What is EBITDA?

A TERM ALL PHYSICIAN INVESTORS MUST KNOW

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What Is Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)?

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EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a measure of a company’s overall financial performance and is used as an alternative to net income in some circumstances. EBITDA, however, can be misleading because it strips out the cost of capital investments like property, plant, and equipment.

This metric also excludes expenses associated with debt by adding back interest expense and taxes to earnings. Nonetheless, it is a more precise measure of corporate performance since it is able to show earnings before the influence of accounting and financial deductions.

Why EBITDA is still a Great Financial Management Metric

Simply put, EBITDA is a measure of profitability. While there is no legal requirement for companies to disclose their EBITDA, according to the U.S. generally accepted accounting principles (GAAP), it can be worked out and reported using the information found in a company’s financial statements.

The earnings, tax, and interest figures are found on the income statement, while the depreciation and amortization figures are normally found in the notes to operating profit or on the cash flow statement. The usual shortcut to calculate EBITDA is to start with operating profit, also called earnings before interest and tax (EBIT) then add back depreciation and amortization.

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

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

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FINANCIAL MANAGEMENT STRATEGIES: For Hospitals and Healthcare Organizations

Managerial Accounting

TOOLS, TECHNIQUES, CHECKLISTS AND CASE STUDIES

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TEXT: https://www.amazon.com/Financial-Management-Strategies-Healthcare-Organizations/dp/1466558733/ref=sr_1_3?ie=UTF8&qid=1380743521&sr=8-3&keywords=david+marcinko

Reviews

Navigating a course where sound organizational management is intertwined with financial acumen requires a strategy designed by subject-matter experts. Fortunately, Financial Management Strategies for Hospital and Healthcare Organizations: Tools, Techniques, Checklists and Case Studies provides that blueprint.
David B. Nash, MD, MBA, Jefferson Medical College, Thomas Jefferson University

It is fitting that Dr. David Edward Marcinko, MBA, CMP™ and his fellow experts have laid out a plan of action in Financial Management Strategies for Hospital and Healthcare Organizations that physicians, nurse-executives, administrators, institutional CEOs, CFOs, MBAs, lawyers, and healthcare accountants can follow to help move healthcare financial fitness forward in these uncharted waters.
Neil H. Baum, MD, Tulane Medical School

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HOSPITALS: Management, Operations and Strategies

Tools, Templates and Case Studies

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NEW TAX PROPOSAL: Higher Capital Gains?

By Staff Reporters

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House proposes raising capital gains tax to 28.8%

  • House Democrats proposed a top federal rate of 25% on long-term capital gains, according to legislation issued by the House Ways and Means Committee.
  • The new rate would apply to gains realized after Sep. 13th.
  • In 2022, it would kick in for single filers with taxable income over $400,000 and for married couples at $450,000, according to a Committee aide.

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PODCAST: United Health Group Acquisition of “Change Healthcare”

A DATA GOLDMINE

By Eric Bricker MD

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

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What is SWIFT Banking?

Belgium’s Society for Worldwide InterBank Financial Telecommunications

A TIMELY FINANCIAL TOPIC

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By Staff Reporters

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Belgium’s Society for Worldwide Interbank Financial Telecommunications (SWIFT) runs a messaging service that facilitates transactions across 11,000+ financial institutions globally. Think of it as the “Gmail of global banking.”

Entities in every country except North Korea use SWIFT to shuffle trillions of dollars’ worth of funds across borders. And Russia is a SWIFT power user—as a major supplier of energy and other goods, it ranks sixth globally for payment messages sent on SWIFT. So if Russia were cut off from SWIFT, “the nation would essentially be severed from much of the global financial system,” the NYT wrote.

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

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SWIFT: https://www.swift.com/

MORE: https://www.livemint.com/news/world/what-is-swift-why-this-banking-service-could-be-a-big-weapon-against-russia-11645760070928.html

RELATED: https://www.msn.com/en-us/news/world/what-is-swift-and-why-does-it-matter-in-the-russia-ukraine-war/ar-AAUlLDv?li=BBnb7Kz

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PODCAST: About the Mathematical WOLFRAM ALPHA Computational Knowledge Engine

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What it is – How it works

SMART CONTRACTS

[By Staff Reporters]

Wolfram Alpha is an online mathematical search engine launched in March 2009 and developed by Stephen Wolfram. It seeks to answer factual queries directly by computing the answer from structured data, rather than providing a list of web pages that might contain the answer.

In this way, WA differs from traditional semantic search engines, which index a large number of answers and then try to match the question to one. Wolfram Alpha has many parallels with Cyc, a project aimed since the 1980s at developing a common-sense inference engine. Wolfram Alpha is built on Wolfram’s earlier flagship product, Mathematica, which encompasses computer algebra, symbolic and numerical computation, visualization, and statistics capabilities.

With Mathematica running in the background, WA is suited to answer mathematical questions. The answer usually presents a human-readable solution.

Link: http://www.wolframalpha.com/

Technology

Wolfram Alpha is written in about 5 million lines of Mathematica (using webMathematica and gridMathematica) code and runs on 10,000 CPUs. As well as being a web site, Wolfram Alpha provides an API (for a fee) that delivers computational answers to other applications. One such application is the Bing search engine.

Capabilities

As an example, one can input the name of a website, and it will return relevant information about the site, including its location, site rank, number of visitors and more. The database currently includes hundreds of datasets, including current and historical weather, drug data, star charts, currency conversion, and many others. The datasets have been accumulated over approximately two years, and are expected to continue to grow. The range of questions that can be answered is also expected to grow with the expansion of the datasets.

Audio: http://www.wolframalpha.com/screencast/introducingwolframalpha.html

Utility and Usefulness

Wolfram Alpha is ideal for use by all readers and subscribers of the ME-P. It may be used by doctors, nurses, financial advisors and insurance agents, economists, mathematicians, editors, and publishers, teachers and students of all academic levels. The graphical nature of output is particularly helpful.

Assessment

Wolfram Alpha has received mixed reviews, to date. Advocates point to its potential, some even stating that how it determines output result is more important than current usefulness.

Note: Info courtesy wikipedia.org

PODCAST: https://www.bing.com/videos/search?q=stephen+wolfram&docid=608027542444182789&mid=7432EA16AEF1CDF4FCDD7432EA16AEF1CDF4FCDD&view=detail&FORM=VIRE

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Give Wolfram Alpha a click, listen to the audio-cast, and tell us what you think. Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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On DISPOSABLE and Other “Next-Gen” Credit Cards

Touring with Marcinko | The Leading Business Education ...

BY DR. DAVID EDWARD MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

‘Chip & Pin’ Technology

Disposable credit cards are the newest innovation to help reduce fraud and assumed identity scams on e-commerce based websites. As with traditional credit cards, these cards are numbered, but used only once. Then, electronically they are erased so that there is nothing left in the merchant’s database for hackers to steal.

But, in 2014, Congress began looking at new ways to keep personal credit card information safe after several high-profile security breaches at some of America’s top retailers.

WHY? Current credit cards use easy to hack magnetic strip technology from the 1960s. Many consumers want more secure “pin & chip” cards which have been in use in Europe for years. Even though micro-chip technology costs billions to implement, merchants are moving in that direction as they issue new cards to consumers. Most modern polls show nearly half of all people surveyed are extremely concerned about the safety of their personal credit card information.

Burner Cards: Similar to a burner phone or “throwaway” social media account, burner credit cards are temporary, virtual credit cards that are not your “main” credit card. The bank or burner card app will give you a temporary number that links back to your main credit card which you can use for online purchases.

An ANonymous Credit Card provides an extreme degree of privacy and prevents the tracking of your expenses by a spouse, people with bad intentions or government monitoring agencies. It is important to realize that there are plenty of legitimate reasons for wanting to buy something discreetly through an Anonymous Credit Card.

Credit Card Mistakes to Avoid

No number has as far-reaching an impact on your money as your credit scores.

Here are some obstacles, physicians and all of us, should dodge on the road to financial security:

  • Don’t pay for a credit card repair service.
  • Don’t miss a payment.
  • Don’t max out your card.
  • Don’t take a cash-advance.
  • Don’t skip using your cards.
  • Don’t chase interest rates.
  • Don’t apply for several credit cards all at once.
  • Don’t co-sign a loan.
  • Don’t spread our car or mortgage payments.

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

Denied Credit

If you are denied a credit card, you have the right to obtain a credit report free from the agency which denied you. Your request must be made in writing and within thirty-sixty days. Consumer credit is governed by the Fair Credit Reporting Act (FCRA).  The regulations are issued by and enforced by the Federal Trade Commission. Certain states offer consumers additional rights.  Credit reporting agencies are referred to as a “consumer reporting agency”.

ASSESSMENT: Your thoughts are appreciated.

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

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What is a Retirement QCD?

A Tax-Efficient Way to Donate Money to Charity

By Staff Reporters

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A qualified charitable distribution (QCD) is a withdrawal from an individual retirement arrangement (IRA) that’s made directly to an eligible charity.

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

IRA account holders who were at least age 70.5 as of Dec. 31, 2019, can contribute some or all of their IRAs to charity.

LINK: https://6acebc46b9e64340fdc1a8917e0c290a.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

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Creative Giving Strategies: The QCD - Nebraska Cultural Endowment

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It might seem counterintuitive that anyone would want to give their savings away after making contributions for years in anticipation of the day when they would retire, but there can be tax advantages for doing so.

IRS: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-distributions-withdrawals

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

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

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The Impact of Private Equity Acquisition on Health Care Spending and Utilization

By NIHCM
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READ HERE: https://nihcm.org/assets/articles/NIHCM-ResearchInsights-Singh01.pdf
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CITE: https://www.r2library.com/Resource/Title/082610254

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What is Financial and Accounting DELTA?

By Staff Reporters

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What is Delta?

FINANCE: Delta is a risk sensitivity measure used in assessing derivatives. It is one of the many measures that are denoted by a Greek letter. The series of risk measures that use such letters are fittingly referred to as the Greeks. They are often also called risk measures, hedge parameters, or risk sensitivities.

ACCOUNTING: Delta is the ratio of the change in price of an option to the change in price of the underlying asset. Also called the hedge ratio; For a call option on a stock, a delta of 0.50 means that for every $1.00 that the stock goes up, the option price rises by $0.50.

STOCK MARKET: Where:

  • S – the stock price
  • K – the strike price
  • r – the risk-free rate
  • q – the annual dividend yield
  • τ – time until expiration
  • σ – the volatility

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

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What is “Mark to Market” Valuation?

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By Staff Reporters

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Marking to Market (MTM) means valuing the security at the current trading price. Therefore, it results in the traders’ daily settlement of profits and losses due to the changes in its market value.

  • Suppose on a particular trading day, the value of the security rises. In that case, the trader taking a long position (buyer) will collect the money equal to the security’s change in value from the trader holding the short position (seller).
  • On the other hand, if the security value falls, the selling trader will collect money from the buyer. The money is equal to the change in the value of the security. It should be noted that the value at maturity does not change much. However, the parties involved in the contract pay gains and losses to each other at the end of every trading day.

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Examples of Mark to Market

An exchange marks traders’ accounts to their market values daily by settling the gains and losses that result due to changes in the value of the security. There are two counterparties on either side of a futures contract—a long trader and a short trader. The trader who holds the long position in the futures contract is usually bullish, while the trader shorting the contract is considered bearish.

If at the end of the day, the futures contract entered into goes down in value, the long margin account will be decreased and the short margin account increased to reflect the change in the value of the derivative.

An increase in value results in an increase in the margin account holding the long position and a decrease in the short futures account.

According to investopedia, for example, to hedge against falling commodity prices, a wheat farmer takes a short position in 10 wheat futures contracts on November 21st. Since each contract represents 5,000 bushels, the farmer is hedging against a price decline on 50,000 bushels of wheat. If the price of one contract is $4.50 on Nov. 21st. the wheat farmer’s account will be recorded as $4.50 x 50,000 bushels = $225,000.

DayFutures PriceChange in ValueGain/LossCumulative Gain/LossAccount Balance
1$4.50   225,000
2$4.55+0.05-2,500-2,500222,500
3$4.53-0.02+1,000-1,500223,500
4$4.46-0.07+3,500+2,000227,000
5$4.39-0.07+3,500+5,500230,500

Because the farmer has a short position in wheat futures, a fall in the value of the contract will result in an increase in their account. Likewise, an increase in value will result in a decrease in account value. For example, on Day 2, wheat futures increased by $4.55 – $4.50 = $0.05, resulting in a loss for the day of $0.05 x 50,000 bushels = $2,500. While this amount is subtracted from the farmer’s account balance, the exact amount will be added to the account of the trader on the other end of the transaction holding a long position on wheat futures.

The daily mark to market settlements will continue until the expiration date of the futures contract or until the farmer closes out his position by going long on a contract with the same maturity.

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

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PODCAST: Accounting Deception in Health Care

Examples of Exploitation and Deception?

BY ERIC BRICKER MD

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TERMS: https://medicalexecutivepost.com/2021/11/02/financial-terms-and-definitions-all-physician-should-know/

Triple Entry Accounting: https://medicalexecutivepost.com/2020/12/28/triple-entry-accounting/

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

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What is a Hospital CHARGE MASTER?

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By Dr. David Edward Marcinko MBA

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According to George Washington University, a hospital chargemaster is a comprehensive list of a hospital’s products, procedures, and services. Everything from prescription drugs to supplies for diagnostic tests has a unique price listing in the chargemaster, making it a go-to document for hospital administrators such as CFOs, clinical documentation improvement specialists, and revenue directors.

Chargemaster usage dates back to the mid-20th century. At that time, fee-for-service (FFS) health insurance plans, which allow patients to direct their medical care by choosing physicians and facilities and paying a portion of the billed total, had just emerged in the U.S. healthcare system. The chargemaster originally served as something akin to an FFS dictionary, with an entry for virtually anything billable under that economic model of healthcare.

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

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Over time, FFS itself has evolved and been challenged by alternatives like value-based care (VBC). Chargemasters built for FFS have changed accordingly, and they remain fixtures of the modern hospital revenue cycle. A standard chargemaster is a large electronic file containing multiple elements for each entry. These attributes usually include:

  • The charge for a single unit of the service in question
  • A Current Procedural Terminology (CPT) code; CPT is the official medical code set of the American Medical Association
  • Potentially, a Healthcare Common Practice Coding System (HCPCS) code; HCPCS is based on CPT
  • Alternative CPT and HCPCS codes if needed, e.g. one corresponding only to specific payers
  • A revenue code associated with the charge
  • Flag(s) indicating if the entry is scheduled for deletion, active or inactive
  • An internal reference number within the ledger for accounting purposes

LINK: https://revcycleintelligence.com/features/the-role-of-the-hospital-chargemaster-in-revenue-cycle-management

COURT: https://www.msn.com/en-us/health/medical/colorado-supreme-court-rules-in-favor-of-woman-who-expected-to-pay-dollar1337-for-surgery-but-was-charged-dollar303709/ar-AAXlqNU?li=BBnbfcL

MORE: https://medicalexecutivepost.com/2013/09/26/some-modern-issues-impacting-hospital-revenue-cycles/

RCC: https://medicalexecutivepost.com/2013/03/06/a-better-approach-to-hospital-cost-estimation/

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

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UPDATE: SPACS, Markets and Covid-19 Fraud

By Staff Reporters

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Chamath Palihapitiya, the billionaire investor who once claimed to be the next Warren Buffett, is winding down two of his special purpose acquisition companies (SPACs) and returning $1.5 billion to investors. It marks the symbolic end to the SPAC bubble that Palihapitiya is credited with instigating.

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  • Markets: Investors pre-gamed the Fed’s big interest rate decision coming this afternoon by sending stocks lower and Treasury yields higher; they’re sweating what’s expected to be the central bank’s third 75-basis-point hike in a row to tamp down inflation. Speaking of inflation, Ford’s stock had its worst day in 11 years after warning of $1 billion in extra supplier costs.

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Finally, the Justice Department charged 47 people for allegedly carrying out the single largest Covid relief fraud scheme to date. Feds say that by exploiting a program meant to feed needy Minnesota children, the defendants stole $250 million. Prosecutors say the fraud was committed by a network of individuals connected to the nonprofit Feeding Our Future and was overseen by the nonprofit’s founder, Aimee Bock. Feeding Our Future was one of a handful of organizations Minnesota trusted to oversee the distribution of meals to children in low-income families during the pandemic. Instead, prosecutors allege, the organization operated a “pay-to-play scheme” in which individuals submitted fake meal sites and children’s names, raking in government money with fraudulent invoices.

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PODCAST: PBM Money Flow Explained

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PHARMACY BENEFITS MANAGER

By Eric Bricker MD

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What Is an IBNR Medical Claim?

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Significance often under Appreciated

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chiefdem2]

As some Medical Executive-Post readers and subscribers are aware, hospitals that filed bankruptcy recently include: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, and four hospital system Hospital Partners of America, in Charlotte.

One can only wonder about the impact of Incurred But Not Reported claims on their plight?  

IBNR Definition

According to the www.CertifiedMedicalPlanner.org, an IBNR claim is a concept that signifies healthcare services have been rendered but not invoiced or recorded by the healthcare provider, clinic, hospital, or organization.

Cause and Affect

IBNRs are usually the result of a commercial prospective payment risk contract between managed care organizations and healthcare providers, an IBNR claim refers to the estimated cost of medical services for which a claim has not been filed, or monitored by an IBNR collection systems or control sheet.

IBNR Types

More formally, IBNRs are a financial accounting of all services that have been performed but, as a result of a short period of time or “lag,” have not been invoiced or recorded. The medical services that will not be collected should be accounted for using the following accrued but not recorded (ABNR) entry:

Debit — accrued payments to medical providers or healthcare entity

Credit — IBNR accrual account

Example:

An example of an IBNR is hospital Coronary Artery Bypass Graft [CABG] surgery for a managed care plan member. Out of the capitated or prospective payment funds, the surgeon and/or healthcare organization has to pay for all related physical and respirator therapy, and rehabilitation services, as well as ancillary providers, drugs, and durable medical equipment [DME], as contractually obligated. This may also include complication diagnosis and extensive follow-up treatment.

Accordingly, the health plan will not be completely billed until several weeks, months, or quarters later or even further downstream in the reporting year after the patient is discharged. In order to accurately project the health plan’s financial liability, however, the health plan and hospital must estimate the cost of care based on past expenses.

Accounting Cost Controls

Since the identification and control of costs are paramount in financial healthcare management, an IBNR reserve fund (an interest bearing account) must be set up for claims that reflect services already delivered but, for whatever reason, not yet reimbursed.

From the accounting perspective, IBNR is accrued as an expense and is related as a short-term liability each fiscal month or accounting period.

Otherwise, the organization may not be able to pay the claim, if the associated revenue has already been spent. The proper handling of these “bills in the pipeline” is crucial for proactive providers and health organizations that are exploring arrangements that put them in the role of adjudicating claims or operating in a sub-capitated system.

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Stetho-Claim

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Assessment

IBNRs are especially important with newer patients who may be sicker than prior norms.

Recoverables that hospitals post as part of their large reserve charges are also, in many cases, IBNR losses. They may be recorded as IBNR claims on their balance sheets. Once these losses start becoming actual losses, the hospital may look to the insurer to pay a part of the claim. This causes disputes between the payor, provider, and/or healthcare organization.

Conclusion

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

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

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

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What is the Cost Per Patient Acquisition [CPA]?

By Neal Baum MD

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There’s a saying by John Wanamaker who pontificated, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half”. Today you have opportunities to determine which parts of your marketing efforts are effective and what is wasted. However, you have to measure your marketing results. This article will discuss marketing metrics and how to use them to get the best bang for your marketing buck.

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The cost per acquisition (CPA)

Not all initial phone callers to a medical practice will convert to paying patients. The 50 patients who made appointments can be plugged into the equation, i.e., campaign costs divided by patients who became paying patients or $2,000 divided by 50 equals $40, representing the patient acquisition cost (PAC).

Now, if each patient who entered the practice spends $800 over the patient’s lifetime, that’s an increase in income of $40,000, not shabby for $2,000 in marketing expenses.

Source: Neil Baum, MD, Physicians Practice [8/26/22]

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MORE: https://pubmed.ncbi.nlm.nih.gov/22834190/

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

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Financial-Tech [Entrepreneurial Start-Ups] Falling

By Staff Reporters

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DEFINITION: Financial technology (abbreviated fintech or FinTech) is the technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. Artificial intelligence, Blockchain, Cloud computing, and big Data are regarded as the “ABCD” (four key areas) of FinTech. The Fintech industry is an emerging industry that uses technology to improve activities in finance. The use of smartphones for mobile banking, investing, borrowing services, and cryptocurrency are examples of technologies aiming to make financial services more accessible to the general public.

Financial technology companies consist of both startups and established financial institutions and technology companies trying to replace or enhance the usage of financial services provided by existing financial companies.

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

A subset of fintech companies that focus on the insurance industry are collectively known as insurtech or insuretech

READ: https://tinyurl.com/yrx2kxy4

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INVESTING: https://www.amazon.com/Comprehensive-Financial-Planning-Strategies-Advisors/dp/1482240289/ref=sr_1_1?ie=UTF8&qid=1418580820&sr=8-1&keywords=david+marcinko

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VENTURE CAPITAL Funding Hits Two Year Low

By Dan McCarthy

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Like everyone’s desire to work, venture funding sank to a new low during the dog days of summer. In August, global venture funding fell to $25.2 billion, per Crunchbase, less than half of the ~$53 billion invested one year prior, and the lowest monthly venture-funding total in two years. It’s down ~10% from the previous month.

Even so…The ongoing pullback didn’t stop several companies—including Adam Neumann’s, uh, controversial, comeback project Flow—from locking down significant investment rounds in August. Here are three rounds that stood out to us…all of which happen to play in the clean-energy space:

  • Terrapower, a nuclear tech developer founded by Bill Gates, raised $750 million. Gates co-led the round with SK Group, which plowed $250 million into the company. In addition to nuclear power generation, the company is also researching nuclear medicine techniques.
  • Longroad Energy, a renewable energy developer based in Boston, raised $500 million. The company said that the funding would catalyze a shift toward an owned-and-operated business model and enable it to grow the capacity of its wind, solar, and storage assets from 1.5 gigawatts (GW) to 8.5 GW in the next five years.
  • Lunar, a home-electrification startup founded by a former Tesla Energy exec, debuted with $300 million in funding, with residential solar bigwig Sunrun and SK Group (hello again) as investors. Later this year, Lunar plans to begin releasing hardware and software products that make it easier for homes to generate, use, and store carbon-free energy.

Monthly venture funding has been trending down since it hit a record high of $69.4 billion last November, as rising rates, inflation, and general economic uncertainty have turned the investing temperature from “deep summer” to “that first really cold day of winter where you neglect to wear a proper coat.” But it’s time for two of our most common refrains on this subject: 1) $25 billion in monthly VC funding is still a lot of money 2) VCs are sitting on a record high of more than half a trillion dollars in dry powder. Those reserves are unlikely to be emptied in 2022, but there is a lot of committed capital on hand for startups to vie for.

READ: https://www.emergingtechbrew.com/stories/2022/09/09/global-vc-funding-hit-a-two-year-low-in-august?mid=349b552221c994e2540a304649746d7c

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

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PODCAST: How Extensive is Healthcare Prior Authorization?

A New Study

BY ERIC BRICKER MD

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

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PODCAST: Google Starts a Health Insurance Stop-Loss Company

By Eric Bricker MD

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

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NFTs 101: Taxes, Risks, and More

Randy Frederick

Nonfungible tokens have become the latest investment craze. Here’s what you need to know.

Until recently, nonfungible tokens (NFTs) were written off by many as a virtual fad and a waste of money. After all, why would someone pay $2.9 million to own the very first tweet when anyone with internet access can view it for free?

But when auction house Christie’s sold the NFT of Everydays: The First 5000 Days, a collage by the artist Beeple, for $69.3 million in March 2021, it suddenly put this emerging asset class on par with collecting a Picasso (whose heirs have jumped on the digital bandwagon by selling NFTs of the artist’s ceramics).

So, what’s all the fuss about?

The basics

Like cryptocurrencies, NFTs are stored on a blockchain, which is a digital, publicly available transaction ledger. However, while a single bitcoin can be exchanged for any other bitcoin—just as a $1 bill can be exchanged for any other $1 bill—each NFT is unique (i.e., nonfungible). In that sense, NFTs are more like the Hope Diamond or Picasso’s Guernica—a one-of-a-kind work for which there is no substitute.

Indeed, an NFT’s inherent scarcity, whether because it’s a unique piece of art or a limited-issue collectible, makes it potentially lucrative—but also substantially less liquid than, say, your average stock or bond. As a result, you may need to drop the price or hold on to your NFT if the demand isn’t there when you want or need to sell it. Other risks include:

  • Security: Like bitcoin, NFTs require a private key that functions as a password. If your key is lost or stolen, you may never again be able to access your NFT. Other security risks involve replicas that purport to be the original—as with any collectibles marketplace—and fraudulent sites designed to steal private keys and their attendant assets.
  • Taxation: Although the IRS has yet to issue specific guidance, NFTs are generally treated as collectibles. As such, if you sell an NFT you’ve held on to for less than a year, any short-term gains will be taxed as ordinary income. Any gains on an NFT held for a year or longer will be taxed at a top collectibles rate of 28%—plus a 3.8% net investment income tax if your modified adjusted gross income exceeds $200,000 ($250,000 for married couples).

Where to start

If, after careful consideration, you’re still interested in dipping your toe in NFT waters, you’ll first need to do three things:

  1. Pick a marketplace: To buy or sell NFTs, you’ll need to choose a reputable marketplace. Both Nifty Gateway and OpenSea are popular, although specialty marketplaces also exist, including ArtOfficial if you’re a fine-art collector and NBA Top Shot for basketball enthusiasts.
  2. Get a wallet: Shopping through most NFT marketplaces requires a Web3 wallet, such as MetaMask, that can store both cryptocurrencies and NFTs. Some marketplaces, like Nifty Gateway, will store your NFT, but you’ll have to pay a fee to transfer it to another wallet should you wish to do so later.
  3. Buy cryptocurrency: Some marketplaces accept payment in so-called fiat currencies, such as the U.S. dollar. However, many marketplaces are built on the Ethereum blockchain and prefer to transact in its native cryptocurrency, ether.

Tread with caution

Although the popularity of NFTs has exploded in the past year, with first-quarter sales topping $11 billion by mid-March 2022—up from $53 million for the fourth quarter of 2020—only time will tell if NFTs will realize their long-term potential or fall tragically short of it. 

Either way, it will be fascinating to see how this new form of digital authentication changes how we invest. (Ernst & Young, for example, is working on NFT-inspired technology that can help collectors track the provenance of fine wines.)

Quantum leap

NFTs experienced exponential growth in 2021.Beginning in Q3 2017, quarterly NFT trading volume remained under $20 million until jumping to $28.01 million in Q3 2020, then $52.98 million in Q4 2020. It went above $1 billion in Q1 2021 and, as of Q1 2022, has remained above $10 billion since Q3 2021.

DappRadar.com

Sales figures include only on-chain transactions conducted on the 49 NFT marketplaces that DappRadar tracks, excluding LooksRare.

*Q1 2022 data as of 03/25/2022.

ASSESSMENT

For the time being, however, there’s a lot to be said for taking a go-slow approach to this new asset class and all the risks it entails. 

In general, those interested in crypto assets like NFTs are wise to limit their exposure to no more than 1% of investable assets.

RELATED: https://www.schwab.com/learn/story/etfs-and-taxes-what-you-need-to-know?cmp=em-XCU

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PODCAST: What’s Going on at the IRS?

Welcome to The Common Bridge

By Richard Helppie

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Hello, welcome to the Common Bridge.

We’ve got a great topic for you today. It’s all about taxes and the IRS and with us today, two experts from Plante Moran. Welcome, Rachel Keller and Brett Bissonnette, welcome to the Common Bridge. The Common Bridge, of course, is available@substack.com. Please go to substack.com. Enter the Common Bridge in your search engine. Subscribe if you wish, either a paid subscription or a free subscription.

Of course, the Common Bridge is available on all of your podcast outlets. Look for us there and on YouTube TV. And of course, with our friends over at Mission Control radio on your radio garden app. We all listen to debates and commentary about law and policy and especially taxes. And every law, every policy and of course tax regulation require mechanisms to ensure compliance.

Well, our President Joseph R. Biden has stated that the IRS needs to be properly funded in order to carry out its mission on our very complex tax code. Taxpayers have been puzzled by missing records, slow refund late fees for things they paid and other matters including slowness in the support that they get directly from the IRS. So today, we’re going to chat with these two experts who are in the field today actively advising people from all stripes about tax law and tax regulation. They spent a lot of their time interacting with the IRS and making sure that their clients are in compliance with the tax law. So we anticipate some education and maybe some policy ideas. 

From Plante Moran, we welcome Rachel Keller and Brett Bissonnette — Welcome to the Common Bridge.

-Richard Helppie

EDITOR’S NOTE: Richard D. Helppie
Former: CEO and Founder
Superior Consultant Company, Inc.
[SUPC-NASD]

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PODCAST: https://podcasts.apple.com/us/podcast/richard-helppies-common-bridge/id1485396596?i=1000576748851

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PODCAST: Reference Based Medical Pricing Negotiation

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7 Best Practices in Reference-Based Pricing Negotiation

By Eric Bricker MD

1) Calculate Extent of Medicare Underpayment

2) Calculate Extent of Medicaid Underpayment

3) Compare Hospital Charity Care to Tax Benefits

4) Threaten to Publish Hospital Prices

5) Publish Email Addresses and Cell Phone Numbers for Hospital Board Members, CEOs and CFOs

6) Have Unions Assist in ‘Persuasion’

7) Threaten to Take Patients to Other States for Free

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

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What is the Back-End Ratio or Back Ratio?

By Staff Reporters

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Back-End Ratio or Back Ratio

DEFINITION: The sum of your monthly mortgage payment and all other monthly debts (credit cards, car payments, student loans, etc.) divided by your monthly pre-tax income.

Traditionally, lenders wouldn’t give people loans that increased this ratio past 36%, but they often do now.

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

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Valuation of Remote Therapeutic Monitoring [Reimbursement Environment]

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By Health Capital Consultants, LLC

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VALUATIONS

Valuation of Remote Therapeutic Monitoring: Reimbursement Environment

The U.S. government is the largest payor of medical costs, through Medicare and Medicaid, and has a strong influence on physician reimbursement. In 2020, Medicare and Medicaid accounted for an estimated $829.5 billion and $671.2 billion in healthcare spending, respectively.

The prevalence of these public payors in the healthcare marketplace often results in their acting as a price setter, and being used as a benchmark for private reimbursement rates. (Read more…) 

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4-PODCASTS: When to [Financial] Plan?

The Professional Edge

By Sean G. Todd, Esq., M. Tax, CFP®, CPA

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1-PODCAST: https://professional-edge.captivate.fm/episode/when-to-plan-s1

2-PODCAST: https://professional-edge.captivate.fm/episode/when-to-plan-s2

3PODCAST: https://professional-edge.captivate.fm/episode/when-to-plan-s3

4-PODCAST: https://professional-edge.captivate.fm/episode/when-to-plan-s4

Why do you spend more time planning your vacation than planning for your retirement?

You don’t plan to fail — you just fail to plan …. stop right now and

Take advantage of http://www.emcthebundle.com/ (THE BUNDLE)

Sean G. Todd, Esq., M. Tax, CFP®, CPA

P.S. Your tax, estate and financial plan – done: http://www.emcthebundle.com/ (THE BUNDLE)

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

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

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PODCAST: Law Firm Fairmark Partners Suing Large Hospital Systems for Antitrust Violations

Using Court System to Change Healthcare

By Eric Bricker MD

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HOSPITALS: https://www.amazon.com/Financial-Management-Strategies-Healthcare-Organizations/dp/1466558733/ref=sr_1_3?ie=UTF8&qid=1380743521&sr=8-3&keywords=david+marcinko

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PODCAST: The Professional Edge in Financial Planning

By Sen G. TODD; Esq., CPA, CFP, MTax

To make a thorough or dramatic change

  1. Begin by taking the first step
  2. Will you make things change or will you let change happen to you
  3. Define your outcome
  4. If it was easy everyone would be a multi-millionaire – it is if you work with the right professional

Have you honestly considered what YOU get from planning? Your safe and secure retirement is YOUR responsibility. What steps should you take – If your climbing Mt. Everest, you don’t do it alone – you follow your Sherpa to guide you there. Why, they have already done this many times and are there to help you. This is similar to working with Estate Management Counselors – we are your guide – we have already assisted others in making the decisions you face.

Taking advantage of THE BUNDLE

To a prosperous and happy 2021!!

Sean G. Todd, Esq., M. Tax, CFP®, CPA

P.S. Your tax, estate and financial plan – done: THE BUNDLE

LISTEN HERE: https://professional-edge.captivate.fm/episode/transform-s2

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

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Understanding Medical Cost Accounting

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A Subset of Managerial Accounting

By Dr. David E. Marcinko MBA CMP®

By ME-P Staff Reporters

CMP logo

SPONSOR: http://www.CertifiedMedicalPlanner.org

Managerial and medical cost accounting is not governed by generally accepted accounting principles (GAAP) as promoted by the Financial Accounting Standards Board (FASB) for CPAs. Rather, a healthcare organization costing expert may be a Certified Cost Accountant (CCA) or Certified Managerial Accountant (CMA) designated by the Cost Accounting Standards Board (CASB), an independent board within the Office of Management and Budget’s (OMB) Office of Federal Procurement Policy (OFPP).

The Cost Accounting Standards Board

CASB consists of five members, including the OFPP Administrator who serves as chairman and four members with experience in government contract cost accounting (two from the federal government, one from industry, and one from the accounting profession). The Board has the exclusive authority to make, promulgate, and amend cost accounting standards and interpretations designed to achieve uniformity and consistency in the cost accounting practices governing the measurement, assignment, and allocation of costs to contracts with the United States.

Codified at 48 CFR

CASB’s regulations are codified at 48 CFR, Chapter 99.  The standards are mandatory for use by all executive agencies and by contractors and subcontractors in estimating, accumulating, and reporting costs in connection with pricing and administration of, and settlement of disputes concerning, all negotiated prime contract and subcontract procurement with the United States in excess of $500,000. The rules and regulations of the CASB appear in the federal acquisition regulations.

North American Industry Classification System (NAICS) codes are used to categorize data for the federal government.  In acquisition they are particularly critical for size standards.  The NAICS codes are revised every five years by the Census Bureau.  As of October 1, 2007, the federal acquisition community began using the 2007 version of the NAICS codes at www.census.gov/epcd/www/naics.html

Cost Accounting Standards

Healthcare organizations and consultants are obligated to comply with the following cost accounting standards (CAS) promulgated by federal agencies:

  • CAS 501 requires consistency in estimating, accumulating, and reporting costs.
  • CAS 502 requires consistency in allocating costs incurred for the same purpose.
  • CAS 505 requires proper treatment of unallowable costs.
  • CAS 506 requires consistency in the periods used for cost accounting.

The requirements of these standards are different from those of traditional financial accounting, which are concerned with providing static historical information to creditors, shareholders, and those outside the public or private healthcare organization.

AssessmentTwo Doctors

Functionally, most healthcare organizations also contain cost centers, which have no revenue budgets or mission to earn revenues for the organization.  Examples include human resources, administration, housekeeping, nursing, and the like.  These are known as responsibility centers with budgeting constraints but no earnings.  Furthermore, shadow cost centers include certain non-cash or cash expenses, such as amortization, depreciation and utilities, and rent. These non-centralized shadow centers are cost allocated for budgeting purposes and must be treated as costs http://www.CertifiedMedicalPlanner.org

MORE:  CASE MODEL EOQ 1

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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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Activity-Based-Medical-Cost Accounting and Management

A Non-Traditional Accounting System

[Dr. David Marcinko MBA and Staff Writers]CPA

Sooner or later you will want to ascertain and then demonstrate the cost effectiveness of your medical care. By using the process of Activity Based Cost (ABC) management, you will be able to do so.  But, if you’re using a traditional accounting system, you won’t know a thing about your activity costs. Here’s how. 

Traditional Cost Accounting Methods 

In a traditional medical practice cost accounting system, costs are assigned to different procedures and services based on volume.  In others words, office costs are spread over the entire office’s product line and you may not know the true profitability of any single medical activity. So, if the office is doing more “procedures” than general medicine, for example, more indirect office overhead costs will be allocated to the procedural portion of the practice. 

ABC management, on the other hand, determines the actual costs of the resources that each service consumes. Because general medicine requires more human resources than “technical procedures,” ABC management will assign more costs to the general medical portion of the practice. 

Accordingly, most physicians, office managers, and their accountants are surprised that a prior notion of office profitability is different than previously thought. ABC management is just more accurate in measuring medical service profitability than traditional accounting methods. 

Medical Activity Cost Drivers 

Examples of medical activities that are office cost drivers include such items as monitoring vital signs, taking radiographic images, removing dressings or casts, performing laboratory tests or veni-punctures, surgical set-ups or operative procedures; etc.  

However, in the office setting, the most economically important activities are listed as specific CPT codes for each medical specialty.  The most important end result of ABC management is the shift of general overhead costs to low volume services from high volume services. These effects are not symmetrical as there is a bigger dollar effect on the per-unit costs of the low volume service.  

ABC Managerial Accounting Improvements 

ABC management improves office managerial cost accounting systems in three ways: 

  1. It increases the number of cost pools used to accumulate general overhead office costs. Rather than accumulate overhead costs in a single office-wide pool, costs are accumulated by activity, service or procedure.
  2. It changes the base used to assign general overhead costs to services or patients. Rather than assigning costs on the basis of a measure of volume (employee or doctor hours), costs are assigned on the basis of medical services or activities that generated those costs.
  3. It changes the nature of many overhead costs in that those formerly considered indirect, are now traced to specific activities or services. The office service mix may then be adjusted accordingly, for additional profit.   

Methodology 

In order to perform an ABC analysis for your medical office, calculate the cost of delivering a single unit of medical or surgical activity using only the work component of the resource based relative value scale (RBRVS).

Do this by adding up your office’s average variable expenses for the prior 1-3 years.  Now, count the number of work resource based relative value units (RBRVUs) delivered for each CPT code for the same time period, using the latest edition of the Federal Register to obtain the latest list of RVUs by CPT code. Then divide total variable expenses by the total number of work RVUs in order to arrive at the marginal cost of a single unit of service for the time period being evaluated.

For example, if your office had variable expenses of $480,000, and produced 80,000 work RVUs last year, it cost $6, on top of the office’s fixed expenses, to deliver one unit of work product. So, if an HMO plan offers to reimburse you at a rate of $11 per member, per month, and you can expect to reasonably deliver on average of one RVU pm/pm, you’ll earn enough on the contract to cover your marginal costs and some of your fixed and direct expenses. 

CASE MODELs: CVPA 4 and CVPA 3

dhimc-bookAssessment

Remember, this method assumes that you have the excess operating capacity and time slots, available and unused, to see the additional patients of the new plan without adding extra overhead expenses to service the contract.

If not, or if you plan for capitation to become a major portion of your practice, you might want the capitated contract(s) to cover all your office expenses, so be sure to include both the fixed and other direct costs to your variable cost calculations. ABC determines the actual costs of resources rendered for each activity and represents a real measure of practice profitability. Office service mix can then be changed to either maximize revenues or better suit your practice personality.

A Caveat

Suppose however, that a medical service is competitively priced but still shows that the CPT code is unprofitable. For example, the costs of special requests can adversely affect office profits. Yet, special patient requests are one of the biggest reasons that a CPT code or procedure isn’t profitable.

In this case, look closely at activity costs and determine which ones are being performed inefficiently. Improving the efficiency of those kinds of medical services, or referring them out or abandoning them all together, will increase office profitability.

MORE: ABCM

Conclusion

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

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

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

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

Product DetailsProduct DetailsProduct Details     

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PODCAST: Orthopedic Surgery Payment Changes in Total Knee and Hip Replacements

By Eric Bricker MD

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Physician Owned Hospitals Myths DeBunked

BY HEALTH CAPITAL CONSULTANTS, LLC

Literature Review Debunks Claims Against Physician-Owned Hospitals


Approximately 250 hospitals across the U.S. are completely or partially physician owned. These physician-owned hospitals (POHs) can offer a variety of services, from general care to specialty services, such as cardiovascular or orthopedic care, known as “focused factories.”

Over the past several decades, healthcare providers and policymakers have claimed that POHs have a negative impact on the healthcare industry, suggesting that: (1) POHs “cherry-pick” the most profitable patients; (2) the quality of care provided at POHs is substandard; and, (3) conflicts of interest exist due to the financial incentive for physician owners to refer patients to their POHs. (Read more…) 

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

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The NATIONAL Emergency Fund!

How Much?

By Staff Reporters

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Grant Cardone is a self-made millionaire, author and sales training expert. He recommends hitting a lofty savings goal — $100,000 — and then investing any money earned after you hit that amount. “You need to prove to yourself that you can go out and get money,” he wrote in a 2018 post for CNBC. “Saving $100,000 shows that you have an ability to make money and then to keep it. Most people can’t do either of those things. Once you can earn and save, then you can start building wealth.”

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NEF: https://www.aol.com/finance/much-cash-stashed-national-emergency-113034956.html

READ HERE: https://www.msn.com/en-us/money/personalfinance/how-much-should-you-have-in-your-emergency-fund-3-financial-experts-weigh-in/ar-AAZZ8e3?cvid=87320afb8c6649f38290bea7b3da7b7e

PHYSICIANS: https://medicalexecutivepost.com/2007/12/05/emergency-funds/

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OUR NEW RADIO SHOW: Listen to Estate Management Consultants

The Professional Edge Radio Show

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By Sean G. Todd Esq., CPA, MTax, CFP™

[Registered Investment Advisor]

Sean G. Todd draws upon the substantial knowledge of tax and financial planning which he gained in his 20+ years of practice.  Sean is a licensed attorney with a Master of Taxation degree.  Sean is also a licensed Certified Financial Planner™ practitioner and a Certified Public Accountant.  He has extensive experience in the areas of Tax, Estate and Financial Planning.  Sean has been an adjunct professor at Oglethorpe University and Emory University in Atlanta.  He is currently teaching Federal Income Tax Planning at The University of Georgia.

Sean earned his Bachelor of Science in Business from Indiana University and his law degree from Ohio Northern College of Law.  In addition, Sean continued his education with a specialization in tax by earning a Master of Taxation degree from The University of Akron.  Sean has been a featured speaker at the National Self Storage Association meeting in Las Vegas, Nevada on several occasions.  He also lectures on topics dealing with estate and financial planning and the new tax laws. 

Clients benefit when working with Sean because of his practical experience. He has completed over 2,000 estate and financial plans for individuals and business owners in the State of Georgia, and clients also benefit from his professional training in investments, finance, accounting, estate planning, taxes and the law.  He has an unmatched ability to coordinate all the moving parts to objectively evaluate and provide effective professional advice to his clients. 

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Tune in Sundays 9-10:00 am EST

Topics include:

  • Tax Strategies
  • IRA Distribution Strategies
  • Retirement Income
  • Estate Planning
  • Asset Protection, and much more!

HISTORICAL REVIEW LISTEN HERE: https://www.emcadvisors.com/radioshow.html

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Editor’s Note: Be sure to visit and subscribe to this ME-P to learn much more from Sean G. Todd. He has deep subject matter expertise of the topics presented aligned with a pragmatic medical perspective from his sister who practices in the Midwest. And, be sure to directly tune into Professor Sean Todd’s own: “The Professional Edge Radio Show” every Sunday at 9-10 am, EST.

Dr. David Edward Marcinko MBA CMP™

[Editor-in-Chief]

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Coordinated Actions Indicate Growing Scrutiny of Tele-Medicine

By Health Capital Consultants, LLC

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GROWING SCRUTINY OF TELE-MEDICINE

On July 20, 2022, the Office of Inspector General (OIG) of the U.S. Department of Health & Human Services (HHS) released a Special Fraud Alert on telemedicine. On the same day, the U.S. Department of Justice (DOJ) announced a “nationwide coordinated law enforcement action” against 36 defendants, and the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity announced administrative actions against 52 providers, related to alleged telemedicine arrangements. These coordinated actions indicate a growing scrutiny of telemedicine arrangements by federal government regulators. (Read more...) 

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

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A Fiduciary Comes with Responsibilities to the Client

By Stephen Kelley, CSA

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As a Registered Investment Adviser (RIA) with a Series #65 securities license, we hold a fiduciary duty to you. This means that we are legally bound to put your interests above those of anyone else, including ourselves.

Now you might reasonably think that anyone offering financial advice or services to clients is required to be a fiduciary. Sadly, if you thought that, you’d be wrong. Some estimates claim that only 15 percent of advisors have a fiduciary duty to their clients. The Paladin Registry puts the number even lower, estimating that just one in 12 (8.3 percent) advisors have a fiduciary responsibility.

For the most part, stockbrokers (also called “Registered Representatives,” “Account Executives,” “Financial Advisors,” or “Wealth Managers”) are not fiduciaries, even though they are allowed to portray themselves as full-service investment advisors. If your stockbroker/registered representative/account executive/financial advisor/wealth manager holds a series seven [#7] securities license, then it’s probable that they aren’t a fiduciary.

This was made amply clear in the movie, “The Wolf of Wall Street,” a biopic about Jordan Belfort, a stockbroker who made his fortune selling junk stocks and bonds to middle-class investors: in other words, by cheating them. Much of it was perfectly legal. The SEC went after Belfort’s company, Stratton Oakmont, for nearly a decade before it was able to shut it down. The point being that even in the face of egregious wrongdoing, theft, fraud and a virtual sea of drugs and blatant hedonism, the securities laws in this country are so loose that it took billions in theft and a decade of suspected and known fraud to step in and stop the abuse. And this movie was based on a true story.

That’s why a fiduciary duty is so important to a client. Being a fiduciary is a legal distinction. A Registered Investment Advisor (RIA) or Investment Advisor Representative (IAR) who holds a Series #65 securities license, subject to the Investment Advisers Act of 1940, is a fiduciary. The legal investment advising standards that govern a non-fiduciary stockbroker and a fiduciary Registered Investment Advisor are very different.

A Registered Investment Advisor is legally required to follow the “trust” standard — the highest known in law — which requires it to place the interests of its clients ahead of its own and fulfill critical fiduciary duties of trust and confidence. Under the fiduciary trust standard, a Registered Investment Advisor must provide its “best advice” to a client. A non-fiduciary stockbroker (like the coveted Series #7 of “The Wolf of Wall Street”) follows only the “suitability” standard, which doesn’t require a stockbroker to place the interests of his clients ahead of its own. Under the non-fiduciary suitability standard, a stockbroker need provide only “suitable advice” to his clients — even if the stockbroker knows that the advice is not the best advice for the client.

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The table below helps summarize which professionals are fiduciaries.

Type of ProfessionalAre They A Fiduciary?
PhysicianYes
LawyerYES/Maybe
CPANo
Trust OfficerYes
Stock BrokerNo
Insurance AgentNo
Registered RepresentativeNo
CFP PractitionerMaybe
Financial PlannerMaybe
Registered Investment AdviserYes
NAFPA-Registered Financial AdvisorYes

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MORE: https://medicalexecutivepost.com/2022/05/21/an-interview-with-bennett-aikin-aif/

RELATED: https://www.kitces.com/blog/the-4-different-types-of-financial-advisor-fiduciaries/

CFPs: https://medicalexecutivepost.com/2016/11/18/why-we-cannot-assume-cfp-equals-fiduciary/

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

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“Triple Entry Accounting”

What it is – How it works?

[By staff reporters]

The term “Triple Entry Accounting,” was first used by Ian Grigg, financial cryptographer, and described in his paper published in 2005, three years before the emergence of Bitcoin and its underlying Blockchain protocol.

Here is the original historical article on “Triple Entry Accounting” by Grigg:

LINK: https://nakamotoinstitute.org/triple-entry-accounting/

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.

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DOCTORS:

“Insurance & Risk Management Strategies for Doctors” https://tinyurl.com/ydx9kd93

“Fiduciary Financial Planning for Physicians” https://tinyurl.com/y7f5pnox

“Business of Medical Practice 2.0” https://tinyurl.com/yb3x6wr8

HOSPITALS:

“Financial Management Strategies for Hospitals” https://tinyurl.com/yagu567d

“Operational Strategies for Clinics and Hospitals” https://tinyurl.com/y9avbrq5

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

PODCAST: “Regulatory” Capture in Healthcare

By Eric Bricker MD

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MORE: https://medicalexecutivepost.com/2016/08/12/the-regulatory-capture-of-american-medicine-by-the-drug-and-alcohol-testing-assessment-and-treatment-industry/

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

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Stay Alert for Investment Scams Involving Cryptocurrency

By Charles Schwab

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Stay alert for investment scams involving cryptocurrency
 
At Schwab, we’re committed to helping you protect your assets. One way we do that is by raising awareness of the increase in fraudulent investment schemes (“scams”) involving cryptocurrencies and digital assets. While investing involves taking some risks, being scammed shouldn’t be one of them.
What do scams look like? Investment scams target investors by promising quick, guaranteed returns. Although “investment pitches” vary, using fraudulent cryptocurrency investment opportunities to entice targets is a common approach.

Once targeted investors indicate interest, they are often instructed to wire funds abroad or to a third party’s personal account, or to transfer cryptocurrency. Fake websites and/or applications often create the illusion of a legitimate trading or investment platform and gain trust. However, once funds have been transferred, they are difficult to trace and retrieve.
5 Investment Scam Red Flags 
Guaranteed” high investment returns, supposedly with little or no risk, and sounding too good to be true.
Unlicensed or unregistered sellers. Use Investor.gov to check out the background of anyone offering you an investment in securities.
Skyrocketing account values. Investments that appear to rapidly increase in value are often fake.
Fake testimonials. Scammers often pay people to provide fake reviews, so never rely solely on testimonials in making an investment decision.
Fake contacts. Take caution if someone approaches you through social media with an investment opportunity. Pretending to be a friend or to have a mutual acquaintance is a common tactic used to gain trust.

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MORE: https://medicalexecutivepost.com/2022/02/22/cryptocurrency-trades-and-income-taxes-2021/

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

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UPDATE: The New IRA & IRS with “Pass-Thru” Business Entities

By Staff Reporters

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  • The US Senate passed their climate, health and tax package, including nearly $80 billion in funding for the IRS.
  • The Inflation Reduction Act allocates $79.6 billion to the agency over the next 10 years, with more than half of the money going to enforcement, with the IRS aiming to collect more from corporate and high-net-worth tax dodgers.
  • The remainder of the funding is earmarked for operations, taxpayer services, technology, development of a direct free e-file system and more. Collectively, those improvements are projected to bring in $203.7 billion in revenue from 2022 to 2031, according to recent estimates from the Congressional Budget Office.

The biggest revenue-raiser of the IRA is a 15% minimum tax on corporations with profits of $1 billion or more, which is expected to generate $258 billion over 10 years. This addresses the problem of the rampant tax dodging among large companies that has mostly benefited wealthy shareholders and executives. The bill includes a 1% excise tax on companies’ stock buybacks, raising an estimated additional $74 billion. This will discourage corporations from siphoning resources into share repurchases that largely benefit shareholders and executives with stock-based pay. Those resources could instead go toward worker wages or other productive investments. And the bill would boost IRS enforcement to ensure the ultra-rich pay.

Finally, the Inflation Reduction Act would also extend a tax limitation on pass-through businesses for two more years. The limitation on how businesses can use losses to reduce taxes is supposed to expire at the start of 2027. A pass-through or flow-through business is one that reports its income on the tax returns of its owners. That income is taxed at their individual income tax rates. Examples of pass-throughs include sole proprietorships, some limited liability companies, partnerships and S-corporations.

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

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

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CMS Issues 2023 Physician Fee Schedule Proposed Rule

PHYSICIAN REIMBURSEMENT

CMS Issues 2023 Physician Fee Schedule Proposed Rule

On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) released its proposed Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2023. Arguably the most noteworthy provision in the proposed rule is the agency’s suggested cut to physician payments. However, the rule also includes a number of other policy proposals, including changes to Medicare accountable care organizations (ACOs), behavioral health care, cancer screening, and dental care. (Read more…)

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BUSINESS: https://www.amazon.com/Business-Medical-Practice-Transformational-Doctors/dp/0826105750/ref=sr_1_9?ie=UTF8&qid=1448163039&sr=8-9&keywords=david+marcinko
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MANUAL MORTGAGE UNDERWRITING FOR DOCTORS: What is it, Really?

By Staff Reporters

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

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

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

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

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

Automated Decision Making

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

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

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So, Why Manual Underwriting?

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

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

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

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

Manual Underwriters

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

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

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

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

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

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

https://www.amazon.com/Comprehensive-Financial-Planning-Strategies-Advisors/dp/1482240289/ref=sr_1_1?ie=UTF8&qid=1418580820&sr=8-1&keywords=david+marcinko

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Inflation Reduction Act of 2022

By Claire

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While the Inflation Reduction Act of 2022 looks good on paper, it will actually do more harm than good if it passes. The plan would hurt working-class taxpayers and small business owners across the country.

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READ: https://wealthofgeeks.com/irs-expansion/

MORE: https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf

FINANCIAL PLANNING: https://www.amazon.com/Comprehensive-Financial-Planning-Strategies-Advisors/dp/1482240289/ref=sr_1_1?ie=UTF8&qid=1418580820&sr=8-1&keywords=david+marcinko

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Financial Ratio Liquidity Analysis for Medical Accounts Receivable

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Understanding Vital Balance Sheet and Income Statement Components

By Dr. David Edward Marcinko; MBA, CMP™

By Dr. Gary L. Bode; MSA, CPA, CMP™ [Hon]

Dr. Gary L. Bode CPA MSAFinancial ratios are derived from components of the balance sheet and income statement. These short and long-term financial ratio values are “benchmarked” to values obtained in medical practice management surveys that become industry standards. Often they become de facto economic indicators of entity viability, and should be monitored by all financial executives regularly.

Defining Terms

One of the most useful liquidity ratiosrelated to ARs is the current ratio. It is mathematically defined as: current assets/current liabilities. The current ratio is important since it measures short-term solvency, or the daily bill-paying ability of a medical practice, clinic  or hospital; etc.  Current assets include cash on hand (COH), and cash in checking accounts, money market accounts, money market deposit accounts, US Treasury bills, inventory, pre-paid expenses, and the percentage of ARs that can be reasonably expected to be collected. Current liabilitiesare notes payable within one year. This ratio should be at least 1, or preferably in the range of about 1.2 to 1.8 for medical practices.

Other Ratios

The quick ratiois similar to the current ratio. However, unlike the current ratio, the quick ratio does not include money tied up in inventory, since rapid conversion to cash might not be possible in an economic emergency. A reasonable quick ratio would be 1.0 – 1.3 for a hospital, since this ratio is a more stringent indicator of liquidity than the current ratio.

Assessment

A point of emphasis in the case of both the current ratio and the quick ratio is that higher is not necessarily better. Higher ratios denote a greater capacity to pay bills as they come due, but they also indicate that the entity has more cash tied up in assets that have a relatively low rate of earnings. Hence, there is an optimum range for both ratios: they should be neither too low nor too high.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

DICTIONARIES: http://www.springerpub.com/Search/marcinko
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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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