• Member Statistics

    • 835,836 Colleagues-to-Date [Sponsored by a generous R&D grant from iMBA, Inc.]
  • David E. Marcinko [Editor-in-Chief]

    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”.

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

    entrepreneur

    Frontal_lobe_animation

  • ME-P Information & Content Channels

  • ME-P Archives Silo [2006 – 2020]

  • Ann Miller RN MHA [Managing Editor]

    ME-P SYNDICATIONS:
    WSJ.com,
    CNN.com,
    Forbes.com,
    WashingtonPost.com,
    BusinessWeek.com,
    USNews.com, Reuters.com,
    TimeWarnerCable.com,
    e-How.com,
    News Alloy.com,
    and Congress.org

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

    Product Details

    Product Details

    Product Details

  • CERTIFIED MEDICAL PLANNER® program

    New "Self-Directed" Study Option SinceJanuary 1st, 2020
  • Most Recent ME-Ps

  • PodiatryPrep.org


    BOARD CERTIFICATION EXAM STUDY GUIDES
    Lower Extremity Trauma
    [Click on Image to Enlarge]

  • ME-P Free Advertising Consultation

    The “Medical Executive-Post” is about connecting doctors, health care executives and modern consulting advisors. It’s about free-enterprise, business, practice, policy, personal financial planning and wealth building capitalism. We have an attitude that’s independent, outspoken, intelligent and so Next-Gen; often edgy, usually controversial. And, our consultants “got fly”, just like U. Read it! Write it! Post it! “Medical Executive-Post”. Call or email us for your FREE advertising and sales consultation TODAY [770.448.0769]

    Product Details

    Product Details

  • Medical & Surgical e-Consent Forms

    ePodiatryConsentForms.com
  • iMBA R&D Services

    Commission a Subject Matter Expert Report [$2500-$9999]January 1st, 2020
    Medical Clinic Valuations * Endowment Fund Management * Health Capital Formation * Investment Policy Statement Analysis * Provider Contracting & Negotiations * Marketplace Competition * Revenue Cycle Enhancements; and more! HEALTHCARE FINANCIAL INDUSTRIAL COMPLEX
  • iMBA Inc., OFFICES

    Suite #5901 Wilbanks Drive, Norcross, Georgia, 30092 USA [1.770.448.0769]. Our location is real and we are now virtually enabled to assist new long distance clients and out-of-town colleagues.

  • ME-P Publishing

  • SEEKING INDUSTRY INFO PARTNERS?

    If you want the opportunity to work with leading health care industry insiders, innovators and watchers, the “ME-P” may be right for you? We are unbiased and operate at the nexus of theoretical and applied R&D. Collaborate with us and you’ll put your brand in front of a smart & tightly focused demographic; one at the forefront of our emerging healthcare free marketplace of informed and professional “movers and shakers.” Our Ad Rate Card is available upon request [770-448-0769].

  • Reader Comments, Quips, Opinions, News & Updates

  • Start-Up Advice for Businesses, DRs and Entrepreneurs

    ImageProxy “Providing Management, Financial and Business Solutions for Modernity”
  • Up-Trending ME-Ps

  • Capitalism and Free Enterprise Advocacy

    Whether you’re a mature CXO, physician or start-up entrepreneur in need of management, financial, HR or business planning information on free markets and competition, the "Medical Executive-Post” is the online place to meet for Capitalism 2.0 collaboration. Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds. THE ME-P DISCLAIMER: Posts, comments and opinions do not necessarily represent iMBA, Inc., but become our property after submission. Copyright © 2006 to-date. iMBA, Inc allows colleges, universities, medical and financial professionals and related clinics, hospitals and non-profit healthcare organizations to distribute our proprietary essays, photos, videos, audios and other documents; etc. However, please review copyright and usage information for each individual asset before submission to us, and/or placement on your publication or web site. Attestation references, citations and/or back-links are required. All other assets are property of the individual copyright holder.
  • OIG Fraud Warnings

    Beware of health insurance marketplace scams OIG's Most Wanted Fugitives at oig.hhs.gov

GOOGLE Health is Hiring!

Personal and Professional Data Included

By Anonymous

***

***

Happy April Fool’s Early Day!

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

Contact: MarcinkoAdvisors@msn.com

***

David J. Shulkin MD is OUT!

Another Doctor is Replaced by the President

dem

[By Dr. David Edward Marcinko MBA]

After weeks of uncertainty atop the Department of Veterans Affairs, President Trump  plans to replace its secretary, David J. Shulkin, with the president’s personal physician, Dr. Ronny L. Jackson, a rear admiral in the Navy.

http://www.msn.com/en-us/news/politics/veterans-affairs-secretary-is-latest-to-go-as-trump-shakes-up-cabinet/ar-AAvdPvR?li=BBnb7Kz

***

https://www.managedhealthcareconnect.com/content/va-secretary-shulkin-resign-trump-nominate-his-personal-physician

***

Dr. Ronny L. Jackson

http://www.msn.com/en-us/news/politics/who-is-ronny-jackson-trumps-pick-to-run-veterans-affairs/ar-AAvdNuM?li=BBnbcA1

***

Jacobetti VA

Marquette, Michigan, USA

***

Barrierers to Healthcare

For U.S .Women

By http://www.MCOL.com

***

***

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

Contact: MarcinkoAdvisors@msn.com

***

Leave FACEBOOK and Join the MEDICAL EXECUTIVE POST.com

AN “OPEN LETTER” FROM THE PUBLISHER-IN-CHIEF

Join Our Mailing List

Niche Specificity is the Key to Future Social Media Action

By Dr. David Edward Marcinko MBA [Publisher-in-Chief]

My solution to Facebook dilution.

It was a no good, very bad week for Facebook.

WHY: It came to light that up to 50 million users had their data improperly accessed by data firm Cambridge Analytica. Ever since, the company has been under incredible scrutiny as its’ stock price is in free fall. In fact, CEO Mark Z. lost about ten billion dollars; at least on paper…Ouch! But, he is still worth about 65 billion dollars, so don’t worry —  be happy for him!

The Critics

  • Did you know that Elon Musk is joining a growing group of people in the tech industry who have taken aim at social media companies and Facebook in particular?
  • Aaron Levie, CEO of cloud computing company Box, recently tweeted: “The days of arguing that (and acting like) tech companies are merely platforms and pipes are behind us.”
  • Marc Benioff, CEO of business software company Salesforce, recently started equating social media to smoking cigarettes.

And now, this Medical Executive-Post is jumping on the alternate social media site bandwagon. Leave Facebook now!

***

0

***

Here’s How to manipulate Facebook instead of it Manipulating You

Social media platforms know a lot about us—but that doesn’t mean we can’t have our own ways of fighting back.

So, try these six tricks to take back control of your digital life. https://tinyurl.com/y888s8m5

Intellectual Riches … thru Niches

As Facebook became ever-more generalized, it also became less powerful, less informed, less important and therefore less credible; writ large. All opinions are not informed opinions

“When you try to be all things to every one – you became nothing to no one”

But smaller, niche alternatives like this Medical Executive-Post can provide new ways for us to interact with other smart, like-minded and informed people online.

Re-Enter the Medical Executive-Post of iMBA, Inc. 

imba inc

This Medical Executive-Post is sponsored by the Institute of Medical Business Advisors Inc., of Atlanta, Georgia; which was founded in 2006 as a leading national scope provider of healthcare administration education and medical practice management reports, books, dictionaries, journals, white-papers, fair-market valuations [FMV] and economic advisory opinions using multi-platform and traditional seminars and channels of knowledge distribution.

iMBA helps the nation’s medical, healthcare and education professionals make decisive improvements in their direction and performance by empowering them through unbiased information, consultants and proprietary tools, books, templates and B-school styled case models. 

We serve universities, medical, business, graduate and nursing schools; physicians, dentists and legal societies; accountants, financial service providers, wealth and hedge fund managers; emerging entities, hospitals, clinics, outpatient centers, CXOs and their BODs – the press, media and related organizations.

My Idea

Join Our Mailing List

For the solution to Facebook dilution, my idea is not new or radical; but it is simple. Join the Medical Executive Post. It is time.

To achieve a better and more niche focused professional social site, we need to be much more concentrated and serious about all vital topics in the healthcare industrial complex – which is an ecosystem projected to become 20% of domestic GDP; very soon.

Thus, this academic niche is not so small; but we are indeed highly educated, powerful and can become very influential and very actionable; more so than the general Facebook populace hoi polloi.

Remember, Pareto’s 80/20 Law and the trivial many versus vital few. Show us your vitality.

More Reasons to Join Us – Today!

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. 

Join Our Mailing List

Contact: MarcinkoAdvisors@msn.com

***

Join Our Mailing List

 

What is a Financial Fiduciary?

Fiduciary Trust 101 – For Consumers and Insiders

***

***

Assessment

For the financial services industry: An Interview with Bennett Aikin AIF®

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

Contact: MarcinkoAdvisors@msn.com

https://www.crcpress.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

***

Why I Won’t Leave Facebook – NO MATTER WHAT!

BEWARE “CLICK-BAIT” SCHEMES [just like this one]

I never joined up! So, I don’t have to leave.

By Dr. David Edward Marcinko MBA

#DeleteFacebook is trending

What-Up with your Facebook account?

The hashtag #DeleteFacebook is trending on Twitter.

People are furious, and they have good reason to be. Data from over 50 million Facebook users was used to target voters and influence the 2016 US presidential election, as well as the 2016 “Brexit” referendum.

So – How do you permanently delete your Facebook account?

To permanently delete your account, read the Facebbok FAQ topic on How do I permanently delete my account?

Assessment

Please keep in mind that you won’t be able to reactivate your account or retrieve anything you’ve added. Before you do this, you may want to download a copy of your info from Facebook.

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

Contact: MarcinkoAdvisors@msn.com

click

***

The Hospital Mismatch and Divergence

On Supply and Demand: Economics 101

***

***

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

Contact: MarcinkoAdvisors@msn.com

https://www.amazon.com/Financial-Management-Strategies-Healthcare-Organizations/dp/1466558733/ref=sr_1_3?ie=UTF8&qid=1380743521&sr=8-3&keywords=david+marcinko

***

Life Expectancy V. Health Expenditures Per Capita

Circa 2014 – 2017

[By staff reporters]

Assessment

Your thoughts are appreciated.

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

Contact: MarcinkoAdvisors@msn.com

https://www.amazon.com/Hospitals-Healthcare-Organizations-Management-Operational/dp/1439879907/ref=sr_1_4?s=books&ie=UTF8&qid=1334193619&sr=1-4

***

Who Pays for your Medication?

Understanding the Supply-Chain Management [SCM]

By Business Inside

***

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

Contact: MarcinkoAdvisors@msn.com

https://www.amazon.com/Financial-Management-Strategies-Healthcare-Organizations/dp/1466558733/ref=sr_1_3?ie=UTF8&qid=1380743521&sr=8-3&keywords=david+marcinko

***

What is Enhanced Medical Mixed Reality?

On physician-avatars and new-age medical care

By Dr. David E. Marcinko MBA

EMMR is a new Enhanced Medical Mixed Reality interface from the Silver Chain Group.

It uses emerging ‘mixed reality’ technology to combine real life, projected holograms and video conferencing, allowing our nurses, clinicians and clients better access to information and services.

***

But, what are the risks?

Assessment

Since a “picture is worth a thousand words”, feel free to check out this video.

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

Contact: MarcinkoAdvisors@msn.com

https://www.crcpress.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989

Product DetailsProduct Details

Happy World Oral Health Day

Join Our Mailing List
Happy World Oral Health Day

[By Staff Reporters]

Today is March 20th – World Oral Health Day (WOHD), a day in which dentists and organizations worldwide are promoting oral health.

***

dental

***

According to the FDI WOHD website, 90% of the world’s population will suffer from oral diseases in their lifetime, and many of them can be avoided with increased governmental, health association and society support and funding for prevention, detection and treatment programs.

Product DetailsProduct Details

Update on Healthcare Wearables

Consumer Digital Health

By http://www.MCOL.com

***

***

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

Contact: MarcinkoAdvisors@msn.com

***

More on Retirement Planning

ShouldaCoulda Woulda Retirement Planning

By Rick Kahler CFP®

My hunch is that most people would agree they “should” invest for the future. My second hunch is that many of them don’t know how to start and are afraid of making serious mistakes.

One of our resident planners, Sterling Gray, summed up that fear eloquently in a post on the KFG blog: “I noticed that my friends and colleagues . . . saw retirement planning as a dark, treacherous terrain that they could never safely travel alone. Unsure of where to turn for help, they often chose to ignore saving for retirement completely . . .”

Here are some pointers to help you take the first steps into the unfamiliar terrain of investing.

1. First and foremost, create a habit of living on less than you make. Spend frugally and invest as much as you possibly can. Ideally, while you are young, start with 20% of your paycheck, but at least start with something. The older you are, the greater the percentage you need to be saving.

2. Choose an investment method that will help reduce the taxes you pay on your contributions and the earnings they produce. This commonly means 401(k) retirement plans and IRAs—Roth IRAs for those in low income tax brackets and traditional IRAs for those in high tax brackets. You typically want to contribute a portion of every paycheck to your retirement plan.

3. Pick an investment. This is the part that scares many people away from investing, so let’s be specific.

3a. The best way for small investors to accumulate wealth is by owning stocks. But you don’t want to fall into the trap of picking individual stocks yourself, or worse yet, trying to buy low and sell high. That is called “playing the stock market,” and according to the research there is a high probability the only thing that will get played is you.

3b. The best way to own stocks is in a mutual fund that owns thousands of stocks of companies from around the globe. My favorite fund for people under age 40 is Vanguard Total World Stock (VT). It owns 7,781 stocks of companies located in 41 countries, including both developed and emerging markets. Over the last 48 years an investment in a globally diversified portfolio of stocks returned 8.9% annually, according to the MSCI World stock index. A $10,000 initial investment turned into about $600,000. If you are over 40, you may want to consider the Vanguard Global Wellington Fund Investor Shares (VGWLX. If you are over 60, the Vanguard Managed Payout Fund (VPGDX) is my favorite.

3c. If your 401(k) doesn’t offer these mutual funds, it probably will offer a number of Target Date Funds. Pick one that is closest to the year you will turn 70. If you are age 30 now, select the 2060 Target Date Fund.

4. This is the most important part of accumulating wealth, and it is absolutely the hardest part. Keep investing out of every paycheck, even when markets are falling or seem sure to fall. Even when the talking heads are sure the world is coming to an end and the financial press is screaming that you need to get out before you lose it all. Never suspend your monthly investment. Never sell out of your stock mutual fund and go to cash. Never sell out even 10% of your stock fund and go to cash. Keep breathing, focus on the long term, and stay the course.

Assessment

Like any trip into new territory, the path to financial independence starts with a single step. Take that first step, and you’re on your way to a successful journey.

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

MarcinkoAdvisors@msn.com

https://www.crcpress.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

***

IS HEALTHCARE [REALLY] DIFFERENT -OR- NOT?

A Particle Physics Analogy

By Dr. David Edward Marcinko MBA

http://www.CertifiedMedicalPlanner.org

Some folks, here and elsewhere, often opine that banking is more progressive than healthcare. And, by inference many, if not most, other industries may be included as well.

Unfortunately, this is a ridiculous reality.

WHY: Sorry – Like Heisenberg – You can’t have it both ways.

Health insurance is becoming less like real, pro-active insurance and more like a taxpayer “pay-as-you-go” system. Hence, the two current societal opinions:

HI AS A RIGHT: On the one hand, we opine that you can’t buy car or home owners insurance after the accident or fire. But, you can buy Obamacare after the cancer diagnosis. Not insurance at all; but a right.

HI AS A PRIVILEGE: On the other hand, others opine that HI is for the privileged few.

Now, here is my third option:

HI AS A RESPONSIBILITY: Well, I suggest HI is a responsibility. We do need catastrophic insurance but not for routine health maintenance. The better we are at pro-active responsibility – the less expensive HI should be, with patient skin-in-the-game. And, I have written about Health Savings Accounts [HSAs] before, here and elsewhere.

***

***

Assessment

So, decide which and proceed accordingly. But, just like the Werner Heisenberg Uncertainty Principle; it can’t be both.

NOTE: In quantum mechanics, the Heisenberg uncertainty principle is any of a variety of mathematical inequalities asserting a fundamental limit to the precision with which certain pairs of physical properties of a particle, known as complementary variables, such as position x and momentum p, can be known simultaneously.

IOW: I can tell you where you are -OR- how fast you are going; but not both.

Conclusion

Your thoughts are appreciated. http://www.BusinessofMedicalPractice.com

***

R.I.P: Stephen Hawking [Age-76]

On Stephen Hawking

[By staff reporters]

The acclaimed and inspirational British physicist has sadly died at the age of 76.

His legacy

Hawking discovered that the Big Bang started from a singularity, and that black holes aren’t totally black but radiate energy, among plenty of other things.

His illness 

He was diagnosed with amyotrophic lateral sclerosis (ALS) in 1963, aged 21. Doctors told him at the time that he would live for just 2-3 years.

His words: “Look up at the stars and not down at your feet. Be curious, and however difficult life may seem, there is always something you can do.”

***

     [Stephen Hawking at Gonville & Caius College, Cambridge]

More: The University of Cambridge, where he worked, published its own tribute.

http://www.cam.ac.uk/stephenhawking

***

The “MyHealthEData” initiative

Fed Initiative to Put Patients in Control of their Health Data

[By Greg Slabodkin]

The Trump administration is attempting to put patients in control of their own health data and to spur healthcare innovation as part of its broader efforts to cut red tape in the federal government.

The Centers for Medicare and Medicaid Services just announced at the HIMSS18 conference in Las Vegas the launch of the MyHealthEData initiative, which CMS Administrator Seema Verma claimed is the first time any administration has set in motion a coordinated initiative to truly make patients the focus of the healthcare system by using the federal government’s full authority to ensure providers and insurers give patients control of their medical records.

***

***

According to Verma, patients might be able to obtain some information from providers within a healthcare system but there’s no way to aggregate that data, and when providers don’t have all the necessary information at hand, they repeat tests, driving up costs and causing medical errors—which threaten patient safety.

“The MyHealthEData initiative will enable doctors to spend more time with their patients and less time looking at their computer once our policies go into effect,” added Verma. “It will declare to hospitals and insurers that the practice of holding patients hostage in their systems and blocking their data will no longer be tolerated.”

Source: Health Data Management [3/6/18]

Should a diversified investment portfolio produce the same return as US stocks?

 On unrealistic expectations

By Rick Kahler CFP®

I have a complaint. The pot pie at one of my favorite restaurants doesn’t taste like a pot roast. I keep complaining, but nothing changes. I am thinking I may need to find a new restaurant because their cooking skills are just not living up to my expectations.

Or maybe I need to adjust my expectations. How can I expect a pot pie—a savory pastry with a mixture of potatoes, vegetables, and beef chunks—to taste like a beef pot roast? Even though beef is an ingredient in a pot pie, no reasonable diner would expect the two meals to taste the same.

Investing

But, that same reasonable diner might be perfectly comfortable expecting that their diversified investment portfolio should produce the same return as US stocks. This is just as unrealistic as it is to expect pot pie and pot roast to produce the same taste.

A diversified portfolio has a variety of investments in it, just as a pot pie has a variety of ingredients in it. A pot pie provides a complete meal with a nice balance of grain, veggies, and protein with a tasty blend of spices. A pot roast provides just one component of a balanced meal, a heavy dose of protein.

Likewise, a diversified portfolio is a meal in itself. A particular recipe that I like has the equivalent of a flour crust made of high quality bonds, high yield bonds, and Treasury Inflation Protected Securities. Stuffed inside is a delicious blend of real estate investment trusts, international stocks, US stocks, emerging market stocks, commodities, all flavored with managed futures, a long/short fund, and a put/write investment strategy.

The flavor of the diversified portfolio is completely different from an investment of just US stocks. Yet investors regularly try to compare the two.

EXAMPLE:

A few months ago, a reader wanted to know why her small account with a well-known brokerage house was doing three times better than her IRA managed by a fee-only advisor. She was thinking she should put all her IRA money with the brokerage firm.

Following up revealed the ingredients in her IRA: 30% was in a global mix of 1,100 high quality bonds, 300 high yield bonds, and 20 TIPS. The remaining 70% was in a global mix of 12,000 US, international and emerging market companies of all sizes, 300 real estate investment trusts, 21 commodities, a long/short fund with hundreds of positions, and a smattering of other investment strategies.

The small brokerage account had just one ingredient: 31 large US stocks.

Over the previous 15 months, the globally diversified portfolio had returned 9% and the 31 US stocks had returned 21%. Of course, the US stocks in her diversified portfolio had also returned 21%, but just like the chunks of beef in a pot pie, they only made up part of the mix, in this case 17%. So, comparing the diversified pot pie of her IRA return to the single-ingredient pot roast of her brokerage account was not valid.

Over the past nine years nothing has done better among major asset classes than US stocks. Any diversified portfolio will have underperformed them. That phenomenon will inevitably end. The time will come, sooner or later, when US stocks will be one of the worst performers of the decade.

***

***

Assessment

Just as a diversified portfolio will often garner smaller returns when US stocks rise, it will also have substantially higher returns when US stocks crash. At that time, those with diversified portfolios will be thankful that they stayed the course. And millions of other investors will be wishing they had ordered pot pie instead of pot roast.

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

Contact: MarcinkoAdvisors@msn.com

***

https://www.crcpress.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

***

Physician Visit Length and Composition

Thirty-Five Minute Doctor Visits for Family Practitioners

By http://www.MCOL.com

***

***

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

 Contact: MarcinkoAdvisors@msn.com

***

WHY MEDICAL TREATMENT COSTS ARE BECOMING EXPENSIVE [25 Factors]

Are Doctors Responsible?

By Dr. Pankaj Kumar

Namaste!

The following features have led to increasing dependence on investors in the medical field which then has to run along the lines of an industry to ensure its financial viability.

For example:

1. Newer technology and rapid advances in newer innovations in medical fields for improvement in diagnostic and newer treatment modalities: If a hospital or doctor does not upgrade, it will be regarded as having obsolete technology. Most of these medical technologies are extremely expensive and owned and marketed by big multinational companies who sell them. Since cost involved is very high, there can be various types of deals involved between middlemen involved in selling and buying the equipment and technologies. Doctors are the end users of these technologies, but not part of business process. They are actually the consumers and users for these technologies.

2. Expensive real estate: A self made doctor at the start or even during his life time, does not have the kind of finances to build a hospital which needs a large parcel of land with commercial location. Therefore there is a need for big investment or investor to pitch in and invest funds. And if they invest, obviously they would look for some returns.

3. Equipping the Hospital: Building of hospital with the infrastructure and equipping it well needs lot of money and investment which only an investor can provide. Same is true for maintenance of equipment, bills, insurances, AMC etc.

4. Staffing of Hospital: A hospital needs lot of skilled human resources, health care being a highly labour intensive industry. Doctors , nurses, technicians, para medical, administrative and clerical staff is required. Employment of non medical in hospital industry too has been increasing because of various regulatory requirements and complex processes other than just treating patients.

5. High regulatory requirements: globally the requirements of regulatory authorities have been sky rocketing and it requires a lot of manpower to maintain such data. Getting accreditation etc are processes which requires manpower, time, and a legal team. All these legal requirements are expensive.

6. Consumer protection act: This single important factor can increase the cost of healthcare for the patient. As doctors are increasingly scared of being dragged to court, they are always on backfoot and are forced to do defensive practice. Investigations are required for documentation. Patient and courts will ask for proof and goes by documentation. Medical problems are very complex and sometimes it is difficult to judge the future course of disease or decisions for surgery, or how patient will behave before or after surgery. A doctor, thus, will always try to play safe legally in present scenarios. Because everything he does will be scrutinized later, with retrospective wisdom, by courts. And since doctors manage so many patients everyday, they never know which one will harass and deceive them later. Mistrust has increased to such an extent that patient relatives do not understand even if things are told in good faith and in patient’s interest. Summarily doctors have to safeguard themselves from treatment as well as legal and documentation hassles.

7. Expensive legal services: Every case that goes to court involves lawyers and their expensive fees. Most of the time even though the doctors may be right, he has to defend himself with the help of lawyers. Law industry has been benefitted enormously because of consumer protection act at the cost of doctors. Increasing mistrust and unhappiness in patient’s mind definitely does not help patients and doctors. Strangely doctor’s fee are quite low but lawyers charges them astronomical amounts, which are beyond any logic.

8. Increased expectation of patients: People want exceptional care, best in the world with best technology, that also at a price less than even a meal in restaurant, and then they want a quick relief!! This is an expectation almost impossible to fulfil. Even government hospitals, which are funded by taxayer’s money find it difficult to provide free treatment with quality.

9. Large claims given by courts: in a country where people fight with their parents, brothers and sisters for money and property, it will be naive to think that idea of making money from doctor does not exist. With court compensations going into crores, doctors can sense many times that some patient relatives try to use the opportunity. They have nothing at stake so they try to make some noise on social media and harass the doctor in court or on social platforms. Even for patients, who had poor prognosis at the very onset of treatment, relatives can create problems. Doctors have no protection from these nuisanse. All these factors further enhance insecurity in doctor’s mind.

10. Expensive and time consuming medical education, on sale: Although an open secret , as reported routinely in news, medical seats are big business. Each private medical college seat sells for huge money. Such doctors, who have purchased seats have already behaved as investors. Once these doctors are in practice, they will try to recover the investment. This can obviously push up the health care costs not to mention vitiation of the medical fraternity.

11. Requirement for maintaining huge data and audits: to maintain standards, to have accreditations, for medicolegal issues , large data storage, audits and surveillance is required. These systems also need new systems and manpower.

12. Employment of large numbers of non-medical personnel: earlier management work was handled by doctors. All senior doctors were given small and differnet departments of administrative work at very little or no extra cost. But now for all these works separate administrators are appointed. Now a days ratio of doctors to nondoctors is higher as compared to previous years. Increased regulatory and and insurance system needs more non- medical staff. But productivity of hospital still remains by doctor-patient interaction. This change in arrangement in Hospitals has caused increase in costs and hence pushed the health care expenses. Advantages and disadvangages of these changes in arrangement will be known with time in future.

13. Non regulation of businesses associated with large health care industry: for example pharma industry, suppliers , biomedical, equipments, consumables. Such individuals, although play important part in medicine, cost, sale and purchase, but are largely unregulated. Unlike doctors, who are regulated by multiple governing bodies. But doctors are often perceived as culprits for these costs escalation.

14. Increasing extinction of Single doctor and small setups: for them it will be difficult to keep pace with newer technology and buying expansive equipments. It will be difficult for them to manage requirements of new medical system, legal problems . At the most they will continue to provide cheap medical services, but for only common and simple ailments. It will be difficult to manage serious patients and sick and complex patients in view of high public expectations . These set ups are under severe security threat and pressure because of non – acceptance of even genuinine complications of treatment. As legal requirements increase, these systems will become unviable and option of common public for cheaper, friendly services may become extinct. So it will decrease the easy and sometimes last option of doctors to settle with a small set up. Chances of them to work for investors and insurance companies will increase, and they will be cheap labour for industry.

15. Medical and health Insurance becoming indispensible: Insurance companies are every where. They sell policies to patients , as well as doctors. In fact, they are positioned between doctor and patients. They make money from both sides. Obviously more expensive the treatment, more dependence on insurance. Therefore a cycle has been set up. Increase in insurance cost will push health care more expensive and a vicious cycle is set up. One should not be surprised, if in future treatment to a large extent will be dictated by insurance companies.

16. Conversion to a industry: Because of above reasons Medical and health care has become an industry and needs investors. So as it is business proposition. Funded by investors and run on commercial principles, the doctors are being slowly reduced to skilled labour, alienated from the core.

17. Aging, multiple diseases: as life expectancy is increasing, it is leading to multiple diseases and more complex diseases and new expensive treatments. In this changed scenario and all people want to prolong life as much as possible. Cost of prolonging life with multiple problems is quite high. It consumes more medication and resouces and hence consequently pushes up the cost of medical treatment.

18. Evolution of complex infections: Advent of antibiotics and germ theory was thought to be game changer in medical history. But because bacteria proved to be smarter than humans and acquired resistant. New and expensive antibiotics have been gradually being rendered useless. Need for more antibiotics is causing treatment to be costlier.

19. Evolution of advanced treatment: Invention of Expensive and new diagnostic techniques along with highly technical treatments by industry is not without added cost. Although it may be useful in certain patients, but how much it will help overall in masses, for general treatment, as it increases the cost of overall treatment.

20. Increasing need for heightened security: It is not uncommon to have mobs causing physical harms to medical workers and damaging hospital properties. These incidents have caused increased need for security for the premises and adding to the cost.

21. Complex interplay of various industries eg pharma industry and consumable industry: large number of consumables pharmaceuticals, sutures, surgical instruments, IT industry, drugs, implants, medical supplies are required. These industries supply their items on a price commanded by them and there is complex interplay of various industries.

22. Non uniform and variable care and cost: each city has multiple hospitals. Care and cost varies in every set up. Even all government set ups are not uniform in facilities and cost. Private setups vary in cost and care, to the extent of maximum possible variations. All this non-uniformity has created confusion in the mind of patients and variation in financial issues.

23. Poor public health care facilities: due to less expenditure on health care, government health care facilities have been under developed. Less investment by government has given way to private health care to flourish.

24: Conversion to a industry model and entry of investors: all the above investments are very expensive. Doctors usually do not have that much money to invest. Therefore Investors and financers have become indispensible part of health. once investor invests money, it will be driven on business principles.

25. Future course: I do not see in future that this arrangement is going to change , rather it will be strengthened more and more and quality care will become more costly. Doctors will be totally alienated from financial and business aspect, because industry will not be sustainable without an investor.

Assessment

As we look at reasons above, doctors are no where in the financial picture and to be blamed for increase in overall health cost. But, since only doctors are visible part of industry, who treat and interact with patients, often they are blamed for the cost. They have actually being alienated from financial aspect, barring small percentage of doctors, who are financially literate. Consequently, the doctors who will be unable to entrench themselves in the business milieu will be unfit in future and hence extinct.

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

Contact: MarcinkoAdvisors@msn.com

https://www.crcpress.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

***

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

Options, Hurricanes and Hedging

Options, Hurricanes and Hedging

By Vitaliy Katsenelson CFA

We always look at our investment process and ask ourselves, “What can we do better?” How can we increase returns and lower risk? We think we have found a new, sensible way to do both.

We can hedge a portion of our market exposure with put options. Put options are contracts that trade on an exchange that give buyer (us) a right, not an obligation, to sell stock (or in our case Exchanged Traded Fund, ETF that mimics a market index) at a specific price for a certain period of time. Put options are cash settled, so when we exercise it or it expires we get cash in lieu of its value. Buying put options is very similar to buying hurricane insurance. We pay a premium, and that is the only cost we bear. Let’s restate this: The only risk we take is that the hurricane doesn’t hit or, in our case, that the stock market doesn’t decline, in which case our premium was “wasted.”

When you buy hurricane insurance you don’t suddenly start wishing for a hurricane, but you do get peace of mind from knowing that if Richard or Betty (we name hurricane like we name pets – makes TV watching so much more exciting, especially if your name is Richard or Betty) pays you a visit, the insurance company will restore your house to its original state.

We look at options “insurance” the same way we look at any asset: It can make sense at one price but make no sense at another. As you will see, at today’s price they make a lot of sense.

For the sake of simplicity let’s make a few assumptions: First, your portfolio is 100% correlated to the stock market. Second, your portfolio is 100% invested. And finally, let’s assume we’d be buying put options to insure your whole portfolio. These assumptions will simplify our example – we’ll modify them later.

Based on our assumptions, we’d buy put options on ETFs that track a particular stock market index – let’s say the S&P 500. As of January 2018, if we were to buy options on the S&P 500 ETF, SPY, that expire in one year and that are 5% out of the money (they don’t start paying us until the S&P declines 5% or more – think of this 5% as our deductible), the cost of insuring the entire portfolio would be about 4% of its total value. For a $1 million portfolio it would be $40,000.

If the stock market decline is greater than 5%, the insurance kicks in. After a 5% decline the value of our stock options starts going up proportionally to the decline in the portfolio. If stock market falls 20%, the $1 million portfolio declines to $800,000, but this $200,000 loss is offset by the appreciation of our put options, which go up by roughly $150,000. Thus the value of the portfolio is now $950,000 (remember our 5% deductible). Actually that number will most likely be less – somewhere between $910,000 and $950,000, because we paid $40,000 for the put options.

Without getting too deep into the weeds, the price of an option is driven by two additional factors: time (options are not good wine; they get cheaper with age) and expected volatility, which we’ll discuss next.

Let’s say you are insuring a home somewhere on the Florida coast. The general formula to calculate the cost of insurance is probability of loss times severity of loss. According to a study by Colorado State University, the climatological probability that the coast of Florida will get hit by a major hurricane in any particular year is 21%, so once every five years or so.

A 21% probability doesn’t mean that a hurricane will pay a visit every fifth year; no, it actually means that over a 100-year period there will on average be 20 hurricanes hitting the Florida coast. Hurricanes may, however, decide to pay a visit two or three years in a row and then take eight or ten years off.

21% is the number an insurance company uses to figure out the intrinsic cost of the insurance. But this is where we have to draw a distinction between climatological probability of loss (intrinsic or true cost) and expected probability of loss.

There are other factors that go into the total cost of the insurance contract, including the size of the policy, its duration, and the deductible. But if you hold all these factors constant, the only number that fluctuates due to supply and demand in insurance market is the expected probability of loss.

A year after a hurricane, homeowners are still licking their wounds from last year’s Richard or Betty. The pain is so recent that those who were hit expect that hurricanes will happen a lot more often and thus the expected probability (in the eyes of these consumers) rises to … pick a number; let’s say 50% (a hurricane every two years). (The insurance industry may have had its capital depleted by recent hurricanes, which will also drive prices higher, but we’ll ignore this factor in our discussion.)

However, if there is no hurricane for a while, let’s say for eight years, the memory and the pain of the last hurricane fade away. A new wave of homeowners moves in, who have seen hurricanes only from the comfort of their leather couches on the Weather Channel. Now the expectation of another hurricane drops to, let’s say, 10% (a storm every ten years).

Thus, though expected probability and thus insurance cost has fluctuated dramatically from 50% to 10%, intrinsic value has not changed; it is still 21%. This example is extremely oversimplified, but the key point is still the same: A rational homeowner would want to buy insurance when no one expected a hurricane to visit Florida and lock in that price for as long as possible. If you are an insurance company you want to write as much insurance as you can when hurricanes are priced at 50% expected probability, and you want to be out of the market when they are priced at a 10% probability.

In the options market, expected probability of loss is expressed in terms of the volatility that is priced into options. Ten years of bull market have eroded even the most unpleasant memories of the 2008 decline. Fear has been replaced by euphoria that has been further amplified by the steady daily appreciation of stocks. The mindset that markets will never decline ever again has gradually seeped into the collective stock market psyche. This is why volatility is cheap! How cheap? Average volatility priced into options since 2004 was about 18%; today it is at 10%. In 2008 it reached 80%, and it has reached 40% a few times since 2008.

Volatility is quickly becoming one of the most interesting assets in the otherwise not very interesting stock market. But the situation in the stock market is even more interesting than in the hurricane insurance market.

Stock markets are fueled by two often contradictory forces: human emotions and movement towards fair value. Human emotions may divorce stocks from their fair value for a considerable period of time, but movement towards fair value can only be postponed but not suspended. During bull markets greed begets greed and stock market valuations go from cheap to average to high to super-high to extra-super-high – we are running out of superlatives, but we hope you get the point: Valuations march ever higher … until the music stops.

It is hard to know what will trigger the “stops” part, but in the late stage of the bull market, stock market behavior is driven less and less by fundamental factors and more and more resembles a Ponzi scheme (though market commentators come up with plenty of rational explanations to wrap around their “this time is different” narrative).

Stocks march higher until the market runs out of buyers and collapses under its own weight. This is how movement towards fair value takes place – except that, historically, markets have rarely stopped at fair value; they have fallen to levels well below fair value. (Vitaliy wrote two books on this subject – we’d be happy to send you copies.)

***

***

We are not meteorologists, but we believe there is an important difference between hurricanes and stocks. Just as when you flip a coin each flip is an independent event and completely unconnected to the previous flip, hurricanes are independent events – just because Richard paid a visit to Florida last year does not change the probability of Betty’s appearance next year. Betty is not aware of Richard’s past misdeeds.

In contrast, the probability of a significant market decline is not constant; it is dependent on past movements of stocks. As markets stretch higher and higher, bulk of the appreciation was driven by expansion of price to earnings. Market valuation which was already high went higher. The gap between the price and intrinsic value creates a rubber band-like tension. The wider the gap the greater the tension and risk of eventually embarking on the return trip towards fair value.

Thus, in the case of the hurricane the climatological probability of 21% of loss remains constant no matter whether Richard or Betty appears, but in the stock market the probability of a sharp decline (an equities hurricane) increases as the gap between price and fair value widens.

In other words, today the value of volatility has increased while its price is making new lows. This is why we believe volatility is one of the most interesting assets we see now.

We are not market timers. We have no idea what the stock market will do in 2018, but we look at buying put options as an opportunity to hedge our portfolios with what we believe is significantly undervalued insurance.

Let’s delve into the practicality of our hedging strategy and modify some assumptions we made in the oversimplified example above. First, our portfolios are not 100% correlated to market indices. Considering that we own high-quality companies that are significantly undervalued, we believe our stocks will (temporarily) decline less than the market if there is a significant correction. Second, we have a lot of cash, which doesn’t require hedging.

Let’s say your account is 60% invested. We only need to worry about hedging that 60%. And considering that our stocks will decline less than the market, we need to buy puts to protect less than 60%. How much less? Historically our stocks have declined a lot less than the market during significant sell-offs. Our average portfolio was down 17-18% in 2008 when markets were down 35-45%. Our guestimate, therefore, is that we need to hedge about half of 60% or 30% of the total portfolio. So the total cost of insuring the portfolio against a decline of 5% or greater for a year would be 1.2% (4% – the cost of “insuring” the total portfolio – times 30%).

You can see how this strategy can reduce risk, but can it increase returns? The answer is a bit more complex and has two parts: First, if the market takes a deep dive, our appreciated put options together with cash will have increased buying power, since everything around us will be cheaper. And second, depending of when it happens – how much time value is left in the option – the value of the option may jump dramatically, as the market will be pricing in not 10% volatility but a much higher number – 30%, 40%? – your guess is as good as ours.

IMA’s ultimate goal is produce good risk-adjusted returns while keeping volatility of our clients’ blood pressure level to a minimum. We try to achieve this through our conservative stock selection, our transparent (sometimes overly long) communication, and now through buying inexpensive insurance on the portion of your portfolio.

Assessment

Our view on what true risk is has not changed. To value investors, true risk is not volatility (a stock temporarily declining in price), but a permanent loss of capital (the stock price decline is permanent). Our hedging strategy goal is to take advantage of an undervalued asset – volatility – and to decrease your (future) blood pressure just a little.

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.

Book Marcinko: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/
Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

***

***

Even More On Healthcare Costs

From 1999 – 2016

By BLS

***

***

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.

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

Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

***

https://www.crcpress.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989

How Amazon could lose its health-care bid

 While drug distributor stocks win

By Vitaliy Katsenelson CFA

Amazon.com has been one of the most innovative and disruptive companies of this century, with incredible success in areas that lie outside of what has been historically perceived as its core business (book selling).

Thus every announcement or speculation that Amazon will enter into a particular industry sends stocks of that industry into a tailspin. Investors sell first and ask questions later. When Amazon announced its purchase of Whole Foods, grocery stores declined as much as 30%. Even Tesco separated by an ocean from Whole Foods, was down on that news.

A big part of Amazon’s success has come from not being taken seriously by its competition. Amazon was able to create a huge lead in AWS (Amazon Web Services) because the competition (Alphabet and Microsoft did not give Amazon enough respect. Competitors thought, “what does a book seller know about the cloud?” Well, according to Amazon CEO Jeff Bezos, such thinking gave Amazon a much bigger lead over its rivals. Today, everyone takes Amazon seriously. Indeed, fear of Amazon is reaching paranoia levels.

McKesson

McKesson shares, for example, took a 20% dive during the fourth quarter of 2017 on speculation that Amazon would start distributing pharmaceuticals in the U.S. As McKesson shareholders, my firm took this speculation seriously, but upon further investigation, it became evident that such concerns were overblown. After the market cooled off from fourth-quarter worry about Amazon, McKesson shares recovered.

Then in late January, news that Amazon, JPMorgan Chase, and Berkshire Hathaway will join forces to drive down U.S. health-care costs hit health-care sector stocks, including McKesson.

How big of a punch could this be? McKesson is the largest distributor of pharmaceuticals in the U.S. Its 2018 sales are on track to exceed $210 billion. It is important to point out that McKesson is not a retailer but a distributor. It is one of three railroads for drugs in the U.S. McKesson distributes drugs to thousands of independent pharmacies, as well as giants like CVS Health, Rite Aid and Walmart McKesson operates two distinct distribution businesses: branded and generics. Though these businesses may look similar on the surface, the economic models of branded and generic businesses are quite different.

In the distribution of branded drugs (about 70% of McKesson’s revenue and 30% of profits) McKesson has a fee-for-service model. Pharmaceutical companies want to be involved in high-value activities: chiefly, inventing and manufacturing drugs. Getting drugs to thousands of pharmacies on a timely basis and collecting accounts receivable is not the business they want to be in. They don’t have the scale and distribution know-how of McKesson, Cardinal Health, and AmerisourceBergen — that collectively control 90% of drug distribution in the U.S. Thus the likes Pfizer and Bristol-Meyers Squibb pay drug distributors a small “fee for service,” and pharmaceutical companies (not distributors) negotiate prices with pharmacies.

More than 90% of McKesson’s profit in this segment is driven by volume, while just 10% is linked to changes in drug prices. Pfizer, for instance, despite its might, would still have higher distribution costs than McKesson because it doesn’t have McKesson’s scale and focus on distribution efficiency. So Pfizer is happy to pay McKesson this service fee and not think about drug distribution.

In its generic drug distribution business (about 30% of sales, 70% of earnings), McKesson uses its enormous buying power to buy drugs at low prices from generics manufacturers and sell at higher prices to pharmacies. Since it can source the same drug from various manufacturers, it leverages better prices from the likes of Mylan and Teva Pharmaceuticals Industries. Drug distributors are a significant deflationary force in generic pricing — good for consumers, not great for Teva or Mylan.

***

Moats

So McKesson has a wide protective moat, which includes the distinct possibility that Amazon’s adventure into drug distribution could lead to miserable failure. Here’s why:

1. Amazon cannot match McKesson’s buying power or negotiating power when it comes to generics. Current Amazon sales of pharmaceuticals are somewhere between zero and slightly above zero. McKesson’s sales are pushing $210 billion, about $65 billion of which comes from generics. Walmart is the fourth-largest pharmacy in the U.S., with sales of $20 billion. It had distributed drugs, but in 2016 it signed a distribution deal with McKesson. Walmart realized it could get better prices for generics through McKesson. Amazon, with near-zero sales, doesn’t stand a chance.

2. Amazon has no structural advantage. In the fight against Barnes & Noble and Best Buy, Amazon could charge lower prices than brick-and-mortar retailers because it had a structural advantage — it did not own stores and have all the extra costs associated with them. On one of his conference calls, McKesson CEO John Hammergren said his company was Amazon before Amazon was Amazon. Indeed. McKesson has highly specialized warehouses designed to distribute drugs. It can get any drug to any pharmacy in the U.S. within hours.

3. McKesson’s pretax margins are just 1.7%. If Amazon is looking to cut fat in the pharmaceutical industry, this is not where the fat is.

4. Distributing and selling drugs is not like selling or distributing most anything else. First, some drugs require refrigeration and others are controlled substances. Distributing them puts an extra regulatory (and self-policing) burden on distributors. McKesson has paid fines and recently received plenty of negative publicity from “60 Minutes” for distributing opioid pain medications to legal pharmacies who illegally sold the medicine on the black market.

Next, unlike in almost any other industry, pharma consumers are price-insensitive. If you are on Medicare, Medicaid, or a copay/low-deductible private insurance plan, you really don’t care if you are paying the lowest price because you don’t see the price (other than for copay). For this group of drug consumers, which constitutes the bulk of the U.S. population, lower drug prices are not an incentive to switch.

Moreover, let’s say Amazon starts an online pharmacy and self-distributes. Internet-savvy millennials are not the ones consuming most of the drugs in the U.S. Their parents and grandparents are. This demographic still has brick-and-mortar habits that are less likely to be broken anytime soon. Also, major pharmacies already have mail-order operations. It would be logical for Amazon to try to get into the almost-trillion-dollar pharma business, but its success here will be limited, and it will take decades to gain a meaningful market share

5. Suppose Amazon opens an online pharmacy and succeeds. It would probably take five to 10 years to reach sales of, let’s say, $10 billion (half of Walmart’s current drug sales). Let’s assume that Amazon self-distributes and will not use McKesson, or that it decides to employ the services of Cardinal Health. This would steal less than a year of current growth from McKesson, in five to 10 years.

Put simply, the laws of economics still apply — even to Amazon. Drug distributors are strong financially and have great scale and a tremendous purchasing-power advantage. Distributors’ stocks may take a dive but their business will be fine in the long run. The only competitive advantage Amazon has against drug distributors is that Wall Street completely ignores its profitability and focuses only on revenue growth.
McKesson is one of the U.S. stock market’s most interesting investments. Its business is future-proof. The demand for its product is not cyclical and is likely to continue to grow as the U.S. population ages. Higher or lower interest rates, recession or no recession, inflation or deflation, McKesson’s earnings power will continue to march ahead for a long time.

McKesson has a conservative balance sheet; it can pay off its debt in less than two years. McKesson pays a lower dividend than its competitors, but it has purchased a third of its shares over the last decade. Expected earnings of about $13 a share this year could grow to $15 in 2019. At a conservative 15 times earnings, McKesson is worth about $225 a share.

Assessment

However, McKesson has spun off its technology business into Change Healthcare, which could go public in 2019. McKesson owns 70% of Change Healthcare, and my firm estimates McKesson’s interest is worth about $25-$30 a share. Thus, a conservative estimate of McKesson’s value is about $250.

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.

Book Marcinko: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/
Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

***

https://www.amazon.com/Comprehensive-Financial-Planning-Strategies-Advisors/dp/1482240289/ref=sr_1_1?ie=UTF8&qid=1418580820&sr=8-1&keywords=david+marcinko
***

State Health and Life-Style Indicators

In the Deep South

http://www.MCOL.com

***

***

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.

Book Marcinko: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/
Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

Why I have no opinion on GE shares – today

On General Electric

By Vitaliy Katsenelson CFA

A lot of times I won’t have an insight into a business because I don’t understand it or because it’s too complex. GE is a great example today. I’m a value investor; I should be all over this stock that is making a generational low. Not at all. I looked at GE a half a dozen times over the years, and every single time I walked away without understanding the business or what it is worth.

Admiration?

To make things worse, despite GE’s being one of the most-admired companies in the US, I have always hated its culture. Jack Welch went into the corporate history books as the best American CEO ever. I’d argue that this history needs some serious rewriting. Welch built a company with a “beat this quarter” culture. Jack’s GE was not in the business of building moats and investing for the long run; he was in the business of beating quarters. In his book, Welch raved that from the early 2000s GE always beat Wall Street estimates. He was proud of how managers of one division were able to “come up with” a few more cents of earnings if another division fell short of its forecast. I kid you not – reread that sentence, three times. If I was at the SEC I’d investigating GE’s accounting.

GE played games with their earnings for a long time, but the reality that its cash flows couldn’t cover its dividend, which was supposedly half of its earnings, is what triggered a wake-up call for investors. GE is another reminder that it is incredibly dangerous to own a stock just because you like the dividend. Consistency of recurrence of dividend payments creates an optical illusion that the dividend will always will be there. Just think about it: GE’s dividend of 96 cents was half of what the company was expected to earn and it still couldn’t afford to pay it.

Polar opposite CEOs

I’d argue that Welch is on the opposite end of the spectrum from Jeff Bezos. Bezos doesn’t even know how to spell quarterly earnings. In one of his interviews Bezos explained that Amazon makes decision years out. So the current quarter’s report reflects decisions Amazon made several years ago. I don’t want to own companies that are run by the likes of Welch, but we own a few that are run by the likes of Bezos. When I hear management praise their ability to beat last quarter’s earnings, I run.

GE was ultimately destroyed by enormous capital misallocation. They assumed anything they touched with Six Sigma, independent of the price they paid, would turn to gold. So they didn’t care how much they paid for acquisitions. (I’ll discuss the topic “death by acquisition” next week in part two of this article.)

There is another lesson for me here. We always look for simplicity and transparency. If a company’s business is complex and opaque, we move on. One of the most important things in investing is what you do in between buying or selling a stock. After you buy it is just a matter of time before your initial assumptions come under fire. Maintaining rationality throughout your ownership of the company is paramount, and to do that you need to understand the business well. Thus (at least for us) the business cannot be opaque or overly complex. (We set an upper limit to the IQ required of us to understand the business.)

Assessment

So, that’s why I have no opinion on GE shares today.

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.

Book Marcinko: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/
Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

***

***

Becoming financially independent to help other people?

Help both the planet and the poor

 

By Rick Kahler CFP®

Here’s is how you can help both the planet and the poor: Live frugally and save for your own old age.

In other words, become a millionaire or close to it.

  • Are you concerned about saving the planet?
  • Would you like to see more government funding for research into projects like developing clean energy?
  • How about helping people who cannot help themselves?
  • Would you like to see more government spending for marginalized populations?

It’s easy to see that reducing your lifestyle can reduce your carbon footprint to help the planet. But how does your becoming financially independent help other people?

It means you will not become a consumer of precious government or charitable resources that could be redirected to making a difference in both preserving the planet and eliminating poverty. If you don’t provide for yourself financially, chances are good that you will end up dependent on government funding for your existence.

Take long-term health care, for example

Forty-five percent of all nursing home spending is funded by our tax dollars. Of Medicaid’s $565 billion dollar annual budget (2016 figures), 20% or $113 billion goes for nursing home care. The federal government—meaning we the taxpayers—picks up the tab for 65% of all people in nursing homes. Medicaid pays for about 1 million of the some 1.5 million nursing home beds in the US.

The average annual amount the government spends is $113,000 for a semi-private room. What’s interesting is the actual average cost of a semi-private nursing home room is around $225 a day, or about $82,000. I am not sure where the other $31,000 goes, but my hunch is that it’s inefficiently spent on the salaries of those who administer the program. So, if you can save enough to pay your nursing home costs, you get an extra bonus of saving an additional $31,000 in government spending.

One way to relieve the government of the cost of your nursing home care is to purchase long term care insurance. According to Morningstar, the average annual premium for long-term care policies being sold in 2014 was $2772. While this isn’t cheap, neither is it prohibitively expensive for many middle-class Americans, especially compared to common expenditures like unlimited cell phone service or annual vacations.

In addition to direct payments like Medicaid, there’s another cost to society from those who fail to or are unable to provide for their own old age. This is the need for family members to become unpaid caregivers. For 2013, Morningstar estimated the dollar value of such care at $470 billion. If caregivers quit jobs or take time off, or if they are forced to take Social Security benefits early, the result is lost tax revenue and increased government spending. In addition, those who sacrifice their own resources to care for parents may carry a pattern of retirement scarcity on into the next generation.

The wealthy

It appears to be a common misperception that “the wealthy” are somehow a drain on society who use more than their fair share of resources. There may be some validity to this perception for the relatively few uber-rich with multiple homes and conspicuously lavish lifestyles.

However, quite the opposite is true for the much greater number of ordinary people who accumulate enough wealth to take care of themselves until the end of their lives. When you are able to fund your own lifetime care, you do not need your family members and fellow taxpayers to provide the resources you require. And at the end of your life, you might even be able to bequeath some of your estate to help the poor and the planet. 

***

***

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.

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

Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

***

***

US Childhood Obesity Trends

FY 2016

By http://www.MCOL.com

***

***

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.

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

Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

***

On Domestic Price Changes and Inflation

1997 – 2017 Selected Goods, Services and Wages

By BLS

***

***

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.

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

Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

***

***

%d bloggers like this: