BUSINESS MANAGEMENT STUDY: Physician Vertical Integration

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BY HEALTH CAPITAL CONSULTANTS, LLC.

DEFINITION: Vertical integration is an arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the supply chain produces a different product or service, and the products combine to satisfy a common need.

CITE: https://www.r2library.com/Resource/Title/0826102549

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Study: Vertical Integration Not Financially Beneficial for Physicians


A study released in the December 2021 issue of Health Affairs examined the correlation between hospital/health system ownership of physician practices and physician compensation. While a number of studies have analyzed the “rapidly growing trend” of vertical integration from the hospital/health system perspective, this is the first study to evaluate vertical integration from the physician practice perspective.

This Health Capital Topics article will discuss the study’s findings and potential implications. (Read more…) 

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The RETURN of Paper Dental Records?

By Darrell Pruitt DDS

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More reasons to stick with paper if you haven’t yet become paperless, Doc 

“Paying Ransomware Paints Bigger Bullseye on Target’s Back – Ransomware attackers often strike targets twice, regardless of whether the ransom was paid. Paying ransomware attackers doesn’t pay off and often paints a bigger target on a victim’s back. Eighty percent of ransomware victims that paid their attackers were hit a second time by the malware scourge.” – Threatpost, June 8, 2022.

A dentist can avoid the second ransomware attack by returning to paper … What? Yeah. I said it.

“New ransomware numbers come from a Cybereason’s April ransomware survey of 1,456 cybersecurity professionals. According to the gated report (registration required), victims that were successfully extorted were not only targeted a second time, but frequently data encrypted by criminals later became unusable during the decryption process because of corruption issues.”

OR – one can retire!

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Dr. Marcinko Interviewed on Physician Retirement and Succession Planning

imba inc

                  Physicians Have Unique Challenges, Opportunities

By Ann Miller RN MHA CMP

[Executive-Director]

Medical Executive-Post Publisher-in-Chief, Dr. David Edward Marcinko MBA CMP™, and financial planner Paul Larson CFP™, were interviewed by Sharon Fitzgerald for Medical News, Inc. Here is a reprint of that interview.

Doctors Squeezed from both Ends

Physicians today “are getting squeezed from both ends” when it comes to their finances, according Paul Larson, president of Larson Financial Group. On one end, collections and reimbursements are down; on the other end, taxes are up. That’s why financial planning, including a far-sighted strategy for retirement, is a necessity.

Larson Speaks

“We help these doctors function like a CEO and help them quarterback their plan,” said Larson, a Certified Financial Planner™ whose company serves thousands of physicians and dentists exclusively. Headquartered in St. Louis, Larson Financial boasts 19 locations.

Larson launched his company after working with a few physicians and recognizing that these clients face unique financial challenges and yet have exceptional opportunities, as well.

What makes medical practitioners unique? One thing, Larson said, is because they start their jobs much later in life than most people. Physicians wrap up residency or fellowship, on average, at the age of 32 or even older. “The delayed start really changes how much money they need to be saving to accomplish these goals like retirement or college for their kids,” he said.

Another thing that puts physicians in a unique category is that most begin their careers with a student-loan debt of $175,000 or more. Larson said that there’s “an emotional component” to debt, and many physicians want to wipe that slate clean before they begin retirement saving.

Larson also said doctors are unique because they are a lawsuit target – and he wasn’t talking about medical malpractice suits. “You can amass wealth as a doctor, get sued in five years and then lose everything that you worked so hard to save,” he said. He shared the story of a client who was in a fender-bender and got out of his car wearing his white lab coat. “It was bad,” Larson said, and the suit has dogged the client for years.

The Three Mistake of Retirement Planning

Larson said he consistently sees physicians making three mistakes that may put a comfortable retirement at risk.

  1. The first is assuming that funding a retirement plan, such as a 401(k), is sufficient. It’s not. “There’s no way possible for you to save enough money that way to get to that goal,” he said. That’s primarily due to limits imposed by the Internal Revenue Service, which allows a maximum contribution of $49,000 annually if self-employed and just $16,500 annually until the age of 50. He recommends that physicians throughout their career sock away 20 percent of gross income in vehicles outside of their retirement plan.
  2. The second common mistake is making investments that are inefficient from a tax perspective. In particular, real estate or bond investments in a taxable account prompt capital gains with each dividend, and that’s no way to make money, he said.
  3. The third mistake, and it’s a big one, is paying too much to have their money managed. A stockbroker, for example, takes a fee for buying mutual funds and then the likes of Fidelity or Janus tacks on an internal fee as well. “It’s like driving a boat with an anchor hanging off the back,” Larson said.

Marcinko Speaks

Dr. David E. Marcinko MBADr. David E. Marcinko MBA MEd CPHQ, a physician and [former] certified financial planner] and founder of the more specific program for physician-focused fiduciary financial advisors and consultants www.CertifiedMedicalPlanner.org, sees another common mistake that wreaks havoc with a physician’s retirement plans – divorce.

He said clients come to him “looking to invest in the next Google or Facebook, and yet they will get divorced two or three times, and they’ll be whacked 50 percent of their net income each time. It just doesn’t make sense.”

Marcinko practiced medicine for 16 years until about 10 years ago, when he sold his practice and ambulatory surgical center to a public company, re-schooled and retired. Then, his second career in financial planning and investment advising began. “I’m a doctor who went to business school about 20 years ago, before it was in fashion. Much to my mother’s chagrin, by the way,” he quipped. Marcinko has written 27 books about practice management, hospital administration and business, physician finances, risk management, retirement planning and practice succession. He’s the founder of the Georgia-based Institute of Medical Business Advisors Inc.

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Succession Planning for Doctors

Succession planning, Marcinko said, ideally should begin five years before retirement – and even earlier if possible. When assisting a client with succession, Marcinko examines two to three years of financial statements, balance sheets, cash-flow statements, statements of earnings, and profit and loss statements, yet he said “the $50,000 question” remains: How does a doctor find someone suited to take over his or her life’s work? “We are pretty much dead-set against the practice broker, the third-party intermediary, and are highly in favor of the one-on-one mentor philosophy,” Marcinko explained.

“There is more than enough opportunity to befriend or mentor several medical students or interns or residents or fellows that you might feel akin to, and then develop that relationship over the years.” He said third-party brokers “are like real-estate agents, they want to make the sale”; thus, they aren’t as concerned with finding a match that will ensure a smooth transition.

The only problem with the mentoring strategy, Marcinko acknowledged, is that mentoring takes time, and that’s a commodity most physicians have too little of. Nonetheless, succession is too important not to invest the time necessary to ensure it goes off without a hitch.

Times are different today because the economy doesn’t allow physicians to gradually bow out of a practice. “My overhead doesn’t go down if I go part-time. SO, if I want to sell my practice for a premium price, I need to keep the numbers up,” he noted.

Assessment

Dr. Marcinko’s retirement investment advice – and it’s the advice he gives to anyone – is to invest 15-20 percent of your income in an Vanguard indexed mutual fund or diversified ETF for the next 30-50 years. “We all want to make it more complicated than it really is, don’t we?” he said.

QUESTION: What makes a physician moving toward retirement different from most others employees or professionals? Marcinko’s answer was simple: “They probably had a better shot in life to have a successful retirement, and if they don’t make it, shame on them. That’s the difference.”

More:

Conclusion

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

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

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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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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™
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Of Financial Certifications and Designations

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The “Too Numerous to Count” Syndrome

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

Dr. MarcinkoThe following list of certifications enumerates only a partial exposure of the often nebulous field of “financial planning credentials” that presently exist in the market place. 

Good … and Not So

Some of these professional designations are awarded to individuals in the financial planning or financial “advisory” space after [some] diligent study and [often not so] arduous testing; others not so.

Disclaimer: I am a reformed Certified Financial Planner®, Series 7 [stock-broker], 63 and 65 license holder, and RIA representative who also held all applicable insurance and security licenses.

The individuals hold not only proper education [some only reguire a HS diploma or GED] as evidenced by the credential; the holders are often people of ethics [hopefully] and competence [usually]. But, not all credentials are the same. Some credentialing bodies have higher educational requirements that also require years of experience and a thorough background search. Others are awarded after only a few hours of study and, most all, remain non-fiduciary in nature.

Too Many To Count – Syndrome

In medicine, the abbreviation TNTC is well known. Sometime, I think this term is better applicable to the plethora of “credentials” in the financial services industry.

dhimc-book1

The Designation Line-up

A brief description for some of these financial designations [not degrees] follows:

  • AAMS – Accredited Asset Management Specialist
  • AEP – Accredited Estate Planner
  • AFC – Accredited Financial Counselor
  • AIF – Accredited Investment Fiduciary
  • AIFA – Accredited Investment Fiduciary Auditor
  • APP – Asset Protection Planner
  • BCA – Board Certified in Annuities
  • BCAA – Board Certified in Asset Allocation
  • BCE – Board Certified in Estate Planning
  • BCM – Board Certified in Mutual Funds
  • BCS – Board Certified in Securities
  • C3DWP – 3 Dimensional Wealth Practitioners
  • CAA – Certified Annuity Advisor
  • CAC – Certified Annuity Consultant
  • CAIA – Chartered Alternative Investment Analyst
  • CAM – Chartered Asset Manager
  • CAS – Chartered Annuity Specialist
  • CCPS – Certified College Planning Specialist
  • CDFA – Certified Divorce Financial Analyst
  • CEA – Certified Estate Advisor
  • CEBS – Certified Employee Benefit Specialist
  • CEP – Certified Estate Planner
  • CEPP – Chartered Estate Planning Practitioner
  • CFA – Chartered Financial Analyst
  • CFE – Certified Financial Educator
  • CFG – Certified Financial Gerontologist
  • CFP – Certified Financial Planner
  • CFPN – Christian Financial Professionals Network 
  • CFS – Certified Fund Specialist
  • CIC – Chartered Investment Counselor
  • CIMA – Certified Investment Analyst
  • CIMC – Certified Investment Management Consultant
  • CLTC – Certified in Long Term Care
  • CMFC – Chartered Mutual Fund Counselor
  • CMP – Certified Medical Planner™
  • CPC – Certified Pension Consultant
  • CPHQ – Certified Professional in Healthcare Quality
  • CPHQ – Certified Physician in Healthcare Quality
  • CPM – Chartered Portfolio Manager
  • CRA – Certified Retirement Administrator
  • CRC – Certified Retirement Counselor
  • CRFA – Certified Retirement Financial Advisor
  • CRP – Certified Risk Professional
  • CRPC – Chartered Retirement Planning Counselor
  • CRPS – Chartered Retirement Plan Specialist
  • CSA – Certified Senior Advisor
  • CSC – Certified Senior Consultant
  • CSFP – Certified Senior Financial Planner
  • CSS – Certified Senior Specialist
  • CTEP – Chartered Trust and Estate Planner
  • CTFA – Certified Trust and Financial Advisor
  • CWC – Certified Wealth Counselor
  • CWM – Chartered Wealth Manager
  • CWPP – Certified Wealth Preservation Planner
  • ECS –  Elder Care Specialist
  • FAD – financial Analyst Designate
  • FIC – Fraternal Insurance Counselor
  • FLMI – Fellow Life Management Institute
  • FRM – Financial Risk Manager
  • FSS – Financial Services Specialist
  • LIFA – Licensed Insurance Financial Analyst
  • MFP – Master Financial Professional
  • MSFS – Masters of Science Financial Service Degree
  • PFS – Personal Financial Specialist
  • PPC – Professional Plan Consultant
  • QFP – Qualified Financial Planner
  • REBC – Registered Employee Benefits Consultant
  • RFA – Registered Financial Associate
  • RFC – Registered Financial Consultant
  • RFG – Registered Financial Gerontologist
  • RFP – Registered Financial Planner
  • RFS – Registered Financial Specialist
  • RHU – Registered Health Underwriter
  • RPA – Registered Plans Associate
  • WMS – Wealth Management Specialist

This list is intentionally incomplete and it is not intended to be an endorsement of any credential by the Institute of Medical Business Advisors, Inc www.MedicalBusinessAdvisors.com

Alphabet Soup

Obviously, these “professional” designations spread across multiple industries. For example there is an alphabet of designations in the brokerage and securities field, another alphabet in the insurance industry and within the insurance industry, designations exist for those who meet face to face with prospective customers, another for those who provide client service and yet another in underwriting the various insurance products. Certainly when the designations are complied in a list such as that above, they present a dizzying array of apparent qualifications.

Assessment

While in general, education for the financial service [and medical] professional is good for everybody, there are certain things that you should do as proper due diligence to protect your family and your financial assets. What are they?

Disclaimer: I am also founder of the Certified Medical Planner™ online educational program in health economics for financial advisors and medical management consultants. www.CertifiedMedicalPlanner.org

Conclusion

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

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

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

LEXICONS: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
BLOG: www.MedicalExecutivePost.com

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

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PODCAST: Reference Based Pricing for Medical Facility Fees

By Eric Bricker MD

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CITE: https://www.r2library.com/Resource/Title/082610254

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