TRICK -or- TREAT: Halloween Night

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SOURCE: Dianna “Mick” McDougall, Sources: Home Depot, Getty Images

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Good Evening

We’re not sure anyone’s administered a Halloween costume contest for almost 1million ME-P readers, but we’re going to give it a shot.

Subscribe, Like and Comment Reply to this post with a pic of your Halloween costume (PG-13 rated or less), and we’ll choose a winner[s] to shout out in a future ME-P.

GOOD LUCK and STAY SAFE

Thank You

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TRANSACTIONAL STOCK ANALYSIS: What it is?

Versus Technical Analysis

By Staff Reporters

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In traditional finance transaction data is guarded by exchanges, brokers, banks and regulators. It’s not accessible to everyone and big players pay a fortune for it.

But, in crypto, Transaction Data is public and on-chain – but it’s not usable by everyone. So, manually making sense of raw blockchain data is practically impossible. The data needs to be processed and analyzed to be made useful. That’s what sophisticated blockchain analytics tools are doing.

The combination of on-chain data and transaction analysis is something that hasn’t been before – in crypto or traditional finance. Getting access to transaction data and tools for searching and analyzing it will unlock a goldmine of potential insight.

People who have been on the inside of projects and see how the sausage is made know that the explanations for price movements are often simple and based on key players buying and selling. When the biggest holders are dumping the price is likely to go down. When a major new buyer takes a position prices are likely to go up.

That’s insight traditional Technical Analysis cannot provide, because it’s limited to looking at price movements. Transaction data, instead, is the underlying activity that generates prices in crypto.

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

Technical Analysis: https://medicalexecutivepost.com/2022/06/23/the-technicians/

Related: https://medicalexecutivepost.com/2022/09/25/what-is-sentimental-stock-market-analysis/

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DAILY UPDATE: Are we living through Dot-com Bust 2.0?

By Staff Reporters

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Also known as the internet bubble or the information technology bubble, the dotcom bubble was the unprecedented rise in equity valuations of internet-based tech companies during the bull market of the late 1990s.

Thanks mainly to speculation and substantial funding for these new internet start-ups, investments in dot-coms (named as such for the .com online top-level domain [TLD] used by such companies) boosted the NASDAQ Composite Index (COMP) from 751 in January 1995 to a peak of 5,048.62 on March 10, 2000. But the bubble eventually burst in March 2000, with many companies failing to even come close to fulfilling their promise. As such, the NASDAQ fell by more than 75 percent between March 2000 and October 2002, thus wiping out more than $5 trillion in market value.

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  • Some financial and economic analysts are beginning to compare this year’s tech rout (which has cost the NASDAQ $8 trillion in value so far) with the bursting of the dot-com bubble in 2000–2002, when the NASDAQ lost the equivalent of $8.6 trillion in today’s dollars. The industrial-focused Dow, on the other hand, is on track for its best October in history.
  • The FOMC is likely a lock to hike interest rates by a large75 basis points on Wednesday for the fourth straight meeting. Evidence that its inflation-fighting campaign is working could come on Friday, with the October jobs report.

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

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

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DR. NATHANIEL POTTER: Rest in Peace [R.I.P]

By Dr. David Edward Marcinko MBA

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READ HERE: https://medicalexecutivepost.com/2009/08/27/off-road-touring-with-dr-marcinko-part-vi/

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OCTOBER: “Financial Planning” Month for Doctors

History for Us All

By Staff Reporters

http://www.CertifiedMedicalPlanner.org

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History of Financial Planning Month

Financial planning as a concept has been around for a long time, but not as we know it today. When Loren Dunton set up the Society for Financial Counseling Ethics in 1969, or when the first graduating class of the College of Financial Planning graduated in 1973, financial planning was very different. It was centered around selling limited partnerships, which came to end with the Tax Reform Act of 1986.

However, financial planning re-emerged — all thanks to Richard Averitt III. The certified financial planner gave new meaning to financial planning, this time with a focus on who the client is and what their needs are. This approach was purely methodological in nature.

Soon after, financial planning picked up again. According to the Certified Financial Planner (C.F.P.) Board of Standards in Denver, today, there are more than 94,000 C.F.P.s worldwide, including over 48,000 in the U.S. Additionally, there are also organizations that have been set up for C.F.P.s, such as the Financial Planning Association (FPA), which has approximately 22,000 members.

Financial planning, as we know it now, includes investing, tax planning, retirement planning, and basically other ways to get your finances in order and create mindful budgets to ensure a safe and secure future. Getting a step ahead of your spending and finances is beneficial in the long run and Financial Planning Month in October is the perfect time to do that.

MORE: https://medicalexecutivepost.com/2022/10/27/october-national-financial-planning-month/

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US Treasury “I” Bonds [Maybe -OR- Not?]

HOW DO THEY WORK?

By Staff Reporters

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What is an I bond and how do they work?

DEFINITION: A a 30-year Treasury bond that protects you against inflation. It pays both a fixed interest rate and a rate that changes twice a year with inflation.

Interest is compounded semiannually, meaning every 6 months a new interest rate is applied to a new principal value that equals the prior principal plus the interest earned in the last 6 months. The bond’s value grows because it earns interest and because the principal value gets bigger.

You can buy $10,000 worth from the Treasury and another $5,000 using your tax refund. You can cash them in after 12 months, but if you do so in less than 5 years, you lose the last 3 months of interest.

Taxes on I Bonds?

You must pay federal income tax but no state and local taxes on I bonds. You can either report each year’s earnings or wait to report all the earnings when you cash the bond.

If you use the money for qualified higher education expenses, you may not owe tax on the earnings.

Current Interest Rates

The current the record high 9.62% interest rate on I bonds issued through October will drop Nov. 1st, 2022 to 6.48%.

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CONTRARY OPINION: https://www.msn.com/en-us/money/markets/why-i-don-t-want-i-bonds/ar-AA13uyWg?cvid=ee66997c39214055ab89f3883629bb92

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MONOGRAM: The “Knee Joint” Replacement IPO

Modernizing the $19.6B Knee Replacement Industry

By Staff Reporters

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One way to classify joints is by range of motion. Immovable joints include the sutures of the skull, the articulations between teeth and the mandible, and the joint located between the first pair of ribs and the sternum. Some joints have slight movement; an example is the distal joint between the tibia and fibula. Joints that allow a lot of motion (think of the shoulder, wrist, hip, and ankle) are located in the upper and lower limbs.

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KNEE: No bones about it

The $19.6b joint-replacement industry uses outdated methods, leading to 100,000 surgeries failing annually. Monogram aims to fix it with precision surgical robots + personalized implants.

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HALLOWEEN: Stock Index Indicator?

SELL IN MAY – AND GO AWAY

By Staff Reporters

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Essentially, the HALLOWEEN INDICATOR is a market-timing strategy. It argues that, by buying into the stock market after Halloween and selling at the end of April, investors would generate a better annual return on their portfolio than if they had remained invested throughout the year. Sell in May and go away is an investment strategy for stocks based on a theory that the period from November to April inclusive has significantly stronger stock market growth on average than the other months

The practice of abandoning stocks beginning in May of each year is widely thought to have its origins in the United Kingdom. The privileged class would leave London and head to their country estates for the summer months, where they would largely ignore their investment portfolios. To this day, many stock market watchers have postulated that the corresponding impact of summer vacations on market liquidity and investors’ risk aversion is at least partly responsible for the difference in seasonal returns.

In what is considered to be a seminal piece of research on the subject, “The Halloween Indicator, ‘Sell in May and Go Away’: Another Puzzle,” authors Sven Bouman and Ben Jacobsen were among the first to document a strong seasonal effect in global stock markets. In 36 of the 37 developed and emerging markets they studied between 1973 and 1998, the authors found returns in the November through April period to be, on average, significantly higher than those in the May through October period, even after taking transaction costs into account. What puzzled the authors was the fact that, while the anomaly was widely known and seemed to offer considerable economic rewards, it had not been arbitraged away.

More recently, Jacobsen partnered with Cherry Zhang on a follow up study, titled, “The Halloween Indicator: Everywhere and All the Time,” and extended the research to 108 stock markets using all historical data available. The result was a sample of 55,425 monthly observations (including more than 300 years of UK data), which helped to rebut any criticisms of data mining and sample selection bias. The results were compelling, as the November through April “winter” period delivered returns that were, on average, 4.52% higher than the “summer” returns. The Halloween effect was evident in 81 out of 108 countries. The size of the Halloween effect varied across geographies. It was found to be stronger in developed and emerging markets than in frontier markets.

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MORE: https://medicalexecutivepost.com/2021/10/30/the-halloween-index-investment-strategy/

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The Future of Nursing?

By Staff Reporters

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The future of healthcare will be defined by nurses. Giving them a platform where they can be seen, heard, and valued for what they contribute each and every day is healthcare innovation.

connectRN is an empowered community of nurses, helping them access the flexible work opportunities they want. Nurses use connectRN to find work, access resources, and get much-needed peer support. And healthcare facilities can get the staff they need to provide high-quality patient care.

From in-app shift scheduling to same-day pay to 24/7 support, connectRN offers nurses a modern, seamless, and stress-free experience. After all, thriving clinicians provide the best care.

Learn more about how connectRN is disrupting the healthcare industry.

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October is “Financial Planning” Month [Especially for Medical Professionals]

By Staff Reporters

SPONSOR: http://www.CertifiedMedicalPlanner.org

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U.S. Financial Planning Month is observed nationwide during October.

With the holiday season coming up (aka hefty gifting expenses) and the new year just around the corner, Financial Planning Month is a great opportunity to get your finances and budgets in order before life gets too busy.

CALL US TODAY TO GET STARTED: https://medicalexecutivepost.com/coach/

CALL FOR A SECOND OPINION: https://medicalexecutivepost.com/schedule-a-consultation/

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

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ELON MUSK’S TWITTER FOR DOCTORS: Same, Change, Grow or Die?

By Staff Reporters

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NEWS FLASH!

Elon Musk, the richest person on the planet, is the CEO of the world’s most valuable automaker TESLA, heads up a $125 billion aerospace giant, and as of yesterday, is the owner of a social media company Twitter.

According to multiple reports, Musk closed the $44 billion deal last night, less than 24 hours before today’s 5pm ET deadline. He began his reign as “Chief Twit” by firing at least four executives, including CEO Parag Agrawal (who was reportedly escorted out of Twitter’s SF headquarters). Later today, Musk is expected to address anxious employees, who might be worried they’ll face the same fate as their former leader. Historically:

  • Musk acquired a large stake in Twitter and later signed a deal to buy all of it.
  • Then he tried to back out, citing bot issues, but Twitter sued him to enforce the agreement.
  • Musk blinked weeks ahead of a trial, and said he would buy Twitter.

Now What?

So begins Musk’s attempt to, in his words, “help humanity” by trying to turn Twitter into a “common digital town square.”

We know that Musk has ultra-ambitious goals for the company: 5x Twitter’s revenue by 2028, supercharge the subscriptions business, and turn Twitter into a super app called “X.” But murkier is the path he intends to take to get there, and he’s already sending mixed signals about his intentions. And what about doctors and the healthcare industrial complex? Will it remain the same or change?

History

Back in early 2014 the first list of the “Top 100 Twitter Accounts For Healthcare Professionals To Follow” was born. Then, the biggest social media-related question to hurdle wasn’t, “Who should I be following on social media?” but rather, “Should I even be on social media at all?”

Many years later, it’s safe to say that social media has firmly established itself in the healthcare industry. By finding healthcare Twitter accounts that are related to your specialty, you can have access to the best information and always remain within the loop.

Top 100 Healthcare Twitter Accounts T...

But, with the Elon Musk takeover of Twitter, the medicine and healthcare accounts available may change, remain static or grow, and finding the most valuable medical accounts to follow has become more challenging than ever.

Today

Today, the question truly is, “Who should I be following?” Thankfully, you have been covered since 2020.

HERE: https://emedcert.com/blog/top-healthcare-twitter-accounts-to-follow

Now, colleagues should follow the rest of the Musk story in 2022 and beyond.

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MANUAL MORTGAGE UNDERWRITING FOR DOCTORS: What is it, Really?

By Staff Reporters

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Editor’s Note: FHA manual underwriting guidelines were updated in 2020 and require that, for those applicants with credit scores below 620 or a debt-to-income (DTI) ratio that exceeds 43%, mortgage applications must be manually underwritten. For a fiercely frugal doctor, or debt adverse medical professional with “poor” credit because of little to no debt, this may actually be good for them. But, it may also make it difficult for a modern automated mortgage lender to issue a loan. Our debt ridden and consumer driven society is largely causative.

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

Consumption: https://medicalexecutivepost.com/2018/09/18/are-doctors-practitioners-of-conspicuous-consumption/

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With many Lenders now making automated lending decisions, much like emerging healthcare A.I. initiatives, it can seem confusing why others are still sticking to a manual process. But, a few physicians with little to no credit/debt history, and hence a low FICO score, may actually find it a bonus.

Banking A.I.: https://www.msn.com/en-us/money/companies/this-american-bank-is-closing-the-most-branches/ar-AAT3PvQ?li=BBnbfcL

Automated Decision Making

Many mortgage lenders currently use computer-based systems to assist with their lending decisions. These systems will look at your client’s credit score, borrowing history, etc. to decide whether or not to approve a mortgage application. It can then be argued that the value of an Underwriter is decreasing; much like physicians are slowly being devalued for many emerging reasons.

ORDER: https://www.amazon.com/Business-Medical-Practice-Transformational-Doctors/dp/0826105750/ref=sr_1_9?ie=UTF8& qid=1448163039&sr=8-9&keywords=david+marcinko

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So, Why Manual Underwriting?

Now, understand that not all [minority of clients] applicants will fit into the box that automated decision making systems like. Due to this, there is a need for manual decisions to be made, that will benefit both the Lender and the Borrower (client)!

Manual underwriting allows our Underwriters to look at the bigger picture and get a balanced view on the potential physician and/or client’s ability to repay the mortgage they are applying for. This means they can have a look at the overall risk to the Society and consider what conditions can be used to meet our lending policies. By using manual underwriting in every case, this embeds sensible and responsible decision making within the Society.

A hands-on approach means a look deeper into your financial position, and consider cases where physician clients may have:

  • Low credit scores;
  • Minimal credit history;
  • Self-employed applicants;
  • Applicants in fixed term employment contracts; and
  • Many more; like really a good personal risk profile.

Manual Underwriters

It is clear to see the benefits for the Society, and physicians, retrospectively. Some benefits of manual underwriting, according to experts David Cox and Richard Groom, include;

“I like that we can look at cases that many other high street lenders wouldn’t consider. This doesn’t mean we are risk takers; we just apply common sense”.

“I enjoy the hands-on approach we apply. Every applicant is different, so why should they all be pushed through an automated system?”

“Just because something doesn’t quite fit, it shouldn’t result in a computer says no decision. It’s great to be able to look at an individual’s situation and see what changes we can make to turn the negative to a positive”.

The great thing about manual underwriting is that while our lending policy is the core of what we do, applying a manual approach means we can consider applications outside of this, where it benefits the borrower and the Society”.

MORE: https://www.bankrate.com/mortgages/manual-underwriting/

ORDER: 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

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Crafting a Medical Practice Strategic Marketing Plan

Necessary Today – Not So In the Past

dem

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

Invite Dr. Marcinko

Marketing plays a vital role in successful practice ventures. How well you market your practice, along with a few other considerations, will ultimately determine your degree of success or failure. 

The key element of a successful marketing plan is to know your patients – their likes, dislikes and expectations. By identifying these factors, you can develop a strategy that will allow you to arouse and fulfill their wants and needs. 

The Beginning

Identify your patients by their age, sex, income/educational level and residence. At first, target only those patients who are more likely to want or need your medical services. As your patient base expands, you may need to consider modifying the marketing plan to include other patient types or medical services. 

Your marketing plan should be included in your medical business plan and contain answers to the questions asked below:

·Who are your patients; define your target market(s)?

·Are your markets growing; steady; or declining?

·How is the practice unique?

·What is its market position?

·Where will we implement the marketing strategy?

·How much revenue, expense and profit will the practice achieve?

·Are your markets large enough to expand?

·How will you attract, hold, increase your market share?

·If a franchise, how is your market segmented?

·How will you promote your practice and services?

Practice Competition

Competition is a way of life. We compete for jobs, promotions, scholarships to institutions of higher learning, medical school, residency and fellowship programs, and in almost every aspect of our lives. 

When considering these and other factors, we can conclude that medical practice is a highly competitive, volatile arena. Because of this volatility and competitiveness, it is important to know your medical competitors. Questions like these can help you determine:

·Who are your five nearest direct physician competitors?

·Who are your indirect physician competitors?

·How are their practices: steady; increasing; or decreasing?

·What have you learned from their operations or advertising?

·What are their strengths and weaknesses?

·How do their services differ from yours?

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Chief-Marketing-Officer

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Patient Targeting

Patient targeting generally describes the strategic competitive advantage and/or professional synergy that is specific and unique to the practice. Intuitively, it answers such questions as:

·Who is the target market?

·How is the practice unique?

·What is its market position?

·Where will we implement the marketing strategy?

· How much revenue, expense and profit will the practice achieve?  

The science of modern marketing however, is based on intense competition largely derived from the interplay of five forces, codified in the early 1980s, by Professor Michael F. Porter of Harvard Business School. They are placed in this section of the business plan and include the following:

Power of suppliers: The bargaining power of physicians has weakened markedly in the last managed care decade.  Reasons include demographics, technology, over/under supply and a lack of business acumen. 

Power of buyers: Corporate buyers of employee healthcare are demanding increased quality and decreased premium costs within the entire healthcare industry. The extents to which these conduits succeed in their bargaining efforts depend on several factors:

·Switching Costs: Notable emotional switching costs include the turmoil caused by uprooting a trusted medical provider relationship.

·Integration Level: The practitioner must decide early on whether or not he will horizontally integrate as a solo practitioner, or vertically integrate into a bigger medical healthcare complex.

·Product Importance: Increasingly, HMOs do not often strive to delight their clients and may be responsible for the beginning backlash these entities are starting to experience. Additionally, some medical specialties have more perceived value than others (i.e., neurosurgery v. dermatology)

· Concentration:  Insurance companies, not patients, represent buyers that can account for a large portion of practice revenue, thereby bringing about certain concessions.  A danger sign is noted when any particular entity encompasses more than 15-25% of a practice’s revenues.

Threat of new entrants: Some authorities argue that medical schools produce more graduates than needed, inducing a supply side shock. Others suggest that there too many patients? Regardless, this often can be mitigated by practicing in rural or remote locations, away from managed care entities, or in areas with under-served populations.

Current or existing competition: Heightened inter-professional competition has increased the intensity and volume of certain medical services and referrals may be correspondingly with-held.  Rivalry occurs because a competitor acts to improve his standing within the marketplace or to protect its position by reacting to moves made by other specialists.

Substitutions: Examples include: PAs for DOs, nurse practitioners for MDs, technicians for physical therapists, hygienists for dentists, cast technicians for orthopedists, nurse midwives for obstetricians, foot care extenders for podiatrists and even, hospital sanitation workers for medical and surgical care technicians.  Any strategy to ameliorate these conditions will augment the successful business practice plan. 

MORE: Healthcare Market.Tensions 2,0 MARCINKO

MORE: Strategic Management Improvement

Enter the Chief Marketing Officer [CMO]

A Chief Marketing Officer or marketing director is a corporate executive responsible for marketing activities in an organization.  The CMO leads brand management, marketing communications, market research, product management, distribution channel management, pricing, often times sales, and customer service, etc.

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DEM at Drexel

Invite Dr. Marcinko

Academic Metaphor?

Now, with all the competition today at the college and university level; notwithstanding the recent Hollywood Elite University acceptance debacle, can you see how these basic ideas might also be helpful in the academic and educational strategic marketing ecosystem?



The Emerging Role of University CHIEF STRATEGY OFFICER

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 The changing role of a college / university Chief Marketing Office [narrow focus] –versus–  Chief Strategy Officer [broader entity focus].

Assessment

A good way to accomplish and codify the above marketing plan concept is through a SWOT analysis. Mention the Strengths, Weaknesses, Opportunities and Threats of your specialty specific practice and what you plan do to maximize the positive, and minimize the negative aspects of the analysis.

Conclusion

Only after the above forces have been considered, should you begin the process that many physicians mistake for crafting their marketing efforts; executing the actual marketing plan. 

If you are not going to the right audience, making the correct statements or delivering your message through the proper advertising channels, you might as well put your medical practice marketing plan into the trash can because it will not secure you funds, or benefit your practice. 

Do you have a marketing plan, and more importantly, how well do you execute it? 

More info: http://www.springerpub.com/prod.aspx?prod_id=23759

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Product DetailsProduct Details

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PODCAST: Value Investing with Vitaliy Katsenelson CFA

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Amazon.com: Vitaliy Katsenelson: Books, Biography, Blog, Audiobooks, Kindle

By Vitaliy N. Katsenelson, CFA

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EDITOR’S NOTE: In this interview with investment website @GuruFocus, my colleague Vitaliy shares the full gamut of how he invests, where and why. He touches on the role of being eclectic when investing, how to invest abroad, and how value investors should think about macro-economics and finance, among many other important topics. Enjoy this fun and wide-ranging interview! It is very timely with the S&P 500, DJIA and NASDAQ just posting their 4th straight day of gains while Facebook rattled investors by posting a rare profit decline, driven by the company’s heavy spending on its vision for a so-called Metaverse and simultaneously confronting advertising challenges on its existing services.

Dr. David Edward Marcinko MBA CMP®

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PODCAST: https://www.youtube.com/watch?v=eTSTbF0GwVw&t=69s

VALUE STOCKS: https://www.msn.com/en-us/money/markets/value-stocks-just-had-their-best-month-since-the-peak-of-the-2001-dot-com-bubble-%e2%80%94-and-theres-still-more-upside-to-come-bank-of-america-says/ar-AATpt1m?li=BBnb7Kz

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FINANCE: 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

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PODCAST: Nine [9] Ways to Pay Doctors

“Behavioral Economic Strategies”

By Eric Bricker MD

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As Published in the Annals of Internal Medicine by an All-Star Cast of Researchers:

1) Limitations of Information
2) Inertia/Status Quo Bias
3) Choice Overload
4) Immediacy
5) Loss Aversion
6) Relative Social Ranking
7) Threshold Effect
8) Limits of Willpower
9) Mental Accounting

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Medical Managed Care IBNR Accounting Claims

Tax Savings Strategies

Claim Anatomy - ipitome

[By Ana Vassallo] AND [Dr. David E. Marcinko MBA]

Managed Care Organizations (MCOs) that accept capitated risk contracts face a potentially significant tax burden for Incurred but Not Reported (IBNR) claims. It is not uncommon that IBNR claims at the end of a reporting period equal one to two months premiums for MCOs under a fee-for-service model. The Internal Revenue Service (IRS) has taken a very strong position relative to the deductibility of these claims by saying that an MCO cannot deduct such losses if they are based on estimates.

Incurred But Not Reported [IBNR] Claims

IBNR is a term that refers to the costs associated with a medical service that has been provided, but for which the carrier has not yet received a claim. The carrier to account for estimated liability based on studies of prior lags in claim submission records IBNR reserves. In capitated contracts, MCOs are responsible for IBNR claims of their enrollees (Kennedy, 1). 

For example, if an enrollee is treated in an emergency room, a plan may not know it is liable for this care for at least 30-60 days. Well-run plans devote considerable attention to accurately estimating such claims because a plan can look healthy based on claims submitted and be financially unhealthy if IBNR claims experience is increasing substantially but is unknown.

Why a Problem for HMO’s/MCOs 

Section 809(d)(1) of the Code provides that, for purposes of determining the gain and loss from operations, a insurance company shall be allowed a deduction for all claims and benefits accrued, and all losses incurred (whether or not ascertained), during the taxable year on insurance and annuity contracts.  Section 1.809-5(a) (1) of the Income Tax Regulations provides that the term “losses incurred (whether or not ascertained)” includes a reasonable estimate of the amount of the losses (based upon the facts in each case and the company’s experiences with similar cases) incurred but not reported by the end of the taxable year as well as losses reported but where the amount thereof cannot be ascertained by the end of the year. By taking into account for its prior years only the reported losses but not the unreported losses, the taxpayer has established a consistent pattern of treating a material item as a deduction. The effect of the taxpayer’s claim for the first time of a deduction for an estimate of losses incurred but unreported under section 809(d)(1) of the Code, was to change the timing for taking the deduction for the incurred but unreported losses.

Due to the taxpayer consistently deducting losses incurred in the taxable year in which reported, a change in the time for deducting losses incurred under section 809(d)(1) is a change in the method of accounting for such losses to which the provisions of section 446(e) apply (IRS, 14-30). 

In order to qualify for an insurance company under the current IRS regulations, the MCO must have the following criteria (Kongstvedt, 235-256):

· At least 50% of the MCO must come from insurance related activities.

· The MCO must have an insurance company license.

If an MCO did not have these two criteria, the IRS will not deem the manage care company as an eligible insurance company.  Therefore, the MCO would not be able to file for IBNRs with the IRS.

How MCOs/HMOs Intensify IBRN Claims

There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims.  The only reason the IRS would not allow an MCO to deduct IBNR because the financial statements is based on an estimate (IRS, 134-155).

Except through the insurance company exclusion IRS does not allow any taxpayer to deduct losses based on estimates. There has been some precedence set that the IRS will accept an amount for incurred but not reported claims if the amount is supported by valid receipts of claims that the company has in-house prior to the filing of the tax return.

There has been some controversy as to how long of a period of reporting time the IRS will allow you to include in those estimates. There are ranges from 3-6 months to file a claim (IRS, 137). The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including the business’ experience with similar cases and historical trends involving claim payment patterns, claim payments, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions and public attitudes.

There has been no clear indication from the IRS that it will accept an accrual for these losses and entities. Therefore, companies deducting such losses may eventually find themselves in a position where the IRS may challenge the relating deductibility of those losses.

Product DetailsProduct DetailsProduct Details

Evaluating IBNRs from a New Present Value Perspective

The best measure of whether or not a stream of future cash flows actually adds value to the organization is the net present value (NPV).  The best decision rule for NPV to accept or reject a decision problem is if the NPV is greater than zero, the project adds value to the organization.  Although – if the NPV is exactly zero it neither adds nor subtracts value from the organization (McLean 193).  In either case, the project is acceptable.  In addition, if the NPV is less than zero, the project subtracts value from the organization and should not be undertaken (McLean, 193).

The provision for unpaid claims represents an estimate of the total cost of outstanding claims to the year-end date. Included in the estimate are reported claims, claims incurred but not reported and an estimate of adjustment expenses to be incurred on these claims. The losses are necessarily subject to uncertainty and are selected from a range of possible outcomes (Veal, 11). During the life of the claim, adjustments to the losses are made as additional information becomes available. The change in outstanding losses plus paid losses is reported as claims incurred in the current period.

All but the smallest organizations have predictable and unpredictable losses. It is important mentally to separate the two since predictable losses are not risks but normal business expenses. Risk is the degree to which losses vary from the expected. If losses average $85,000 per year but could be as much as $20 million, the risk is $20 million minus $85,000. The $85,000 figure represents reasonably predictable losses (Veal, 12).

IBNR Challenges and Solutions

While I was unable to find an actual amount of the cost of the penalties that can be incurred, the IRS is able to impose penalty fees under Section 4958 of the IRS code (IRS, 255). While penalties differ depending on individual bases, MCOs will be penalizing for any misconduct either by IRS Codes or Court Jurisdiction.

It is prudent that MCOs ensure their organization that they will not incur a financial “meltdown”. They further need to ensure IBNR is funded for period of at least 2-3 months. In some states, the state laws make the MCO financially responsible to pay the providers for a second time if the intermediary fails to pay or becomes insolvent (Cagle, 1).

Paid losses, paid expenses and net premiums are usually deductible; reserves for incurred-but-unpaid losses generally are not, unless the taxpaying entity is an insurance company. Consequently, if a corporation has a high effective tax rate and concedes that it cannot deduct self-insured loss reserves, some of its more cost-effective options may be a paid-loss retro (if state rules are not too restrictive), a compensating balance plan, or the formation of a pool or industry captive. Even these plans may be subject to IRS challenge. To qualify as a tax-deductible expense, a premium or other payment must satisfy two criteria (Cagle, 2):

 

  • There must be transfer of risk: an insurance risk. This differs from investment risk, but there is no authoritative definition of “risk transfer” other than various court decisions (primarily Helvering v. Le Gierse, 312 US 531 — U.S. Supreme Court 1941).
  • There must be both risk shifting and risk distribution. “Risk shifting” means that one party shifts the risk of loss to another, generally not in the same corporate family. “Risk distribution” means that the party assuming the risk distributes the potential liability, in part, among others.

The deductibility of an insurance expense may also be questioned if it is contingent upon a future happening, such as a loss payment, right to a dividend or other credit, or possible forgiveness of future loans or notes (Cagle, 3). This may seem a broad statement, but the Cost Accounting Standards Board states in its Standards for Accounting for Insurance Expense that any expense which is recoverable if there are no losses shall be accounted as a deposit, not an expense. This is essentially the IRS position (IRS, 145).

Assessment

While there are a few solutions to this matter, the IRS is making sure that MCOs will be penalized if MCOs improperly handle IBNRs.  It is also important for organizations to understand the MCO’s policies regarding IBNR reserves and their contractual obligations. And, while the IRS has set limitations for MCOs to file their IBNR claims, MCOs have the major responsibility of allocating these IBNR claims appropriately.  There are severe penalties for not properly filing the IBNR claims appropriately.  However, there is several tax saving strategies to help MCOs properly file their IBNR claims with the IRS.  It imperative that MCO executives and accounting manager consult an expert to properly plan an ethical strategy that will help them build a stable business that is trustworthy and reliable.

Bibliography

1. Cagle, Jason, Esq., Interview, June 8, 2004, interview performed by Ana Vassallo.

2. McLean, Robert A., Net Profit Value, Pages 193-194, 2nd Edition, Thomson/Delmar Learning, Financial Management in Heath Care Organization, 2003.

3. Patient-Physician Network, Managed Care Glossary, Printed 6/11/04 http:/www.drppg.com/managed_care.asp.

4. Internal Revenue Services, IRS.Gov, Printed 6/12/04, http://www.irs.gov/

5. Internal Revenue Services, Revenue Ruling, Printed 6/11/04, http://www.taxlinks.com/rulings/1079/revrul179-21.thm

6. Kongstvedt, Peter R., Managed Care – What It Is and How it Works, Pages 235-256, Jones and Bartlett Publishers, 2003.

7. Veale, Tom, The Return of Captives in the Hard Market, Tristar Risk Management Aug. 22, 2002, San Diego RIMS.

Conclusion

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

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

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BIG TECH STOCKS: Down … Down … Down!

By Staff Reporters

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Plunging tech stocks are dragging the markets down and snapping a brief winning streak. Up next for the economy: The third-quarter GDP report.

America’s internet giants are slumping hard in this era of higher interest rates, lower advertising budgets, and widespread economic uncertainty

For example, Meta recently became the latest Big Tech company to post rough financial results for the prior quarter. It recorded its second straight quarter of declining revenue and provided a gloomy outlook for Q4. Perhaps Meta shouldn’t even be considered “Big Tech” anymore. Since its share price peaked in September 2021, the company lost nearly two-thirds of its value…before diving another ~20% in after-hours trading yesterday.

What went wrong? Younger people are fleeing Facebook, and investors aren’t confident CEO Mark Zuckerberg can reinvent the company as a metaverse platform. “Meta has drifted into the land of excess—too many people, too many ideas, too little urgency,” a prominent shareholder wrote this week in a scathing letter. Meta’s metaverse unit, Reality Labs, has lost $9.4 billion so far this year.

While Meta may be the poster child for Big Tech’s struggles, it’s not the only company that needs a checkup

  • Google parent Alphabet posted its slowest revenue growth since 2013 (outside of one early pandemic quarter), and YouTube ad sales actually fell in Q3. It’s “a tough time in the ad market,” CEO Sundar Pichai acknowledged. Alphabet shares had their worst day since March 2020.
  • And Microsoft also had its worst day since March 2020 after giving a disappointing forecast. Its push to dominate the metaverse is also faltering, per the WSJ.

Big view

Tech giants scored record profits during COVID, when interest rates were near zero, stimulus checks were flowing, and everyone was stuck inside with only the internet to entertain themselves. No anymore!

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PODCAST: AMA to Teach Medical Students Health Economics?

AMA TO TEACH MEDICAL STUDENTS ABOUT HEALTH ECONOMICS?

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Courtesy: www.CertifiedMedicalPlanner.org

DICTIONARY: https://medicalexecutivepost.com/2009/06/08/dictionary-of-health-economics-and-finance/

Did you know that the American Medical Association is calling on medical schools and residency programs to include specific information about healthcare economics and financing in their curricula.

But, is health economics heterodoxic, or not? And; what about demand-derived economics in medicine?

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economic freedom

LINKS

ESSAY: https://medicalexecutivepost.com/2019/08/31/is-health-economics-heterodoxic-or-not/

ESSAY: https://www.modernhealthcare.com/education/ama-adopts-new-policy-training-physicians-healthcare-economics

MORE: https://medicalexecutivepost.com/2019/11/10/ricardian-derived-demand-economics-in-medicine/

MORE: https://medicalexecutivepost.com/2014/08/27/financial-and-health-economics-benchmarking/

MORE: https://healthcarefinancials.files.wordpress.com/2019/01/big-data.pdf

PODCAST: https://vimeo.com/ihe

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PODCAST: Private Equity in Healthcare Explained

By Eric Bricker MD

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Private Equity is a Newer Name for Leveraged-Buyout Firms that were Popular in the 1980s.

These Companies Use Investor Money and Debt to Buy Companies and Often Use Additional Debt to Accelerate Growth.

The Private Equity Firm then ‘Flips’ or Sells the Company for a Profit.

The Private Equity Firm KKR’s Acquisition of the Physician Staffing Firm Envision is a Great Example of This Strategy.

However, Private Equity Firms May Be Contributing to the Rising Cost of Healthcare Through Their Activities.

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Hospitals in the RED

By Staff Reporters

Hospitals this year are seeing more red than black as growing financial challenges, like spiked labor costs and inflation on medical supplies, puts them on pace to have the worst financial performance into the pandemic thus far.

More than half of hospitals (53% of more than 900 sampled) are projected to have negative margins by the end of the year, compared to 39% in 2019, according to a September report from management consulting firm Kaufman Hall, on behalf of AHA. The firm put the median operating margin for hospitals at about -1%, which could mean service cuts, and for more vulnerable hospitals, including rural ones, closing their doors.

But why is the financial outlook so bleak for hospitals? A few factors are conspiring:

Labor costs: The top reasons hospitals are struggling financially in 2022 are “labor, labor, and labor,” said Kevin Holloran, senior director at Fitch Ratings. The healthcare labor shortage doesn’t just extend to nurses, but across the board.

Rising supply prices: Blame inflation. AHA reported that the “costs for energy, resins, cotton, and most metals surged in excess of 30%” between fall 2020 and early 2022.

Sicker patients, longer stays: Intensive care units across the country were overwhelmed with Covid-19 patients at the outset of the pandemic, but more recently hospitals have been caring for sicker non-Covid patients, said Aaron Wesolowski, AHA’s vice president for policy research and analytics

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HOSPITALS: 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

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

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What is CHROMETOPHOBIA?

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A great question to ponder during National Financial Planning Month!

About the “FEAR OF MONEY”

By Charles Patrick Davis, MD, PhD

Fear of money: An abnormal and persistent fear of money. Sufferers experience undue anxiety even though they realize their fear is irrational. They worry that they might mismanage money or that money might live up to its reputation as “the root of all evil.” Perhaps they remember well the ill fortune that befell the mythical King Midas. His wish that everything he touched be turned to gold was fulfilled, and even his food was transformed into gold.

The fear of money is termed chrometophobia or chrematophobia, from the Greek “chrimata” (money) and “phobos” (fear). The “chrome” in “chrometophobia” may also be related to the Greek word “chroma” (color) because of the brilliant colors of ancient coins — for example, gold, silver, bronze and copper.

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

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

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

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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™ book cover

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

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PHYSICIAN FINANCIAL ADVISORS: https://medicalexecutivepost.com/2021/10/11/

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SURVEY: Doctors Want Out?

By Staff Reporters

25% of Clinicians Want Out of Healthcare: Survey

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One quarter of U.S. physicians, advanced practice providers, and nurses are considering switching careers and one third are considering switching employers, according to newly released results from a survey conducted by Bain & Company. Below are some key takeaways from the survey and brief, which was released October 11th and can be found in full here.

1. Of the 25 percent of clinicians who are thinking about exiting healthcare entirely, 89 percent cite burnout as the main driver.

2. The top three things clinicians care about most in their profession are compensation, quality of patient care, and workload, according to the survey. Of those three, they are least satisfied with compensation (59 percent expressed satisfaction) and workload (60 percent). Eighty percent said they are satisfied with the quality of patient care. 

3. Burnout shows up throughout clinicians’ days, with 63 percent saying they feel worn out at the end of the workday, 51 percent saying they feel they don’t have time and energy for family and friends during leisure time, and 38 percent feeling exhausted in the morning at the thought of another workday. 

Source: Molly Gamble, Becker’s Hospital Review [10/11/22]

BURNOUT: https://medicalexecutivepost.com/2022/10/04/its-ok-not-to-be-ok-physician-burnout-and-mental-health/

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SAVINGS: Rates Plummet!

By Staff Reporters

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The personal savings of Americans have plunged this year, hitting $629 billion in the second quarter of 2022, according to the Federal Reserve Bank of St. Louis. That’s down from $1.98 trillion in the second quarter of 2021, and $4.85 trillion in the second quarter of 2020, boosted by COVID-related government cash. But it’s also down from $1.41 trillion in the second quarter of 2019, before the pandemic.

In fact, the personal saving rate — meaning personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — fell to 3.5% in August, according to the Bureau of Economic Analysis. It’s quite a U-turn: The personal saving rate recently peaked at 26.3% in March 2021 and 33.8% in April 2020. But the drop in the personal saving rate isn’t all pandemic-related: In January 2020, before the coronavirus pandemic, it was 9.1%.

But, what about doctors and other medical professionals?

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FLASH ALERT: “Alphabet” Stock Shares!

By Staff Reporters

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  • Stocks are hot and posted their third straight day of gains on hope that the FOMC might end its rate hikes at some point in the future. But that streak could end today.
  • Alphabet shares took a tumble in late trading after the company revealed its fifth consecutive quarter of slower revenue growth. Cracks are emerging in some of its core properties: Google search and YouTube. YouTube revenue declined for the first time since Google started reporting the division’s earnings separately.
  • Alphabet’s total quarterly revenue growth drastically declined from 41% to 6%.
  • The growth rate of Microsoft’s search and news advertising business has been shrinking each quarter of the past year, coinciding with the general downward trajectory of the entire online advertising market.

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

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APPLE: Health Insurance?

By Bertalan Meskó, MD PhD

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Ben Wood, chief analyst at European CCS Insights predicts that Apple will enter the US health insurance market in partnership with a major insurer in 2024 – Forbes reported

The company already collects heaps of health data, such as blood pressure, blood oxygen levels, ECG readings and body temperature from the Watch, and through phone apps that help people regulate their medication or manage chronic conditions like diabetes. 

I hope you find the report useful!

Best regards,
Bertalan Meskó, MD
The Medical Futurist

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RELATED: https://www.kevinmd.com/2022/10/amazon-cvs-and-walmart-are-playing-health-cares-long-game.html

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ORDER: https://www.amazon.com/Dictionary-Health-Insurance-Managed-Care/dp/0826149944/ref=sr_1_4?ie=UTF8&s=books&qid=1275315485&sr=1-4

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META: “Needs to Get its Mojo Back”

By Staff Reporters

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Quote: “Meta needs to get its mojo back.”

With Meta’s share price down more than 60% this year, investors are losing patience with Mark Zuckerberg’s big bet on the metaverse.

Altimeter Capital CEO Brad Gerstner, whose firm has more than 2 million shares in the company, wrote an open letter yesterday urging Meta to cut headcount expenses by 20% and keep metaverse spending under $5 billion per year to become a “more productive, and more focused company.”

We’ll see how Meta feels about its own mojo when it reports earnings tomorrow.

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ORDER: https://www.amazon.com/Dictionary-Health-Information-Technology-Security/dp/0826149952/ref=sr_1_5?ie=UTF8&s=books&qid=1254413315&sr=1-5

MEDICARE: Expanding Dentistry?

By Staff Reporters

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Dental coverage under Medicare could soon start expanding for seniors under a new proposal from the U.S. Centers for Medicare and Medicaid Services (CMS). Still, the proposed rules would not provide full coverage for regular dental care, which has been explicitly excluded from Medicare since the program’s founding in 1965.

“Traditional Medicare doesn’t cover routine preventive dental services, such as exams, cleanings, X-rays, nor more expensive services such as fillings, crowns or dentures,” said Meredith Freed, a Medicare expert with the Kaiser Family Foundation.

However, the new proposal would effectively open the door to Medicare potentially covering a wider array of dental services if medical science can demonstrate that oral health substantially improves the

READ: https://www.govinfo.gov/content/pkg/FR-2022-07-29/pdf/2022-14562.pdf

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HEALTH INSURANCE: https://www.amazon.com/Dictionary-Health-Insurance-Managed-Care/dp/0826149944/ref=sr_1_4?ie=UTF8&s=books&qid=1275315485&sr=1-4

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PODCAST: What is a “Leveraged” ETF?

WHAT IT IS – HOW IT WORKS

Traditional ETFs: https://medicalexecutivepost.com/2008/01/07/exchange-traded-funds-etfs/

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Leveraged DEFINITION:

Leveraged ETFs have received tremendous media attention and are proving to be extremely popular with both individual and institutional investors. There are hundreds of leveraged ETFs, covering virtually every asset class and industry sector. The majority are double-leveraged, but there’s a sizeable group of triple-leveraged ETFs.

For professional investors, leveraged ETFs are useful in statistical arbitrage, short-term tactical strategies, and for use as short-term hedges without the need to roll futures. For individual investors, leveraged ETFs are alluring because of the potential for higher returns.

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

Now, some physicians and Uninformed investors might assume that the leverage returns are generated on a continuous basis, so that if an underlying index is up 5% for a month, the double-leveraged ETF will be up 10% for the same month; if the index is up 10% for 6 months, the ETF will be up 20%, and so forth. That is absolutely not the case. The leverage is determined on a daily basis and the returns for any other period usually will not be double or triple the underlying index.

In order for the leveraged funds to achieve appropriate levels of assets so they can provide their implied leverage, they have to rebalance daily. In the case of an ETF providing long 2-times leveraged exposure, they would typically attain exposure to a notional set of assets equal to 2 times their NAV.

Example: An example would be an ETF that takes in 100 units in assets that does a swap with a counterparty to provide exposure to 200 units in performing assets. The rebalancing activity of these funds will almost always be in the same direction as the market.

In essence, a leveraged ETF is essentially marked to market every night. It starts with a clean slate the next day, almost as if the previous day had not existed. This process produces daily leverage results. However, over time, the compounding of this reset can potentially vary the performance of the fund versus its underlying benchmark. This can result in either greater or lesser degrees of final leverage over individual holding periods.

PODCAST: https://www.investopedia.com/terms/l/leveraged-etf.asp

RELATED: https://smartasset.com/investing/what-is-a-leveraged-etf

ASSESSMENT: Your comments and thoughts are appreciated.

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

CONTACT: Ann Miller RN MHA

MarcinkoAdvisors@msn.com

Ph: 770-448-0769

Second Opinions: https://medicalexecutivepost.com/schedule-a-consultation/

DIY Textbooks: https://medicalexecutivepost.com/2021/04/29/why-are-certified-medical-planner-textbooks-so-darn-popular/

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FINANCE: 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

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What is a JUMBO Home Loan Mortgage?

By Staff Reporters

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What Is a Jumbo Loan?

A jumbo loan, also known as a jumbo mortgage, is a type of financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA). Unlike conventional mortgages, a jumbo loan is not eligible to be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements and tax implications. These kinds of mortgages have gained traction as the housing market continues to recover following the Great Recession.

The value of a jumbo mortgage varies by state—and even county. The FHFA sets the conforming loan limit size for different areas on an annual basis. The limit for 2022 was set at $647,200 for most of the country. This was an increase of $98,950 from the 2021 limit of $548,250. For counties that have higher home values, the baseline limit is set at $970,800, or 150% of $647,200.1

The FHFA has a different set of provisions for areas outside of the continental United States for loan limit calculations. As a result, the baseline limit for a jumbo loan in Alaska, Guam, Hawaii, and the U.S. Virgin Islands as of 2022 is also $970,800. That amount may actually be even higher in counties that have higher home values.

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

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What is OBSERVATIONAL BIAS?

EVIDENCE BASED MEDICINE

By Staff Reporters

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Observer bias occurs in research when the beliefs or expectations of an observer (or investigator) can influence the data that’s collected in a study.

Cite: https://www.amazon.com/Dictionary-Health-Information-Technology-Security/dp/0826149952/ref=sr_1_5?ie=UTF8&s=books&qid=1254413315&sr=1-5

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Supporting Teachers: Reducing Observational Bias - TeacherToolkit

This causes the results of a study to be unreliable and hard to reproduce in other research settings.

READ HERE IN MEDICINE: https://www.ebmconsult.com/articles/observational-bias-statistical-analysis

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

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What is GAAP?

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HOW IT WORKS

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

Generally Accepted Accounting Principles

As a new physician investor, it’s important to know the distinctions between like measurements because the market allows firms to advertise their numbers in ways not otherwise regulated. Often companies will publicize their numbers using either GAAP or non-GAAP measures. GAAP, or generally accepted accounting principles, outlines rules and conventions for reporting financial information. It is a means to standardize financial statements and ensure consistency in reporting.

When a company publicizes its earnings and includes non-GAAP figures, it means it wants to provide investors with an arguably more accurate depiction of the company’s health (for instance, by removing one-time items to smooth out earnings). However, the further a company deviates from GAAP standards, the more room is allocated for some creative accounting and manipulation.

When looking at a company that is publishing non-GAAP numbers, new physician investors should be wary of these pro forma statements, because they may differ greatly from what GAAP deems acceptable.

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

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The Core GAAP Principles

GAAP is set forth in 10 primary principles, as follows:

  1. Principle of consistency: This principle ensures that consistent standards are followed in financial reporting from period to period.
  2. Principle of permanent methods: Closely related to the previous principle is that of consistent procedures and practices being applied in accounting and financial reporting to allow comparison.
  3. Principle of non-compensation: This principle states that all aspects of an organization’s performance, whether positive or negative, are to be reported. In other words, it should not compensate (offset) a debt with an asset.
  4. Principle of prudence: All reporting of financial data is to be factual, reasonable, and not speculative.
  5. Principle of regularity: This principle means that all accountants are to consistently abide by the GAAP.
  6. Principle of sincerity: Accountants should perform and report with basic honesty and accuracy.
  7. Principle of good faith: Similar to the previous principle, this principle asserts that anyone involved in financial reporting is expected to be acting honestly and in good faith.
  8. Principle of materiality: All financial reporting should clearly disclose the organization’s genuine financial position.
  9. Principle of continuity: This principle states that all asset valuations in financial reporting are based on the assumption that the business or other entity will continue to operate going forward.
  10. Principle of periodicity: This principle refers to entities abiding by commonly accepted financial reporting periods, such as quarterly or annually.

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PODCAST: Top Five Healthcare Consulting Firms

By Eric Bricker MD

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What is Medical Practice FINANCIAL RATIO ANALYSIS?

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BY DR. DAVID E. MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

Financial ratio analysis typically involves the calculation of ratios that are financial and operational measures representative of the financial status of a clinic or medical practice enterprise.  These ratios are evaluated in terms of their relative comparison to generally established industry norms, which may be expressed as positive or negative trends for that industry sector. The ratios selected may function as several different measures of operating performance or financial condition of the subject entity.

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

Common types of financial indicators that are measured by ratio analysis include:

  • Liquidity. Liquidity ratios measure the ability of an organization to meet cash obligations as they become due, i.e., to support operational goals. Ratios above the industry mean generally indicate that the organization is in an advantageous position to better support immediate goals.  The current ratio, which quantifies the relationship between assets and liabilities, is an indicator of an organization’s ability to meet short-term obligations.  Managers use this measure to determine how quickly assets are converted into cash.
  • Activity. Activity ratios, also called efficiency ratios, indicate how efficiently the organization utilizes its resources or assets, including cash, accounts receivable, salaries, inventory, property, plant, and equipment.  Lower ratios may indicate an inefficient use of those assets.
  • Leverage. Leverage ratios, measured as the ratio of long-term debt to net fixed assets, are used to illustrate the proportion of funds, or capital, provided by shareholders (owners) and creditors to aid analysts in assessing the appropriateness of an organization’s current level of debt.  When this ratio falls equal to or below the industry norm, the organization is typically not considered to be at significant risk.
  • Profitability. Indicates the overall net effect of managerial efficiency of the enterprise. To determine the profitability of the enterprise for benchmarking purposes, the analyst should first review and make adjustments to the owner(s) compensation, if appropriate.  Adjustments for the market value of the “replacement cost” of the professional services provided by the owner are particularly important in the valuation of professional medical practices for the purpose of arriving at an ”economic level” of profit.

The selection of financial ratios for analysis and comparison to the organization’s performance requires careful attention to the homogeneity of data. Benchmarking of intra-organizational data (i.e., internal benchmarking) typically proves to be less variable across several different measurement periods.

However, the use of data from external facilities for comparison may introduce variation in measurement methodology and procedure. In the latter case, use of a standard chart of accounts for the organization or recasting the organization’s data to a standard format can effectively facilitate an appropriate comparison of the organization’s operating performance and financial status data to survey results.

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

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What is the Stock Market DEATH CROSS?

Is A Market Downside Ahead?

By Staff Reporters

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What Is a Death Cross?

The death cross is a technical chart pattern indicating the potential for a major sell-off. The death cross appears on a chart when a stock’s short-term moving average crosses below its long-term moving average. Typically, the most common moving averages used in this pattern are the 50-day and 200-day moving averages.

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What is a BEAR MARKET Relief Rally?

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

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Summary:

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FOMC: Treasuries the Next Financial Crisis?

By Staff Reporters

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For months, traders, academics, and other analysts have fretted that the $23.7 trillion Treasury market might be the source of the next financial crisis. Then last week, U.S. Treasury Secretary Janet Yellen acknowledged concerns about a potential breakdown in the trading of government debt and expressed worry about “a loss of adequate liquidity in the market.” Now, strategists at BofA Securities have identified a list of reasons why U.S. government bonds are exposed to the risk of “large scale forced selling or an external surprise” at a time when the bond market is in need of a reliable group of big buyers.

“We believe the UST market is fragile and potentially one shock away from functioning challenges” arising from either “large scale forced selling or an external surprise,” said BofA strategists Mark Cabana, Ralph Axel and Adarsh Sinha. “A UST breakdown is not our base case, but it is a building tail risk.”

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PODCAST: Help Your Medical Practice Embrace Population Health

CHANGE MANAGEMENT

By NextGen Healthcare

NextGen Healthcare Completes Integration of CoverMyMeds ...

With any organizational change, getting support from physicians, practice administrators, and clinical and office staff isn’t easy. The transition to a population health-based strategy is no different.

Find out how to educate and coach your staff to implement your population health program successfully — based on the real-world experience of Verlin Janzen MD, medical director at Hutchinson Clinic. Dr. Janzen has dedicated his career to implementing a population-health based strategy. To achieve his goals at Hutchinson Clinic, he had to overcome a major challenge—lack of buy-in from his colleagues.

PODCAST: https://www.healthsharetv.com/content/change-management-help-your-practice-embrace-population-health-nextgen-healthcare

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Diwali – 2022

Diwali, Deepavali or Dipavali

By Dr. David E. Marcinko MBA

Diwali, Deepavali or Dipavali is the Hindu festival of lights, which is celebrated every autumn in the northern hemisphere.

One of the most popular festivals of Hinduism, Diwali symbolises the spiritual “victory of light over darkness, good over evil and knowledge over ignorance”.

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During the celebration, temples, homes, shops and office buildings are brightly illuminated. The preparations, and rituals, for the festival typically last five days, with the climax occurring on the third day coinciding with the darkest night of the Hindu Lunisolar month Kartika.

In the Gregorian calendar, the festival generally falls between mid-October and mid-November.

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IRS: Increases Contribution Limits for Retirement Savings Plans

By Staff Reporters

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The IRS just said that the maximum contribution that an individual can make in 2023 to a 401(k), 403(b) and most 457 plans will be $22,500. That’s up from $20,500 this year.

People aged 50 and over, which have the option to make additional “catch-up” contributions to 401(k) and similar plans, will be able to contribute up to $7,500 next year, up from $6,500 this year. That’s means a 401(k) saver who is 50 or older can contribute a maximum of $30,000 to their retirement plan in 2023.

The IRS also raised the 2023 annual contribution limits on individual retirement arrangements, or IRAs, to $6,500, up from $6,000 this year. The IRA “catch-up” contribution limit remains at $1,000, as it’s not subject to an annual cost of living adjustment, the IRS said.

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

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What is ABSOLUTE [Intrinsic] VALUE?

A MATH AND FINANCIAL-INVESTING TERM

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By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

In mathematics, the absolute value or modulus of a real number x, denoted |x|, is the non-negative value of x without regard to its sign. Namely, |x| = x if x is positive, and |x| = −x if x is negative (in which case −x is positive), and |0| = 0. For example, the absolute value of 3 is 3, and the absolute value of −3 is also 3. The absolute value of a number may be thought of as its distance from zero.

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In finance, absolute value, also known as an intrinsic value, refers to a business valuation method that uses discounted cash flow (DCF) analysis to determine a company’s financial worth. The absolute value method differs from the relative value models that examine what a company is worth compared to its competitors. Absolute value models try to determine a company’s intrinsic worth based on its projected cash flows.

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

In investing, the key issues are as follows:

  • Absolute value refers to a business valuation method that uses discounted cash flow analysis to determine a company’s financial worth.
  • Investors can determine if a stock is currently under or overvalued by comparing what a company’s share price should be given its absolute value to the stock’s current price.
  • There are some challenges with using the absolute value analysis including forecasting cash flows, predicting accurate growth rates, and evaluating appropriate discount rates.
  • Absolute value, unlike relative value, does not call for the comparison of companies in the same industry or sector.

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National Mammography Day 2022

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Within National Breast Cancer Awareness Month

[By Staff Reporters]

Annually observed on the third Friday-Saturday in October, as part of National Breast Cancer Awareness Month, October 22nd. is National Mammography Day. This day serves as a reminder to all women that the best defense is early detection.

What to Do

  • Perform regular monthly self-examinations.
  • Make sure you get your regular physician checkups.
  • Make your mammography appointment today!

History

President Bill Clinton proclaimed the first National Mammography Day in 1993.

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Don’t forget male breast cancer

Male breast neoplasm is a relatively rare cancer in men that originates from the breast. As it presents a similar pathology as female breast cancer, assessment and treatment relies on experiences and guidelines that have been developed in female patients. The optimal treatment is currently not known.

Incidence

According to Wikipedia, about one percent of breast cancer develops in males. It is estimated that about 2,140 new cases are diagnosed annually in the United States (US) and about 300 in the United Kingdom (UK). The number of annual deaths in the US is about 450. In a study from India, eight out of 1,200 (0.7%) male cancer diagnoses in a pathology review represented breast cancer. Incidences of male breast cancer have been increasing which raise the probability of other family members developing the disease. The relative risk of breast cancer for a female with an affected brother is approximately 30% higher than for a female with an affected sister. The tumor can occur over a wide age range, but typically appears in men in their sixties and seventies. Known risk factors include radiation exposure, exposure to female hormones (estrogen), and genetic factors.

High estrogen exposure may occur by medications, obesity, or liver disease, and genetic links include a high prevalence of female breast cancer in close relatives. Chronic alcoholism has been linked to male breast cancer. The highest risk for male breast cancer is carried by men with Klinefelter syndrome. Male BRCA mutation carriers are thought to be at higher risk for breast cancer as well, with roughly 10% of male breast cancer cases carrying BRCA2 mutations, and BRCA1 mutation being in the minority.

Conclusion

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

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

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Breast Cancer Myths vs. Reality

Turning Data into Information

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By Dr. David Edward Marcinko MBA

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As reported on this ME-P and elsewhere, I was recently in Philadelphia for a number of reasons and had the opportunity to stop by Drexel University to get some information on their nursing program. There, I learned that it is one of the nation’s top nursing schools.

In fact, Drexel University is ranked one of “America’s BEST Colleges 2011” by U.S.News & World Report. I also learned the following about breast cancer:

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Assessment

Understanding the facts about breast cancer is of vital importance, because it may save your life or the life of someone you love.

Conclusion

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

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

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What is an “INSIDER” Company Shareholder?

TERMS AND DEFINITIONS PHYSICIAN INVESTORS SHOULD KNOW

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

Insider transactions shouldn’t be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

In legal terms, an “insider” refers to any shareholder who owns at least 10% of a company. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

SEC: https://www.sec.gov/about/forms/form4data.pdf

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

INSIDER TRANSACTIONS

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

MORE: https://smartasset.com/financial-advisor/insider-trading

EXAMPLE:

Mark Zuckerberg, CEO at Facebook (NASDAQ:FB), just made a large buy and sell of company shares on November 3, according to a new SEC filing. A Form 4 filing from the U.S. Securities and Exchange Commission states that Mark Zuckerberg exercised options to purchase 62,300 Facebook shares for $0 on November 3. They then sold their shares on the same day in the open market. They sold at prices ranging from $324.04 to $332.02 to raise a total of $25,463,482 from the stock sale.

Zuckerberg still owns a total of 232,400 shares of Facebook worth, $78,226,142.

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