logically wants to pay as little as possible, but he is not going to quibble over price. He wants the stock now, whatever it takes to get it. If he’s a seller, the doctor client wants to receive as much as possible, but will not quibble, he wants out, and will take what he can get, right now. No other type of order can be executed so rapidly. Some market orders are executed in less than one minute from the time the broker phones in the order. Because the investor has specified no price, a market order will always be executed. The doctor is literally saying, “I will pay whatever it takes, or accept whatever is offered”.

Limit Order:

The chief characteristic of a limit order is that the doctor decides in advance on a price at which he decides to trade. He believes that his price is one that will be reached in the market in reasonable time. He is willing to wait to do business until he has obtained his price even at the risk his order may not be executed either in the near future or at all. In the execution of a limit order, the broker is to execute it at the limit price or better. Better, means that a limit order to buy is executed at the customer’s price limit or lower, in a limit order to sell, at price limit or higher. If the broker can obtain a more favorable price for his doctor customer than the one specified, he is required to do so.

Order Length:

Now, even though the doctor has given his price limit, we need to know the length of effectiveness of the order. Is the order good for today only? If so, it is a day order, it automatically expires at the end of the day.  Alternatively, the doctor may enter an open or, “good until canceled” order. This type of order is used when the doctor believes that the fluctuations in the market price of the stock in which he’s interested will be large enough in the future that they will cause the market price to either fall to, or rise to, his desired price, i.e. his limit price. He is reasonably sure of his judgment and is in no hurry to have/his order executed. He knows what he wants to pay or receive and is willing to wait for an indefinite period.

Years ago, such orders were carried for long periods of time without being reconfirmed. This was very unsatisfactory for all parties concerned.  A doctor would frequently forget his order existed and, if the price ever reached his limit and the order was executed, the resulting trade might not be one he wished to make. To avoid the problem, open (GTC) orders must be reconfirmed by the doctor customer each six months. Does that mean six months after the order is entered? … No! The exchange has appointed the last business day of April and the last business day of October as the two dates per year when all open orders must be reconfirmed.

Example: Dr. Smith wants to buy 100 shares of XYZ. The price has been fluctuating between 50 and 55. He places a limit order to buy at 51, although the current market price is 54. Limit orders to buy (buy limit orders) are always placed below the current market. To do otherwise makes no sense. It is possible that, within a reasonable time, the price will drop to 51 and his broker can purchase the stock for him at that price. If the broker can purchase the stock at less that 51, that would certainly be fine with the doctor customer since he wants to pay no more than 51. A sell limit order works in reverse and is always placed above the current market price.

Example: Dr. Smith wants to sell 100 shares of XYZ stock. The order is 54. A sell limit order is place at 56. Sell limit orders are always placed above the market price. As soon as the pride rises to 56, if it ever does, the broker will execute it at 56 or higher. In no case will it be executed at less than 56.

The advantage of the limit order is that the doctor has a chance to buy at less or to sell at more than the current market price prevailing when he placed the order. He assumes that the market price will become more favorable in the future than it is at the time the order is placed. The word” chance ” is important. There is also the “chance” that the order will not be executed at all. The doctor just mentioned, who wanted to buy at 51, may never get his order filled since the price may not fall that low.  If he wanted to sell at 56, the order may also not ever be executed since it might not rise that high during the time period the order is in effect.

Stop Orders:

A very important type of order is the stop order, frequently called a stop-loss order. There are two distinct types of stop orders. One is the stop order to sell, called a sell stop, and the other is a stop order to buy, called a buy stop. Either type might be thought of as a suspended market order; it goes into effect only if the stock reaches or passes through a certain price.

The fact that the market price reaches or goes through the specified stop price does not mean the broker will obtain execution at the exact stop price. It merely means that the order becomes a market order and will be executed at the best possible price thereafter. The price specified on a stop order bears a relationship to the current market price exactly opposite to that on a limit order. Whereas a sell limit is placed at a price above the current market, a sell stop is placed at a price below the current market. Similarly, while a buy limit is placed at a price below the current market, a buy stop is placed at a price above the current market. Why would a doctor investor use a stop order?

There are two established uses for stop orders. One of them might be called protective; the other might be called preventive.

Protective: This order protects a doctors’ existing profit on a stock currently owned.

For example, a doctor purchases a stock at 60. It rises to 70. He has made a paper profit of $10 per share. He realizes that the market may reverse itself. He therefore gives his broker a stop order to sell at 67. If the reversal does occur and the price drops to 67 or less, the order immediately becomes a market order. The stock is disposed of at the best possible price. This may be exactly 67, or it may be slightly above or below that figure. Why? …Because what happened at 67 was that his order became a market order; the price he actually received was dependent upon the next activity in the market. Let us suppose that the sale was made at 66 1/2. The doctor customer made a gross profit of 6 1/2 points per share on his original purchase. Without the stop order, the stock may have dropped considerably below that before the customer could have placed a market order and his profit might have been less or, in fact, he might have even sold at a loss.

Preventive:

A doctor purchases 100 shares of a stock at 30. He obviously anticipates that the price of the stock will rise in the near future (why else would he buy?). However, he realizes that his judgment may be faulty. He therefore, at the time of purchase, places a sell stop order at a price somewhat below his purchase price, for example, at 28. As yet, he has made neither profit nor loss; he’s merely acting to prevent a loss that might follow if he made the wrong bet and the stock does fall in price. If the stock does drop, the doctor knows that once it gets as low as 28, a market order will be turned in for him and, therefore, he will lose only 2 points or thereabout. It might have been much more had he not used the sell stop.

Miscellaneous Orders and Positions

Beside market, limit and stop orders, there are some other miscellaneous orders to know.

A stop limit order is a stop order that, once triggered or activated, becomes a limit order. Realize that it is possible for a stop limit to be triggered and not executed, as the limit price specified by the doctor may not be available.

In addition, there are all or none and fill or kill orders, and even though both require the entire order to be filled, there are distinct differences. An all or none (AON) is an order in which the broker is directed to fill the entire order or none of it. A fill or kill (FOK) is an order either to buy or to sell a security in which the broker is directed to attempt to fill the entire”‘ amount of the order immediately and in full, or that it be canceled.

The difference between an all or none and a fill or kill order is that with an all or none order, immediate execution is not required, while immediate execution is a critical component of the fill or kill. Be cause of the immediacy requirement, FOK orders are never found on the specialist’s book. Another difference is that AON orders are only permitted for bonds, not stocks, while FOK orders may be used for either.

Also, there exists an immediate or cancel order (IOC), which is an order to buy or sell a security in which the broker is directed to attempt to fill immediately as much of the order as possible and cancel any part remaining. This type of order differs from a fill or kill order which requires the entire order to be filled. An IOC order will permit a partial fill. Because of the immediacy requirement, IOC and FOK orders are never found on the specialist’s book.

Long and Short Positions

A long buy position means that shares are for sale from a market makers inventory, or owned by the medical investor, outright. Market makers take long positions when customers and other firms wish to sell, and they take short positions when customers and other firms want to buy in quantities larger than the market maker’s inventory. By always being ready, willing, and able to handle orders in this way, market makers assure the investing public of a ready market in the securities in which they are interested. When a security can be bought and sold at firm prices very quickly and easily, the security is said to have a high degree of liquidity, also known as marketability.

A short position investor seeks to make a profit by participating in the decline in the market price of a security.

Now, let’s see how these terms, long and short, apply to transactions by medical investors, rather than market makers, in the securities markets.

When a doctor buys any security, he is said to be taking a long position in that security. This means the investor is an owner of the security. Why does a doctor take a long position in a security? Besides – receiving dividend income, to make a profit from an increase in the market price. Once the security has risen sufficiently in price to satisfy the investor’s profit needs, the investor will liquidate his long position, or sell his stock. This would officially be known as a long sale of stock, though few people in the securities business use the label “long sale”. This is the manner in which the above investor had made a profit is the traditional method used; buy low, sell high.

Let’s look at an actual investment in General Motors to investigate this principle further. A medical investor has taken a long position in 100 shares of General Motors stock at a price of $70 per share. This means that the manner in which he can do that is by placing a market order which will be executed at the best “available market price at the time, or by the / placing of a buy limit order with a limit price of $70 per share. The investor firmly believes, on the basis of reports that he has read about the automobile industry and General Motors specifically, that at $70 a share, General Motors is a real bargain. He believes that based on its current level of performance, it should be selling for a price of between $80 and $85 per share. But, the doctor investor has a dilemma. He feels certain that the price is going to rise but he cannot watch his computer, or call his broker, every hour of every day. The reason he can’t watch is because patients have to be seen in the office. The only people who watch a computer screen all day are those in the offices of brokerage firms (stock broker registered representatives), and doctor day traders, among others.

In the above example, with a sell limit order, if the doctor investor was willing to settle for a profit of $12 per share, what order would he place at this time? If you said, “sell at $82 good ’til canceled”, you are correct. Why GTC rather than a day order? Because our doctor investor knows that General Motors is probably not going to rise from $70 to $82 in one day. If he had placed an order to sell at $82 without the GTC qualification, his order would have been canceled at the end of this trading day. He would have had to re-enter the order each morning until he got an execution at 82. Marking the order GTC (or open) relieves him of any need to replace the order every morning. Several weeks later, when General Motors has reached $82 per share in the market, his order to sell at 82 is executed. The medical investor has bought at 70 and sold at 82 and realized a $12 per share profit for his efforts.

Let’s suppose that the medical investor, who has just established a $12 per share profit, has evaluated the performance of General Motors common stock by looking at the market performance over a period of many years. Let’s further assume that the investor has found by evaluating the market price statistics of General Motors is that the pattern of movement of General Motors is cyclical. By cyclical, we mean that it moves up and down according to a regular pattern of behavior. Let’s say the investor has observed that in the past, General Motors had repeated a pattern of moving from prices in the $60 per share range as a low, to a high of approximately $90 per share. Further, our investor has observed that this pattern of performance takes approximately 10 to l2 months to do a full cycle; that is, it moves from about 60 to about 90 and back to about 60 within a period of roughly l2 months. If this pattern repeats itself continually, the investor would be well advised to buy the stock at prices in the low to mid 60’s hold onto it until it moves well into the 80’s, and then sell his long position at a profit. However, what this means is that our investor is going to be invested in General Motors only 6 months of each year. That is, he will invest when the price is low and, usually within half a year, it will reach its high before turning around and going back to its low again. How can the doctor investor make a profit not only on the rise in price of General Motors in the first 6 months of the cycle, but on the fall in price of General Motors in the second half of the cycle? One technique that is available is the use of the short sale.

The Short Sale

If a doctor investor feels that GM is at its peak of $ 90 per share, he may borrow 100 shares from his brokerage firm and sell the 100 shares of borrowed GM at $ 90. This is selling stock that is not owned and is known as a short sale. The transaction ends when the doctor returns the borrowed securities at a lower price and pockets the difference as a profit. In this case, the doctor investor has sold high, and bought low.

Odd Lots

Most of the thousands of buy and sell orders executed on a typical day on the NYSE are in 100 share or multi-100 share lots. These are called round lots. Some of the inactive stocks traded at post 30, the non-horseshoe shaped post in the northwest corner of the exchange, are traded in 70 share round lots due to their inactivity. So, while a round lot is normally 700 shares, there are cases where it could be 10 shares. Any trade for less than a round lot is known as an odd lot. The execution of odd lot orders is somewhat different than round lots and needs explanation.

When a stock broker receives an odd lot order from one of his doctor customers, the order is processed in the same manner as any other order. However, when it gets to the floor, the commission broker knows that this is an order that will not be part of the regular auction market. He takes the order to the specialist in that stock and leaves the order with the specialist. One of the clerks assisting the specialist records the order and waits for the next auction to occur in that particular stock. As soon as a round lot trade occurs in that particular stock as a result of an auction at the post, which may occur seconds later, minutes later, or maybe not until the next day, the clerk makes a record of the trade price.

Every odd lot order that has been received since the last round lot trade, whether an order to buy or sell, is then executed at the just noted round lot price, the price at which the next round lot traded after receipt of the customer’s odd lot order, plus or minus the specialist’s “cut “.  Just like everything else he does, the specialist doesn’t work for nothing. Generally, he will add 1/8 of a point to the price per share of every odd lot buy order and reduce the proceeds of each odd lot sale order by 1/8 per share. This is the compensation he earns for the effort of breaking round lots into odd lots. Remember, odd lots are never auctioned but, there can be no odd lot trade unless a round lot trades after receipt of the odd lot order.

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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About the Patient Choice Act

On HR 2520

By Staff Reporters

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Austin Frakt PhD, over at www.TheIncidentalEconomist.com has been writing that many of the policy attributes, mechanisms and challenges facing the Affordable Care Act (ACA) are similar to those of the Ryan-Rivlin plan and what Ezra Klein calls Ryan-Coburn. 

http://theincidentaleconomist.com/wordpress/ryan-coburn-ryan-rivlin-and-aca/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheIncidentalEconomist+%28The+Incidental+Economist+%28Posts%29%29

The PCA

Ryan-Coburn is The Patients’ Choice Act (PCA) that was introduced into the last Congress, and is what may be the most comprehensive Republican health reform proposal put into bill form.  Co-sponsor Sen. Richard Burr (R-NC) has said the PCA will be reintroduced in this Congress. 

Assessment

Act Link: Patient Choice Act

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

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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Mike Kitces asks: What Can Financial Planners Learn from Suze Orman and Dave Ramsey?

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Follow Paretto’s Law – or Learn Something Unique and Compete?

By Dr. David Edward Marcinko; FACFAS, MBA, CMP™

[Publisher-in-Chief]

Michael Kitces is an industry pundit, and well known certified financial planner [CFP], who writes for a financial advisory and financial planner audience at thewebsite Nerd’s Eye View:

http://www.kitces.com

He is a bright guy, who holds the following professional degrees and designations:

  • MSFS – Master of Science in Financial Services
  • MTAX – Master’s in Taxation
  • CFP – Certified Financial Planner
  • CLU – Chartered Life Underwriter
  • ChFC – Chartered Financial Consultant
  • RHU – Registered Health Underwriter
  • REBC – Registered Employee Benefits Consultant
  • CASL – Chartered Advisor of Senior Living
  • CWPP – Chartered Wealth Preservation Planner

Yet, in a recent essay, he laments that all the CFPs® in the country added together don’t have as much reach, or impact, as three mass marketing gurus: Suze Orman, David Bach, and Dave Ramsey. And, he is correct.

Markets Vary

These gurus, and the CFPs®, serve different markets for sure. The gurus’ products are free or inexpensive. Their messages are simple and actionable. Once you go beyond the simple messages, however, you will find the gurus no longer satisfying. So, it’s no coincidence that the three gurus focus on controlling spending and getting out of debt. Why?

Eighty percent of us do need to get out of debt and control our spending, period!

Link: Do Financial Planners Have Something To Learn From Suze Orman and Dave Ramsey?

Pareto’s Law

Here is where the mass market is located, said economist V. Pareto PhD more than a century ago. The Pareto principle (also known as the 80-20 rule, the law of the vital few, or the principle of scarsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. It is a common thumb-rule in business; e.g., “80% of your sales come from 20% of your clients”.

Look, most clients can’t control their income but they can be taught to control spending and debt habits [needs versus wants]. Most patients need a family doctor; not a brain surgeon.  And, most of us do not have Einstein’s intelligence, Gate’s wealth, or Hercules’s strength.

But, our lives can vastly be improved by 80%, with just 20% more effort and cost. This is what the gurus know – most of us are average – not so the CFPs® who believe we all need a comprehensive financial plan and have the ability to pay for it and the time to execute and monitor it.

Assessment

And so, CFPs® can’t charge an 80% premium – to 80% of the population – when clients don’t need or want a comprehensive financial plan. Or, when clients can be better off by 80%, and such success can be had for 20% of the cost and effort offered by the CFPs®.

Basic supply-demand economics 101! Ford autos are fine – we all don’t need or want a Mercedes.

More confusing is the fact that even the CFPs® themselves are suspect since prior to 2008 a college degree was not required for the certification mark. And, having same allows the practitioner no additional diagnostic or interventional tools.

IOW: Whatever a CFP® can do – a non-CFP® can do.  And, it is increasingly considered by the well-informed …. to be a marketing mark …. to hold a marketing mark. This is akin to being famous; for being famous.  That’s why I resigned my CFP® mark years ago.

Full Disclosure: I am the Founder of the: http://www.CertifiedMedicalPlanner.org online program. CMP™ certificants – like doctors – hold fiduciary accountability at all times and with unique healthcare industry specificity.

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Search Guidance for a Chief Medical Security Officer

A Business Case Model

By Richard J. Mata MD MS CIS

Dr. Mata

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The Mighty-Soft Hospital is a futuristic 1,500 bed fortress-like facility operating with a state-of-the-art dual wired-wireless infrastructure complete with computerized physician order entry  system, radio frequency inventory device (RFID) control tags, and integrated electronic medical records (EMRs) that are the envy of its competitors and vendors, and offer a formidable strategic competitive advantage in the marketplace.

Now, imagine the potential liability, PR disaster and chagrin when its enfant terrible CEO is told of a massive security breach similar to the ChoicePoint and Lexis-Nexis fiascos.  The ID theft involves release of critically protected healthcare financial, employment, clinical, and contact information for all of its patients, employees, physicians, business associates, and affiliated medical personnel.

Suddenly, senior management is charged with the task of establishing the new position of Chief Medical Security Officer (CMSO) for Mighty-Soft, and navigating a crisis management dilemma never previously faced by the formerly HIPAA-compliant electronic giant.

The CMSO is to be a senior level management position responsible for championing institutional security.  Awareness of electronic and HIPAA policy and procedure developments, while working to ensure compliance with internal and external standards related to information security, is vital.  The CMSO is to report directly to the CEO and the CIO.

The Search Committee developed the following list of CMSO duties and responsibilities:

  • Chair the hospital’s Information Security and Privacy Committee in its policy development efforts to maintain the security and integrity of information assets in compliance with state and federal laws, and accreditation standards.
  • Provide project management and operational responsibility for the administration, coordination, and implementation of information security policies and procedures across the enterprise-wide hospital system.
  • Perform periodic information security risk assessments including disaster recovery and contingency planning, and coordinate internal audits to ensure that appropriate access to information assets is maintained.
  • Work with the financial division to coordinate a business recovery plan.
  • Serve as a central repository for information security-related issues and performance indicators.  Research security or database software for implementing the central repository, and note that a server based system could be useful for a Wide Area Network (WAN), so this information can be shared with the enterprise-wide hospital system.  Develop, implement, and administer a coordinated process for response to such issues.
  • Function when necessary as an approval authority for platform and/or application security and coordinate efforts to educate the hospital community in good information security practices.
  • Maintain a broad understanding of federal and state laws relating to information security and privacy, security policies, industry best practices, exposures, and their application to the healthcare information technology environment.
  • Make recommendations for short- and long-range security planning in response to future systems, new technology, and new organizational challenges.
  • Act as an advocate for security and privacy on internal and external committees as necessary.
  • Develop, maintain, and administer the security budget required to fulfill organizational information security expectations.
  • Demonstrate effectiveness with consensus building, policy development, and verbal and written communication skills.
  • Possess the clear ability to explain information technology concepts to audiences outside the field.
  • Become the public face for the Mighty-Soft Hospital’s legacy security system.

Minimum Qualifications:

  • MD, DO, DPM, DDS, DMD, with bachelor’s/master’s degree in computer science or related field or equivalent experience.
  • Three or more years of experience in the healthcare industry.
  • Five or more years of experience in information security.
  • Eight or more years of experience in information technology.
  • In-depth understanding of network and system security technology and practices across all major computing areas (mainframe, client/server, PC/LAN, telephony) with a special emphasis on Internet related technology.

Preferred Qualifications:

  • Experience with electronic medical devices.
  • Specific experiences in the healthcare industry.
  • Familiarity with legislation and standards for PHI and patient privacy.
  • Demonstrated successful project management expertise.
  • Professional certification, e.g., CISSP, CISA, PMP.
  • Experience with student record/higher education laws.

Key Issues:

  • What is your IT hardware infrastructure and how are security-related devices deployed?
  • What security requirements are imposed by federal and state authorities on your institution?
  • What would you consider the most important criteria for choosing a CMSO?
  • What relationship will the CMSO have with the CIO, CMIO and CEO?
  • What level of security education/training do you consider necessary for your hospital community?
  • What are the key security issues your CMSO will have to address?
  • What are the key privacy issues?
  • What are the key risk management issues?
  • What are the pros and cons of EHRs for your institution?
  • What do you see as the EHR priorities for your CMSO?
  • What are the security issues of EHRs for your institution?

Assessment

How would you select a CMSO?

Conclusion

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Understanding Municipal Bond Underwriting

A Primer for Physician Investors

By Dr. David Edward Marcinko MBA CMP™

[Publisher-in-Chief]

While the underwriting procedures for corporate bonds are almost identical to corporate stock, there are significant differences in the underwriting of municipal securities. Municipal securities – hospitals for example – are exempt from the registration filing requirements or the Securities Act of 1933. A state or local government, in the issuance of municipal securities, is not required to register the offering with the SEC, so there is no filing of a registration statement and there is no prospectus which would otherwise have to be given to investors.

Municipal Underwriting

There are two main methods of financing when it comes to municipal securities. One method is known as negotiated. In the case of a negotiated sale, the municipality looking to borrow money would approach an investment bank and negotiate the terms of the offering directly with the firm. This is really not very different from the equity process.

Competitive Bidding

The other type of municipal underwriting is known as competitive bidding. Under the terms of competitive bidding, an issuer announces that it wishes to borrow money and is looking for syndicates to submit competitive bids. The issue will then be sold to the syndicate which submits the best bid, resulting in the municipality having the lowest net interest cost (lowest expense to the issuer).

If the issue is to be done by a competitive bid, the municipality will use a Notice of Sale to announce that fact. The notice of sale will generally include most or all of the following information.

  • Date, time, and place. This does not mean when the bonds will be sold to the public, but when the issue will be awarded (sold) to the syndicate issuing the bid.
  • Description of the issue and the manner in which the bid is to be made (sealed bid or oral).
  • Type of bond (general obligation, revenue, etc.)
  • Semi-annual interest payment dates and the denominations in which the bonds will be printed.
  • Amount of good faith deposit required, if any.
  • Name of the law firm providing the legal opinion and where to acquire a bid form.
  • The basis upon which the bid will be awarded, generally the lowest net interest cost.

The Bond Attorney

Since municipal securities are not registered with the SEC, the municipality must hire a law firm in order to make sure that they are issuing the securities in compliance with all state, local and federal laws. This is known as the bond attorney, or independent bond counsel. Some functions are included below:

  1. Establishes the exemption from federal income tax by verifying requirements for the exemption.
  2. Determines proper authority for the bond issuance.
  3. Identifies and monitors proper issuance procedures.
  4. Examines the physical bond certificates to make sure that they are proper
  5. Issues the debt and a legal opinion, since municipal bonds are the only securities that require an opinion.
  6. Does not prepare the official statement.

When medical or other investors purchase new issue municipal securities from syndicate or selling group members, there is no prospectus to be delivered to investors, but there is a document which is provided to purchasers very similar in nature to a prospectus. It is known as an Official Statement. The Official Statement contains all of the information an investor needs to make a prudent decision regarding a proposed municipal bond purchase.

Underwriting Syndicate

The formation of a municipal underwriting syndicate is very similar to that for a corporate issue. When there is a negotiated underwriting, an Agreement Among Underwriters (AAU) is used. When the issue is competitive bid, the agreement is known as a Syndicate Letter. In the syndicate letter, the managing underwriter details all of the underwriting agreements among members of the syndicate. Eastern (undivided) and Western (divided) accounts are also used, but there are several different types of orders in a municipal underwriting.

Order Types

The traditional types of orders, in priority order, are:

  • Pre-Sale Order: Made before the syndicate actually offers the bonds. They have first priority over any other order turned in.
  • Syndicate (group net) Order: Made once the offering is under way at the public offering price. The purchase is credited to each syndicate member in proportion to its allotment. An institutional buyer will frequently purchase” group net”, since many of the firms in the syndicate may consider this buyer to be their client and he wishes to please all of them.
  • Designated Order: Sales to medical investors (usually healthcare institutions) at the public offering price where the investor designates which member or members of the syndicate are to be given credit.
  • Member Orders: Purchased by members of the syndicate at the take-down price (spread). The syndicate member keeps the full take-down if the bonds are sold to investors, or earns the take-down less the concession if the sale is made to a member of the selling group. Should the offering be over-subscribed, and the demand for the new bonds exceeds the supply, the first orders to be filled are the pre-sale orders. Those are followed by the syndicate (sometimes called group net) orders, the designated orders, and the last orders filled are the member’s.

Assessment

Finally, be aware that the term bond scale is a listing of coupon rates, maturity dates, and yield or price at which the syndicate is re-offering the bonds to the public. The scale is usually found in the center of a tombstone ad and on the front cover of the official statement. One of the reasons why the word “scale” is used – is that like the scale on a piano – it normally goes up. A regular or positive scale is one in which the yield to maturity is lowest on the near term maturities and highest on the long term maturities. This is also known as a positive yield curve, since the longer the maturity, the higher the yield. In times of very tight money, such as in 1980-81, one might find a bond offering with a negative scale. A negative (sometimes called inverted) scale is just the opposite of a positive one, with, yields on the short term maturities are higher than those on the long term maturities.

http://www.amazon.com/Financial-Planning-Handbook-Physicians-Advisors/dp/0763745790/ref=sr_1_1?ie=UTF8&s=books&qid=1276795609&sr=1-1 

Conclusion

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***

 

 

 

Using Spot Audits to Reduce Internal Medical Practice Fraud

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The Mistrusting Doctor

[By Dr. Gary L. Bode MSA, CPA, LLC]

Spot audits are an important internal medical practice control.  Here, physician-owners use their expertise with the logistics and dynamics of their practice, to devise a series of regular inspections to see if anything is going wrong, and assuring that everything is going right.

Frequent, small spot audits, perhaps different in nature, are best.  These are non disruptive.  Implementation and application of these spot audits can make the difference between them being perceived (by employees, patients and vendors), as prudent and responsible versus petty and mistrusting. Nothing erodes a practice’s efficiency faster than physician indifference.  Nothing demoralizes a practice more than a petty, mistrusting doctor.

Sporadic Audit of Random Employees

Examples of possible spot audit components include:

  • Is the time clock accurate?
  • Can it be manipulated?
  • Is this a real employee?
  • Is there the correct number of employee days being paid?
  • Is there the correct number of employee hours being paid?
  • Is the compensation level accurate?
  • Is petty cash reimbursement fully documented?
  • Are withheld funds appropriate?
  • Do the net pay figures in the accounting software agree with the bank records?
  • Are payroll tax and liability [i.e., child support checks accurate and timely?]
  • Are payroll reports being properly generated and submitted?

Assessment

What else did we miss?

Link: www.BusinessofMedicalPractice.com

TOC: Front Matter BoMP – 3

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Understanding MCO-Medical Practice Contract Standards

The Conversion to Negotiated Managed Healthcare is Significant

Dr. David Edward Marcinko, MBA CMP™

Prof. Hope Rachel Hetico, RN MHA CPHQ CMP™

www.BusinessofMedicalPractice.com

The conversion to managed healthcare and capitation financing is a significant marketing force and not merely a temporary business trend. More than 60% of all physicians in the country are now employees of a MCO. Those that embrace these forces will thrive, while those opposed will not.

Developing an Attractive Practice

After you have evaluated the HMOs in your geographic area, you must then make your practice more attractive to them, since there are far too many physicians in most regions today. The following issues are considered by most MCO financial managers and business experts, as they decide whether or not to include you in their network:

General Standards

  • Is there a local or community need for your practice, with a sound patient base that is not too small or large? Remember, practices that already have a significant number of patients have some form of leverage since MCOs know that patients do not like switching their primary care doctors or pediatricians, and women do not want to be forced to change their OB/GYN specialist. If the group leaves the plan, members may complain to their employers and give a negative impression of the plan.
  • A positive return on investment (ROI) from your economically sound practice is important to MCOs because they wish to continue their relationship with you. Often, this means it is difficult for younger practitioners to enter a plan, since plan actuaries realize that there is a high attrition rate among new practitioners. They also realize that more established practices have high overhead costs and may tend to enter into less lucrative contract offerings just to pay the bills.
  • A merger or acquisition is a strategy for the MCO internal business plan that affords a seamless union should a practice decide to sell out or consolidate at a later date. Therefore, a strategy should include things such as: strong managerial and cost accounting principles, a group identity rather than individual mindset, profitability, transferable systems and processes, a corporate form of business, and a vertically integrated organization if the practice is a multi-specialty group.
  • Human resources, capital, and IT service should complement the existing management information system (MIS) framework. This is often difficult for the solo or small group practice and may indicate the need to consolidate with similar groups to achieve needed economies of scale and capital, especially in areas of high MCO penetration.
  • Consolidated financial statements should conform to Generally Accepted Accounting Principles (GAAP), Internal Revenue Code (IRC), Office of the Inspector General (OIG), and other appraisal standards.
  • Strong and respected MD leadership in the medical and business community is an asset. MCOs prefer to deal with physician executives with advanced degrees. You may not need a MBA or CPA, but you should be familiar with basic business, managerial, and financial principles. This includes a conceptual understanding of horizontal and vertical integration, cost principles, cost volume analysis, financial ratio analysis, and cost behavior.
  • The doctors on staff should be willing to treat all conditions and types of patients. The adage “more risk equates to more reward” is still applicable and most groups should take all the full risk contracting they can handle, providing they are not pooled contracts.
  • Are you a team player or solo act? The former personality type might do better in a group or MCO-driven practice, while a fee-for-service market is still possible and may be better suited to the latter personality type.
  • Each member of a physician group, or a solo doctor, should have a valid license, DEA narcotics license, continuing medical education, adequate malpractice insurance, board qualification or certification, hospital privileges, agree with the managed care philosophy, and have partners in a group practice that meet all the same participation criteria. Be available for periodic MCO review by a company representative.

Specific Medical Office Standards

MCOs may require that the following standards are maintained in the medical office setting:

  • It is clean and presentable with a professional appearance.
  • It is readily accessible and has a barrier-free design (see OSHA requirements).
  • There is appropriate medical emergency and resuscitation equipment.
  • The waiting room can accommodate 5 – 7 patients with private changing areas.
  • There is an adequate capacity (e.g., 5,000 – 10,000 member minimum), business plan, and office assistants for the plan.
  • There is an office hour minimum (e.g., 20 hours/week).
  • 24/7 on-call coverage is available, with electronic tracking and eMRs.
  • There are MCO-approved sub-contractors.

Assessment

What have we missed?

Front Matter Link: Front Matter BoMP – 3

 

Conclusion

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Learning from a Hospital Cash Flow Management Case Model

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The Mackenzie Hospital Clinic

[By Staff Reporters]


The Mackenzie Hospital Clinic was offered a private fixed-rate MCO contract that would increase revenues by $50,000 for the next fiscal year. The clinic’s 30% gross margin would not change because of the new business.

However, $10,000 would be added to overhead expenses for another part-time assistant. More importantly, the AR collection time would be lengthened to one year, or paid at the end of the contract period.

The cost of services provided for the contract represents the amount of money needed to service the patients produced by the contract. Since gross margin is 30% of revenues, the cost of services is 70% or $35,000.

The financial manager had to decide whether there would be enough internally generated cash flow to accept the contract.

The Financial Facts

The manager knew that adding the extra overhead would result in $45,000 of new spending money (cash flow) needed to care for the patients. He had to further refine his calculations by dividing the $45,000 total by the number of days the contract extends (i.e., 365 days) to determine that the new contract would cost about $123.29 per day of cash flow. Now, the financial manger had to ask: where would the money come from?

He was reluctant to turn away any business for the clinic, so decided he must develop other methods to generate the additional cash. He made the following suggestions:

  • extend AP timelines and reduce AR times; and/or
  • borrow with short-term bridge loans or a line of credit; and/or
  • discuss the situation with vendors for longer or more favorable terms; and
  • do not stop paying corporate taxes.

Key Issues:

1) Consider what changes the Mackenzie Hospital Clinic might implement to ensure that it regularly makes good cash management, budgeting, and risk projection decisions?

2) If the Mackenzie Hospital Clinic is successful and attracts more long-term managed care fixed contracts, the serious nature of the cash flow problem becomes apparent. For instance, adding another nine contracts would multiply the above example tenfold. In other words, the clinic would increase revenues to $1 million with the same 70% cost of services and $100,000 increases in operating overhead expenses.

3) How much free cash flow would be required?

[Using identical mathematical calculations, we determine that $450,000/365 days equals $1,232.88 per day of needed new cash flow.]

4) What happens if the contract only pays off at the end of the year?

Assessment

Any other thoughts?

Conclusion

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Healthcare Reform at a Glance

A One-Stop-Look-See with Comparisons

By Staff Reporters

Link: Health-Care-Reform-Comparison-in-Brief

[Courtesy: BuckConsultants]

Conclusion

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Not so Fast – Examining eMR Options and Alternatives

Look Before you Leap

By Shahid N. Shah MS

Because of all the talk about electronic medical records [EMRs] and medical records software, doctors have many reasons to start immediately looking for an EMR vendor.

But, try to resist that urge and look at broader non-EMR solutions that can help remove some of the non-clinical burdens from your staff.

Here are some examples from Chapter 13, in our new book: www.BusinessofMedicalPractice.com

  • Using Microsoft Office Outlook® or an online calendaring system like Google to maintain patient schedules. While most vendors of clinical scheduling will tell you that medical scheduling is too complex to be handled by non-medical scheduling systems, most small and medium sized physician practices can easily get by with free or very inexpensive and non-specialized scheduling tools. By using general-purpose scheduling tools you will find that you can use less expensive consultants or IT help to manage your patient scheduling technology needs.
  • Using off-the-shelf address book software such as those built into Microsoft Office®, the Windows® and Macintosh® operating systems, or online tools such as Google apps you can maintain complete patient and contact registries for managing your patient lists. While a patient registry may not give you all of the features and functions you need immediately they can grow to a system that will meet your needs over time.
  • Using physician practice management systems you can remove much of the financial bookkeeping and insurance record-keeping burdens from your staff. Unlike calendaring or address book functionality which can be adapted from non-medical systems, insurance claims and related bookkeeping is an area where you should choose specific software based on how your practice earns its revenue. For example if a majority of your claims are Medicare related, then you should choose software that is specifically geared towards government claims management. If however your revenue comes less from insurance and more from traditional cash or related means you can easily use small business accounting software like Quicken® or Microsoft accounting.
  • Using computer telephony technology you can integrate automatic call in and call out the services that can be tied to your phone system so that you can track phone calls or send out call reminders.
  • Using integrated medical devices that can capture, collect, and transmit physiological patient data you can reduce paper capture of vital signs and other clinical data so that your staff are freed to do other work.
  • Using e-mail, instant messaging, social networking, and other online advanced tools you can reduce the number of phone calls that your practice receives and needs to return and yet continue to improve the patient physician communication process. One of the most time-consuming parts of any office is the back-and-forth phone calls so any reduction in phone calls will yield significant productivity increases.

Assessment

Any other ideas?

Link: Front Matter BoMP – 3

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Self-Branding For Physicians

In the Modern Era

[By Eugene Schmuckler PhD, MBA]

www.BusinessofMedicalPractice.com

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In 1987 the magazine Fast Company published an article authored by Tom Peters entitled “The Brand Called You.” Although some individuals may shy away from the concept of self-branding in actuality, many of the online social network sites such as Facebook become media by which we in fact brand ourselves. In his article, Peter’s stated. “Regardless of position, regardless of the business we happen to be in, all of us need to understand the importance of branding.

Me, Inc

We are CEOs of their own companies: Me Inc. to be in business today, our most important job is to be head marketer for the brand called you. As a medical practitioner how do you differentiate yourself from others in your specialty and why should a new patient choose your practice above those of the others in the field? Branding is about finding your big idea and building your identity and game plan around it. The bottom line: if you can’t explain who you are, and the value you bring to your practice in a short sentence or two, you have work to do.

Coaching

According to Catherine Kaputa, a personal coach she suggests that there are the objective things: your credentials, the schools you went to, your years of experience, and your skill set, which represent what she refers to as hard power. Then there’s soft power: your image and reputation, your visibility in the community, your network of contacts, supporters and mentors. In today’s competitive marketplace, soft power plays a vital role in attracting people to you and your practice.

Stand Out

Peters suggests that everyone has a chance to stand out. Everyone has a chance to learn, improve, and build up their skills. Everyone has a chance to be a brand worthy of remark. Corporations spend millions of dollars creating and maintaining their distinct brand. The Olympic Rings are representative of a brand which the International Olympic Committee guards zealously.

CMP

Self-Branding

Professional services firms such as McKinsey, foster self-branding among their employees. Major corporations have as employees those individuals who are smart, motivated and talented. Self-branding allows the employees to differentiate themselves from their peers.

For one to engage in self-branding is first necessary to ask the question, “What is it that my practice does that makes it different?” You can begin by identifying the qualities or characteristics that make you distinctive from your competitors-or your colleagues. What have you done lately-this week-to make yourself stand out? What would your colleagues say is your greatest and clearest strength? What would they say is your most noteworthy personal trait?

Assessment

As a medical practitioner does your patient-customer get dependable, reliable service that meets his or her strategic needs?

In addition, ask yourself: “what do I do that adds remarkable, measurable, distinguished distinctive value.”

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: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

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***

Financial Life Planning Defined for Physicians and Advisors

Integrating Financial Planning, Practice Management and Life

By Dr. David Edward Marcinko MBA, CMP™

www.CertifiedMedicalPlanner.com

Life planning has many detractors and defenders. Formally, it has been defined by Mitch Anthony, Gene R. Lawrence and Roy T. Diliberto of the Financial Life Institute, in the following trinitarian way.

Financial Life Planning is an approach to financial planning that places the history, transitions, goals, and principles of the client at the center of the planning process.  For the financial advisor or planner, the life of the client becomes the axis around which financial planning develops and evolves.

Other definitions are: 

  • Financial Life Planning is about coming to the right answers by asking the right questions. This involves broadening the conversation beyond investment selection and asset management to exploring life issues as they relate to money.
  • Financial Life Planning is a process that helps advisors move their practice from financial transaction thinking, to life transition thinking. The first step aiming to help clients “see” the connection between their financial lives and the challenges and opportunities inherent in each life transition.

But, for informed physicians, life planning’s quasi-professional and informal approach to the largely isolate disciplines of financial planning and medical practice management is inadequate. Today’s practice environment is incredibly complex, as compressed economic stress from HMOs, financial insecurity from Wall Street, liability fears from attorneys, criminal scrutiny from government agencies, IT mischief from malicious hackers, economic benchmarking from hospitals and lost confidence from patients all converge to inspire a robust new financial planning approach for medical professionals. Now, add politics and the ACA of 2010.

Our Approach

The iMBA approach to financial planning, as championed by the Certified Medical Planner, integrates the traditional concepts of financial life planning, with the increasing complex business concepts of medical practice management. The former are presented in our textbook on financial planning for doctors. And, the later is in our companion book: “The Business of Medical Practice” www.BusinessofMedicalPractice.com

Others on risk management and insurance; accounting, tax and investing; retirement, practice succession and estate planning, are planned in our future iMBA Handbook series for physicians and their advisors www.MedicalBusinessAdvisors.com

Example

For example, views of medical practice, personal lifestyle, investing and retirement, both what they are and how they may look in the future, are rapidly changing as the retail mentality of medicine is replaced with a wholesale philosophy. Or, how views on maximizing current practice income might be more profitably sacrificed for the potential of greater wealth upon eventual practice sale and disposition. Or, how the ultimate fear represented by Yale University economist Robert J Shiller, in “The New Financial Order”: Risk in the 21st Century, warns that the risk for choosing the wrong profession or specialty, might render physicians obsolete by technological changes, managed care systems or fiscally unsound demographics.

Assessment

Yet, the opportunity to re-vise the future at any age through personal re-engineering, exists for all of us, and allows a joint exploration of the meaning and purpose in life. To allow this deeper and more realistic approach, the advisor and the doctor must build relationships based on trust, greater self-knowledge and true medical business and financial enhancement acumen.

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

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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Appreciating the Financial Rewards of a Managerially Efficient Medical Practice

The Real Benefits of Improving Medical Practice Performance

By Dr. Gary L. Bode MSA, CPA, PC

www.BusinessofMedicalPractice.com

Most medical practitioners are not well trained in business.  However, our health care services are provided in an underlying business environment. Let’s consider the financial rewards of a well-run practice, since they are the most tangible. We shall demonstrate the financial benefit of improving practice performance one percent, in three key parameters.

Example:

Our hypothetical example uses a practice with $500,000 per year of gross fees, a 20% aggregate contractual write off rate, 3% of bad debt and 70% of overhead.  The money available for pre tax practitioner salary is $116,400 as calculated below:

1) 80% (100% minus the 20% of contractual write off) of 500,000 in gross fees is $400,000.

2) 97% (100% minus the 3% of bad debt) of 400,000 is $388,000.

3) 30% (100% minus the 70% of overhead) of 388,000 is $116,400.

Leverage

The financial leverage inherent in a practice makes even small improvements in performance yield dramatic bottom-line or “in pocket” results. Cutting overhead 1% nets the practitioner an extra annual $3,880 of potential salary.  Likewise, decreasing bad debt 1% yields $1200.  A simultaneous 1% improvement in both parameters yields $5,120, all for the same amount of patient care with no additional malpractice liability.

Assessment

Notice that increasing gross fees, the area most practitioners think of when discussing practice management, has the least financial impact of the three key parameters.  While outside the scope of this essay, good services marketing can improve any practice’s gross fees, even in today’s environment.  The key to this is superb patient service, of which the clinical result is only a component.  Making the patient’s total perceptions exceed their prior expectations insures a full appointment book.

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

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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Seeking Healthcare Administration Experts and Contributing Print Authors

Healthcare Organizations [second edition]

By Ann Miller RN MHA

[Executive-Director]

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Greetings ME-P Readers, Experts and Subscribers,

As you may know, we are now preparing the next edition of our book: Healthcare Organizations [Management Strategies, Operational Techniques and Case Studies]. And so, we solicit your interest in crafting new material or simply updating original chapters for subscriber, ACPE, Barnes & Noble, MGMA, ACHE and related distribution channels.

Tentative Table of Contents [400 pages]

  1. On the Origins and Development of Quality Initiatives in Healthcare
  2. Competitive Analysis of the Contemporary Healthcare Ecosystem
  3. Capital Formation Strategies for Healthcare Entities
  4. Inventory Management and Economic Order Quantity Analysis
  5. Improving Operations and Management to Achieve Objectives
  6. Financial and Clinical Features of Hospital Information Systems
  7. Managing Health Information Technology Security Risks
  8. Monitoring, Managing and Enhancing Hospital Revenue Cycles  
  9. Patient [Customer] Relations Management in Healthcare
  10. Healthcare Organization Compliance Processes and Tactics
  11. Reviewing OSHA Standards and Health Policy Practices
  12. Operational Impact of HIPAA, Sarbanes-Oxley and the USA PATRIOT ACT
  13. Understanding Continuous Healthcare Process Improvement
  14. Using Medical Informatics to Track Health Care
  15. Appreciating Six-Sigma Healthcare Quality Improvement
  16. Hospital-Flow Through Efficiency and Logistics.

Editorial support is available, and you would enjoy increasing subject-matter notoriety, exposure and public relations in an erudite and credible fashion. ME-P expert reader synergy seems ideal and our time line for submission is ample in a prose writing style that is “wide, and deep.”  Scheduled release is 2012.

Assessment [first edition]

Foreword: http://healthcarefinancials.com/aboutus.aspx

Style and format: http://healthcarefinancials.com/Documents/Clinical%20and%20Financial%20Features%20of%20Hospital%20IT%20Systems.pdf

Prior authors: http://healthcarefinancials.com/contributors.aspx

TOC: http://healthcarefinancials.com/Documents/TABLE%20OF%20CONTENTS.pdf

We look forward to working with you and appreciate your continued “crowd-sourced” interest in this important body of work. So, please advise me of your interest: MarcinkoAdvisors@msn.com

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

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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How to Review Style-Based Portfolio Performance Evaluations

Stock or Manager Relevance Comparisons and Philosophy

By Dr. David Edward Marcinko MBA, CMP™

[Publisher-in-Chief]

One relatively recent performance evaluation approach that was developed to help improve the relevance of comparisons is the separation of stock universes and managers by style. This classification method attempts to distinguish between stocks or manager philosophies based upon general financial characteristics of the investments. 

The Managers

In very general terms, a manager is often a growth manager if the investment approach that the manager uses focuses on stocks showing growth and momentum in its earnings and price.

A value manager is generally considered to be a manager that attempts to identify under-valued securities based upon fundamental analysis of the company.  A stock may be considered either “growth” or “value” based on a given set of valuation measures such as price-to-earnings, price-to-book value, and dividend yield. 

The Style

The goal of style-based performance comparisons is to take some of the biases of the market environment out of the comparison, since a portfolio’s returns will ideally be evaluated versus a universe of alternatives that represent similar investment characteristics facing the same basic market environment.  Thus, if the environment is one in which investors in stocks with strong past earnings and price momentum have generally performed better than those using fundamental analysis to find under-valued stocks, comparing the growth/momentum portfolio to a growth index or universe should help eliminate the bias.

Style-based universes can help the medical professional better understand the basic environment captured over a given performance time period. 

However, there are significant limitations with the various approaches to constructing style-based stock and manager universes that should be understood if they are to be used in direct performance comparisons.  Taking style-based stock universes separately from style-based manager universe, one of the most significant issues regarding the categorization of stocks by “growth” and “value” styles is the lack of agreement in the specification of what a growth stock is versus a value stock.  With some universes divided by price-to-book value, others by price-to-earnings and/or dividend yields and some by combinations of similar variables, stocks are often classified very differently by two different stock universes.  Further, stocks move across a broad spectrum as their price and fundamentals change, resulting in stocks constantly moving between growth and value categories for any given universe.  If there is ambiguity in the rating of a given stock, then the difficulty is only compounded when we attempt to boil what may be complex investment processes of an investment manager or mutual fund portfolio manager to a simple classification of growth or value.  A beaten down cyclical stock that no self-respecting growth/momentum manager would purchase may be classified as “growth” because it has a high price-to-earnings ratio (i.e., from low earnings) or a high price-to-book value (i.e., from asset write-offs).  Value managers are not the only ones to own low valuation stocks that have improving earnings.

http://www.amazon.com/Financial-Planning-Handbook-Physicians-Advisors/dp/0763745790/ref=sr_1_1?ie=UTF8&s=books&qid=1276795609&sr=1-1

The second problem with style categorization is that managers are often misclassified or they purposefully “game” the categorization of their own process in order to appear more competitive.  As an example, if a manager that typically looks for relatively strong earnings/price momentum is lagging in a period when “growth” managers are outperforming, the rank of the manager can be improved simply by claiming a “value” approach.  Morningstar’s “style box” classification of mutual funds by size and style of the current portfolio highlight this problem for any given fund by showing how their portfolio has changed its classification annually. 

Current Events

The stock market has been booming lately. Up almost 100% since March 2009, after being down almost 50%. And so, perhaps this is a good time to re-evaluate the performance of your investment portfolio[s].

Assessment

However, this leads to an interesting question for the medical professional or his/her advisor: If a manager is still using the same basic investment philosophy and disciplines, but their “style” category has changed according to the ratings service, should you fire them?  If the answer is “yes”, then the burden of monitoring and the cost of manager turnover are an inevitable part of narrow style based performance comparisons. 

But, if the answer is “no,” then it is easy to see the difficulty of fitting every management approach into a simple style box.  The more reasonable alternative is to use style-based stock and manager universes as a tool for understanding the environment, rather than an absolute performance benchmark.

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

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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Sponsors Welcomed: And, credible sponsors and like-minded advertisers are always welcomed.

Link: https://healthcarefinancials.wordpress.com/2007/11/11/advertise

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Smartphone App Market Outperformes Other Booming Markets – 3 Years Benchmark

The Smartphone Applications Market is Impressive 

By Markus Pohl

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The mobile applications market made it from ramp-up phase to a mass market in only 3 years. This is much faster than previous mobile market sectors needed.

Berlin, March 8th, 2011 

The numbers regarding the smartphone applications market are impressive: Global app download numbers increased by 1700%, user base by 1300%, number of different smart devices by 800%, number of apps by 500% and even app store number increased by 300% in the first 3 years.

With application numbers increasing by almost 100.000 apps per quarter on all major app stores the competition level in a category and platform can change over night, which has an immediate impact on download numbers. Compared to these trends user behavior and demographics in terms of age, gender, usage time, downloads etc. has not changed so quickly over the last three years but will do when applications are proliferating into the mass market. There will be substantial differences per country and platform any company should be aware of, when formulating their application strategy.

Apple dominated the years 2008 and 2009. Since 2010 the hype moved over to Android. With the partnership of Microsoft and Nokia, this might change again as deteriorating average application download numbers on the Android platform will make developers shift again their priorities. What will be the most promising application types and categories will be the next big question.

When looking at the initial phases of other markets, companies really had a lot of time to decide on if, how and when to enter the market. It seems that industry cycles become shorter and shorter and the ability of a company to react very quickly becomes even more important. To stay updated on current trends subscribe to our new “Smartphone App Market Monitor”. This monitoring subscription service will be updated every quarter. Benefit from the intro offer, which saves you 20% until 31st of March.

Twitter: #smartphone #app market outperformes other booming markets – 3 years #benchmark http://j.mp/hRMi6c

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.

research2guidance | The Mobile Research Specialists

phone: +49 (0) 30 60 989 3363

mobile: +49 (0) 178 4007736

fax: +49 (0) 30 60 989 3369

email: mp@research2guidance.com

www.research2guidance.com

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

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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Sponsors Welcomed: And, credible sponsors and like-minded advertisers are always welcomed.

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About Consent Care.Net

The Case for Fully Informed Consent

By Dr. Martin Young

MBChB, FCS(SA)Otol.

martin@carespace.net

The issue of ‘informed consent’ is an ever present bugbear in all healthcare systems around the world, raising its head time after time in journals, weblogs, healthcare administration policies and, above all, medical malpractice lawsuits. Every mention emphasizes the need for improving this difficult issue, but in spite thereof little seems to change.  ConsentCare is a new initiative aiming at addressing the challenges of facilitating and enhancing informed consent.

Why the big deal?

Medical ethicists have long known that, if trust is indeed the cornerstone of the successful doctor-patient relationship, that subjecting a person to medical or surgical treatment without discussing all aspects thereof wherever possible, i.e. fully informed consent, constitutes a betrayal of that trust.

Common opinion asserts that good informed consent creates better mental preparation for surgery, decreased anxiety, shorter hospital stays, earlier recognition of complications by patients before they become serious, and a generally higher success rate and satisfaction rate for the surgery.

70% of the detail of discussion about surgical detail and risk held in doctors’ rooms is forgotten by patients by the time the consultation is over. Patients are ordinarily asked to consent to surgical procedures ‘on the spot’ without access to the detailed documentation of the risks of those procedures that they can consider in their own time and own comfortable environment.

A person knowing all the information about his or her procedure acts as another measure of control to avoid outright human error, such as the wrong operation, or operating on the wrong side.

Almost every case of litigation following surgery will address the adequacy of the consent process.

The right to full knowledge about medical or surgical interventions is entrenched as a human right, even legally enforceable by inclusion in the constitutions of some countries.

No longer is a successful surgical outcome adequate protection against litigation, particularly where the consent is deemed to have contained inadequate information.

In an environment where litigation is on the increase, and expectations, demands and knowledge by the public have heightened, adequate and fully informed consent is one of the few protections doctors can apply both to their own benefit and to that of their patients.

The challenges

Good informed consent is not just presentation of a form that demands the patient’s signature on the bottom.  The process is dependent on all aspects of a good doctor-patient interaction, i.e. positive and empathetic communication, good bedside manner, open and frank discussion of alternatives and costs, opportunity to ask questions, to seek independent advice, and to make decisions based on full disclosure of relevant facts.  The result can however be a valuable clinical record of benefit to all role-players in the process of having a surgical procedure.

The demands of taking fully informed consent are considerable.  No patient is the same, and a standard ‘one size fits all’ approach cannot take this into consideration. The same can be said for the doctor taking the consent.  All have individual approaches and styles that should facilitated by the consent process.  Again, ‘one size fits all’ is as inappropriate for doctors as it is for patients.  The challenge for doctors is in documenting the process for both their patients’ and their own benefit.  Without technological assistance this is impossible to do, for example, to the satisfaction of a medical malpractice lawyer hell-bent on proving medical negligence.

Solutions

ConsentCare was designed taking all these considerations into account, but preserving the traditional and familiar signed document as a final result .  A web-based platform was used, making the system accessible to both doctors and patients through a doctor portal and a patient portal, and opening the possibilities of direct doctor-patient communication around the specified procedure.  Call it if you like a ‘mini-Facebook’ around the consent process.

On logging in a doctor adds a new patient, and proceeds through progressive steps, selecting procedure name, adding or editing graphics, and having editorial control over the content at all stages.  An “editor’s” function allows preset information to be saved, speeding up the process for subsequent consents.

For all procedures a detailed consent document specific to the doctor, patient and procedure is produced in pdf form within a few minutes. This can be emailed to a patient beforehand, edited digitally using tablet PC’s, or printed out and discussed on the spot, leaving all options open as per the doctor’s preferences.

The potential

No other process leaves better evidence of a doctor’s ethical approach, transparency, patient care and responsibility than the informed consent process.  This is a document that should be in the patient’s possession as well as in the medical record, an ethical yardstick of due diligence.  It gives very little clinical detail away other than a patient’s name, the procedure, and likelihood of expected risks.  As such, this can assist the detailed case management of patients, warn nursing staff of anticipated complications, and allocate patients to different levels of post operative care.  It becomes a valuable nursing tool, not just a medicolegal hassle.

The record of a doctor’s approach to his patients in terms of attention to informed consent can be an ethical yardstick that raises that doctor’s profile above the rest.  In an era of doctor and hospital ratings, rising healthcare costs, rising litigation, and increasingly limited resources, all payers, i.e. patients, funders and insurers, could benefit from recognizing where their money is best spent.

The doctor’s excuse “I don’t have the time” should no longer be relevant. Technology takes care of that issue.  The consent process is so important, and with such cost-saving potential in the long term, that time considerations should be far secondary to ethical considerations.  In an era where low markups on doctors’ services promote the push to do high numbers of procedures, the consent process could be the one determinant to start reversing that process.

So, doctors, please make the time, cut the volumes, but, funders and insurers, make sure the doctor does not pay a financial penalty, and is remunerated properly for work done properly.  And malpractice insurers, please take note, and lower premiums for users.

Herein lies the true potential of facilitated informed consent, a ‘win-win’ for everyone involved.

Our position 

ConsentCare is a working proof-of-concept,  available for ‘reskinning’ to the designs of any users /institutions, with the same design elements applied to the final document, and can be hosted on private servers.

Interested users are invited to sign in on the website at www.consentcare.net for more information and a look around with basic functionality, and to contact me for more information.

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.

Channel Surfing the ME-P

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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.

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

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On Track for Meaningful Use?

Are we on track to be a huge disappointment to our children’s children – or What?

[By Darrell K. Pruitt DDS]

When our grandchildren get the bill for the Obama administration’s subsidies benefitting primarily the health information technology industry, I bet they’re going to be really, really pissed at us for allowing today’s lawmakers to blow their 28 billion dollars to please HIT advocates who mislead consumers as well as lawmakers about the benefits of EHRs.

The Doctors Speak 

According to physicians who actually do the hard lifting in healthcare, the “meaningful use” requirements that they must prove in order to qualify for stimulus money will arguably increase both the cost and danger of healthcare – all for the benefit of stakeholders rather than principals. For one thing, “meaningful use” is meaningless if it fails to help physicians treat their patients. I think HIT stakeholders’ grandchildren should somehow be held accountable to my grandchildren.

Opposing Opinions  

Just days apart this week, two HIT reporters, Rich Daly from ModernHealthcare.com and Joseph Goedert from HealthDataManagment.com described two opposing letters the Office of the National Coordinator for Health Information Technology (ONC) recently received: One from doctors and one from patients (et al).

On Monday, here is how Daly’s article “AMA to ONC: EHR program doesn’t work for docs” began:

http://www.modernhealthcare.com/article/20110302/NEWS/303029950/1153

“Many physicians—specialists in particular—will not participate in the federal electronic health-record adoption incentive program because it requires them to include patient data that they do not otherwise collect, according to a Feb. 25 letter from 39 medical organizations letter to the Office of the National Coordinator for Health Information Technology”

On Wednesday, Joseph Goedert, writing for HealthDataManagment.com began “Consumer Groups: Hold Strong on MU” with this:

http://www.healthdatamanagement.com/news/meaningful-use-criteria-comments-consumers-42080-1.html

“A coalition of 25 consumer groups and unions is asking federal officials to hold firm on more stringent criteria for Stage 2 of electronic health records meaningful use, and expressing support for going further. For instance, because patients still trust their providers more than other information sources, holding providers accountable for actual usage of a patient Web portal ‘is entirely appropriate and we strongly urge ONC to resist pressure from the provider community to absolve them from responsibility for making these services available and useful to their patients,’ according to a comment letter to the Office of the National Coordinator”

  • AARP
  • Advocacy for Patients with Chronic Illness, Inc.
  • AFL-CIO
  • American Association on Health and Disability
  • American Hospice Foundation
  • Caring from a Distance
  • Center for Democracy & Technology
  • Childbirth Connection
  • Consumers for Affordable Health Care
  • Consumers Union
  • Families USA
  • Family Caregiver Alliance
  • Healthwise
  • Mothers Against Medical Error
  • National Alliance for Caregiving
  • National Coalition for Cancer Survivorship
  • National Consumers League
  • National Family Caregivers Association
  • National Health Law Program
  • National Partnership for Women & Families
  • National Women’s Health Network
  • OWL – The Voice of Midlife and Older Women
  • SEIU
  • The Children’s Partnership

Like the “Record Demographics” MU mandate, this is all for the “common good” I suppose. Consumer Advocasy groups wouldn’t mislead patients, would they?

I doubt many Americans represented by these 25 organizations ever imagined a new federal requirement that doctors record each patient’s demographics. (Notice of Proposed Rulemaking: Medicare and Medicaid Programs; Electronic Health Record Incentive Program; Federal Register / Vol. 75, No. 8 / Wednesday, January 13, 2010 / page 1861; RIN 0938-AP78).

This means that the 25 stakeholder groups are doing their best to help American taxpayers hold physicians accountable to record and share their patients’ demographic information with the US government – private information about me and my family members that I personally don’t trust the government to be given – even if I’m in vulnerable need of health care.

Daly’s Article 

According to Daly’s article, the demands of MU are distractions for increasingly busy doctors and staff whose focus, I believe, should include eye-contact with patients with specific health problems rather than irrelevant data needs of third parties, including consumer advocacy groups.

On the other hand, if consumer advocacy groups have successfully defined for the federal government what clueless patients allegedly need, who will the mandate really benefit? 25 consumer advocacy groups don’t equal one consumer, so their letter isn’t grass roots at all. It’s deception wearing lipstick. Gullible and vulnerable patients are again being misrepresented by HIT stakeholders for a cut of our grandchildren’s 28 billion.

Assessment

Finally, if MU requirements are an arguably expensive and dangerous distraction for physicians, how can the law possibly be any less absurd for dentists? I’ll look at meaningful use as well at the ADA’s apparently flagging commitment to EHRs next. The ADA is abandoning state informatics departments – leaving them exposed to ADA members’ questions they are unable to answer. It looks to me that intra-ADA relationships are deteriorating quickly, but nevertheless, traditional stoicism still hasn’t been broken. “Image is everything” – ADA/IDM slogan.

Dentists

Here’s a teaser, dentists: Chances are, your state ADA organization hasn’t yet shared with you how the MU requirement of CPOE (Computerized physician order entry – page 1858) will change your practice communications. If you are a HIPAA-covered entity with an NPI number and you don’t email instructions to your denture lab rather than include a hand-written note with the relevant patient’s plaster models, you won’t qualify for stimulus money. What can possibly go wrong with that meaningful idea?

Conclusion

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About RepairPal.com for Doctors

Doctors – Take the Mystery Out of Auto Repair!

By Staff Reporters

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RepairPal gives you independent and unbiased repair estimates, user ratings and reviews, plus advice you can’t get anywhere else. It’s easy, accurate, and FREE!

How it Works

If you’ve received a price estimate for a specific automobile repair job, compare it to a RepairPrice estimate to make sure you’re getting a fair deal. They’ll show you what to expect and what to look out for when you have the service or repair performed.

DEM with JAG

Assessment

Doctors, and advisors, take the mystery out of auto repair by giving em’ a click, and telling us what you think.

www.RepairPal.com

Conclusion

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On the Collapse of Medical Labor Unions?

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Lessons Learned from the State of Wisconsin

[By Dr. David Edward Marcinko MBA, CMP™]

Did you know that healthcare journalist William F. Shea opined a decade ago that there were numerous psychological barriers against the formation of physicians unions [personal communication].

The Reasons

These included (1) public perception of doctor’s as a “cut above” ordinary workers; (2) doctor’s attempts to wrap collective bargaining in a mantle of patient’s rights that lacked credibility; and (3) the highly educated physician’s ability to re-engineer and seek alternate employment opportunities rather than accept the salary scale or lack of autonomy present in restrictive managed care entities.

Assessment

Time has proven him correct as MD resignation through individual re-deployment and/or innovation has been more effective than any “strike” if called for by one practitioner, or union group, at a time.

MORE: Unions

MORE: https://www.beckershospitalreview.com/hospital-physician-relationships/princeton-economists-physicians-are-taking-money-away-from-the-rest-of-us.html?origin=bhre&utm_source=bhre&oly_enc_id=

Conclusion

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Protecting Personal Health Information [PHI on Talk Radio]

Check out the Xerox Blog Talk Radio

By Staff Reporters

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Federal regulations require that healthcare organizations put new safeguards be put in place to protect a person’s personal health information, also known as PHI. This means new challenges for anyone who handles sensitive data [covered entities]. And, there are also severe penalties if the guidelines aren’t followed.

From ACS

Mark Tripodi, chief innovation officer for ACS’ government healthcare solutions group will explain why data can easily be put at risk and what can be done to ensure organizations meet privacy standards.

Assessment

You can access the recording here: http://bit.ly/eyv65U.

For more on Xerox: http://xrx.sm/news.

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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Understanding and Using Portfolio Performance Benchmarks

Concerning Periodic Measurements and Meters

By Dr. David Edward Marcinko MBA, CMP™

[Publisher-in-Chief]

The stock market has been booming lately; flirting with DJIA 12,000. Up almost 100% since March 2009, after being down almost 50%. And so, perhaps this is a good time to [re]-evaluate the performance of your investment portfolio[s]. But how?

Performance measurement has an important role in monitoring progress towards any physician’s portfolio’s goals.  The portfolio’s objective may be to preserve the purchasing power of the assets by achieving returns above inflation or to have total returns adequate to satisfy an annual spending need without eroding original capital, etc.  Whatever the absolute goal, performance numbers need to be evaluated based on an understanding of the market environment over the period being measured.

Time Weighted Return

One way to put a portfolio’s a time-weighted return in the context of the overall market environment is to compare the performance to relevant alternative investment vehicles.  This can be done through comparisons to either market indices, which are board baskets of investable securities, or peer groups, which are collections of returns from managers or funds investing in a similar universe of securities with similar objectives as the portfolio.  By evaluating the performance of alternatives that were available over the period, the physician investor and his/her advisor are able to gain insight to the general investment environment over the time period.

The Indices

Market indices are frequently used to gain perspective on the market environment and to evaluate how well the portfolio performed relative to that environment.  Market indices are typically segmented into different asset classes. 

Common stock market indices include the following:

  • Dow Jones Industrial Average- a price-weighted index of 30 large U.S. corporations.
  • Standard & Poor’s (S&P) 500 Index – a capitalization-weighted index of 500 large U.S. corporations.
  • Value Line Index – an equally-weighted index of 1700 large U.S. corporations.
  • Russell 2000 – a capitalization-weighted index of smaller capitalization U.S. companies.
  • Wilshire 5000 – a cap weighted index of the 5000 largest U.S. corporations.
  • Morgan Stanley Europe Australia, Far East (EAFE) Index – a capitalization-weighted index of the stocks traded in developed economies. 

Common bond market indices include the following:

  • Lehman Brothers Government Credit Index – an index of investment grade domestic bonds excluding mortgages [N/A].
  • Lehman Brothers Aggregate Index – the LBGCI plus investment grade mortgages [N/A].
  • Solomon Brothers Bond Index – similar in construction to the LBAI.
  • Merrill Lynch High Yield Index – an index of below investment grade bonds.
  • JP Morgan Global Government Bond – an index of domestic and foreign government-issued fixed income securities. 

The selection of an appropriate market index depends on the goals of the portfolio and the universe of securities from which the portfolio was selected.  Just as a portfolio with a short-time horizon and a primary goal of capital preservation should not be expected to perform in line with the S&P 500, a portfolio with a long-term horizon and a primary goal of capital growth should not be evaluated versus Treasury Bills.

While the Dow Jones Industrial Average and S&P 500 are often quoted in the newspapers, there are clearly broader market indices available to describe the overall performance of the U.S. stock market.  Likewise, indices like the S&P 500 and Wilshire 5000 are capitalization-weighted, so their returns are generally dominated by the largest 50 of their 500 – 5000 stocks.  While this capitalization-bias does not typically affect long-term performance comparisons, there may be periods of time in which large cap stocks out- or under-perform mid-to-small cap stocks, thus creating a bias when cap-weighted indices are used versus what is usually non-cap weighted strategies of managers or mutual funds. 

Finally, the fixed income indices tend to have a bias towards intermediate-term securities versus longer-term bonds.  Thus, an investor with a long-term time horizon, and therefore potentially a higher allocation to long bonds, should keep this bias in mind when evaluating performance.

Assessment

RIP: Lehman Brothers

Peer group comparisons tend to avoid the capitalization-bias of many market indices, although identifying an appropriate peer group is as difficult as identifying an appropriate market index.  Further, peer group universes will tend to have an additional problem of survivorship bias, which is the loss of (generally weaker) performance track records from the database.  This is the greatest concern with databases used for marketing purposes by managers, since investment products in these generally self-disclosure databases will be added when a track record looks good and dropped when the product’s returns falter.  Whether mutual funds or managers, the potential for survivorship bias and inappropriate manager universes make it important to evaluate the details of how a database is constructed before using it for relative performance comparisons.

Conclusion

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About HealthCareAndYou.org

What it is – How it works?

By Staff Reporters

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At a time when many Americans are confused about the healthcare overhaul law, a coalition of groups representing doctors, nurses, pharmacists and consumers has launched a website to answer questions about the Affordable Care Act.

The new website – HealthCareandYou.org – doesn’t delve into the politics behind the law, but spells out what the law means to consumers, depending on the state they live in and their age. The website also provides a timeline, telling consumers when different parts of the law go into effect.

The Site

According to the site, The Affordable Care Act is a health care law that aims to improve our current health care system by increasing access to health coverage for Americans and introducing new protections for people who have health insurance.

If you have health insurance, you will benefit from steps to stop insurance companies from cancelling your coverage if you get sick. The law will also require insurance plans to cover your out-of-pocket costs for many proven preventive and screening services, such as colonoscopies and mammograms, to catch problems at their earliest, most treatable stages.

Your job might not offer health insurance. Or, maybe you have been denied coverage because of a pre-existing condition such as asthma or cancer. The law now offers health plans for people with pre-existing conditions who have had trouble finding care. And it will increase access to coverage for more Americans in 2014.

The law helps small businesses pay for health insurance for their employees. And it supports programs that will help increase the number of primary care physicians, nurses, physician assistants and other health care professionals.

Assessment

It is important to understand what the law means for you. Check out what changes have already taken place and learn more about what is happening in your state.

Link: http://www.healthcareandyou.org

Conclusion

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How Investment Professionals Evaluate Time Periods for Portfolio Comparison

On Capturing a Full Range of Market Environments

By Dr. David Edward Marcinko MBA, CMP™

[Publisher-in-Chief]

What is the appropriate time period for portfolio growth comparison? 

Performance measurements over trailing calendar periods, such as the last one, three, five or 10 years, are often used in the mutual fund and investment industry.  While three-to-five-to-ten years may seem like a long enough time for an investment strategy to show its value added, these time periods will often be dominated by either a bull or bear market environment, and/or a large cap or small cap dominated environment, etc. 

Market Cycles

One way to lessen the possibility of the market environment biasing a performance comparison is to focus on a time period that captures full range of market environments; a market cycle. 

The market cycle is defined as a market peak, with high investor confidence and speculation, through a market trough, in which investor bullishness and speculation subsides, to the next market peak. 

A bull market is a market environment of generally rising prices and investor optimism.  While there have been several definitions of a bear market based upon market returns (e.g., a decline of –15 percent or more, two consecutive negative quarters, etc.), the idea implied by its name is a period of high pessimism and sustained losses. 

Thus, one returns-based rule-of-thumb that can be used to identify a bear market is a negative return in the market that takes at least four quarters to overcome. 

http://www.amazon.com/Financial-Planning-Handbook-Physicians-Advisors/dp/0763745790/ref=sr_1_1?ie=UTF8&s=books&qid=1276795609&sr=1-1

Assessment

The stock market has been booming lately. Up almost 100% since March 2009, after being down almost 50%. And so, perhaps this is a good time to re-evaluate the performance of your investment portfolio[s].

And so, by examining performance over a full market cycle, there is a greater likelihood that short-term market dislocations like the “flash crash” of 2009 will not bias the performance comparison.

Conclusion

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Quality Business Issues in the 21st Century

A  Revisit –  Circa 2011

By Henry H. Goldman PhD, CPCM

[Risk Management Associates International, LLP]

Dear Ms. Ann Miller RN MHA

I’ve attached an article which might be of interest to your ME-P readers, subscribers and clients. 

It’s new and can easily be modified to meet your healthcare needs.

Link: QUALITY ISSUES IN THE 21ST CENTURY[1]

Assessment

Although this essay is not medically specific, the general concepts are applicable to the healthcare industrial complex.

About the Author

Henry H. Goldman PhD

Executive Managing Partner
Risk Management Associates International, LLP
5005 SW Raintree Circle
Lee’s Summit, MO 64082

Henry H. Goldman, Ph.D. is the Managing Director of the GOLDMAN-NELSON GROUP (USA), a global management consulting and executive training organization that he founded in 1981. Dr. Goldman’s areas of expertise include supervisory and management training, decision-making and problem solving, team building, international financial management, and strategic planning. He is frequently invited to facilitate programs and workshops on such diverse subjects as “Leading Organizational Change,” “Decision-Making for Managers,” “Budgeting in the Borderlands,” as well as issues dealing with global business and finance. Goldman recently served as Co-Editor of Taking Stock: A Survey on the Practice and Future of Change Management (Berlin, 2005). He has worked with executives and managers, worldwide, to develop an understanding of management and financial concerns in a global marketplace. He has conducted training programs along the Pacific Rim, Southern Africa, and the Middle East and among the Newly Independent States of the former Soviet Union. His clients include MGM Studios, Lucent Technologies–China, General Motors, Hughes Aircraft Company and Citizens’ Development Corps. He served as adjunct professor of management at the University of Macau, China, where he taught “Team Building” to MBA students. He is currently affiliated with the National Graduate School and Boston University’s Center for Executive Education. Dr. Goldman was recently appointed to the Mine Relief Global Business Council to assist in the remediation of land mines, world-wide, with a particular focus on the Turkey-Syria border.

Conclusion

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Tax Exempt Hospitals Granted IRS Filing Delay

Recent Developments on Form 990 and Schedule H

By Children’s Home Society of Florida Foundation

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In Announcement 2011-20; 2011-10 IRB 1 (23 Feb 2011), the IRS granted a three-month automatic filing extension for most tax-exempt hospitals.

Form 990 and Schedule H

Following the development of a new Form 990 Return for Charitable Organizations, the IRS published a comprehensive Schedule H for medical centers. With the passage of the Patient Protection and Affordable Care Act of 2010, both the IRS and many medical centers need additional time to properly prepare for filing of Form 990 with the Schedule H for medical centers.

As a result, the IRS indicates that the earliest permitted filing date for tax-exempt medical centers filing Form 990 and Schedule H will be July 1, 2010. This is the earliest filing date whether the filing is in paper form or electronic format.

Filing Extension Form 8868

For those medical centers with return due dates before August 15, 2011, there is an automatic three-month extension of time to file. This extension is available without filing Form 8868, Application for Extension of Time to File an Exempt Organization Return.

However, there may be new organizations that have not filed Form 990 Schedule H for tax year 2009. In this case, they may choose to file Form 8868 to clarify their intention to extend the deadline. If a medical center requires an additional three months to file, then it should file Form 8868.

Assessment

Finally, for those medical centers that qualify for this automatic extension, there will be no penalty if they file within the additional three-month period.

Conclusion

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Are We in a Bond Market Bubble?

Beware all Physicians and Investors

By Sean G. Todd, Esq., M. Tax, CFP, CPA

Investors have been pouring money into bonds. The Investment Company Institute statistics show that since January 2007, average net new money going into bond mutual funds each month has been roughly four times greater than net outflows from equity funds.* So does that mean we’re in the bond market’s equivalent of the late-1990s tech bubble?

What’s been driving interest in bonds?

There are several reasons why bond funds have been attracting investor interest.

First, in the wake of both the tech crash of 2000-2002 and the 2008 financial crisis, the Federal Reserve felt it needed to make credit more available by lowering interest rates. Over the last 10 years, the yield on the 10-year Treasury bond has fallen from 5% to well under 3% at the end of 2010.

And for the first time ever, 5-year Treasury Inflation-Protected Securities (TIPS) actually paid a negative yield when they were auctioned last October.

Because bond prices rise as interest rates fall, that has increased bond prices generally.

As a result, bonds have outperformed stocks in recent years. For the last 20-year period, total returns from stocks and bonds have been equal: 8.2%.

And during the decade between January 2000 and the end of 2009, bonds actually outperformed stocks; the S&P 500 saw a total return of -0.9%, while long-term government bonds returned 7.7%.

That outperformance has lured investors who may have forgotten that past performance doesn’t guarantee future results, and invest in an asset class based on its recent history rather than its prospects for the future.

The Demographics

Next, demographics also have played a role. Many aging baby boomers who became accustomed to investing much of their IRAs and 401(k)s in stocks are beginning to realize that their time horizon for retirement isn’t as long as it used to be, and that they should consider allocating an increasing percentage of their retirement portfolios to income-producing assets. The financial crisis also sent many frightened investors scurrying to put their money anywhere besides stocks.

Finally, diminished dividends from stocks have encouraged many investors to look elsewhere for income. During the tech boom, companies preferred to reinvest in growth or buy back stock rather than increase dividends, and according to Standard and Poor’s, 2009 was the worst year on record for dividend payments.

Though there has been some reversal of that trend in recent months, stingy dividends helped make bonds and their income more attractive.

What to Watch out For

No investing trend lasts forever without interruption. Here are some factors that could affect bond prices:

  • Signs that inflation is picking up: Higher inflation means fixed income payments will have less purchasing power in the future, diminishing bonds’ appeal as income vehicles.
  • Fed reversal on interest rates: As the economy recovers, the Federal Reserve will need to withdraw the support it has given the bond markets. As it gradually rachets up interest rates, bonds will begin to reverse their pattern of the last decade. Depending on the pace of the Fed action, that reversal could be swift. Rising interest rates typically mean falling bond prices, and longer-term bonds often feel the most impact because bond buyers are reluctant to tie up their money long-term if a better rate lies ahead.
  • Lack of overseas interest in U.S. debt: Foreign buyers have been large purchasers of U.S. government debt. If foreign buyers show signs of turning away from U.S. debt, it could send shivers through the bond markets.
  • Muni bond troubles: Some experts worry that defaults by cash-strapped state and local governments could become a problem.

Assessment

However, balance those factors against the possibility of further sovereign debt problems abroad. Several European nations are still struggling to deal with their debt problems; another bout of global jitters like the one in spring 2009 could remind investors that the United States has never defaulted on its debt. Also, if the potential for deflation that the Fed is so concerned about turns into an actual decline in wages and prices, that could be a positive for bonds, since the income they pay would be more valuable as prices fall. Either way, now is an especially good time to keep an eye on your bond investments.

Source: Average of monthly net new cash flows from January 2007 through September 2010 as reported in Investment Company Institute’s “Long-Term Mutual Fund Flows Historical Data” as of Nov. 20, 2010.

Source: U.S. Treasury historical data on daily Treasury yield curve rates.

Source: “Record Setting Auction Data,” http://www.treasurydirect.gov.

Conclusion

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Events Planner: March 2011

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Events-Planner: MARCH 2011

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 – And now, the important dates:

  • March 17: Ethical Insurance Business Meeting, Florham Park, NJ
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  • March 28: Innovative Real Estate Strategies Conference, Palm Beach Gardens, FLA

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

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