Medical [Dental] Anti-Defamation Contracts and Doctor Accountability

Posted on April 27, 2024 by Dr. David Edward Marcinko MBA

Was the ADA Complicit?

By D. Kellus Pruitt DDS

If you were to walk into my dental office with a toothache, and I told you that before I relieve your pain, you have to agree not to say bad things about me on the internet, how badly would the tooth have to be hurting to keep you from walking out the door?

The article, “Toothache lawsuit may stifle medical gag orders against online rants”, by JoNel Aleccia, was posted on MSN.com years ago.

[Robert Lee, 42] who had a bad toothache has filed a class-action lawsuit against his New York dentist after she required him to sign a contract promising not to trash-talk her online — and then fined him thousands of dollars trying to enforce it.”

Aleccia adds: “[Dr. Stacy Makhnevich] was among hundreds of medical professionals nationwide in recent years who refused to care for patients unless they signed anti-defamation contracts. In the contracts, the doctors and dentists promised not to evade federal patient privacy protections in exchange for patients’ agreeing not to post public comments about them.”

The Dentist

Other than its obvious ineffectiveness for this particular Manhattan dentist, whose practice is on the 69 th. floor of the Chrysler Building, Lexington Avenue at East 42St., (212) 697-4400, what’s wrong with this business plan?

First of all, aside from the insult, if a dentist required you to sign a contract forfeiting your right to express your opinion about the quality of care even before being seen, how confident would it make you feel about the doctor’s abilities?

The HIPAA Question

Then there’s HIPAA. It’s sad that healthcare providers on the 69th.  floor of the Chrysler Building would take advantage of vulnerable Americans who don’t understand that their right to privacy isn’t something that can be withheld – even as part of a twisted “copyright” deal intended to enable a dentist to dodge accountability. It seems to me like the Office of Civil Rights as well as the Attorney General should be alerted. How is threatening a patient’s privacy in return for direly-needed treatment different than extortion?

The Gotcha!

Mr. Lee had forgotten the contract until months later when he allegedly discovered that Dr. Makhnevich had overcharged him by about $4,000, improperly filed the insurance and then refused to provide him with the documents he needed to file the claim himself. That’s when he started posting rants on sites like Yelp and DoctorBase, such as, “Avoid at all cost! Scamming their customers!” and “Honestly, how do you live with yourself? Just try being a decent human being.”

“Within days, Makhnevich demanded that the sites remove the comments and threatened to sue Lee. She also said he was infringing on her copyright provisions and started sending invoices for fines of $100 a day. By October, the total topped $4,600, he said.”

The Service

Since the dentist purchased the right to use Medical Justice Inc. anti-defamation contracts to prevent complaints from dis-satisfied customers from being discussed on the internet, I say she is due a refund. What’s more, if she’s given any trouble about it, she should get on the internet and complain – if she didn’t forfeit that right as part of the agreement.

The ADA

So where did Dr. Stacy Makhnevich learn about Medical Justice Inc.’s ineffective, unethical and probably illegal anti-defamation contract service? Of all places, it may well have been in ADA Headquarters, 211 E. Chicago Ave., Chicago, (312) 440-2500

Dr. Jeffrey Segal [MD, JD], the neurosurgeon and founder of Medical Justice Services Inc. which sold providers like Dr. Makhnevich the right to use his company’s contracts, was a featured speaker at the American Dental Association’s [ADA] annual Benefits Conference last year.

The ADA leadership’s decision to invite Dr. Segal to advertise his product at a benefits conference (?) reveals the old timers’ underlying paranoia that makes them prefer silence from members as well as their own dental patients.

Assessment

Since the ADA effectively put its stamp of approval on Medical Justice’s anti-defamation contracts, don’t you think the ADA News should at least post a warning about the liability to members who attended Dr. Segal’s presentation in ADA Headquarters? Let’s watch dentistry’s leaders ignore the abysmal results of yet another half-baked blunder caused by people too proud to listen.

Conclusion

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FTC: Non-Competition Contract Clause Agreements?

Posted on April 27, 2024 by Dr. David Edward Marcinko MBA

By Staff Reporters

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FTC Votes 3-2  to Ban Non-Compete Agreements, but Legal Challenges Expected

The Federal Trade Commission (FTC) just voted 3-2 to issue a final rule striking new non-compete agreements for all workers and phasing out existing non-competes for all but senior executives across “most employers.” The ban does not apply to non-profits including many of the country’s healthcare provider organizations due to the limitations of the FTC’s jurisdiction, one of several points of contention that has been raised by hospital industry groups that have opposed the ban.

The final rule will take effect 120 days after its publication in the Federal Register. To be in compliance, impacted employers will need to stop enforcing existing non-competes with workers other than senior executives, inform those who are no longer bound by existing non-competes and stop initiating new non-competes for all workers going forward, FTC staff said during an open meeting on the final rule held last week.

Source: Dave Muoio, Fierce Healthcare [4/23/24]

Moreover, the stay-or-pay contract practice requires nurses to put in a certain amount of time “or be required to pay money to their employer for an alleged debt, which could be tied to so-called training, a sign-on bonus, or other costs their employer claims are related to their employment,” according to National Nurses United (NNU), a union that represents about a quarter of a million registered nurses (RNs).

“The new FTC rule is a step in the right direction for nurses and those aspiring to take on this critical role in our communities,” NNU President Nancy Hagans said in a statement.

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Behavioral Finance for Doctors?

Posted on April 27, 2024 by Dr. David Edward Marcinko MBA

On the Psychology of Investing [Book Review]

By Peter Benedek, PhD CFA

Founder: www.RetirementAction.com

Some of the pioneers of behavioral finance are Drs. Kahneman, Twersky and Thaler. This short introduction to the subject is based on John Nofsinger’s little book entitled “Psychology of Investing” an excellent quick read for all medical professionals or anyone who is interested in learning more about behavioral finance.

Rational Decisions?

Much of modern finance is built on the assumption that investors “make rational decisions” and “are unbiased in their predictions about the future”, however this is not always the case.

Cognitive errors come from (1) prospect theory (people feel good/bad about gain/loss of $500, but not twice as good/bad about a gain/loss of $1,000; they feel worse about a $500 loss than feel good about a $500 gain); (2) mental accounting (meaning that people tend to create separate buckets which they examine individually), (3) Self-deception (e.g. overconfidence), (4) heuristic simplification (shortcuts) and (4) mood can affect ability to reach a logical conclusion.

John Nofsinger’s Book

The following are some of the major chapter headings in Nofsinger’s book, and represent some of the key behavioral finance concepts.

Overconfidence leads to: (1) excessive trading (which in turn results in lower returns due to costs incurred), (2) underestimation of risk (portfolios of decreasing risk were found for single men, married men, married women, and single women), (3) illusion of knowledge (you can get a lot more data nowadays on the internet) and (4) illusion of control (on-line trading).

Pride and Regret leads to: (1) disposition effect (not only selling winners and holding on to the losers, but selling winners too soon- confirming how smart I was, and losers to late- not admitting a bad call, even though selling losers increases one’s wealth due to the tax benefits), (2) reference points (the point from where one measures gains or losses is not necessarily the purchase price, but may perhaps be the most recent 52 week high and it is most likely changing continuously- clearly such a reference point will affect investor’s judgment by perhaps holding on to “loser” too long when in fact it was a winner.)

Considering the Past in decisions about the future, when future outcomes are independent of the past lead to a whole slew of more bad decisions, such as: (1) house money effect (willing to increase the level of risk taken after recent winnings- i.e. playing with house’s money), (2) risk aversion or snake-bite effect (becoming more risk averse after losing money), (3) trying to break-even (at times people will increase their willing to take higher risk to try to recover their losses- e.g. double or nothing), (4) endowment or status quo effect (often people are only prepared to sell something they own for more than they would be willing to buy it- i.e. for investments people tend to do nothing, just hold on to investments they already have) (5) memory and decision making ( decisions are affected by how long ago did the pain/pleasure occur or what was the sequence of pain and pleasure), (6) cognitive dissonance (people avoid important decisions or ignore negative information because of pain associated with circumstances).

Mental Accounting is the act of bucketizing investments and then reviewing the performance of the individual buckets separately (e.g. investing at low savings rate while paying high credit card interest rates).

Examples of mental accounting are: (1) matching costs to benefits (wanting to pay for vacation before taking it and getting paid for work after it was done, even though from perspective of time value of money the opposite should be preferred0, (2) aversion to debt (don’t like long-term debt for short-term benefit), (3) sunk-cost effect (illogically considering non-recoverable costs when making forward-going decisions). In investing, treating buckets separately and ignoring interaction (correlations) induces people not to sell losers (even though they get tax benefits), prevent them from investing in the stock market because it is too risky in isolation (however much less so when looked at as part of the complete portfolio including other asset classes and labor income and occupied real estate), thus they “do not maximize the return for a given level of risk taken).

In building portfolios, assets included should not be chosen on basis of risk and return only, but also correlation; even otherwise well educated individuals make the mistake of assuming that adding a risky asset to a portfolio will increase the overall risk, when in fact the opposite will occur depending on the correlation of the asset to be added with the portfolio (i.e. people misjudge or disregard interactions between buckets, which are key determinants of risk).

This can lead to: (1) building behavioral portfolios (i.e. safety, income, get rich, etc type sub-portfolios, resulting in goal diversification rather than asset diversification), (2) naïve diversification (when aiming for 50:50 stock:bond allocation implementing this as 50:50 in both tax-deferred (401(k)/RRSP) accounts and taxable accounts, rather than placing the bonds in the tax-deferred and stocks in taxable accounts respectively for tax advantages), (3) naïve diversification in retirement accounts (if five investment options are offered then investing 1/5th in each, thus getting an inappropriate level of diversification or no diversification depending on the available choices; or being too heavily invested in one’s employer’s stock).

Representativenes may lead investors to confusing a good company with a good investment (good company may already be overpriced in the market; extrapolating past returns or momentum investing), and familiarity to over-investment in one’s own employer (perhaps inappropriate as when stock tanks one’s job may also be at risk) or industry or country thus not having a properly diversified portfolio.

Emotions can affect investment decisions: mood/feelings/optimism will affect decision to buy or sell risky or conservative assets, even though the mood resulted from matters unrelated to investment. Social interactions such as friends/coworkers/clubs and the media (e.g. CNBC) can lead to herding effects like over (under) valuation.

Financial Strategies

Nofsinger finishes with a final chapter which includes strategies for:

(i) beating the biases: (1) Understand the biases, (2) define your investment objectives, (3) have quantitative investment criteria, i.e. understand why you are buying a specific investor (or even better invest in a passive fashion), (4) diversify among asset classes and within asset classes (and don’t over invest in your employer’s stock), and (5) control your investment environment (check on stock monthly, trade only monthly and review progress toward goals annually).

(ii) using biases for the good: (1) set new employee defaults for retirement plans to being enrolled, (2) get employees to commit some percent of future raises to automatically go toward retirement (save-more-tomorrow).

Assessment

Buy the book (you can get used copies through Amazon). As indicated it is a quick read and occasionally you may even want to re-read it to insure you avoid the biases or use them for the good. Also, the book has long list of references for those inclined to delve into the subject more deeply.

You might even ask “How does all this Behavioral Finance coexist with Efficient Market theory?” and that’s a great question that I’ll leave for another time.

More: SSRN-id2596202

Conclusion

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DAILY UPDATE: Cannabis, Healthcare and the Stock Market Rally!

Posted on April 27, 2024 by Dr. David Edward Marcinko MBA

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Here’s where the major stock market benchmarks ended:

  • The S&P 500 index gained 51.54 points (1.0%) to 5,099.96, up 2.7% for the week; the Dow Jones Industrial Average® ($DJI) increased 153.86 points (0.4%) to 38,239.66, up 0.7% for the week; the NASDAQ Composite jumped 316.14 points (2.0%) to 15,927.90, up 4.2% for the week.
  • The 10-year Treasury note yield (TNX) lost about 4 basis points to 4.665%.
  • The CBOE Volatility Index® (VIX) fell 0.34 to 15.03.

Alphabet’s rally helped communication services reverse Thursday’s downturn, which was driven by disappointing quarterly results from Meta Platforms (META). The S&P 500 Communication Services index ($SP500#50) surged 4.7% Friday and ended the week with a 2.7% gain. Semiconductor shares were also strong, led by a 6% gain in Nvidia (NVDA). The Russell 2000® Index (RUT) added 1.1% Friday and posted a 2.8% advance for the week.

In other markets, WTI Crude Oil (/CL) futures rose slightly Friday, ending around $83.65 per barrel and shutting down a three-week losing streak.

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  • Midi Health, a health clinic geared toward women in midlife, raised $60 million in Series B funding to expand its network to 150 clinicians by the end of the year, among other efforts. (MobiHealthNews)
  • “We’re fooling ourselves if we think that’s cheap or can be done less expensively.”—Carmela Coyle, president and CEO of the California Hospital Association, on hospital finances and cutting costs (AP)
  • The federal government implemented new staffing rules to improve patient care, but most nursing homes won’t be able to meet that demand. (KFF Health News/NPR)

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The Biden administration is considering a change that would downgrade cannabis from a Schedule I drug to a Schedule III drug this year. The reclassification would have major effects on the business of cannabis, but for that to happen, the Drug Enforcement Agency needs proof of medical effectiveness.

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