PODCAST: What is the McNamara [Bio] Statistics Fallacy?

A Metaphor for the Corona Virus Pandemic!

Courtesy: www.CertifiedMedicalPlanner.org

By Dr. David E. Marcinko MBA

A belief that rational decisions can be made with quantitative data and measures alone, when in fact the things you can’t measure are often the most consequential.

Secretary McNamara, who tried to quantify every aspect of the Vietnam War.

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PODCAST: https://www.bing.com/videos/search?&q=McNamara+Fallacy&view=detail&mid=201A0081979919F8D651201A0081979919F8D651&form=VDRVSR&ru=%2Fvideos%2Fsearch%3Fq%3DMcNamara%2BFallacy%26FORM%3DHDRSC3&ajaxhist=0

QUERY: Is this also a metaphor for the “Art” and Science of Medicine and Economics?

Assessment: Your thoughts and comments are appreciated.

HEALTH DICTIONARIES FOR PHYSICIAN-EXECUTIVES AND MEDICAL CXOs

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DRIPS: Disadvantages, Problems and Cons

DIVIDEND REINVESTMENT PLANS

By Staff Reporters

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DEFINITION

DRIPs are merely an automated strategy in which a company’s dividends are reinvested into additional shares of that company. Instead of being paid dividends in cash, you get additional shares of ownership in the company.

There are three ways to get involved in DRIPs: directly through the company, through your broker, or through a transfer agent.

Company-run DRIPs are generally only available through large, blue-chip dividend stocks.That’s because smaller companies don’t want to take on the overhead costs of tracking all their shareholders and going through the paperwork headache of calculating how much each one gets in dividends and additional fractional shares. The company benefits from gaining an additional source of capital, but most of all in creating a more stable base of shareholders, ones who are less likely to panic and sell during a market decline. This can help decrease the volatility of a company’s shares.

As a result, more and more companies are deciding to use transfer agents, which are third-party DRIP administrators such as American Stock Transfer and Trust or Computershare.

Finally, most large discount brokers, such as Scottrade, TD Ameritrade, and E*Trade, also offer DRIPs, though with different requirements and limitations.

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

The Case Against DRIP Plans

While dividend reinvestment is powerful, there are a couple reasons why you might not want to reinvest your dividends.

DRIPs Drawback 1: You may need the dividend income
The most obvious reason is that you need the income. If you’re in the “distribution” phase of your investing life, dividends are a perfect source of passive income. Income from qualified dividends is taxed at the long-term capital gains rate (currently 15% for investors who are in the 25% to 35% tax bracket for ordinary income, 0% for taxpayers in a lower bracket and 20% for those in the highest bracket). So if you’re going to be looking to your portfolio for income every month anyway, it makes sense to have that cash deposited in your account.

DRIPs Drawback 2: You may need to reallocate your positions
You might also choose to stop reinvesting your dividends for allocation reasons. Reinvesting your dividends, through DRIP plans or otherwise, will cause your stock positions to grow over time, and if you’ve owned a particular issue for a long time, it may already be a large enough percentage of your portfolio. Higher-yielding positions will grow faster, which can throw your allocations out of whack pretty quickly. So once a stock position is as big as you want it to get (for now) feel free to turn off dividend reinvestment for that position, and either enjoy the extra income or save up the cash to invest in other stocks.

DRIPs Drawback 3: You may not want to buy that stock at that time
Finally, you may also have stock-specific reasons not to reinvest dividends—if a stock is temporarily overvalued, or you simply don’t want to buy any more of it at current prices.

But bottom line, reinvesting dividends through a broker or by signing up for DRIP plans directly through the dividend-paying companies, is a surprisingly powerful tool to passively improve your investment returns.

So yes, DRIP plans are still worth it, as long as they fit with your investing goals.

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

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What is the “Good-Rx” Business Model?

By Anonymous

GoodRx Holdings, Inc. is an American healthcare company that operates a telemedicine platform and a free-to-use website and mobile app that track prescription drug prices in the United States and provide free drug coupons for discounts on medications. GoodRx checks more than 75,000 pharmacies in the United States

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Good Rx makes money by perpetuating the, artificially set, high sticker prices of medications and receiving a portion of Pharmacy Benefits Manager [PBM] fees.

How it Works

GoodRx taps into PBM network for their “discounts” off of sticker price (e.g. Express Scripts, Optum Rx, Navitus … etc)

Consumer pays the newly “discounted” drug price.

Pharmacy pays PBM fee.

PBM pays GoodRx portion of the fee.

Good Rx adjusted EBITDA in 2019: $160 Million

Good Rx 2020 revenue is up 48% first half of 2020 – $257M

IPO: https://mobile-reuters-com.cdn.ampproject.org/c/s/mobile.reuters.com/article/amp/idUSKBN24Y0N6

Opinion:

This is not market value.

This is another hand in the cookie jar keeping healthcare prices artificially high.

The consumer is the one ultimately harmed.

COMMENTS APPRECIATED

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What is the “Butterfly” Effect?

What is it – How it works

[By Dr. David E. Marcinko MBA and staff reporters]

The butterfly effect refers to a concept that small causes can have large effects. Initially, it was used with weather prediction but later the term became a metaphor used in and out of science.

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[Copyright 2019 iMBA, Inc. All rights reserved. USA.]

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The term, closely associated with the work of Edward Lorenz, is derived from the metaphorical example of the details of a tornado (the exact time of formation, the exact path taken) being influenced by minor perturbations such as the flapping of the wings of a distant butterfly several weeks earlier. Lorenz discovered the effect when he observed that runs of his weather model with initial condition data that was rounded in a seemingly inconsequential manner would fail to reproduce the results of runs with the unrounded initial condition data. A very small change in initial conditions had created a significantly different outcome.

NOTE: Edward Lorenz is not to be confused with the scientist Max Lorenz: https://medicalexecutivepost.com/2018/01/26/about-the-lorenz-curve/

In Chaos Theory

In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state.

In Psychology / Psychiatry

Although I first learned about the Butterfly Effect is high school physics class, I also later learned that it relates to psychological/psychiatry in medical school. It seems the effect serves as a metaphor for life in a chaotic world. Specifically, it suggests that small events can have very large psychological / psychiatric effects.

In Insurance and Risk Management

As a health economist, and  former financial advisor, I also know that the Butterfly Effect is related to the insurance and financial service industries; as weill as risk management theory in general.

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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™

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Assessment: Your thoughts are appreciated.

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Invite Dr. Marcinko

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PODCAST: Hospital-Insurance Contracting [“Carve-Out” Prices Explained]

By Eric Bricker MD

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ORDER: 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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COMMENTS APPRECIATED

Thank You

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