THE “MEDICAL EXECUTIVE-POST” MAST HEAD

Posted on November 28, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST 

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Back to Medical School – Not

Posted on November 28, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Certified Medical Planner

Physician Education and Re-engineering 

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]dem2

The Times … are a Changing 

Absent significant health reforms, it is important for healthcare providers to stay informed and current as to the volatile direction that health care is taking in this country. And, it is vital for every physician to learn as much about medically related business and financial topics as possible.  

In fact, several medical schools have even initiated business certification and degree programs, and other medical colleges along with the private sector will do the same going forward. This will allow the Profession to make the transition from a supply based medical system, to a demand driven one. It will also ensure that practices are operated as a Strategic Business Unit (SBU), and not like the “home office” medical practices of the past.

The Trend

Surprisingly, the trend in managed care now appears to be moving toward giving control back to informed physician-executives, who “stay the course” and continue to practice medicine.  

However, many physicians, nurses and healthcare workers don’t see it this way and become depressed. Pragmatically, the future healthcare industrial complex will offer great opportunities to change medicine for the better.

One way to accomplish this goal is to run your practice like a business and integrate management concepts with tem of trusted team of advisors, or formally re-educate yourself.  

Online master’s degree programs, for medical professionals, like those offered at Regis University (303) 964-5447, the University of Tennessee (423) 974-1768, Washington University (Olin) in St. Louis (888-273-6820), and the University of Wisconsin (608) 263-4889, may also help.

Example:

To illustrate this education premium, total compensation for a full time and experienced Chief Medical Officer (CMO) increased 8% annually the last few years, and more than half were working toward an advanced management degree.

But, CMO turnover is becoming alarmingly high of late; and may not be the great career move it once was. 

Still, since an MBA is a huge time, and money investment ($30-90,000), it is not for everyone. And, do not expect increased earnings or an automatic managerial position without experience.  

telehealth

Assessment

So instead, consider earning the professional fiduciary designation Certified Medical Planner [CMP™], which integrates personal financial planning principles with medical practice management acumen http://www.CertifiedMedicalPlanner.org

For more information: Professor Hope R. Hetico; RN, MHA, CMP™ MarcinkoAdvisors@msn.com or [770.448.0769 ph]

Conclusion

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Physicians “Stay the Course”

Posted on November 28, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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“Don’t give up Medical Practice, Yet!”

By Dr. David Edward Marcinko; MBA, CMP™dr-david-marcinko 

Practicing Medicine … is Hard to Do 

Is practicing medicine today, really that tough? Increasingly, the answer is “Yes”, according to our doctor clients and the docs we interviewed for this post.  

And, it’s no wonder that Dr. Regina E. Herzlinger – the Nancy R. McPherson professor of business administration and chair at Harvard Business School and author of the books Creating New Healthcare Ventures and Market Term in Healthcare – says that many medical professionals have become depressed and want to give up their careers, entirely. 

For example, Gigi Hirsch, MD, a former ER physician and instructor at Harvard Medical School grew so disenchanted with clinical medicine, that she ditched her career and started her own business, MD IntelliNet, in Brookline, Mass. The company places doctors in non-traditional jobs by pairing them with venture capitalists and other businesses seeking physicians [personal communication].  

In the same light, Michael Burry, MD, a promising young neurologist from Stanford and Vanderbilt, rejected his medical career to become a private portfolio manager for Scion Capital Management, as did Harvard trained radiologist, Faraz Naqvi, MD, the former fund manager for Dresdner RCM Biotechnology Fund [personal communication]. 

Other notables include Dr. Dimitri Sogoloff, MBA of Alexandra Investment Management, LLC, and Dr. Ken Shuben-Stein, CFA©, formerly of Promethean Investing, a hedge fund in New York City [personal communication].   

In a final example, Dr. Laura Eackloff, 45 was a podiatrist for 10 years and thoroughly enjoyed treating patients, but she hated spending more time on the phone negotiating with health insurance companies than examining her patients. “Honestly, health care is a business, and I didn’t like the business of medicine,” said Eackloff, who shut down her practice and opened Gotta Knit, a yarn store in New York City’s Greenwich Village. Her friends and family were extremely supportive of her decision to help people with their hands instead of their feet.

Source: Geoff Williams, Entrepreneur.com [11/27/07]

Assessment

But, Herzlinger implores in her book, Market Driven Healthcare, “don’t give up practice, yet.”  

So, will you stay the course – or abandon ship – and what are your alternatives?

Conclusion

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Managed Care Backlash?

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

A True “Sea-Change”

By Dr. David Edward Marcinko; MBA, CMP™

Publisher-in-Chief 

Does anyone recall a study several years ago by The MEDSTAT Group and JD Power and Associates, which surveyed nearly 30,000 physicians – participating in 150 healthcare plans and located in 22 different markets – nearly seven of ten physicians considered themselves “anti-managed care” with capitation accounts declining in nearly every HMO category. 

Of course, dis-satisfaction with financial reimbursement was the leading factor back then; but 4 other major factors drive physician’s rating of health plans now, as listed below: 

  • Satisfaction with financial reimbursement
  • Administration
  • Policies impacting on care quality
  • Support of clinical practice
  • Limits on medical care

Nevertheless, HMOs had not been initially unresponsive to this managed care backlash. 

For example, since 1998, managed care companies and their allies fought against restrictive new proposed regulations and spent more than $112,000 per lawmaker to lobby Congress.

This 60 million dollar outlay was four times the $14 million plus spent by medical organizations, trial lawyers ($1 million), unions ($1.4 million) and consumer groups ($8 million) to press for passage of the failed Patients Bill of Rights.

The $60 million dollar lobbying tab is also 50 percent higher than the $40 million dollars that tobacco interests spent to kill legislature to raise cigarette taxes to curb teenage smoking! 

But, there have been some recent physician victories.  

For example, the Independence Blue Cross (IBC) and the Pennsylvania Orthopedic Society agreed to settle a class action lawsuit about its payment policies, in July 2003, with payouts in 2004. Members of the class were to receive benefits worth an estimated $40 million, but more importantly, IBC was to disclose its standard fee schedules, changes applicable to provider’s specialty, and policies that may have effected reimbursement.  IBC also replaced its independent procedure designation with Current Procedure Terminology’s (CPT’s) separate procedure designation, and was to process claims in accordance with established standards.

Finally, the insurance company will establish a formal resolution process for provider payments appeals.  

Current and newly defunct IBC subsidiaries include QCC Insurance Company, Keystone Health Plan East, Amerihealth HMO, Amerihealth, Amerihealth HMO New Jersey, or Amerihealth New Jersey. 

Can you report a victory to our readers, in your own case?

Is this a sea-change, or merely an isolated event?

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Reporting Healthcare Fraud and Abuse

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Patient Bounty Hunters 

By Dr. David Edward Marcinko; MBA, CMP™

Publisher-in-Chief 

Fraud and Abuse Reporting Incentives 

Under the Health Insurance Portability Accountability Act, the Department of Health and Human Service (HHS) has operated an “Incentive Program for Fraud and Abuse Information”, since January 1999. 

In this program, HHS pays $100-$1,000 to Medicare recipients who report abuse in the program. To assist patients in spotting fraud, CMS has published examples of potential fraud, which include: 

  • Medical services not provided
  • Duplicate services or procedures
  • More expenses services or procedures than provided (upcoding/billing).
  • Misused Medicare cards and numbers
  • Medical telemarketing scams
  • Non-medical necessity.

And, there is no question that real fraud exists.

For example, the Office of Inspector General of the Department of Health and Human Services (HHS) saved American taxpayers a record $21 billion in Fiscal-Year 2003-04, according to former Inspector General Janet Rehnquist. 

Savings were achieved through an intensive and continuing crackdown on waste, fraud and abuse in Medicare and over 300 other programs for which the Office of Inspector General. (OIG) had oversight responsibility.

At last report, the agency performed or oversaw 2,372 audits, conducted 70 evaluations of department programs, and opened 1,654 new civil and criminal cases, bringing to more than 2,700 the number of active OIG investigations. 

Additionally, the OIG excluded 3,448 individuals and entities from participation in Medicare, Medicaid and other federally sponsored health care programs, and its enforcement efforts resulted in 517 criminal convictions and 236 successful civil actions. 

To discourage flagrant allegations, regulations require that reported information must directly contribute to monetary recovery for activities not already under investigation.

Nevertheless, expect a further erosion of patient confidence, as they begin to view healthcare providers in the same light as “bounty hunters”. 

Doctors – has a patient “turned-you-in” needlessly – yet?

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Concierge Medicine – New Wave or Drought?

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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Boutique Medical Practices – Wave of the Future or Mirage?

[By Dr. David Edward Marcinko; MBA, CMP™]dr-david-marcinko1

Briefly, a new-wave boutique, or concierge medical practice business model requires an annual retainer fee for personalized treatment that includes amenities far beyond those offered in the typical practice. And, as doctors may not accept Medicare patients for two years thereafter, there is no going back to the economic oasis if the model doesn’t pan out.

Rather, patients pay annual out-of-pocket fees for top tier service, but also use traditional health insurance to cover allowable expenses, such as inpatient hospital stays, outpatient diagnostics and care, and basic tests and physician exams.   

Typical annual fees can range from $1,000 to $ 5,000 per patient, to family fees that top $20,000 a year, or more.  The concept, initially developed for busy corporate executives, has now made its way to those desiring such service; but the masses have been slow to accept the new business model. 

Conclusion

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Medical Malpractice – Hope Springs?

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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The Medical Malpractice Insurance Crisis 

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief, FA and Health Insurance Agent]

DEM @ WhartonHas the Corner Been Turned?

In the fall of 2003, the American Medical Association announced that six more states had reached a medical malpractice crisis, with patients losing access to care due to physician attrition. The AMA’s list of crisis states then totaled 18.

The new states were: Arkansas, Connecticut, Illinois, Kentucky, Missouri and North Carolina. The 12 states previously identified are: Florida, Georgia, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Washington and West Virginia.

More recently, the Medical Group Management Association (MGMA) reported that medical malpractice premiums for its members increased by more than 53% between 2003 and 2004. Today, about 25% of those physicians planned to retire, relocate or restrict their services over the next few years. Massachusetts was especially hard hit in 2003-06, as the practice environment worsened for the twelfth consecutive year, driven primarily by rising premiums for medical malpractice coverage. 

Yet, in 2007, the rate of medical malpractice claims fell for the fourth straight year in Pennsylvania, with half the payout of 2003. That suggests that claims are getting smaller, as observer’s credit a 2002 law which banned attorneys from moving cases to counties they felt would have more favorable juries. Now, the state’s physicians would like to see the state enact caps on non-economic damages. 

So, how is this crisis affecting you; if at all?

Spring 2011 - NIH

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PPMC Redux

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Physician Practice Management Corporations

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]dem21

Here Come the PPMCs … again, Maybe!

The Physician Practice Management Corporation (PPMC), left for dead by the year 1999, may make a comeback going forward in 2008.

PPMC are evolving from first generation multi-specialty national concerns, to second generation regional single specialty groups, to third generation regional concerns, and now to fourth and fifth generation Internet enabled service companies, providing both business to business solutions to affiliated medical practices, as well as business to consumer health solutions to plan members. 

Even survivors like Pediatrix Medical Group saw its stock drop was floundering following disclosure that federal officials were investigating its Medicaid billing practices a few years ago. 

On the other hand, many private medical practices were bought back by the same physicians that sold out to the PPMCs originally.

But, if an entity is being bought back and accounts receivable is being purchased, be careful not to pick this item up as income twice.  The costs can be immense to your medical practice 

Example: 

A family practice purchased itself back from a PPMC.  Part of the mandatory purchase price, approximately $200,000 (the approximate net realizable value of the accounts receivable), was paid to the PPMC to buy back accounts receivable generated by the physicians buying back their practice.   

Unfortunately, the physician-executive unknowingly began recording the cash receipts specifically attributable to the purchased accounts receivable as patient fee income.  If left uncorrected, this error could have incorrectly added $200,000 in income to this practice and cost it (a C Corporation) approximately $70,000 in additional income tax ($200,000 in fees x 35% tax rate).

The error in the above example is that the PPMC must record the portion of the purchase price it received for the accounts receivable as patient fee income.  The buyer practice has merely traded one asset, cash, for another asset, the accounts receivable.  When the practice collects these particular receivables, the credit is applied against the purchased accounts receivable (an asset), rather than to patient fees.

So, be careful out there! www.MedicalBusinessAdvisors.com

Assessment: Anyone burned in a similar manner?

PPMC Update 2019

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The Hospitalists [Evolved]

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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Whither the Hospitalists? 

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief] 

New Role also includes Hospital Based Medical Groups 

The usual role of inpatient care in this country, for many decades, saw hospitalized patients cared for by their primary care doctor or admitting physician. 

Although this model had the advantage of continuity, and perhaps personalization, it often suffered because of the limited knowledge base of the physician, as well as familiarity with the available internal and external resources of the hospital.  Furthermore, the limited time spent with each individual patient prevented the physician from becoming the quality leader in this setting.

These shortcomings have led hundreds of hospitals around the country to turn to the hospitalists as dedicated inpatient specialists. The National Association of Inpatient Physicians (NAIP) estimates the model could result in up to 50,000 hospitalists by the Year 2008. The term hospitalist was coined by Dr. Robert M. Wachter of the University of California at San Francisco. It denotes a specialist in inpatient medicine (personal communication). 

At its center is the concept of low cost and comprehensive broad based care in the hospital, hospice or even extended care setting. If, well designed, hospitalist programs can offer benefits beyond the often cited inpatient efficiencies they bring.

For example, the average length of stay for patients on the medical service of UCSF’s Moffitt-Long Hospital initially fell by 15%, compared to historical controls adjusted for case mix. There was no reported decrease in patient satisfaction or clinical outcomes. 

Similarly, another integration model is “on-site” employee affiliations that represent an adjustment of the hospitalist concept. This redeployment of existing MDs into the workplace (factory, police station, office building) or retail setting (Walmart, Intel Corp, Microsoft, IBM etc) is another exciting challenge in heath care today.

The keys to success are thoughtful implementation and a commitment to measure the results of change and use the data to produce further innovations. 

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Hospital

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Conclusion

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

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Beware “Faux” Health Insurance Models

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

 

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The Proliferation of Fraudulent Silent (“Mirror”) Healthcare Models – Should I Join?

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chiefdem2]

Beware the Silence 

A silent, faux, or “mirror” PPO, HMO or other provider model is not a formal managed care organization.  Rather, it usually is simply an intermediary attempt to negotiate practitioner fees downward by promising a higher volume of patients in exchange for the discounted fee structure.

Of course, the intermediary then resells the packaged contract product to any willing insurance company or other payer, thereby pocketing the difference as a nice profit. And, sometimes these virtual organizations are just indemnity companies in disguise.

Physicians should not fall for this ploy, since pricing pressure will be forced even lower in your next round of “real” PPO negotiations! 

Occasionally, an insurer or bold insurance agent will enter a market and tell its practitioners that they have signed up all the local, or many major, employers. Then, they’ll go to the employers and give them the same story about signing up all the major providers. The true story is that they haven’t signed up either and a Ponzi like situation is created!  

As an active fiduciary Certified Medical Planner™, insurance agent and licensed medical provider, I urge you to be on guard for silent HMOs, MCOs and any other silent insurance variation, since these virtual organizations may not exist except as exploitable arbitrage situations for the middleman. 

So, has anyone been duped out there?

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Assessment

Thanks so much for your interest in the ME-P. We hope it, and all our books, texts, dictionaries, products and educational formats serve you well.

Conclusion

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Social HMOs

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

What is a Social HMO – Should My Patients Join? 

Staff Writers

 

 

A New Model Evolves 

 

A social HMO offers extended coverage for some of the unconventional expenses associated with senior healthcare, such as transportation and in-home day care not covered by traditional MCOs.  

According to the American Association of Health Plans (AAHP), social HMOs provide coordinated services by uniting federal and state funds and services, to benefit the elderly. 

The Four Medicare Plans 

There are currently four S/HMO’s participating in Medicare and each has eligibility criteria http://endoflifecare.tripod.com/imbeddedlinks/id1.html 

These S/HMO plans are located in: Portland, Oregon; Long Beach, California; Brooklyn, New York; and Las Vegas, Nevada.  Listed below are the four plans and the criteria for joining each plan.  

1. Kaiser Permanente, Portland Oregon

The enrollee must be 65 years of age or older, must have Medicare Part A and Part B, must continue to pay the Part B premium and must live in Kaiser Permanente’s S/HMO service area. The enrollee cannot have end-stage renal disease, or reside in an institutional setting. In order to receive the long-term care benefit, an expanded care resource coordinator will visit you at home to determine if you qualify for nursing home certification based on criteria established by the State of Oregon Senior and Disabled Services. These criteria may include needing daily ongoing assistance from another person with one of the following activities of daily living: walking or transferring indoors, eating, managing medications, controlling difficult or dangerous behavior, controlling your bowels or bladder, or the need for protection and supervision because of confusion or frailty.  

2. SCAN, Long Beach California

The enrollee must be 65 years of age or older, must have Medicare Part A and Part B, must continue to pay the Part B premium and must live in SCAN’s service area. The enrollee cannot have end-stage renal disease. In addition, in order to receive extended home care services, members must have a Nursing Home Certificate which indicates that the member’s informal support system, such as a family member or care giver, is not sufficient to keep the member out of a nursing home. 

3. Elderplan, Brooklyn, New York

The enrollee must be 65 years of age or older, must have Medicare Part A and Part B, must continue to pay the Part B premium and must live in Elderplan’s service area. The enrollee cannot have end-stage renal disease. In order to receive chronic care benefits, the enrollee must meet state nursing home certifiable criteria. 

4. Health Plan of Nevada, Las Vegas, Nevada

The enrollee must be at least 65 years of age, or may be under 65 if they are disabled. The enrollee must have Medicare Part A and Part B, must continue to pay the Part B premium and must live in Health Plan of Nevada’s service area. The enrollee cannot have end-stage renal disease. For the long-term care benefit, the beneficiary must meet certain criteria based on established medical, psychological, functional, and social criteria as well as needing to be medically necessary.

Assessment

As always however, it’s “buyer-beware” as these new-wave organizations continue to evolve and morph; but your experiences are invited so that others may benefit.

Conclusion

Your comments are appreciated.

For related info: The Business of Medical Practice [Advanced Profit Maximization Techniques for Savvy Doctors]
http://www.springerpub.com/prod.aspx?prod_id=23759

Institutional: www.HealthcareFinancials.com

Terminolog: www.HealthDictionarySeries.com

Filed under: Managed Care | Leave a comment »

Tiered Future Healthcare Delivery Models

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Futuristic Healthcare Economic Models

 By Dr. David Edward Marcinko; MBA, CMP™dem21

A Three Tiered Insurance System? 

Uwe Reinhardt PhD, James Madison Professor of Political Economics of Princeton University in New Jersey, and an opponent of MCO liability, opined several years ago that in the near future there will be a three tiered system of medical care in the US. The bottom tier will consist of the uninsured and uninsurable (46 million, January, 2007), the middle tier will be served by managed care organizations, and the top tier will continue to demand traditional (indemnity) fee-for-service medicine.

Probable Characteristics

Regardless of future model(s) of care, we believe the goals of any optimal healthcare economic policy should include the following characteristics: (1) low demand barriers of price, travel, wait time, referral ease and paperwork, (2) adequacy of supply regarding medical personnel, clinics, drugs and equipment, (3) technical efficiencies such as service mix, (4)   public expenditure control with tax reductions, and (5) quality medical care for the common social good. 

For related info: The Business of Medical Practice [Advanced Profit Maximization Techniques for Savvy Doctors]
http://www.springerpub.com/prod.aspx?prod_id=23759

Conclusion

As always, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759 

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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

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Filed under: Health Economics | 1 Comment »

Point-Counter Point Debates

Posted on November 27, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Voices of the “Executive-Post” Community

Coming Soon!

Now in Beta Launch Development

The Executive-Post is always seeking new and innovative features for our online community of medical professionals, financial advisors and practice management consultants. And so, as we consider all novel ideas sent in for consideration, we will begin incorporating the “best-of-breed” into our network.

The first concept is our emerging “Point-Counter Point” thread. It will be a debate forum for all medical professionals and financial advisors to lock-horns-on. As stated on our MASTHEAD, we have “an attitude that’s fiercely independent, outspoken, intelligent and so Next-Gen; often edgy, usually controversial.”  And so, let us begin the controversy with this query.

Question

Should a medically focused financial advisor, or management consultant, act as a fiduciary to physicians or other healthcare entity clients?

In other words, doctors and nurses serve in a fiduciary relationship with their patients; and can not opt-out of this bond of trust. Should we – or should we not – hold our financial advisors and management consultants to the same standard of care; part-time, or full-time? Or, does some lower standard suffice?

Fiduciary or not a fiduciary – that is the question?

Voices of the Executive-Post Community

We will moderate, edit and post opposing thoughts and ideas on this subject, in the order they are received. Duplications will be purged. Eloquence counts. Be cogent, on-point and present evidence supporting your views. The more scholarly, legal, ethical, experienced, and/or pragmatic, the better! Less opinion, more facts and detail is appreciated

So, start the dialog and Socratic discussion, now!

You may also vote in real time here: http://certifiedmedicalplanner.com/vote.aspx

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Financial Planning: http://www.jbpub.com/catalog/0763745790

Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Administrative Terms: www.HealthDictionarySeries.com

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Filed under: Ethics, Op-Editorials, Point-Counter Point | 1 Comment »

The CSO Life Insurance Table

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Do You Know About the “New-Old” 2001-2009 CSO Life Insurance Table?

By Dr. David Edward Marcinko; MBA, CMP™

Publisher-in-Chiefinsurance-book  

As physicians and medical professionals, we know that all life insurance and annuity product pricing is based on mortality – the expectation of when, not if, death will occur.  

But, did you know that at its December 2002 meeting, the National Association of Insurance Commissioners (NAIC, http://www.naic.org) approved a new mortality table for individual life insurance products sold in the United States.  

The 2001 Commissioners Standard Ordinary (CSO) Table is the new valuation mortality table – insurers will use it to determine mortality risk when they calculate their own company reserves.  So, all physicians should be aware that this may lead to structural changes to term policies including a reduction in term rates and higher issues ages for level term products.   

The good news is that several large insurers have already lowered term rates 20-30%. 

The trouble is that the “new CSO table” is not required to be used by all insurance companies until 2009! 

Your comments are appreciated? 

More on: “New Risks for Physicians to Manage”

www.physiciansmoneydigest.com/article.cfm?ID=3146

 

Related info: http://www.jbpub.com/catalog/978076373342

Product DetailsProduct DetailsProduct Details       

Product Details  Product Details

1

 

Filed under: Insurance Matters | Tagged: | 1 Comment »

Annuity Taxation Basics

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

The Annuity Taxation Primer for Physicians

By: Gary A. Cook, MSFS, CFP®, CLU, ChFC, RHU, LUTCF, CMP™ (Hon); with Kathy D. Belteau, CFP®, CLU, ChFC, FLMI, and Philip E. Taylor, CLU, ChFC, FLMI insurance-book

Introduction  

The tax treatment of annuities is dependent on whether it is a qualified or non-qualified annuity.  Although both permit the tax-deferred growth of the investment and both have penalties for early distributions, they are governed under different sections of the IRC. 

Qualified Annuity Taxation

Qualified annuities are treated no different than any other tax-qualified retirement investment.  Growth of the investment, whether fixed interest or variable-based, escapes current taxation under one of the 400-series IRC sections. 

Additionally, if the funds are withdrawn prior to age 59½, there is a 10 percent penalty.  As the money is withdrawn, every dollar is taxed as ordinary income.  

Finally, fund distributions must begin no later than April 1 of the calendar year following the year when the owner turns age 70½.

Non-Qualified Annuity Taxation 

The taxation of non-qualified annuities is generally contained within IRC § 72.  Again, the annuity is provided tax-deferred growth and the 10 percent penalty for early withdrawal.  The manner that distributions are taken, however, will determine the nature of their taxation.

Withdrawals

Withdrawals from non-qualified annuities are taxed in one of two ways depending upon when the annuity was issued.  Annuities issued prior to 8/14/82 had FIFO accounting (first in, first out). Since principal was first in, it came out first, tax-free.  With annuities issued on 8/14/82 and thereafter, taxation changed to LIFO (last in, first out). Simply put, withdrawals are now taxable since interest is withdrawn first.  

However, if annuitization is chosen, the insurance company using governmental tables develops an exclusion ratio.  This permits a portion of each received payment to be considered a return of principle and thus only a portion of each payment is taxable.  This exclusion ratio remains in effect until the insurance company has returned all of the original principle to the owner.  After that, every payment received will be considered 100 percent earnings and totally subject to ordinary income taxation. 

The 10% Excise Penalty Tax      

Just like an IRA, there is a 10% excise tax penalty on premature withdrawals for deferred annuities.  The government extends tax advantages to the annuity for retirement purposes. The government also extends tax disadvantages to taxpayers who do not use the annuity for retirement. All interest withdrawn prior to the owner being age 59½ will be subject to a 10% excise tax penalty.  

Exceptions to this penalty tax are disability of taxpayer, distribution from a pre 8/14/82 annuity, death of the owner, payout from an immediate annuity or substantially equal payments over the taxpayer’s life expectancy.

Wealth Transfer Issues

Regardless of whether the medical professional or healthcare practitioner has a qualified or non-qualified annuity, extreme care must be given when specifying beneficiaries.  Although these investments have great potential for appreciating sizable amounts of wealth during a lifetime, they are, unfortunately, very poor vehicles for the transfer of this wealth to successor generations after death.

Upon the death of an annuity owner, an annuity can be subject to both federal estate and federal income taxes.  This double taxation often results in a 40 to 70 percent loss of annuity value before the heirs can receive it.   The retired medical professional should seek wealth transfer advice if he/she holds a large portion of their wealth in annuities or other qualified plans such as IRAs. One good strategy to consider may be the Stretch IRA. 

Conclusion

As always, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759 

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790 

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com 

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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

Subscribe Now: Did you like this Executive-Post, or find it helpful, interesting and informative? Want to get the latest E-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

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Filed under: Taxation | Tagged: | 3 Comments »

Annuity Insurance Products

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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A Brief Overview of Annuities for Physicians

[By Gary A. Cook, MSFS, CFP®, CLU, ChFC, RHU, LUTCF, CMP™ (Hon)]

[By Kathy D. Belteau, CFP®, CLU, ChFC, FLMI]

[By Philip E. Taylor, CLU, ChFC, FLMI]fp-book1

 Introduction

Annuities were reportedly first used by Babylonian landowners to set aside income from a specific piece of farmland to reward soldiers or loyal assistants for the rest of their lives.

Today’s annuities substitute cash for farmland; however the concept is the same. In 1770, the first annuities were sold in the United States and were issued by church corporations for the benefit of ministers and their families. Annuities have grown on a tax-deferred basis since enactment of the Federal Income Tax Code in 1913.  They began to gain widespread acceptance in the early 1980s when interest rates credited exceeded 10%.  During the last two decades, annuities have been the fastest growing sector of premiums for life insurance companies.

Nevertheless, are they actually “needed” by contemporary physicians – – or merely “sold” to them? 

An annuity is a legal contract between an insurance company and the owner of the contract. The insurance company makes specific guarantees in consideration of money being deposited with the company.

Annuities are generally classified as fixed or variable – deferred or immediate.  As their names indicate, deferred annuities are designed as saving funds to accumulate for future use.They are growth-oriented products where the tax on the interest earned is deferred until the money is withdrawn.  An immediate annuity is used for systematically withdrawing money without concern for the money lasting until the end.  The insurance company assumes this risk.

Deferred Annuities

The deferred annuity contract, like a permanent life insurance policy, has been found by some to be a convenient method of accumulating wealth.  Funds can be placed in deferred annuities in a lump sum, called Single Premium Deferred Annuities, or periodically over time, called Flexible Premium Deferred Annuities.  Either way, the funds placed in a deferred annuity grow without current taxation (tax-deferred).  .

Fixed Deferred Annuity

Fixed deferred annuities provide a guaranteed minimum return of return (usually around 3 percent per year) and typically credit a higher, competitive rate based on the current economic conditions.

Fixed annuities are usually considered conservative investments as the principal (premium) is guaranteed not to vary in value. Insurance companies are required by state insurance laws to maintain a reserve fund equal to the total value of fixed annuities.  Fixed annuities are also protected by State Guaranty Fund Laws. 

Example: 

Dr. Park, a retired physician, desires a safe financial vehicle for $100,000 of her excess savings.  She doesn’t need the earnings of this investment for current income and also wants to reduce her income tax liability.  She decides to purchase a fixed deferred annuity with her $100,000.  The annuity guarantees a 3 percent annual return and the current rate is 6 percent. 

After the first year, $6,000 of interest is credited to the annuity and Dr. Park has no current income taxes as a result.  If the 6 percent interest rate does not change, after 3 years, the annuity will have $119,102 of value.

Variable Deferred Annuity

Recently, variable deferred annuities have become very popular.  Like fixed annuities, variable deferred annuities offer tax-deferred growth, but this is where the similarities end.  Variable annuities are not guaranteed.  The appreciation or depreciation in value is totally dependent on market conditions.

Variable deferred annuities assets are maintained in separate accounts (similar to mutual funds) that provide different investment opportunities.  Most of the separate accounts have stock market exposure, and therefore, variable annuities do not offer a guaranteed rate of return.

But, the upside potential is typically much greater than that of a fixed annuity. The value of a variable deferred annuity will fluctuate with the values of the investments within the chosen separate accounts.  Although similar to mutual funds, there are some key differences.  These include:

·  A variable annuity provides tax deferral whereas a regular mutual fund does not

·  If a variable annuity loses money because of poor separate account performance, and the owner dies, most annuities guarantee at least a return of principal to the heirs.  This guarantee of principal only applies if the annuity owner dies.  If the annuity value decreases below the amount paid in, and the annuity is surrendered while the owner is alive, the actual cash value is all that is available.

·  When money is eventually withdrawn from a deferred annuity, it is taxable at ordinary income tax rates.  With taxable mutual funds, they can be liquidated and taxed at lower, capital gains rates.

·  There is also a 10 percent penalty if the annuity owner is under 59½ when money is withdrawn.  There is no such charge for withdrawals from a mutual fund.

· The fees charged inside of a variable annuity (called mortality and expense charges) are typically more than the fees charged by a regular mutual fund. 

Assessment

Variable deferred annuities are sensible for physicians who want stock market exposure while minimizing taxes.  Most financial advisors and Certified Medical Planners™ [CMP™] recommend regular mutual funds when the investment time horizon is under 10 years.  But if the time horizon is more than 10 years, variable annuities may occasionally become more attractive because of the additional earnings from tax-deferral. 

Both types of deferred annuities are subject to surrender charges.  Surrender charges are applied if the annuity owner surrenders the policy during the surrender period, which typically run for 5 to 10 years from the purchase date.  The charge usually decreases each year until it reaches zero.  The purpose of the charge is to discourage early surrender of the annuity. 

Equity Index Annuity 

The equity index annuity combines the basic elements of both the variable and the fixed annuity. The credited interest earnings are generally linked to a percent of increase in an index, such as the Standard & Poor’s 500 Composite Stock Price Index (S&P 500). This percentage is called the Participation Rate and may be guaranteed for a specified period of up to 10 years or adjusted annually. Thus, the physician annuity owner is able to participate in a portion of market gains while limiting the risk of loss. 

Typically, the indexed annuity has a fixed principal, with the insurance company and contract owner sharing the investment risk.  If the S&P 500 Index goes up, so do interest earnings.  If it declines, the insurance company guarantees the principal.   

So, the physician contract owner accepts the risk of an unknown interest yield based on the growth or decline of the S&P 500.  Medical professionals and healthcare practitioners should pay particular attention to surrender penalties, asset management fees and any monthly caps on appreciation. 

Immediate Annuities

Immediate annuities provide a guaranteed income stream.  An immediate annuity can be purchased with a single deposit of funds, possibly from savings or a pension distribution, or it can be the end result of the deferred annuity, commonly referred to as annuitization.  Just like deferred annuities, immediate annuities can also be fixed or variable.  

Immediate annuities can be set up to provide periodic payments to the policy owner annually, semiannually, quarterly or monthly.  The annuity payments can be paid over life or for a finite number of years.  They can also be paid over the life of a single individual or over two lives. 

Insurance Agent Commissions

Immediate Fixed Annuity

Immediate fixed annuities typically pay a specified amount of money for as long as the annuitant lives.They may also be arranged to only pay for a specified period of time, i.e., 20 years.  They often contain a guaranteed payout period, such that, if the annuitant lives less than the guaranteed number of years, the heirs will receive the remainder of the guaranteed payments. 

A note of caution here, as the selection of an immediate annuity is an irrevocable decision! 

Example: 

Dr. Jones is 70 years old and retired.  He is only of average wealth, but is concerned that if he lives too long, he could deplete his savings.  He decides to use $100,000 and purchase a lifetime immediate annuity with 20 years certain.  The insurance company promises to pay him $7,000 per year as long as he lives. If Dr. Jones dies four years after purchase, he would only have received $28,000 out of a $100,000 investment.  However, his heirs will receive $7,000 for the next 16 years.  If Dr. Jones survives to the age of 98, he would have received $196,000 (or 28 years of $7,000).

Immediate Variable Annuity

Immediate variable annuities provide income payments to the annuitant that fluctuates with the returns of the separate accounts chosen.  The theory is that since the stock market has historically risen over time, the annuity payments will rise over time and keep pace with inflation.   If this is indeed what happens, it is a good purchase, but it cannot be guaranteed. 

Some companies will, at a minimum, provide a guarantee of a low minimum monthly payment no matter how poorly the separate accounts perform.

Split annuities

A popular method of adding income and yet still accumulating savings is through the use of two separate annuity policies.  Part of the funds is placed in an immediate annuity to provide monthly income.  The balance is placed in a deferred annuity grows to the total value of the premium paid for both annuities.  

The income that is received from the Immediate Annuity includes a portion of the initial premium, as well as the taxable interest earned.   Only the portion of income that is interest is taxable. The ratio between the annuity principal and interest being paid out is called an Exclusion Ratio. 

Example:

Dr. Jeanne Jones has put $100,000 into a 5-year non-tax deferred vehicle at 5%. The earnings to supplement Jeanne’s retirement is $25,000.  With a combined federal and state tax of 33%, the net after tax income would be $16,750. Jeanne takes the same $100,000 using the split annuity concept she would receive $24,444 over the 5 years.  Based on an exclusion ration of 89%, her total taxable amount is $2,797.  This would yield $923 in taxes at the same 33% tax rate.  Jeanne would have $23,521 of spendable income with the split annuity compared to the $16,750.

Qualified Annuities

The term qualified refers to those annuities which permit tax-deductible contributions under one of the Internal Revenue Code (IRC) sections, i.e., § 408 Individual Retirement Accounts (IRA), § 403(b) Tax Sheltered Annuities, § 401(k) Voluntary Profit Savings Plans.  Qualified annuities can also result from a rollover from such a plan.  

Assessment

Currently, there is much lively debate in the industry as to whether an annuity, which is tax-deferred by nature, should be used as a funding vehicle within a tax-qualified plan, i.e., a tax-shelter within a tax-shelter.  Since the investment options within the annuity are also generally available to the plan participant without the additional management expenses of the annuity policy, it is felt this could be a breach of fiduciary responsibility. And, most insurance agents are not fiduciaries. 

Both the National Association of Securities Dealers (NASD) and the Securities and Exchange Commission (SEC) have gone on record as criticizing these sales.  

However, there are numerous examples of deferred annuities that have outperformed similar investment-category mutual funds, even after taking the annuity expenses into account. 

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

 

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Pro Bono Medical Care

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™
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The Demise of Pro Bono Medical Care?

[By Staff Writers]

biz-book3A survey some years back suggested that more than 40% of the country’s doctors are doing less pro-bono work due to managed care, and the resulting decrease in personal income.  

To combat this unintended economic phenomenon today, the organization Volunteers in Healthcare – now with the American Academy of Family Physicians – offers a free information patient record system to track the medical care given to the uninsured.

The system allows you to track and store information on patients, visits, providers, clinics, referrals and more.  It is guide-driven with sample reports that can be reconstituted to provide summary statistics on patients and providers. 

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Product Details  Product Details

Product Details

Filed under: Managed Care | Tagged: | 8 Comments »

Competitive Practice Strategies for Physicians

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

How Physicians Must Develop a Strategic Competitive Practice Philosophy!

Staff Writersbiz-book3

It is currently believed that a general medical, or even broad specialty, practice will have limited appeal to patients and buyers of healthcare services in the future. 

In its place, a doctor must philosophically decide if she or he is to become a (1) discount, (2) service or (3) value-added provider, and then aggressively pursue this business cultural and competitive strategy. 

Here is the lowdown on three strategic competitive philosophical types: 

The Service Provider:  

A provider committed to a service philosophy must be willing to do whatever it takes to satisfy the patient. 

For example, this may mean providing weekend, weeknight, or holiday office hours, instead of a routine 9-5 schedule. House calls, hospital visits, prison calls and nursing home rounds would be included in this operational model.  

In 2001, the number of physician house calls billed to Medicare in the aggregate was about 1.5 million annually, according to the American Association of Home Care Physicians. Since then it has doubled, and the national organization is getting more requests from doctors about house calls. Current membership stands at about 1,500 doctors.  The Medicare premium for home visits is about 1.5 times what it pays for office visits. 

In a real life example, Dr. Keri Miller DO, now an assistant professor of family and community medicine at the University of Georgia, School of Osteopathic Medicine, first began making house calls shortly after beginning practice, in 2003.  

In another example, high-tech companies, located in Silicon Valley and Southern California are even importing medical specialists, and mobile treatment facilities, onto their corporate campuses to care for workers. Children, elderly patients or those with mental, physical or chemically induced challenges are all fertile niches of a core service philosophy.  

Up to about 30% of all medical providers today; and slowly growing  

Think: Nordstrums, Cartier and Sak’s, etc. 

The Discount Provider:  

A discount medical provider is one who has made a conscious effort to practice low cost, but high volume medicine.   

For example, discount providers must depend on economics of scale to purchase bulk supplies, since this model is ideal for multi-doctor practices. 

Otherwise, several practitioners must establish a network, or synergy to create a virtual organization to do so.  In this manner, malpractice insurance, major equipment and other recurring purchases can be negotiated for the best price.  Para-professional, and non-professional, medical care extenders and substitutes must also be used in place of more costly medical providers.

Another major commitment must be made to computerized office automation devices, HIT, EMRs, CPOE systems, etc.  By necessity, such as offices are small, neatly but sparsely furnished, with functional and utilitarian assets.  Most all managed care contracts just be aggressively sought since patient flow and volume is the key to success in this competitive philosophical type. 

About 60% of all providers today; but the denouement has begun.  

Think: WalMart, K-Mart, Office-Deport, or Home Depot, etc. 

The Value-Added Medical Provider: 

A value-added medical provider is committed to practicing at the highest and riskiest levels of medical and surgical care and has the credentials and personality to do so.   

Value differentiation is based on such factors as: board-certification extended training, hospital privileges, subspecialty identification or other unique attributes such as fluency in a second language or acceptance into an ethnocentric locale. This brand identification must be inculcated in all you do, as you continually answer the question: What can I offer that no one else can?   

Approaching about 5-10% of all providers today; but much less for pure concierge or boutique medical practices.

Think: Nieman-Marcus, etc.  

Conclusion: 

Remember, it is better for a physician to consciously decide which competitive strategy to purse; than merely fall into one model, by unthinking default.

Filed under: Marketing & Advertising | 1 Comment »

Practice Pro-Forma Accounting Statements

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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What are Medical Practice Pro-Forma Financial Statements?

[By Staff Writers]

biz-book1Since a start-up medical practice has no historical financial information, simplified Pro Forma’s are estimated statements that are typically projected for 3 years.  They demonstrate the best care, worst case and most likely financial scenarios of a new practice, clinic, healthcare entity, etc. Computerized spreadsheets are ideal for this task.  Other relevant financial information may be included, as needed. 

 Net Income (Profit and Loss) Statement 

By allocating a practice’s profit or loss into operating groups, banks or investors can isolate profitable revenue centers and isolate unprofitable costs drivers. In certain managed care contracts, an analysis to identify unit or per dollar revenues, gross profits and/or gross margins, is vital.  Other non-cash expenses (i.e., depreciation, amortization and deferred taxes) are then deducted from revenues to determine overall net income. All is included in the income statement.  

Cash Flow Statement 

The Statement of Cash Flow (SCF) projects estimated cash flows by month, quarter and year, along with the anticipated timing of cash receipts and disbursements.  The office’s bills and obligations are paid out of cash flow, not net income.  It is very important for accrual based accounting practices; especially in terms of Medicare, Medicaid, MCOs, PPOs and HMOs producing insurance payment time delays and other aged accounting methodologies.  Cash flow reflects the internal generation of fund available to supply operating capital.  

 Balance Sheet 

The Balance Sheet (BS) forecasts the financial condition, assets and liabilities, of an office at a singular point in time.  It projects the ability to meet financial obligation and the capacity to absorb financial setbacks without becoming insolvent. 

Statement of Retained Earnings 

This is a fourth new financial statement, but it is not usually a pro-forma statement since little cash is generated from a new medical practice

Conclusion

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Domestic and Healthcare Economic Indicators

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

What are Domestic and Medical Economic Indicators?

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By Staff Writerscmp-logo1

There are 12 leading, 6 lagging and 4 co-incidental indicators for the United States economy. And, there are 3 macro-economic medical indicators for physicians and the healthcare industrial complex. Their purpose is to help evaluate which period of the business cycle is in play. 

 

Leading Economic Indicators:  

1. Average workweek for manufacturing production workers

2. Layoff rate in manufacturing

3. New orders for consumer goods

4. Vendor performance and slow/on-time deliveries

5. New business formation

6. New building permits for private housing *

7. Contracts and orders for plants and equipment

8. Net changes in inventories

9. Change in sensitive prices

10. Change in total liquid assets

11. Stock prices

12. Money supply 

  

Co-incidental Economic Indicators: 

1. Employees on non-agricultural payrolls

2. Personal income

3. Industrial production

4. Manufacturing and trade sales 

 

Lagging Economic Indicators:

1. Average duration of unemployment

2. Manufacturing and trade inventories

3. Labor costs per unit of output

4.  Average bank prime interest rates

5. Commercial and industrial loans outstanding

6. Ration of consumer installment dent to personal income [* Often considered the leading, leading economic indicator]. 

Specific Medical Economic Indicators for Physicians 

  1. Medical Labor Production is a measure of medical professional output per hour, or per each unit (patient) of labor. Managed care has decreased labor production cost in medicine.
  2. Unit Medical Labor Costs represent the cost of physician labor (treatment), per unit (CPT code) of output.
  3. Capacity of Medical Utilization is a percentage of the maximum rate at which a medical office, clinical hospital or surgical center can operate under normal conditions. At the rate nears 100 percent, efficiency declines due to mechanical breakdowns, burnout of doctors and employees, and less experienced medical care extenders and para-professionals, etc.

Like domestic economic indicators, these evaluate the macro-economic healthcare business cycle which may be entering the depressed state. And so, what do you think; doctor colleagues and laymen, alike?

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What is the Business Cycle?

Posted on November 26, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

The Business [Economic] Cycle Explained

By Staff Writers

The business cycle is also known as the economic cycle and reflects the expansion or contraction in economic activity. Understanding the business cycle and the indicators used to determine its phases may influence investment or economic business decisions and financial or medical planning expectations. 

Although often depicted as the regular rising and falling of an episodic curve, the business cycle is very irregular in terms of amplitude and duration. Moreover, many elements move together during the cycle and individual elements seldom carry enough momentum to cause the cycle to move.  

However, elements may have a domino effect on one another, and this is ultimately drives the cycle, too.  We can also have a large positive cycle, coincident with a smaller but still negative cycle, as may be seen in the current healthcare climate of today. 

  1. First Phase: Trough to Recovery (service and production driven)

Scenario: A depressed GNP leads to declining industrial production and capacity utilization. Decreased workloads result in improved labor productivity and reduced labor (unit) costs until actual producer (wholesale) prices decline. 

  1. Second Phase: Recovery to Expansion (patient and consumer driven)

Scenario: CPI declines (due to reduced wholesale prices) and consumer real income rises, improving consumer sentiment and actual demand for consumer goods. 

  1. Third Phase: Expansion to Peak (service and production driven)

Scenario: GNP raises leading to increased industrial production and capacity utilization. But, labor productivity declines and unit labor costs and producer (wholesale) prices rise. 

  1. Fourth Phase: Peak to Contraction (patient and consumer driven)

Scenario: CPI rises making consumer real income and sentiment erode until consumer demand, and ultimately purchases, shrink dramatically.  Recessions may occur and economists have an alphabet used to describe them.  

For example, with a “V” graph shape, the drop and recovery is quick. For a “U” shaped graph, the economy moves up more sluggishly from the bottom. A “W” is what you would expect: repeated recoveries and declines. An “L” shaper recession describes a prolonged dry economic spell or even depression.

Some pundants believe we may be entering the generalized “U” economic phase, along with the “L” medical economic business cycle. 

What do you think?

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About the Federal Reserve [FOMC]

Posted on November 25, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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Always in the News … but, What Does the Federal Reserve Do?

[By Staff Writers]Great Seal

Money lending, or extending credit, is probably one of the oldest professions. It precedes the creation of currency. It wasn’t long ago that the term “usury” was used to describe the charging of interest on borrowed money. Today it is associated with an unlawful rate of interest.  The usury rate is the maximum rate that may be charged for loans made by non-regulated lenders. The rate is calculated and disclosed on the last day of each month by the Treasury commissioner.   

Federal Reserve Activities

The price of the commodity “money” is its interest rate. There are two types of short term interest rates: the discount rate is what the Federal Reserve charges member banks, and the Federal Funds rate is what the member banks charge each other.  A third rate, known as the prime rate, is what banks charge to their most creditworthy clients. Be aware however, that the law of supply and demand determines long-term interest rates, not the Federal Reserve banking stem. 

Perhaps the most vital functions of the Federal Reserve itself includes keeping member banks afloat; providing a system of check collecting and clearance; supplying member banks with paper currency reserve balances; supervising and regulating member banks; and regulating the supply of money and credit.  The Federal Open Market Committee (FOMC) achieves these short-term goals in the following two ways: 

  1. By decreasing the overall money supply, the Federal Reserve sells government securities, forcing member banks to pay for them with dollars. This shrinks free reserves and the capability of banks to supply funds to personal and business owns, such as medical professionals. The borrowed money ultimately leaves the money supply. This is called a tight or contractionary monetary policy.
  2. By increasing the overall money supply, the Federal Reserve buys government securities paying banks with dollars. This expands free reserves and the capability of banks to supply funds to personal and business borrowers, such as medical professionals. The money ultimately enters the money supply. This is called an easy or expansionary money policy.

Of course, the ability to make new loans and increase the money supply is controlled by FOMC reserve requirements. For example, an increase in the reserve requirement lowers free reserves, reduces the ability to borrow, and is contractionary. On the other hand, a decrease in the reserve requirements, raises free reserves, and is expantionary. If the FOMC removes additional reserves, this extraction could begin a painful contraction process as interest rates rise, potentially causing stock market prices to fall.

Assessment

Physicians should be aware that many experts today expect the Fed to ease and lower rates in the coming future because of a slowing economy.

Conclusion

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Of Bull and Bear Markets

Posted on November 25, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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What is a Bull or Bear Market? 

[By Staff Writers]

A bull market is generally one of rising stock prices, while a bear market is the opposite. Metaphorically, a wild bull tends to throw prey up; while a bear claws prey down. There are usually two bulls for every one bear market over the long term.

More specifically, a bear market is defined as a drop of twenty percent or more in a market index from its high, and can vary in duration and severity.   In the bear market of Y-2001, for example, the PE ratio of Standards & Poor’s fell from a high of 36, to a low of about 22. The PE for the Dow DJIA fell to about 19, from its high of 28. Recall, that PE is a measure of share price value relative to earnings per share. Historically, it has been about 15-16, according to most analysts.

However, as a physician investing for the long-term, do not worry since the average bear market has lasted only about a year. Sans the 2001 implosion, the bear markets of the prior past fifty years are listed below, using the Dow Jones Industrial average as a benchmark:

  • Dec. 1961 to June, 1962: Days lasted: 195 Decline: 27% 

  • Feb. to Oct. 1966: Days lasted: 240 Decline: 25% 
  • Dec. 1968 to May, 1970: Days lasted: 539 Decline: 35% 
  • Jan. 1973 to Dec. 1984: Days lasted: 694 Decline: 45% 
  • Sept.1976 to Feb. 1978: Days lasted: 525 Decline: 27% 
  • April 1981 to Aug. 1982: Days lasted: 472 Decline: 24 
  • Aug. to Oct. 1987: Days lasted: 55 Decline: 36 
  • July-Oct. 1990: Days lasted: 86 Decline: 21%

Assessment

What about now?

Today, it’s possible that the United States is already slipping into recession; downturns are recognized only in retrospect, and the Dow is down 10.3 % this last quarter of 2007.

Ironically, The Economist noted recently, 95% of American economists polled in March 2001 said a recession was not likely, but it was already under way. So, go figure!

Still, the Fed’s Beige Book report showed a slowing economy in October 2007. The anecdotal snapshot of the economy said retail sales were relatively soft, and retailers are bracing for a weak holiday shopping season; while demand for residential real estate remained depressed.

So, what do you think? Are we heading for a bull, or bear market?

Bear + A Falling Stock Chart

Conclusion

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Economic Crisis Management

Posted on November 25, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Personal Financial Stress Management for Physicians

Dr. David E. Marcinko; MBA, CMP™

[Publisher in Chief]

Dr. David E. Marcinko MBAThe physician who remains in practice long enough is sure to undergo some adverse situation that may negatively affect his financial life. When it occurs, you must have a crisis management plan in place to deal successfully with the matter. In fact, the following three scenarios typically occur somewhere along life’s journey for the average doctor:                       

· Office Crisis Management

· Employment Crisis Management

· Financial Windfall Crisis Management.

1. Office Crisis Management

Crisis management is a matter of perception versus reality. For example, a high profile patient may die under your watch inducing a PR fiasco. But, then again, such a celebrity had confidence in you in the first place, so all is not lost. Therefore, honest spin control is needed when tragedy strikes: 

· Stay calm and relaxed; but act immediately

· Release detrimental but accurate information and stay neutral

· Educate your staff and local community

· Fix the problem, or minimize recurrence

· Continually release information

· Monitor and report your strategy to all affected parties. 

2. Employment Crisis Management

Sooner or later the employed doctor will be terminated or reduced. Or, a partnership will dissolve; a major local employer will relocate or your hospital will close. If you become aware of impending job loss, the following may help: 

· Decrease retirement contributions to the minimum company match

· Place retirement contribution differences in an after-tax emergency fund

· Eliminate unnecessary payroll deductions and deposit the difference to cash

· Replace group term life insurance with personal term or universal life

·Take your old group term life insurance policy with you, if possible

· Establish a home equity line of credit to verify employment

· Borrow against your pension plan as a last resort.

After you loose your job, negotiate your departure and execute the following: 

· Prioritize fixed monthly bills: rent or mortgage; car payments, utility bills; minimum credit card payments; and restructured long-term debt.

· Consider liquidating assets: emergency fund, checking accounts, investments, or assets held in a child’s name

· Review coverage and increase deductibles on homeowner’s and automobile insurance

· Sell stocks or mutual funds; personal valuables like furnishings, jewelry or real estate; and assets not in pensions or annuities

· Keep or rollover any lump-sum pension or savings plan distribution to your new practice. Pay taxes and penalties as a last resort

· Apply for unemployment insurance and review COBRA coverage

· Consider a high-deductible health plan using tax-deferred dollars. 

3. Financial Windfalls

Although ironic, a financial windfall may be more problematic than short-term financial disadvantage. Consider these suggestions:

· Be discrete; don’t quit practice or disrupt your life materially

· Deposit cash into a money market account and limit access

· Title securities correctly

· Redefine your financial plans, and continue to save and invest

· Pay down non-deductible debt

· Review insurance policies, will, estate plan or trusts

· As an executor, be aware of estate tax freeze benefits using the alternate valuation method

· Consider charitable gifting carefully. 

Hire an Expert 

If any of the above occurs, get tax advice immediately, retain an attorney and hire a financial professional. And, unlike stock-brokers and most financial designees, the Certified Medical Planner© is an emerging new financial-advisor subspecialist and fiduciary with focused medical specificity. 

Conclusion

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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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A Real American Healthcare Hero

Posted on November 23, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Call to Action: VAMCS Employee Inspired to Serve 

By Staff Writers

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Captain Cecilia “Terry” Perez, Baltimore VA Medical Center emergency and operating room nurse, answered an internal call to duty after the attacks of September 11.  She told her story exclusively to the Executive Post, and Defend America – an electronic newsletter published by the U.S. Department of Defense.

 

Her story is extraordinary because she decided to join the Army at age 44.  “I felt very proud to be working with our veterans at the time of the events of September 11,” commented Terry.  “Their stories, courage and pride in serving their country in their generation’s time of crisis inspired me to investigate the possibility of joining the reserves.”  

Initially, Captain Perez ANC served with the 67th Combat Support Hospital (CSH) in Tikrit, Iraq, during Operation Iraqi Freedom II.  She makes us proud of her courage in the field and awed by her talents as the ultimate strategist. 

Terry is now stationed at Ft. Lewis in Washington State, having just returned from Baghdad and Baqouba, Iraq. She is with the 3-2 SBCT (Third Brigade, Second Infantry Division, Stryker Brigade Combat Team).

Today, at age 50, she hopes to be discharged by the summer of 2008; a full six years after her heroic journey began. She will then resume blogging, writing, editing and her position as print-guide BOD member.  

And no doubt, a book of her experiences is in the works. 

http://www.defendamerica.mil/CallAction/CalltoAction.html

 

Cecelia

Conclusion

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Legal Disclaimer, Copyright and “Fair Use” Notice

Posted on November 22, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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COPYRIGHT AND FAIR USE NOTICE: The comments, essays and personal opinions on Healthcare Financials … The Executive Post  – and this blog – are that of the individual poster, and not of any related organizations. We are not responsible for it. This blog may also contain copyrighted material. Such material is made available for health administration educational purposes, to advance understanding of patient human rights, social democracy, scientific, medical, moral, ethical, and political justice issues, etc. This constitutes ‘fair use’ as provided for in Title 17 U.S.C. section 107 of the US Copyright Law.

In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

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Our Recommended Book List

Posted on November 18, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

A List of Important New Releases in Health Economics, Medical Practice Management and Finance

Staff Writers

Currently recommended book list:

Financial Planning for Physicians and Advisors

Financial Planning Handbook for Physicians and Advisors

http://www.jbpub.com/catalog/9780763733421 

The Business of Medical Practice [Advanced Profit Maximization Techniques for Savvy Doctors]

Advanced Profit Maximization Techniques for Savvy Doctors  

 

 

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

Risk Management and Insurance for Physicians and Advisors

Insurance and Risk Management Strategies for Physicians and Advisors  

 

 

http://www.jbpub.com/catalog/9780763733421 

Dictionary of Health Insurance and Managed Care

Dictionary of Health Insurance And Managed Care  

 

 

http://www.springerpub.com/prod.aspx?prod_id=49944 

Dictionary of Health Economics and Finance

Dictionary of Health Economics And Finance 

http://www.springerpub.com/prod.aspx?prod_id=02549 

Dictionary of Health Information Technology and Security

Dictionary of Health Information Technology and Security  

 

 

http://www.springerpub.com/prod.aspx?prod_id=49952

And, be sure to review this link for the complete list of all recommended books on related topics of healthcare administration import: www.amazon.com/s/ref=nb_ss_gw/103-2940163-7675863?url=search-alias%3Dstripbooks&field-keywords=david+marcinko&x=11&y=21

Note: Recommendation does not imply endorsement; but add these to your library.

Feel free to write and post a book review, too! 

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This HIPAA Mess

Posted on November 14, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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Medical R&D Efforts to Slow?

[By Staff Writers]Prescription Bottle

An Institute of Medicine sponsored survey from 1,527 epidemiology practitioners published in a November 2007 issue of the Journal of the American Medical Association [JAMA], reported that variability in HIPAA interpretation has slowed scientific research by making it more costly and time consuming to the point that some academic institutional  review boards are closing down R&D efforts. 

Assessment

Have you experienced this happening at your medical institution, and what is being done about this HIPAA mess?

Conclusion

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Subscribe to Healthcare Financials … the “Executive Post”

Posted on November 12, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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CMS and the Economic S.G.R for 2008-15?

Posted on November 6, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

CMS to Docs … Payments to Drop!

[By Staff Writers]

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According to Modern Physician, November 1, 2007, Medicare payments to physicians in 2008 will drop nearly 10 percent under a final rule issued by CMS, which estimates it will pay approximately $58.9 billion to 900,000 physicians and other health care professionals next year. The sustainable growth rate formula, which is tied to the health of the economy and is used to calculate physician payments under the Medicare program, is the force driving the projected cut.

Assessment

Since it has been estimated that payments will drop by more than 40 percent by 2015, unless the SGR is replaced, do you think Congress will adopted interim measures to stop payment reductions?

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Conclusion

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SNFs

Posted on October 24, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Skilled Nursing Facilities in the News

Staff Writers

The Carlyle Group is taking steps to head off critics of its $6.3 billion acquisition of long-term care player Manor Care.

Responding to pressure from unions representing Manor Care’s workers, Carlyle sent letters to state regulators pledging that it would hire enough staff, train them well and make proper infrastructure investments in its homes. This gesture, however, apparently wasn’t enough to impress some Congressmen, who have begun an inquiry into not only Carlyle, but business practices at investor-owned nursing homes generally. They’re investigating widespread allegations that private equity firms cut staff to the bone while remaking corporate structures to avoid getting sued when patients are harmed.

Reps. John Dingell (D-MI) and Barney Frank (D-MA) are planning hearings on the topic, and most likely legislation as well. This follows action by Sens. Max Baucus (D-MT) and Charles Grassley (R-IA), who have sent letters to five private investment firms asking for information on their ownership structure and management practices. Baucus and Grassley also asked CMS for information on its oversight of nursing homes.

The concern on the The Hill isn’t unique. Earlier this month, officials in Florida, Illinois, Pennsylvania, Michigan and Washington asked regulators to investigate the Carlyle acquisition–and to withhold approval of the deal until they did so.

New York Times – October 24, 2007

NOTE: Any insider thoughts on this breaking development?

It seems to co-incide nicely with release of our November print edition which features financial benchmarks for this industry. 

-The Moderators

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HIT and Virtual Medical Visits?

Posted on October 22, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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Compensation for e-mail – A New Payment Model for Doctors?

By Staff Writers

It’s been a long wait, but we have recently learned that – ever so slowly – some health plans are beginning to pay doctors for ‘virtual visits’ with patients.

Vendors like McKesson-owned RelayHealth, Epic Systems and Web portal vendor Medfusion have offered the technology for some time, but payer acceptance has been slow. However, a consensus is building that such visits may be a good idea, despite lingering questions over billing and the ability of physicians to legally offer e-care from out of their home state. These visits might save substantial amounts of money while keeping patients healthy–including a Kaiser study concluding that it saves $70 to $120 on each virtual visit.

  1. And so, are hospitals to follow this physician trend?
  2. How about CMS and the various state Medicaid systems?
  3. What about private insurance companies, HMOs and MCOs, etc?

Please opine!

The Moderators 

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What is a Certified Medical Planner™?

Posted on October 15, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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The CMP™ Defined

[By Staff Writers]

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Here is the answer taken directly from the www.CertifiedMedicalPlanner.org website.

The CERTIFIED MEDICAL PLANNER™ charter designation program is a live, instructor-led, online asynchronous educational exercise designed to increase your health industry knowledge, affinity for physician-clients and financial advisory practice revenues in an honest and ethical fashion; regardless of compensation model. Fiduciary capacity is implicit.

We provide 500 hours of health economics and medical practice management education, during a 12 month period, that comprises four quarter-mesters. Adult learners should plan on spending 5-10 hours per week on study activities. The program may be crashed under special situations and/or delivered traditionally and onground upon request.

Check it out for yourself!
Prof. Hope Hetico; RN, MHA, CMP™

Enter the CMPs

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NPI Numbers

Posted on October 15, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

The Impending NPI Deadline 

By Staff Reporters

www.HealthcareFinancials.com

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Most of us know that until now, hospitals and other healthcare organizations had until May 23, 2008 to implement the National Provider Identifier (NPI) scheme for Medicare claims; but we were apparantly wrong! 

CMS said today that hospitals must get their NPI in place for submitting Medicare fee-for-service claims by January 1, 2008. If not, CMS will begin rejecting such claims. (CMS is will still accept non-NPI claims from professional services providers like doctors, labs and clinics).

CMS officials say they’re moving up the deadline because most providers are already on board with the NPI.

Really! Are they sure? Not from my view of the universe!

To be sure, providers who aren’t using the NPI are already technically in trouble already, as the original deadline is long past. However, as part of the transition to full NPI rollout, CMS has been letting them slide if (in essence) they promised to work on it by filing a contingency plan.

Anyone caught off guard with this announcement?

– A Healthcare CTO

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High Deductible Health Care Plans

Posted on October 8, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Providing Health Care in a High-Deductible World

By Steven Podnos MD, CFP®

With the increasingly common use of  High Deductible Health Care Plans (HDHCP) (often combined with a Health Savings Account), health care providers are seeing a growing population of health care consumers that are paying “out of pocket” in some fashion for the first several thousand dollars of health care expenses each year.

Q: What is the impact of this for health care providers and hospitals? 

Consider that historical pricing for health care services are much higher than providers expect to receive. Many “fee schedules” hark back to a day in which reimbursement bore some relationship to charged fees-almost unheard of now. 

Let’s illustrate

Enter the consumer with a high deductible plan.  Last year, with his old more traditional health insurance, he sees a physician for an initial visit.  With ancillaries, the office bill might be $300, but the patient pays his $20 co-pay and leaves.  The physician is contracted with the insurer to provide that level of service for a total of $110, and collect the remaining $90 from the carrier.  Everybody is happy. 

This year however, no one is happy.  The consumer with the HDHCP gets a $300 bill for the same service that cost him $20 last year.  He doesn’t know or doesn’t remember that his health care insurance premiums are lower than last year (as he may not pay them). 

The result is one very unhappy patient. Clearly, health care providers need to adapt to the new world of HDHC plans. Hospitals and physician offices should have a list of charges for patients paying cash or having these plans.  The charges would fairly approximate what they expect to receive from patients with Medicare and/or managed care plans for the same services. 

Conversely, patients with these HDHC plans must learn to ask up front for a “cash” price on health care services.  

Dr. Podnos is a fee-only financial planner in Brevard County, Florida.

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About the Medical Executive-Post

Posted on October 8, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

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Welcome Bloggers, Registered Users, Visitors and Colleagues

By Dr. David E. Marcinko; FACFAS, MBA, CPHQ, CMP™

[Publisher-in-Chief]dem2

The Medical Executive-Post is a public online community of physicians, healthcare executives and administrators, and their informed financial advisors, accountants and business consultants who have strong connections to the health economics, management and advisory space. Most are professionals who are empowered to connect, inform and interact with those who share the same interests and expertise in this important expanding universe.

It is lightly moderated and dedicated to meeting the administrative needs of our nation’s physicians, office managers, medical practices, clinics and small healthcare entities. Our aim is to help them maintain a competitive edge in the markets they serve; and to take advantage of emerging business opportunities in the healthcare industrial complex.

By its very nature … the Medical Executive-Post emphasizes informative brief-features, essays, case-models, interviews of industry “movers-and-shakers,” and insider “tips and pearls” for individual physicians, clinics and medical practices. We emphasize how-to material and columns as well as insightful practice management articles. We also include relevant personal financial planning topics for doctors, with insightful viewer comments and follow-up opinions.  And, because more features are in development – it is subject to change without notice.

We therefore invite you to blog and comment as you see fit, and join us for the exciting e-journey as we “seek to operate at the intersection of medical mission and profit margin.”

And so, to surf through the current month, click the first entry on the list and start reading. If you want something specific, try searching by category. If you’re looking for something really specific, try using the Search feature on the top-right.

To encourage users to join and participate in the ongoing cognitive community discussions, we’ve left commenting enabled after free sign-up, so speak your mind and leave all the informed comments you like: review, read, rant and rave!  

Let the Medical Executive-Post be among your personal tools for success.

Want to Know Even More?

Advertise with Us: The Medical Executive-Post is an iMBA Inc imprint property that delivers targeted messages when readers are subscribed, visiting or searching for content on a specific healthcare administration topic. 

Community Involvement: The Medical Executive-Post is our community of users who actively participate in sharing their knowledge through cogent posts, essays, comments, Q-As and informed opinions. Leverage the power of a dynamic professional social network and word-of-mouth marketing on the leading online forum in the lucrative and expanding healthcare administration space.

Brand Impact: The Medical Executive-Post offers an uncluttered advertising environment that promotes contextual relevancy while improving visibility and impact. 

Support Us: There are two ways to contribute to the Medical Executive-Post:

Contact Us Today: Discuss your needs and allow us to provide solutions. MarcinkoAdvisors@msn.com

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MARCINKO’s New Risk Management and Asset Protection Textbook for MDs and Financial Advisors

Posted on December 6, 0202 by Dr. David Edward Marcinko MBA MEd CMP™

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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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 Our New Text – “Take a Peek Inside“ 

Available – ORDER NOW!

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

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Foreword by J. WESLEY BOYD MD PhD MA

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“BY DOCTORS – FOR DOCTORS – PEER REVIEWED – FIDUCIARY FOCUSED”

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Book Reviews

“Physicians who don’t understand modern risk management, insurance, business and asset protection principles are sitting ducks waiting to be taken advantage of by unscrupulous insurance agents and financial advisors; and even their own prospective employers or partners. This comprehensive volume from Dr. David Marcinko, and his co-authors, will go a long way toward educating physicians on these critical subjects that were never taught in medical school or residency training.”
—Dr. James M. Dahle, MD, FACEP, Editor of The White Coat Investor, Salt Lake City, Utah, USA

“With time at a premium, and so much vital information packed into one well organized resource, this comprehensive textbook should be on the desk of everyone serving in the healthcare ecosystem. The time you spend reading this frank and compelling book will be richly rewarded.”
—Dr. J. Wesley Boyd, MD, PhD, MA, Harvard Medical School, Boston, Massachusetts, USA

“Physicians have more complex liability challenges to overcome in their lifetime, and less time to do it, than other professionals. Combined with a focus on practicing their discipline, many sadly fail to plan for their own future. They need trustworthy advice on how to effectively protect themselves, families and practice, from the many overt and covert risks that could potentially disrupt years of hard work.
Fortunately, this advice is contained within ‘Risk Management, Liability Insurance, And Asset Protection Strategies For Doctors And Advisors: Best Practices From Leading Consultants And Certified Medical Planners™’. Written by Dr. David Edward Marcinko, Nurse Hope Rachel Hetico and their team of risk managers, accountants, insurance agents, attorneys and physicians, it is uniquely positioned as an integration of applied, academic and peer-reviewed strategies and research, with case studies, from top consultants and Certified Medical Planners™. It contains the latest principles of risk management and asset protection strategies for the specific challenges of modern physicians. My belief is that any doctor who reads and applies even just a portion of this collective wisdom will be fiscally rewarded. The Institute of Medical Business Advisors has produced another outstanding reference for physicians that provide peace of mind in this unique marketplace! In my opinion, it is a mandatory read for all medical professionals.”
—David K. Luke, MS-PFP, MIM, CMP™, Net Worth Advisory Group, Inc., Sandy, Utah, USA

“This book is a well-constructed, comprehensive and experiential view of risk management throughout the entire medical practice life-cycle. It is organized in an accessible, high-yield style that is familiar to doctors. Each chapter has case models, examples and insider tips and useful pearls. I was pleased to see multi-degreed physicians sharing their professional experiences in a textbook on something other than clinical medicine. I can’t decide if this book is right on – over the top – or just plain prescient. Now, after a re-read, I conclude it is all of the above; and much more.”
—Dr. Peter P. Sidoriak, Pottsville, Pennsylvania, USA

“When a practicing physician thinks about their risk exposure resulting from providing patient care, medical malpractice risk immediately comes to mind. But; malpractice and liability risk is barely the tip of the iceberg, and likely not even the biggest risk in the daily practice of medicine. There are risks from having medical records to keep private, risks related to proper billing and collections, risks from patients tripping on your office steps, risks from medical board actions, risk arising from divorce, and the list goes on and on. These liabilities put a doctor’s hard earned assets and career in a very vulnerable position. This new book from Dr. David Marcinko and Prof. Hope Hetico shows doctors the multiple types of risk they face and provides examples of steps to take to minimize them. It is written clearly and to the point, and is a valuable reference for any well-managed practice. Every doctor who wants to take preventive action against the risks coming at them from all sides needs to read this book.”
—Richard Berning, MD, FACC, New Haven, Connecticut, USA

“This is an excellent companion book to Dr. Marcinko’s Comprehensive Financial Planning Strategies For Doctors And Advisors: Best Practices from Leading Consultants and Certified Medical Planners™. It is all inclusive yet easy to read with current citations, references and much frightening information. I highly recommend this text. It is a fine educational and risk management tool for all doctors and medical professionals.”
—Dr. David B. Lumsden, MD, MS, MA, Orthopedic Surgeon, Baltimore, Maryland, USA

“This comprehensive text book provides an in-depth presentation of the cyber security and real risk management, asset protection and insurance issues facing all medical profession today. It is far beyond the mere medical malpractice concerns I faced when originally entering practice decades ago.”
—Dr. Barbara s. Schlefman, DPM, MS, Family Foot Care, PA, Tucker, Georgia, USA

“Am I over-insured and thus wasting money? Am I under-insured and thus at risk for a liability or other disaster? I never really had the means of answering these questions; until now.”
—Dr. Lloyd M. Krieger, MD, MBA, Rodeo Drive Plastic Surgery, Beverly Hills, California, USA

“I read and use this book, and several others, from Dr. David Edward Marcinko and his team of advisors.”
—Dr. John Kelley, DO, Orthopedic Surgeon, Tucker, Georgia, USA

“An important step in the risk management, insurance planning and asset protection process is the assessment of needs. One can create a strong foundation for success only after all needs have been analyzed so that a plan can be constructed and then implemented. This book does an excellent job of recognizing those needs and addressing strategies to reduce them.”
—Shikha Mittra, MBA, CFP®, CRPS®, CMFC®, AIF®, President – Retire Smart Consulting LLC, Princeton, New Jersey, USA

“The Certified Medical Planner™ professional designation and education program was created by the Institute of Medical Business Advisors Inc., and Dr. David Edward Marcinko and his team (who wrote this book). It is intended for financial advisors who aim specifically to serve physicians and the medical community. Content focuses not only on the insurance and professional liability issues relevant to physicians, but also provides an understanding of the risky business of medical practice so advisors can help work more successfully with their doctor-clients.”
—Michael E. Kitces, MSFS, MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL, http://www.Kitecs.com, Reston, Virginia, USA

“I have read this text and used consulting services from the Institute of Medical Business of Advisors, Inc. on several occasions.”
—Dr. Marsha Lee, DO, Radiologists, Norcross, Georgia, USA

“The medical education system is grueling and designed to produce excellence in medical knowledge and patient care. What it doesn’t prepare us for is the slings and arrows that come our way once we actually start practicing medicine. Successfully avoiding these land mines can make all the difference in the world when it comes to having a fulfilling practice. Given the importance of risk management and mitigation, you would think these subjects would be front and center in both medical school and residency – ‘they aren’t.’ Thankfully, the brain trust over at iMBA Inc., has compiled this comprehensive guide designed to help you navigate these mine fields so that you can focus on what really matters – patient care.”
—Dennis Bethel, MD, Emergency Medicine Physician

MORE: FRONT MATTER Risk Management

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