BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
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Posted on April 25, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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An uptick in corporate dealmaking fueled investment banking growth at the four largest US banks—JPMorgan Chase, Bank of America, Wells Fargo, and Citibank—as well as at Goldman Sachs and Morgan Stanley. The result was “one of [investment banking’s] best quarters” since the Fed began hiking rates in 2022, the Wall Street Journal reported. Their earnings releases over the last week either matched or beat the consensus forecasts for revenue and earnings per share, according to the WSJ.
“It’s clear that we’re in the early stages of a reopening of the capital markets,” Goldman Sachs CEO David Solomon said in an earnings call last Monday. Goldman reported that growth in its investment banking and trading pushed its net income up 28% year over year, beating analyst expectations. Solomon said he expects more M&A activity will keep boosting the demand for debt underwriting at Goldman, which saw a 32% Year over Year jump in internet-banking revenue.
Solomon’s sunny outlook was beclouded the next day by Fed Chair Jerome Powell. The Fed had hoped inflation reports would show it could cut rates soon without overheating the economy, but instead inflation has continued to tick up.
As a young adult, what could you spend money on that would be a wise investment in your financial future? A home? Medical school education? A money management class?
Well, all of these may be good ideas, but there’s something else you can buy that could make an even greater difference in your long-term financial health: counseling.
Behavioral Finance
What does psychological counseling have to do with money? Sometimes; a lot!
For example, I was recently interviewed by a reporter for an article about money disorders. The conversation reminded me just how many problems can result from dysfunctional money beliefs and behaviors. Money disorders can impair people’s functioning and disrupt their lives just as significantly as disorders like alcoholism or other addictions.
Some common money disorders include the following:
Compulsive Spending is a consuming focus on spending. It can include buying things you can’t afford as well as shopping where no money is actually spent
Financial Enabling is a codependent attempt to help others that actually does more harm than good. A pattern of bailing kids out financially is a good example.
Hoarding is compulsively buying and storing things that you don’t need or will never use.
Financial Infidelity is keeping money secrets (such as spending, saving, or investment mistakes) from your partner because you would be ashamed to have them find out.
Financial Incest is inappropriate sharing of worries or financial details in ways that violate the boundaries between children and adults.
Workaholism, especially medical professionals, is a consuming focus on work or earning to a point of damaging your relationships.
Under-spending is frugality taken to extremes, such as inadequate spending on health care, nutrition, shelter, or clothing even when you can afford them.
Not about Money
How many of the above “disorders” are you guilty of?
All these disorders have one thing in common: fundamentally, they aren’t about the money. A given pattern of behavior around money can be someone’s unconscious response to emotional pain, in the same way addiction or anger might be.
For that particular person, the money behavior may just happen to be the medicator that works to cope with deep emotional stress. While one person may find relief in alcohol or drugs and another may find it in work, someone else might use shopping or hoarding as a way to feel better and function in the world.
An Addiction?
Just like addictions, however, money disorders only relieve pain for a short time. In the long term, they only cause more pain. The result is an escalating cycle of destructive behavior that has many negative consequences, including financial ones.
Rag Mags
To see how emotional health and financial health are linked, all you have to do is read a celebrity magazine or look around at the people you know. I’ve seen high-earning doctors and other medical professionals who have a negative self-worth because they can’t control their spending. We all know people who bounce from one financial mess to another, never seeming to learn from their money mistakes. Some very capable and intelligent doctors struggle financially and in their careers because of emotional issues that have nothing directly to do with money.
Counseling
Counseling to resolve emotional issues may seem to be a low-priority expense that comes far down the list after basic needs like housing, food, and transportation. Yet for anyone who struggles to overcome destructive patterns of behavior—even those that aren’t directly about money—counseling can pay off in very real monetary ways.
Assessment
Emotionally healthy and confident people make better choices about relationships, careers, and other major aspects of their lives. They also make better choices about money. This is why counseling is more than an investment in your emotional health. It can also make a measurable difference in your financial health.
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
Posted on April 25, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Otherwise known as “National Prescription Drug Take Back Day,” National Drug Take Back Day on April 25th is sponsored by the Drug Enforcement Agency. Its goal is to keep the public aware of the dangers of prescription drug use and misuse. Many Americans don’t know how to safely dispose of the prescription drugs that have been sitting in the medicine cabinet past their prime. Using these expired drugs, or using someone else’s, is dangerous and puts both the public and the environment at risk.
Spotify made money in Q1. According to Morning Brew, the streaming music giant grew its revenue last quarter by 20% to $3.8 billion on a record $180 million in profit, it announced yesterday. The smash report comes after Spotify cut costs last year, which included laying off more than a quarter of its workforce. The company also raised prices in 2023 for the first time in a decade as it further expanded beyond music into audio books and other categories. Spotify shares soared ~11% following the news.
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Here’s where the major benchmarks ended:
The S&P 500 index® (SPX) rose 1.08 points (0.02%) to 5,071.63; the Dow Jones Industrial Average® ($DJI) fell 42.77 points (0.1%) to 38,460.92; the NASDAQ Composite® ($COMP) added 16.11 points (0.1%) to 15,712.75.
The 10-year Treasury note yield rose more than 4 basis points to 4.644%.
The CBOE Volatility Index® (VIX) rose 0.28 to 15.97.
Transportation shares were among the market’s weakest performers Wednesday behind a drop of more than 10% in Old Dominion Freight Line (ODFL), which reported lighter-than-expected quarterly revenue. The shipper’s nosedive helped send the Dow Jones Transportation Average ($DJT) down 2.3%. Consumer staples, semiconductors, and utilities posted moderate advances. The Dow Jones Utility Index ($DJU) gained for the sixth straight day and ended at a three-and-a-half-month high.
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The National Association of Realtors’ $418 million settlement over an alleged conspiracy to inflate commissions received preliminary approval yesterday. It’s a new world order: Sellers won’t have to pay buyers’ agents anymore. There’s been talk of a metaphorical death of real estate agents, or a mass extinction; the jury is still out, but RE/MAX cofounder and chairman Dave Liniger doesn’t seem too concerned.
The Labor Department announced it has finalized its Retirement Security Rule, which aims to protect American workers who are saving for retirement and relying on advice from fiduciaries for it. The new rule will update the definition of an investment advice fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.
Clinicians don’t always get it right, and their mistakes can be costly: Studies show misdiagnoses lead to roughly 800,000 patient deaths or permanent disabilities each year in the US and cost the healthcare system an estimated $20 billion annually. Cleveland Clinic is using telehealth to try to combat misdiagnoses via its virtual second opinions program, which has saved an average of $8,705 per patient by avoiding unnecessary treatments, according to an analysis released in March.
Posted on April 24, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Tesla’s pivotal earnings call yesterday had the vibes of an undergrad at office hours begging for extra credit after failing every assignment all semester. The automaker whiffed on revenue targets, even after tempering expectations.
And, forthe first time since 2020, the EV-maker’s quarterly revenue dropped, falling to $21.3 billion, compared with $23.3 billion from the same period a year ago (analysts were expecting about $22b). Tesla’s profits sunk to a six-year low. The company said earlier this month that it only delivered 386,810 cars in the first quarter, down 8.5% from the same time in 2023.
On the bright side according to Morning Brew, despite the earnings miss, Tesla’s stock went up in after-hours trading, likely because the company vowed to accelerate the launch of more affordable models. It announced it was working on integrating ride-hailing technology into its app in a bid to take on Uber, and that the growth of its energy storage business is set to outpace that of its auto business this year.
That signal came amid broader concern that Tesla would move away from its traditional car making roots in favor of a business model focused on autonomous driving, robotics and AI-related technologies. It triggered an after-hours jump in Tesla stock that was cemented by a shareholder-friendly conference call from Chief Executive Elon Musk.
“I think we’ll have higher sales this year than last year,” Musk told investors, even as the group reiterated its forecast for “notably lower” vehicle deliveries for the current year.
Posted on April 24, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Stat: 740. That’s how many employees Nike will lay off at its Oregon HQ before the end of June. In February, Nike CEO John Donahoe informed employees of the company’s plan to reduce 2% of its workforce, which would mean around 1,600 employees in total. (USA Today)
Let’s say you leave your job at any time during or after the calendar year you turn 55 (or age 50 if you’re a public safety employee with a government defined-benefit plan). Under a little-known separation-of-service provision, often referred to as the “rule of 55,” you may be able take distributions (though some plans may allow only one lump-sum withdrawal) from your 401(k), 403(b), or other qualified retirement planfree of the usual 10% early-withdrawal penalties. However, be aware that you’ll still owe ordinary income taxes on the amount distributed. This exception applies only to the plan (including any consolidated accounts) that you were contributing to when you separated from service. It does not extend to IRAs.
The S&P 500 index rose 59.95 points (1.2%) to 5,070.55; the Dow Jones Industrial Average gained 263.71 points (0.7%) to 38,503.69; the NASDAQ Composite® ($COMP) surged 245.33 points (1.6%) to 15,696.64.
The 10-year Treasury note yield (TNX) decreased about 2 basis points to 4.602%.
The CBOE Volatility Index® (VIX) fell 1.25 to 15.69.
Similar to Monday, chipmakers were among the market’s strongest areas, carrying the Philadelphia Semiconductor Index (SOX) to a 2.2% advance. Retailers and communication services shares were also strong. The Dow Jones Utility Index ($DJU) gained for the fifth straight day and ended at its highest level in over three months. The Russell 2000® Index (RUT) surged nearly 2%.
Posted on April 23, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Busy earnings week will focus on the Magnificent Seven
Big Tech is leading the stock-market rout, but in the coming days, it has the opportunity to turn things around. Magnificent Seven members Microsoft, Meta, Alphabet, and Tesla are among the 178 S&P 500 companies scheduled to report their earnings this jam-packed week.
Other blue-chip stocks reporting include GM, Boeing, IBM, and PepsiCo.
Posted on April 23, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
The March Consumer Price Index, which the Bureau of Labor Statistics released last week, revealed that core inflation hit 3.8% Year over Year in March, rising for the first time in 12 months. That’s moving in the wrong direction for the Fed, whose goal is to bring inflation down to 2%.
The S&P 500 index rose 43.37 points (0.9%) to 5,010.60; the Dow Jones Industrial Average® ($DJI) gained 253.58 points (0.7%) to 38,239.98; the NASDAQ Composite advanced 169.30 points (1.1%) to 15,451.31.
The 10-year Treasury note yield (TNX) was little changed at 4.617%.
The CBOE Volatility Index® (VIX) fell 1.41 to 16.39.
Chipmaker strength lifted the Philadelphia Semiconductor Index (SOX) up 1.7% Monday, partially reclaiming last week’s 9.2% tumble. Banking shares were also among the strongest sectors, while the Russell 2000® Index (RUT) advanced 1%. WTI crude futures earlier dropped to just a few cents above $82 per barrel, the lowest intraday price since late March.
“Telemedicine has a lot of potential to bridge barriers and make it convenient for people to access healthcare. But it’s limited by lack of tools. Your doctor can’t reach through the computer screen.”—Akshaya Anand, co-founder of Korion Health, on the startup’s efforts to create an electronic stethoscope for clinicians to record heart and lung movement (Maryland Today)
Posted on April 21, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
A SPECIAL REPORT
(In case you missed it)
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By Vitaliy Katsenelson CFA
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I am going to share with you excerpts from a research paper I wrote in 2018 about Tesla and electrical vehicles (EVs), which I have turned into a small book for reader convenience (it is available for free, here). I want to share these essays with you today because we are at a pivotal moment for traditional carmakers, and these essays, which I have not updated, present an important thinking framework about the industry.
It is easier to convince shareholders and the board of directors to invest money into new factories when the demand for EVs is growing, even if you are losing money per vehicle. At least there is hope that once you get to scale and perfect new technology, the losses will turn into profits.
However, when the demand for electrical vehicles stutters and your inventory of EVs starts piling up – which is exactly what is happening right now – investing in EVs becomes very difficult (I wrote about it here).
Retreating to what you know, what has worked for almost a century, what doesn’t generate huge losses with every vehicle sold, and what your current workforce is trained for, and comfortable producing, seems like a natural decision. The decisions traditional carmakers will make over the next year or two will be very important for what their future looks like a decade or two from now.
Posted on April 20, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
A group of 15 financial officers representing 13 states issued a warning to Bank of America over its alleged practices of “politicized de-banking” targeting conservatives. In a letter to Bank of America CEO Brian Moynihan, the officials said the bank’s practices threaten its own financial health and reputation with customers while simultaneously harming the U.S. economy and Americans’ civil liberties. They pointed to examples of Bank of America shuttering the accounts belonging to Christian groups and leaders and joining a net-zero climate alliance in addition to its poor viewpoint diversity rating.
Texas and Missouri will soon have about two dozen Walmart health centers, the retail giant announced this month, adding to its 50-site roster. The company plans to open eight clinics in the Houston metro area, 10 sites in the Dallas-Fort Worth area, and four facilities in Kansas City by the end of 2024, Modern Healthcare reported.
Hospitals reported the strongest quarter of mergers and acquisitions since 2020, according to consulting firm Kaufman Hall. Four of the 20 announced transactions in the first quarter of 2024 were “megamergers” and brought in $12 billion in revenue in that time period, per the firm’s analysis. The era of consolidation is here.
The S&P 500 index fell 43.89 points (0.9%) to 4,967.23, down 3% for the week; the Dow Jones Industrial Average gained 211.02 points (0.6%) to 37,986.40, little changed for the week; the NASDAQ Composite lost 319.49 points (2.1%) to 15,282.01, down 5.5% for the week.
The 10-year Treasury note yield (TNX) dropped more than 2 basis points to 4.623%, still up about 10 basis points for the week.
The CBOE Volatility Index® (VIX) rose 0.71 to 18.71.
Nvidia (NVDA) plunged 10% to lead the chip sector lower, sending the Philadelphia Semiconductor Index (SOX) down 4.1% to a two-and-a-half-month low. Communication Services shares were also among the weakest sectors, fueled by Netflix weakness. There were several pockets of strength, however. Banking shares posted firm gains Friday behind stronger-than-expected quarterly results from some regional lenders. Utilities also advanced.
The S&P 500 has fallen 5.5% from a record close March 28, more than halfway to the 10% threshold that’s traditionally viewed as a correction. The NASDAQ Composite is down 7.1% from a record close on April 11th.
Posted on April 19, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
If the practice makes a reasonable effort to collect from a patient who is experiencing financial hardship (e.g., job loss due to COVID-19), providers may be able to offer a discount (e.g., settle for 70% of the amount owed) without violating Stark Law, says Reed Tinsley, CPA, healthcare consultant in Houston, Texas. “But remember that just because even if someone doesn’t have a job, they could still have money,” he adds. “There are a lot of people out there with big savings accounts.”
Source: Lisa A. Eramo, MA, Keith A. Reynolds, Physicians Practice [4/3/24]
23andMe cofounder and CEO Anne Wojcicki wants to take the once-hot DNA company private. 23andMe said a Special Committee would evaluate the proposal in light of other options. The company’s valuation has tumbled since its stock market debut in 2021. The struggling DNA company once valued in the billions — was essentially worthless as of Wednesday.
But,shares soared Thursday less than three years after it began selling shares. Wojcicki told board members she is proposing to acquire the company in a potential go-private transaction, according to a filing with the Securities and Exchange Commission.
The S&P 500 index fell 11.09 points (0.2%) to 5,011.12; the Dow Jones Industrial Average® ($DJI) rose 22.07 points (0.1%) to 37,775.38; the NASDAQ Composite lost 81.88 points (0.5%) to 15,601.50.
The 10-year Treasury note yield (TNX) gained almost 5 basis points to 4.633%.
The CBOE Volatility Index® (VIX) dropped 0.22 to 17.99.
Weakness in chip maker shares pushed the Philadelphia Semiconductor Index (SOX) down 1.7% to a two-month low. Biotechnology and consumer discretionary shares were also among the weakest sectors. Energy companies eroded as WTI Crude Oil (/CL) futures dropped for a third straight trading day and closed at a three-week low.
The S&P 500 is on track for its third consecutive weekly decline, its weakest stretch since September, while the NASDAQ Composite appears headed for a fourth straight weekly slide.
You’ve got a sense of your ideal retirement age. And you’ve probably made certain plans based on that timeline. But what if you’re forced to retire sooner than you expect? Aging baby-boomers, corporate medicine, the medical practice great resignation and/or the pandemic, etc?
Early retirement is nothing new, but it’s clear how much the COVID-19 pandemic has affected an aging workforce. Whether due to downsizing, objections to vaccine mandates, concerns about exposure risks, other health issues, or the desire for more leisure time, the retired general population grew by 3.5 million over the past two years—compared to an annual average of 1 million between 2008 and 2019—according to the Pew Research Center.1 At the same time, a survey conducted by the National Institute on Retirement Security revealed that more than half of Americans are concerned that the COVID-19 pandemic has impacted their ability to achieve a secure retirement.2
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There’s no need to panic, but those numbers make one thing clear, says Rob Williams, managing director of financial planning, retirement income, and wealth management for the Schwab Center for Financial Research. Flexible and personalized financial planning that addresses how you’d cope if you had to retire early can help you make the best use of all your resources.
So – Here are six steps to follow. We’ll use as an example a person who’s seeing if they could retire five years early, but the steps remain the same regardless of your individual time frame.
Step 1: Think strategically about pension and Social Security benefits
For most retirees, Social Security and (to a lesser degree) pensions are the two primary sources of regular income in retirement. You usually can collect these payments early—at age 62 for Social Security and sometimes as early as age 55 with a pension. However, taking benefits early will mean that you get smaller monthly benefits for the rest of your life. That can matter to your bottom line, even if you expect Social Security to be merely the icing on your retirement cake.
On the Social Security website, you can find a projection of what your benefits would be if you were pushed to claim them several years early. But if you’re part of a two-income couple, you may want to make an appointment at a Social Security office or with a financial professional to weigh the potential options.
For example, when you die, your spouse is eligible to receive your monthly benefit if it’s higher than his or her own. But if you claim your benefits early, thus receiving a reduced amount, you’re likewise limiting your spouse’s potential survivor benefit.
If you have a pension, your employer’s pension administrator can help estimate your monthly pension payments at various ages. Once you have these estimates, you’ll have a good idea of how much monthly income you can count on at any given point in time.
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Step 2: Pressure-test your 401(k)
In addition to weighing different strategies to maximize your Social Security and/or pension, evaluate how much income you could potentially derive from your personal retirement savings—and there’s a silver lining here if you’re forced to retire early.
Rule of 55
Let’s say you leave your job at any time during or after the calendar year you turn 55 (or age 50 if you’re a public safety employee with a government defined-benefit plan). Under a little-known separation-of-service provision, often referred to as the “rule of 55,” you may be able take distributions (though some plans may allow only one lump-sum withdrawal) from your 401(k), 403(b), or other qualified retirement plan free of the usual 10% early-withdrawal penalties. However, be aware that you’ll still owe ordinary income taxes on the amount distributed.
This exception applies only to the plan (including any consolidated accounts) that you were contributing to when you separated from service. It does not extend to IRAs.
4% rule
There’s also a simple rule of thumb suggesting that if you spend 4% or less of your savings in your first year of retirement and then adjust for inflation each year following, your savings are likely to last for at least 30 years—given that you make no other changes to your withdrawals, such as a lump sum withdrawal for a one-time expense or a slight reduction in withdrawals during a down market.
To see how much monthly income you could count on if you retired as expected in five years, multiply your current savings by 4% and divide by 12. For example, $1 million x .04 = $40,000. Divide that by 12 to get $3,333 per month in year one of retirement. (Again, you could increase that amount with inflation each year thereafter.) Then do the same calculation based on your current savings to see how much you’d have to live on if you retired today. Keep in mind that your money will have to last five years longer in this instance.
Knowing the monthly amount your current savings can generate will give you a clearer sense of whether you’ll have a shortfall—and how large or small it might be. Use our retirement savings calculator to test different saving amounts and time frames.
Step 3: Don’t forget about health insurance, doctor!
Nobody wants to spend down a big chunk of their retirement savings on unanticipated healthcare costs in the years between early retirement and Medicare eligibility at age 65. If you lose your employer-sponsored health insurance, you’ll want to find some coverage until you can apply for Medicare.
Your options may include continuing employer-sponsored coverage through COBRA, insurance enrollment through the Health Insurance Marketplace at HealthCare.gov, or joining your spouse’s health insurance plan. You may also find discounted coverage through organizations you belong to—for example, the AARP.
Step 4: Create a post-retirement budget
To make sure your retirement savings will cover your expenses, add up the monthly income you could get from pensions, Social Security, and your savings. Then, compare the total to your anticipated monthly expenses (including income taxes) if you were to retire five years early and are eligible, and choose to file, for Social Security and pension benefits earlier.
Take into account various life events and expenditures you may encounter. You may not pay off your mortgage by the date you’d planned. Your spouse might still be working (which can add income but also prolong certain expenses). Or your children might not be out of college yet.
You’re probably fine if you anticipate that your monthly expenses will be lower than your income. But if you think your expenses would be higher than your early-retirement income, some suggest that you take one or more of these measures:
Retire later; practice longer.
Save more now to fill some of the potential gap.
Trim your budget so there’s less of a gap down the road.
Consider options for medical consulting or part-time work—and begin to explore some of those opportunities now.
To the last point, finding a physician job later in life can be challenging, but certain employment agencies specialize in this area. If you can find work you like that covers a portion of your expenses, you’ll have the option of delaying Social Security and your company pension to get higher payments later—and you can avoid dipping into your retirement savings prematurely.
When you retire early, you have to walk a fine line with your portfolio’s asset allocation—investing aggressively enough that your money has the potential to grow over a long retirement, but also conservatively enough to minimize the chance of big losses, particularly at the outset.
“Risk management is especially important during the first few years of retirement or if you retire early,” Rob notes, because it can be difficult to bounce back from a loss when you’re drawing down income from your portfolio and reducing the overall number of shares you own.
To strike a balance between growth and security, start by making sure you have enough money stashed in relatively liquid, relatively stable investments—such as money market accounts, CDs, or high-quality short-term bonds—to cover at least a year or two of living expenses. Divide the rest of your portfolio among stocks, bonds, and other fixed-income investments. And don’t hesitate to seek professional help to arrive at the right mix.
Many people are unaccustomed to thinking about their expenses because they simply spend what they make when working, Rob says. But one of the most valuable decisions you can make about your life in retirement is to reevaluate where your money is going now.
This serves two aims. First, it’s a reality check on the spending plan you’ve envisioned for retirement, which may be idealized (e.g., “I’ll do all the home maintenance and repairs!”). Second, it enables you to adjust your spending habits ahead of schedule—whichever schedule you end up following. This gives you more control and potentially more income.
Step 6: Reevaluate your current spending
For example, if you’re not averse to downsizing, moving to a less expensive home could reduce your monthly mortgage, property tax, and insurance payments while freeing up equity that could also be invested to provide additional monthly income.
“When you are saving for retirement, time is on your side”. You lose that advantage when you’re forced to retire early, but having a backup plan that anticipates the possibility of an early retirement can make the unknowns you face a lot less daunting.
Posted on April 18, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Pharmacy Benefits Managers often need more transparency regarding their pricing structures and the rebates they negotiate with drug manufacturers. Some argue that PBMs might receive hidden fees or undisclosed profits from drug manufacturers in exchange for favorable positioning on their formularies (lists of covered medications). This can be seen as a form of kickback, which is illegal.
Lawmakers Express Fury Toward UnitedHealth in Change Attack Hearing on the fallout surrounding the unprecedented cyberattack on Change Healthcare in late February. Individuals representing the American Hospital Association, private cybersecurity groups and providers testified before members of the House Energy and Commerce Committee on April 16th to discuss the healthcare industry’s response to the attack and how the federal government should act.
In March, the cyber criminal organization received $22 million in bitcoins, though UnitedHealth Group has not addressed whether the company paid the ransom. On April 15th, ransomware group RansomHub posted files on its dark web leak site comprising of personal and protected health information on patients whose data was taken in the hack. The files also include contracts and agreements between Change and its clients, marking the first time hackers have posted data from the attack.
Stocks started the day strong yesterday but ended up slumping before the market closed as investors pulled back on tech stocks, including Nvidia. United Airlines took off after releasing a strong forecast for the year despite saying it took a $200 million hit because of Boeing’s troubles.
Here’s where the major benchmarks ended:
The S&P 500 index lost 29.20 points (0.6%) to 5,022.21; the Dow Jones Industrial Average declined 45.66 points (0.1%) to 37,753.31; the NASDAQ Composite dropped 181.88 points (1.2%) to 15,683.37.
The 10-year Treasury note yield (TNX) decreased more than 7 basis points to 4.585%.
The CBOE Volatility Index® (VIX) fell 0.20 to 18.20.
ASML’s slump helped send the Philadelphia Semiconductor Index (SOX) down 3.3% to its lowest level since late February. Transportation shares were also under pressure after trucking company J.B. Hunt Transport Services (JBHT) dropped 8.1% in the wake of disappointing quarterly numbers. Energy shares slipped as WTI Crude Oil (/CL) futures fell 3% to a three-week low.
Did you know that desperate doctors of all ages are turning to knowledgeable financial advisors and medical management consultants for help? Symbiotically too, generalist advisors are finding that the mutual need for knowledge and extreme niche synergy is obvious.
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But, there was no established curriculum or educational program; no corpus of knowledge or codifying terms-of-art; no academic gravitas or fiduciary accountability; and certainly no identifying professional designation that demonstrated integrated subject matter expertise for the increasingly unique healthcare focused financial advisory niche … Until Now!
So, if you are looking to supplement your knowledge, income and designations; and find other qualified professionals you may want to consider the CMP® program.
Enter the Certified Medical Planner™ charter professional designation. And, CMPs™ are FIDUCIARIES, 24/7.
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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
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
Many financial planning websites mention fees, as required, but still remain opaque to potential clients because the advisor wants to control the discussion and understandably wishes to avoid the website shopper phenomenon.
But, physicians and all investors can still control the discussion, and still provide transparency, because posting up front pricing information doesn’t mean presenting information in a vacuum!
For example, a 1%/year fee doesn’t have to just be 1%; it can be 1%, compared to an industry average cost of X%, where the average cost of an actively managed mutual fund is Y%.
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Similarly, it doesn’t have to be a retainer fee of $1,000/year; it can be a retainer fee for less than the cost of a monthly cable bill! And, a financial plan doesn’t cost $1,500; it costs 8-12 hours of staff time to craft extensive, customized solutions; but saves the doctor-client so much more!
And, if services have a range of potential prices, they might be provided with some insight into the factors that impact the price. Modern young and internet savvy doctors expect this sort of information.
Posted on April 17, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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If you need a reprieve to prevent the government from raiding your bank account, you’re not alone—the IRS expects 19 million people to file for an extensionthis year. The agency will automatically grant you a six-month extension, although it’s recommended you remit a payment by April 15th if you expect to owe money to avoid interest and penalties. The good news is you probably won’t have to fork over as much as Mark Cuban, who said he is sending the IRS $288 million today and is proud to pay his fair share.
The stock market is coming off its worst week of the year, and the road ahead is no less bumpy. A direct military confrontation between Iran and Israel has investors on edge about a wider regional war that threatens energy supplies. Amid the uncertainty, safe-haven assets are seeing major interest: The US dollar just had its best week in more than 18 months.
Posted on April 17, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Stat: 10%. That’s the percentage of Tesla employees that will be impacted by its global workforce reduction. Elon Musk sent an email to employees on Monday informing them of the layoffs, which he said were made to “reduce costs and increase productivity,” according to the WSJ. The move comes as the electric vehicle maker deals with a wider slowdown in EV sales. (the Wall Street Journal)
UnitedHealth Group, reeling from the Change cyberattack, recorded a loss of $1.4 billion in the first quarter. Still, its EPS exceeded expectations and the stock is trading up.
And … physicians made steady pay gains last year, but increases were undercut by inflation rates. See how other specialties fared, according to a report from Medscape.
The social determinants of health can impact a woman’s chance of being up to date with her mammogram, according to a recent Centers for Disease Control and Prevention report. Women are less likely to get a mammogram if they feel socially isolated, have lost a job or don’t have reliable transportation.
And…A major House subcommittee is considering whether to issue another short-term extension on telehealth flexibilities as they continue to evaluate cost and quality issues or to enact permanent changes to virtual care reimbursement. The American Telemedicine Association is pushing Congress to make permanent the Medicare telehealth flexibilities implemented during the COVID-19 pandemic.
The S&P 500® index (SPX) declined 10.41 points (0.2%) to 5,051.41, its lowest close in almost two months; the Dow Jones Industrial Average® ($DJI) advanced 63.86 points (0.2%) to 37,798.97; the NASDAQ Composite® ($COMP) eased 19.77 points (0.1%) to 15,865.25.
The 10-year Treasury note yield gained almost 4 basis points to 4.667%.
The CBOE Volatility Index® (VIX) fell 0.83 to 18.40.
Scaled-back expectations for Fed rate cuts continued to burden interest-rate-sensitive sectors, such as banks and utilities. The KBW Regional Bank Index (KRX) lost 1.4% and ended near a five-month low. The small-cap Russell 2000® Index (RUT) dropped 0.4% and ended at a two-month low.
In other markets, the U.S. dollar index (DXY) strengthened for the fifth consecutive trading day and hit its highest level since late October, reflecting expectations rates will stay elevated.
A closed-end fund (CEF) or closed-ended fund is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund.
Unlike open-end funds, new shares in a closed-end fund are not created by managers to meet demand from investors. Instead, the shares can be purchased and sold only in the market, which is the original design of the mutual fund, which predates open-end mutual funds but offers the same actively-managed pooled investments.
Questions – from doctors – like these remind me that the workings of the financial services industry which I tend to take for granted but can be confusing to people outside the field.
The following analogy may help to explain.
Orchestra Analogy
Think of an orchestra. The investment adviser is the equivalent of the director/conductor and the money managers are the instrumentalists. Each one is a specialist who plays a particular type of instrument, and it takes a variety of these specialists to make up the orchestra.
Specialists
The broad specialties are the types of instruments, such as strings, brass, winds, and percussion. These are the equivalent of fund managers who specialize in asset classes like equities, bonds, real estate, commodities, and absolute returns.
Sub-Specialists
Within each specialty are a variety of subspecialists. Winds, for example, include clarinets, oboes, and saxophones—which are further divided into alto, soprano, tenor, and bass. The brass section has French horns, trumpets, and trombones. The divisions and sub-divisions go on and on. Similarly, within the various asset classes are a great many mutual fund managers who specialize in narrower subcategories.
Conductor
The task of the orchestra conductor-director is to pick, not just the best musicians, but the best mix of musicians. A group with only trumpets or every subspecialty of percussion, no matter how skilled, isn’t an orchestra. Before auditioning a single musician, the director’s first task is to clarify the purpose of the ensemble being created. A different mix of instruments will be required for a symphony, a marching band, an intimate chamber group, or a dance band. It all depends on what the audience wants.
The conductor-director needs to weigh the various musicians’ abilities against their cost and their specific specialties against the needs of the orchestra. When the right mix of players has been chosen, the director needs to pick the appropriate music, assemble the group, and rehearse. The director’s talent, experience, and leadership skills all serve to help the right players produce the right sound for their audiences.
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It takes similar coordination and skill to put together the right mix of asset classes and mutual fund managers to produce the best results for various clients, especially since there are some 17,000 mutual funds to choose from.
Fees
Just as both the orchestra director and the musicians are paid based on their skills and their work, both mutual fund managers and investment advisers are paid based on the assets they manage. Mutual fund managers earn 0.05% to 3.0%. Financial advisers earn 0.30% to 3.0%. An informed consumer could pay as low as 0.35% while an uninformed consumer could pay up to 6% a year, which would eat up most of the investment returns.
One essential responsibility for an adviser, then, is to choose mutual fund managers whose fees are low.
However, the cost of the mutual fund manager isn’t the be-all and end-all. One must also weigh performance, just as an orchestra director might pay more to get an outstanding musician who would add significant value to the performances.
Example:
For example, my firm’s overall average fee for mutual fund managers is 0.5%. We could get that as low as 0.1%, which might be impressive at first glance.
However, we would give up 0.25% to 1.00% of net return in some areas, resulting in poorer outcomes for the clients.
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Assessment
Skilled direction of an orchestra is obviously more art than science. Skilled coordination of mutual fund managers is the same. Both require knowledge, integrity, and commitment to the quality of the final product.
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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
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
Posted on April 16, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Here’s where the major stock market benchmarks ended:
The S&P 500 index fell 61.59 points (1.2%) to 5,061.82; the Dow Jones Industrial Average lost 248.13 points (0.7%) to 37,735.11; the NASDAQ Composite® ($COMP) dropped 290.08 points (1.8%) to 15,885.02.
The 10-year Treasury note yield (TNX) surged almost 12 basis points to 4.618%.
The CBOE Volatility Index® (VIX) rose 1.92 to 19.23.
Interest-rate-sensitive sectors like real estate and utilities were among the weakest performers Monday. Technology shares were also under pressure. The small-cap Russell 2000® Index (RUT) shed 1.4% and ended at a two-month low.
In other markets, the U.S. dollar index (DXY) strengthened for the fourth consecutive trading day and hit its highest level since early November, reflecting expectations rates will stay elevated. Volatility based on the VIX jumped near 19.50, its highest level since late October.
Monday’s session also produced technical damage on the charts of benchmarks like the S&P 500, which closed under its 50-day simple moving average, currently around 5,114, for the first time since early November. The S&P 500 has dropped almost 4% from a record intraday high posted March 28th.
And, after a tough funding year for digital health startups, the first quarter of 2024 saw a flurry of deals announced—a “positive signal” that the funding landscape is looking up, according to Adriana Krasniansky, head of research at digital health strategy group and venture fund Rock Health’s advisory arm. Overall, the number of digital health funding deals (133) that closed in Q1 was the highest in six quarters, though the average deal size ($20.6 million) was smaller, according to a Rock Health report. Total funding for digital health startups was $2.7 billion, the lowest level since 2019. An increase in the frequency of deals—even if they’re smaller—is a good sign, according to Krasniansky.
Dental startup Tend aims to simplify the patient billing process via a partnership with health tech startup Cedar, the companies announced on April 11th, 2024. The US spends roughly $165 billion per year on dental services as of 2022, according to professional organization the American Dental Association—but the payment experience can be “opaque” and “confusing,” Matthew Fitzgerald, chief marketing officer at Tend, told Healthcare Brew. “From the outset, Tend has sought to innovate the dental experience by leveraging technology and hospitality to build a company around the patient,” Tend CEO Troy Bage said in a statement. “By partnering with Cedar, we’ll be able to streamline and simplify the payment process for all our members—further enhancing their overall experience with Tend, while unlocking new ways for us to elevate engagement.”
An attractive investment and a polished sales pitch can often hide the underlying costs of the investment, leading some medical professionals to give up a significant portion of the long-term growth of their assets to fees. Fees absolutely matter.
In a good market investors have a propensity to ignore them and in challenging markets they are scrutinized, but in the end no matter what type of market we are in fees do make a substantial difference in your long-term investment returns.
Assessing the Worth of the Investment
The first step in assessing the worth of the investment under consideration is figuring out what the fees actually are. If a medical professional is investing in a mutual fund, these costs are found in mutual fund company’s now obligatory “Fund Facts”.
This manuscript clearly outlines all the fees paid – including upfront fees (or commissions/loads), deferred sales charges, and any switching fees. Fund management expense ratios are also part of the overall cost of ownership. Trading costs within the mutual fund can also impact performance.
The List of Fees Keep Coming … and Coming!
Here is a list of the traditional fees from investing in a mutual fund:
Front end load: It is the commission charged to purchase the fund through a broker or financial advisor. The commission reduces the amount you have available to invest. Thus if you start with $100,000 to invest and the advisor charges a 5 percent front end load, you end up actually investing $95,000.
Deferred Sales Charge (DSC) or back end load: Charge imposed if you sell your position in the mutual fund within a pre-specified period of time (normally five years). It is initiated at a higher start percentage (i.e. as high as 10 percent) and declines over a specific period of time.
Operating Fees: These are costs charged by the mutual fund including the management fee rewarded to the manager for investment services. It also includes legal, custodial, auditing and marketing.
Annual Administration Fee: Many mutual fund companies also charge an additional fee just for administering the account – usually under $150 per year. A 1 percent disparity in fees for a medical professional may not seem like a lot. But fees do make a considerable impact over a longer time period. [For example, a $100,000 portfolio that earns 8 percent before fees, grows to $320,714 after 20 years if the client pays a 2 percent operating fee. In comparison, if the investor opted for a fund that charges a more reasonable 1 percent fee, after 20 years, the portfolio grows to be $386,968 – a divergence of over $66,000! For many investors, this is the value of passive or index investing. In the case of an index fund, fees are generally under 0.5 percent, thus offering even more fee savings over an elongated period of time].
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[The Carousel of Fees]
Assessment
Fees and expenses can have significant impact on the performance of your investments. Always monitor the costs of an investment program to ensure that fees and expenses are reasonable for the services provided and are not consuming a disproportionate amount of the investment returns.
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:
Posted on April 15, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
“Worried about an IRS audit? Avoid what’s called a red flag. That’s something the IRS always looks for. For example, say you have some money left in your bank account after paying taxes. That’s a red flag.“
― Jay Leno
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Americans are saving less at their lowest pace in more than a year, and are apparently spending more than the growth of their incomes, according to an analysis by Wells Fargo that was shared with Newsweek.
In February, the personal savings rate hit 3.6 percent, “marking the lowest rate at which households saved in 14 months,” Wells Fargo economists noted in the Thursday report, adding that spending outpaced income growth for the month. The savings rate is higher than the below 3 percent level it fell to following the COVID-19 pandemic, but is nevertheless way down from the pre-pandemic rate of 6 percent.
The deadline for most people to file a 2023 tax return with the IRS is fast approaching; returns are due by 11:59 p.m., in your time zone, on Monday, April 15th today, with some exceptions. Taxpayers in Massachusetts and Maine have until April 17th to file and pay taxes because of the Patriots’ Day and Emancipation Day holidays. There are also extensions in some areas impacted by extreme weather. Individuals and businesses impacted by the October 7th attack on Israel have also been given an extension, the IRS announced. There are extensions for certain active-duty military members and citizens living abroad.
Nike announced plans to lay off around 1,600 employees, or about 2% of its global workforce, as part of a $2 billion cost-cutting strategy. CEO John Donahoe said performance has not been the best and took responsibility. Donahoe said, “This is a painful reality and not one that I take lightly.”
Stellantis is the world’s fourth-largest automaker by sales, behind Toyota, Volkswagen Group, and Hyundai Motor Group. The company designs, manufactures, and sells automobiles bearing its 14 brands: Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, and Vauxhall. Their headquarters is located in Amsterdam, and they have over 300,000 employees in 130 countries.
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The Biden administration wants to make changes to private Medicare insurance plans that officials say will help seniors find plans that best suit their needs, promote access to behavioral health care and increase use of extra benefits such as fitness and dental plans. “We want to ensure that taxpayer dollars actually provide meaningful benefits to enrollees,” said Health and Human Services Secretary Xavier Becerra. If finalized, the proposed rules rolled out Monday could also give seniors faster access to some lower-cost drugs. Administration officials said the changes, which are subject to a 60-day comment period, build on recent steps taken to address what they called confusing or misleading advertisements for Medicare Advantage [Part C] plans. Just over half of those eligible for Medicare get coverage through a private insurance plan rather than traditional, government-run Medicare.
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Healthcare varies substantially by state based on dozens of factors. The same is valid for cities. Some of this is due to the availability of medical facilities. Some have to do with health habits. Some have to do with incomes and poverty levels. People who live in poor states, based on income, almost always have unhealthy populations. A new study from Renew Bariatrics shows the “Healthiest (and Unhealthiest) States in the US—2024 Rankings,” and reviews alcohol use, diabetes, drug overdoses, mental health, isolation, tobacco use, exercise, and the presence of heart disease, obesity, and cancer. These, taken together, create an index from 0 to 100, with 100 being the worst possible score. These are the most expensive states to live in.
Posted on April 15, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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DEFINITION: Tax season is the period of time, generally between January 1st and April 15th of each year, when individual taxpayers prepare to report their taxable income to the federal government and, in most cases, to the government of the state in which they live.
Some Year-End Preparation for the Upcoming Tax Filing Season
The filing season for 2023 tax returns us now upon us. A little advance preparation can prevent stressful tax time surprises for doctors and all medical professionals. Here are some important steps you can take now to set yourself up for worry-free tax filing:
Do one last withholding checkup. Time is running out to adjust your paycheck withholding to make sure you have paid enough tax throughout 2023. You can use the online IRS Withholding Estimator tool to make sure your numbers are on track.
If your name changed in 2023, report the change to the Social Security Administration as soon as possible, preferably before the end of the year.
Locate your bank account information, including both your account number and the bank routing number, so you can receive your tax refund by direct deposit.
Watch for year-end income statements, especially in late January and early February. These statements may include W-2 forms, along with 1099-NEC, 1099-MISC, 1099-INT, 1099-G and other 1099 forms. Note that some of these forms may come by mail, while others may be sent to you electronically. Keep all of the forms together and organized.
Organize records for tax deductions and credits. These records may include Form 1095-A (Health Insurance Marketplace Statement), tuition statements (Form 1098-T), medical bills, mortgage interest statements, and home energy improvement or clean vehicle receipts or invoices.
Waiting until the last minute to try to assemble these documents can lead to missing the filing deadline, so start early.
Posted on April 14, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Texas Governor Greg Abbott has issued a sharp warning about proposed changes to Medicaid, claiming they could “strip millions of Americans” from access to healthcare. In February 2023, the Centers for Medicare & Medicaid Services (CMS) issued a new proposed rule that would change long-standing practices for how states fund the non-federal share of Medicaid payments. In particular, the CMS is pushing for greater oversight of how states use of healthcare provider taxes to help fund their programs.
Democratic lawmakers Sen. Richard Blumenthal and Rep. Andy Kim have partnered up with RepublicanRep. Jen Kiggans to introduce legislation aiming to give army reservists and members of the National Guard that also work for the federal government options on the type of health care plans they can receive. The bill, which could impact thousands of federal employees that are also in the U.S. Army, plans to give this group of Americans the ability to decide whether they want military or civilian health care. The lawmakers said in a shared statement that their proposal will fix current regulations that limit service members who also work for the government to enroll in the cheaper Tricare Reserve Select (TRS) health plan when they also qualify for federal health plans.
Stocks tanked last Friday after the big banks reported underwhelming earnings and the sheen from the Magnificent Seven’s AI-driven surge earlier this week wore off. Meanwhile, oil prices continue to rise near six-month highs as concern grows over geopolitical tensions in the Middle East. The tech sector was highlighted in this market, particularly due to the exceptional performance of a group of mega-cap tech giants last year nicknamed the “Magnificent Seven.” This elite group includes Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA).
Posted on April 13, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
Medial Office Equipment Interest Rate Costs
Dr. David E. Marcinko; MBA, MEd, CMP™
[Publisher in Chief]
Physicians, administrators and healthcare entrepreneurs are aware of the compounding effect of interest.However, since interest is deductible as a medical office business expense, many seem to forget about it despite the fact that it must be continually paid until the asset is either purchased or otherwise disposed.
So, what are the various types of interest rates important to the medical practitioner and commodity – money?
[1] Simple Interest
Simple interest is merely the pro rata interest on a loan or deposit and represents the most basic interest rate type.
For example, for every $100 Dr. Bill borrows at 12 percent annual interest, he pays twelve dollars per year. The interest is calculated by multiplying the principal or original amount, by the interest rate in decimal form (100 x .12).
[2] Add-On Interest
Add on interest immediately attaches the annual interest amount, to the principal amount, at the beginning of the payment period. Payments are then made according to the number of years required.
The following formula is useful:
Add-on-Interest minus Payment = Total Interest on Balance/Number of Payments
For example, if Dr. William Needy borrows $10,000 at 8 percent add-on interest, he will repay $10,000 plus $ 800 ($10,000 x 8%) or $10,800, divided by twelve months, for a total of $900 per month, since $ 900/month x 12 months equals $10,800.
[3] Discounted Interest
When using the discounted interest method, the interest amount is deducted from the principal right up front. Notice that this is the opposite of add-on-interest that is applied up front.
For example, if Dr. Bill borrows the same $ 10,000 at a discounted interest rate of 8 percent, he will only receive a $9,200 loan, since $10,000 – $800 is $9,200.
Obviously, the discount method is the most expense way to borrow money.
[4] Annual Percentage Rate
Most financial institutions advertise an annual percentage rates (APR) for loans, deposits and investments. The APR is the periodic interest rate multiplied by the number of periods a year. If the APR is 12 percent, and interest is compounded monthly, you receive (or pay) 1 percent of your balance each month, and the balance shifts with each compounding.
For example, if Dr. Bill deposits $ 100 dollars at 12 percent APR compounded monthly, he receives $ 1 interest the first month (1% of $100), $1.10 the second month (1% of $101), and so forth. If compounding is daily, the interest accumulates at the rate of 1/365 of the APR each day.
Unless interest is compounded annually, the APR will be lower than the effective annual interest rate, discussed below.
[5] Effective Interest Rate
It is important to differentiate between the effective interest rate and the APR, which is often the most prominent figure in advertisements for medical business equipment, consumer goods and financial services (loans, annuities, IRAs, CDs, investment analysis, college funding or retirement planning). Although the APR is the periodic interest rate multiplied by the number of periods per year, the effective annual interest rate is the periodic rate, compounded.
In our case, if the APR is 12 percent, compounded monthly, the monthly interest rate is 1 percent and the effective annual rate is the monthly rate compounded for 12 periods.
Therefore, if your calculation is for a single year, you can treat the effective rate as simple interest. If you deposit (or borrow) $1,000 at 12 percent APR, the effective rate is 12.68 percent, and interest for the first year is about $126.80 (12.68% of $1,000).
For longer periods, you can use the effective interest rate as the periodic interest rate, compounded annually.
[a] “Rule of 72” (Double your Money)
The number of periods required to double a lump sum of money can be quickly estimated by using what is known as the “Rule of 72”. To get the number of periods, usually years, just divide 72 by the periodic interest rate, expressed as a whole number (not a decimal).
For example, if the annual interest rate is 10 percent, it will take about 7.2 years (72/10) to double any lump cache of money. Conversely, you can also calculate the interest rate required to double your money in a given period by dividing 72 by the term.
Thus, to double your money in ten years, you need to earn about 7.2 percent annual interest (72/10) = 7.2%).
[b] “Rule of 78”
According to this method, interest is front end loaded like a home mortgage, or office condominium, to discourage prepayment of a loan and consequently preserve the lender’s profit. In other words, it is a method of calculating installment loan interest rebates.
The number 78 comes from an approved method of accelerated tax depreciation, known as the “Sum of the Years Digits” (SOYD) method (i.e., 12 + 11 + 10 + 9 . . . = 78). This fact is important because, throughout the period of a loan, even though the payments are all the same, the portions that are interest and principal are very different.
Using this method for a one year loan shows that, in the first payment, 15.38 percent of the interest due is paid off, and by the sixth month, 73.08 percent of the interest is paid off. This means, that if a physician makes a one year equipment loan with a total interest charge of $ 100 and pays the loan off in full with the sixth payments, he or she will not get an interest rebate of $ 50, but only $ 26.92, since $ 73.08 of the interest has already been prepaid.
Most ethical lenders use simple interest rates for loan rebates, and the Rule of 78 is unfair according to many authorities.
[c] “Rule of 116”
A derivative of the Rule of 72 is the Rule of 116. This determines the number of years it takes for a principal amount to be tripled and is calculated by dividing the annual interest rate into 116.
The Rules of 72 and 78 are very handy for figuring the amount of interest payments made or growth of funds invested. They can also be used in reverse to calculate at what rate of interest money must be invested to double or triple in a certain number of years.
[6] Medical Equipment Payback Cost Analysis
The payback period, expressed in years, is the length of time that it takes for the medical equipment investment to recoup its initial cost out of the cash receipts it generates. The basic premise is that the quicker the cost of an investment can be recovered, the better the investment is. It is most often used when considering equipment whose useful life is short and unpredictable.
When the same cash flow occurs every year, the formula is as follows:
Investment Required / Net Annual Cash Inflow = Payback Period
Thus, in today’s tightening medical reimbursement atmosphere, practice cost control and expense reduction is the easiest method to increase medical office profitability. Keeping the cost of the commodity money in the form of interest rate charges, as low as possible, will assist in this endeavor
Assessment
And so, how have these rules affected your medical office borrowing costs; if at all? Does these principles apply to the medical student loan crisis, today?
Posted on April 13, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Medical colleague and our financial planning for physicians textbook contributor Michael Burry MD predicted a second inflation surge, and price growth re-accelerated in March,. 2024.
The “Big Short” investor first warned of inflation in April 2020, over two years before it peaked.
Burry expected a recession, rate cuts, and stimulus spending to reignite inflation.
A growing number of drugs are in short supply around the U.S., according to pharmacists.
In the first three months of the year, there were 323 active medication shortages, surpassing the previous high of 320 shortages in 2014, according to a survey by the American Society of Health-System Pharmacists (ASHP) and Utah Drug Information Service. It also amounts to the most shortages since the trade group started keeping track in 2001. “All drug classes are vulnerable to shortages. Some of the most worrying shortages involve generic sterile injectable medications, including cancer chemotherapy drugs and emergency medications stored in hospital crash carts and procedural areas,” ASHP said in a statement.
Scheduling an appointment with a primary care doctor who belongs to a large health system might cause an increase in health care spending, according to a recent study. Such physicians tend to make more referrals to specialists, and emergency room visits and hospitalizations sometimes increase, according to the research out of Harvard T.H. Chan School of Public Health.
In short, physicians who work for health care systems like hospitals are more likely to recommend that patients use other services within those systems, compared with independent physicians. For the study — which was published in JAMA Health Forum, a journal of the American Medical Association — researchers analyzed the experiences of more than 4 million patients in Massachusetts.
UnitedHealth ChairmanStephen Hemsley and other executives sold $102 million in company stock months before a federal antitrust probe became public, Bloomberg reported.
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Small physician practices are still struggling in the wake of February’s Change Healthcare cyberattack, according to an American Medical Association (AMA) survey released Wednesday.
More than half of ~1,400 respondents (55%) reported that they’ve had to use personal funds to cover their practice’s expenses due to the cyberattack’s effects on cash flow. Practices across the country have been unable to fill prescriptions or process insurance claims as Change Healthcare systems went offline, Healthcare Brew previously reported. About two-thirds of respondents said they’ve experienced restrictions to core functions, such as suspending claim payments (36%), not being able to submit claims (32%), and not being able to obtain electronic remittance advice (39%), according to the survey.
The S&P 500 index fell 75.65 points (1.5%) to 5,123.41, down 1.6% for the week; the Dow Jones Industrial Averagelost 475.84 points (1.2%) to 37,983.24, down 2.4% for the week; the NASDAQ Composite® ($COMP) dropped 267.10 points (1.6%) to 16,175.09, down 0.5% for the week.
The 10-year Treasury note yield (TNX) fell more than 5 basis points to 4.52%, still up about 12 basis points for the week.
The CBOE Volatility Index® (VIX) rose 2.38 to 17.30.
Semiconductor shares were also among the weakest performers Friday as chip makers reversed Thursday’s sharp gains. The Philadelphia Semiconductor Index (SOX) dropped more than 3% and ended with its third straight weekly decline. Energy companies were also under pressure after crude oil prices retreated from the morning rally. Oil futures are still up 20% this year. The small-cap Russell 2000® Index (RUT) lost 1.9% and posted a 2.9% drop for the week.
In other markets, the U.S. dollar index (DXY) strengthened to a five-month high and gained 1.7% this week, reflecting beliefs the hotter-than-expected inflation readings earlier this week will keep interest rates elevated. Volatility based on the VIX jumped to its highest level since late October.
Posted on April 12, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
Essay on the Eight-Hundred Pound Gorilla in the Medical Treatment Room
By Dr. David E. Marcinko MBA MEd CMP
[Editor-in-Chief]
According to economist Austin Frakt PhD, and others, there is a school of thought that says Congress is incapable of controlling costs in the Medicare and Medicaid System [CMS].
And, then there is the reality known by all practicing medical professionals regardless of specialty orientation or degree designation. That is to say, CMS really can control healthcare costs and with great ferocity and efficiency, and to non-public sectors as well …. PARADOXICAL?
On Getting What You Wish For
Blogger Ezra Klein opines that one of the dirty little secrets of the health-care system is that Medicare has done a much better job controlling costs than private health insurers.
Of course, we doctors know that the real problem is that Medicare seemingly [think Seinfeld’s character George Costanza] controls costs all too well; but not really. It is just that CMS pays doctors too little and thus it appears costs are controlled. What really is happening is that physician fees are being reduced carte’ blanche.
Nevertheless, and regardless of semantics, CMS will never control costs much more efficiently than private insurance companies or doctors will simply abandon Medicare for related payment models like direct reimbursement or concierge medicine. This is happening right now. Physicians, osteopaths and podiatrists etc, are opting out of Medicare in increasingly large numbers. In a world where there’s only Medicare and Medicare to control costs, doctors can either take the pay cut or stop seeing patients, and stop being doctors. “Taking what they are given – because they’re working for a livin.”
So sorry that this seems like a forehead-palm moment for Ezra, but not for healthcare practitioners or the ME-P!
Too Much Demand Elsewhere
And, as we see from other countries, many young bright folks want to be doctors, even if being a doctor doesn’t make one particularly wealthy [high demand and high eventual supply produces lower provider costs in the long term?]. Think medical tourism.
Not so much the case anymore in this country [lower demand and lower eventual supply produces higher reimbursement costs to the doctor survivors in the very long term?].
Our Domestic World
But, we are not elsewhere. In fact, in our present domestic healthcare ecosystem, when Medicare decides to control costs, many doctors can simply stop accepting Medicare patients, and the politicians will lose their jobs. One political party then declares that Medicare is rationing and will hurt senior citizens. The other party capitulates and pays MDs more [SGR]. Then, the federal budget looks bad as it does now. The circle is complete when one party asserts that Medicare actually can’t contain costs but the private insurance companies will. It all fails, in an unending circular Boolean-like loop of illogic.
Listen Up!
So, listen up AARP, politicians, CMS and seniors as I admonish you to be careful what you wish for [medical cost controls]. It might just come true. As Ezra rightly says; rinse, repeat – rinse, repeat – ad nausea. You simply can’t have it both ways. You either choose to spend less and offend certain cohorts, or spend more and offend different factions. Either way, you’re going to piss someone off. A good healthcare reimbursement system would try to make that decision rationally [a-politically]. But, at least it would make an economics driven decision; wouldn’t it?
Assessment
Is CMS really the eight hundred pound cost-controlled gorilla in the increasingly large Medicare treatment room? Why or why not? Now, relative to the ACA of 2010, please read: The Case for Public Plan Choice in National Health Reform [Key to Cost Control and Quality Coverage], by Jacob S. Hacker, PhD. Link:Jacob Hacker Public Plan Choice
Conclusion
And so, your thoughts and comments on this ME-P are appreciated. Do we have a Medicare cost control efficiency paradox? Or, are the economists just reveling in the publication banal? 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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The paradox of thrift (saving) states that an increase in autonomous saving leads to a decrease in aggregate demand and thus a decrease in gross output which will in turn lower total saving. The paradox is that total saving may fall because of individuals’ attempts to increase their saving, and, broadly speaking, that increase in saving may be harmful to an economy.
Both the narrow and broad claims are paradoxical within the assumption underlying the fallacy of composition, namely that which is true of the parts must be true of the whole. The narrow claim transparently contradicts this assumption, and the broad one does so by implication, because while individual thrift is generally averred to be good for the economy, the paradox of thrift holds that collective thrift may be bad for the economy.
Posted on April 12, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Costco started selling gold bars to its members last August, and Wells Fargo analysts believe that the product is now bringing in between $100 million and $200 million a month. The retailer doesn’t reveal the price of the 1-ounce bullion to nonmembers online, but it’s estimated to be ~2% above the spot price gold trades at, per CNBC—and that price has soared since Costco got into the gold game. The price of gold has gone up 13% this year and reached record highs as investors pile in amid inflation worries.
The big numbers from the Consumer Price Index data released on Thursday
In March, inflation rose 3.5% from the year before, up from 3.2% in February.
The “core” CPI reading, which excludes volatile food and fuel prices, came in even higher, rising 3.8% on an annual basis. That’s the same as in February, but this time it’s serious.
Half of the increases came from rising gas prices and housing.
After seeing inflation fall by 3% over the course of 2023, Fed officials believed that higher inflation readings in January and February 2024 represented a hiccup in an otherwise downward trajectory. However, with the March reading also coming in hotter than anticipated, analysts say this is more than a fluke. That means hopes for a June interest rate cut are dashed. Even the US Postal Service plans to raise the price of “forever” stamps to $0.73 in July. Get yours now. And the Mexican peso is on an absolute tear, leaving the US dollar behind.
The S&P 500® index (SPX) advanced 38.42 points (0.7%) to 5,199.06; the Dow Jones Industrial Average® ($DJI) lost 2.43 points to 38,459.08; the NASDAQ Composite gained 271.84 points (1.7%) to 16,442.20.
The 10-year Treasury note yield (TNX) rose nearly 2 basis points to 4.578%.
The CBOE Volatility Index® (VIX) fell 0.89 to 14.91.
Chip maker strength lifted the Philadelphia Semiconductor Index (SOX) more than 2% and extended the benchmark’s year-to-date gain to more than 17%. Communications services and transportation shares were also among the strongest sectors. Financial shares were mixed ahead of expected quarterly results Friday from some major banks including JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC).
Posted on April 12, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
Paradox of Prosperity
“A paradox of prosperity is revealed and shown to be stable in the cycles of economic advancement between generations. I would put the matter this way: If one accepts, for example, that Mr. Brokaw’s ‘Greatest Generation’ were characterized by prudence, diligence, and patriotism in deed rather than word, that very generation produced its opposite in the generation that followed it. That is to say, I have found it repeated across the ages and across cultures, that the more diligent a previous generation, as a natural propensity, the more licentious the generation that follows. Invariably therefore, the generation that exhibits the more cogent properties of character for the best sort of citizenship fails to produce a generation of the same or similar characteristics.”
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“Paradox of Prosperity” was applied as a term of analysis in the recent New York Times, Wall Street Journal bestseller Rescue America: Our best America is only one generation away (published October 2011), which Professor Morris co-authored with Chris Salamone. There the inter-generational breakdown is given a fuller exposition. Morris, who has been a careful reader of Thorstein Veblen, particularly Veblen’s masterpiece The Theory of the Leisure Class, says his own advancement of this inter-generational thesis was influenced by Veblen. “I think”, says Morris, “Veblen gave some insight as to what is produced in the generation which follows one such as Tom Brokaw described. The Greatest Generations – if by that we mean a generation characterized by prudence and sacrifice – nearly always produces a generation which can be characterized as a leisure class. They consume without manufacturing. They project feelings over principles. In general terms, they lack a spirit of sacrifice because they abhor the notion of “Objective Values” and so lack the will to re-create or advance the social ethos created by their parent’s generation.” In cultural terms, the generation that followed the “Greatest Generation” were the baby boomers (essentially, the children of the Greatest Generation between 1945–1965). The “Boomers” fit the classic definition of a “leisure class”, which Veblen described as being characterized by Conspicuous Consumption. To quote their description of their leisure class “they move values toward behavior, rather than behavior toward values”.
Posted on April 11, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST– Today’sNewsletter
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
NEW YORK (Reuters) -The U.S. accounting watchdog on Wednesday said it has hit KPMG Netherlands with a $25 million civil penalty, a record for the regulator, in response to “egregious” and widespread exam cheating at the foreign affiliate of the major audit firm.
As millions of Americans approach age 66, they face the inevitable question, is it time to retire? The physician population is aging alongside the general population—more than 40% of physicians in the U.S. will be 65 years or older within the next decade. In the case of surgeons, there is little guidance on how to best ensure their competency throughout their career and at the same time maintain patient safety while preserving mature physician dignity.
It is a scenario playing out nationwide. From Oregon to Pennsylvania, hundreds of communities have in recent years either stopped adding fluoride to their water supplies or voted to prevent its addition. Supporters of such bans argue that people should be given the freedom of choice. The broad availability of over-the-counter dental products containing the mineral makes it no longer necessary to add to public water supplies, they say. The Centers for Disease Control and Prevention says that while store-bought products reduce tooth decay, the greatest protection comes when they are used in combination with water fluoridation.
More health systems are going to be opting out of Medicare Advantage (MA) plans, George Hill, a managing director at Deutsche Bank in Boston, predicted Monday at a “Wall Street Comes to Washington” webinar hosted by the Brookings Institution. “I think you’re going to see more large provider organizations threaten to opt out of networks, particularly as it relates to MA,” Hill said, adding that there are a number of reasons for this. “Prior authorizations are the problem, claims denials are a huge problem, delayed payments and rates are the problem — barriers in access to care in all varieties are the problem.”
The latest budget update from the nonpartisan Congressional Budget Office (CBO) found that the federal government has spent more on paying interest on the national debt than on the military in fiscal year 2024. The CBO’s budget report for March showed that the U.S. has spent $412 billion on military programs at the Department of Defense through the first half of FY-2024, according to preliminary figures from CBO and the Treasury Department.
Consumer price increases remained high last month, boosted by gas, rents, and car insurance, the government said Wednesday in a report that will likely give pause to the Federal Reserve as it weighs when and by how much to cut interest rates this year. Prices outside the volatile food and energy categories rose 0.4% from February to March, the same accelerated pace as in the previous month. Measured from a year earlier, these core prices were up 3.8%, unchanged from the year-over-year rise in February. The Fed closely tracks core prices because they tend to provide a good read of where inflation is headed.
Here’s where the major benchmarks ended:
The S&P 500® index (SPX) dropped 49.27 points (1.0%) to 5,160.64; the Dow Jones Industrial Average lost 422.16 points (1.1%) to 38,461.51; the NASDAQ Composite® ($COMP) fell 136.28 points (0.8%) to 16,170.36.
The 10-year Treasury note yield (TNX) soared more than 18 basis points to 4.548%.
The CBOE Volatility Index® (VIX) jumped 0.82 to 15.80.
Interest-rate-sensitive sectors like banks, real estate, and utilities led Wednesday’s decliners. The KBW Regional Bank Index (KRX) tumbled 5% to its lowest point since late November. The small-cap Russell 2000® Index (RUT) lost 2.5%. Energy shares were among the few gainers as WTI Crude Oil (/CL) futures rebounded after three-straight losing sessions.
In other markets, the U.S. dollar index (DXY) jumped 1% to a five-month high amid expectations interest rates will remain elevated.
Posted on April 10, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Boeing had yet another rough day, at one point dropping 2.5% to its lowest mark in five months after reports that the FAA is investigating a whistleblower’s claims about safety issues with the 787 Dreamliner.
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And, US stocks on Tuesday ended with small moves, weighed down by the financial sector ahead of key earnings reports later this week. Market participants also exhibited caution a day before the latest consumer inflation data. Wall Street’s three major averages opened in the green but then spent most of the day languishing in negative territory.
Finally, the tech-heavy NASDAQ Composite (COMP:IND) eventually closed 0.32% higher at 16,306.64 points, while the benchmark S&P 500 (SP500) added 0.15% to settle at 5,209.94 points. The blue-chip Dow (DJI) fell marginally by 0.02% to conclude at 38,883.67 points.
The S&P 500® index (SPX) gained 7.52 points (0.1%) to 5,209.91; the Dow Jones Industrial Average® ($DJI) lost 9.13 points (0.02%) to 38,883.67; the NASDAQ Composite® ($COMP) rose 52.68 points (0.3%) to 16,306.64.
The 10-year Treasury note yield (TNX) fell more than 6 basis points to 4.358%.
The CBOE Volatility Index® (VIX) fell 0.21 to 14.98.
Financial and industrial shares led Tuesday’s decliners. Oil services stocks were also soft as WTI Crude Oil (/CL) futures dropped for a third consecutive trading session. The Philadelphia Oil Service Index (OSX) lost 0.7% and ended at its lowest point since April 1.
In other markets, Gold (GC) futures neared $2,400 per ounce and hit a record high for the eighth consecutive trading session. Gold’s rally has been driven by factors including reports of purchases by China’s central bank as well as expectations for lower interest rates and escalating conflict in the Middle East. Bitcoin (BTC) tumbled about 3.5% and fell to less than $70,000, giving up much of Monday’s gain.
Posted on April 9, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Like use, investors were a little checked out yesterday, focusing on the eclipse or maybe the fact that earnings season starts later this week, and stocks were relatively flat. Diamondback Energy hit an all-time high following several other energy companies that did so last week as oil prices surge.
Here’s where the major benchmarks ended:
The S&P 500® index (SPX) lost 1.95 points (0.04%) to 5,202.39; the Dow Jones Industrial Average® ($DJI) eased 11.24 points (0.03%) to 38,892.80; the NASDAQ Composite® ($COMP) gained 5.44 points (0.03%) to 16,253.96.
The 10-year Treasury note yield rose more than 4 basis points to 4.422%.
The CBOE Volatility Index® (VIX) fell 0.84 to 15.19.
Bank shares were among Monday’s strongest performers, sending the KBW Regional Banking Index (KRX) up 1.5%. Consumer discretionary companies were also strong. WTI Crude Oil (/CL) futures fell sharply earlier in the session following reports Israel had removed some troops from Gaza but bounced back to end down 0.5% at around $86.47 per barrel.
Posted on April 9, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Vitaliy Katsenelson, CFA ***
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Something weird happened to me on Twitter a few months ago. A “follower” started lashing out at me about a stock we own. When people attack me for my views it doesn’t bother me (I wrote several chapters in Soul in the Game on this topic). I don’t let personal attacks get to me, unless people start attaching bricks to their 280 characters.
This person’s lambasting of me was different. He was upset about the decline of a stock I had never publicly discussed in any of my newsletters or talks. This person was not a client. I didn’t know who he was; I had never met him. I was really confused why a stock my clients and I personally owned was so important to him. It’s like someone being upset about the color my wife chose to paint our kitchen.
Once gently confronted, he apologized, said he was a big fan, and explained that he had read my 13F (a form we have to file with the SEC 45 days after the quarter end, where we have to report our holdings in US stocks). He saw that the stock was one of our top holdings, and he bought it. Because I owned it, he made it a disproportionately large position.
I was truly upset about this incident. One of my principles in life is to have a net positive impact on the people I touch. If every single stock I discussed only went straight up, I wouldn’t have to worry about it. But this is not how life works.
Posted on April 8, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
SAFE SOLAR ECLIPSE DAY
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NVIDIA is accelerating the pace of healthcare innovation! Last week they unveiled a suite of AI microservices for developers, launched cutting-edge healthcare AI tools, and deepened their collaborations with giants like Johnson & Johnson. Plus, they’re ramping up investment in clinical trials and drug design.
Do you ever struggle with finding the best sources of information about healthcare AI? Check out my new video, where I share my favorite newsletters, websites, sub-reddits, and a list of must-follow experts. With this toolkit, you won’t miss anything important. Also, I hope you enjoyed a restful and Happy Spring Break – should you celebrate it!
Last week, several Fed officials said they were in no rush to slash interest rates in 2024, which investors have been banking on this year. Meanwhile, oil prices have risen to five-month highs due to concerns about supply shocks in key areas around the world.
And, Wall Street is preparing for a crammed week, with crucial inflation data dropping on Wednesday and big banks (JPMorgan, Wells Fargo, Citigroup) inaugurating earnings season on Friday. The pressure is on companies to post beefy profits to back up their strong stock performance in Q1.
In a recent survey by Edelman Financial Engines, 57% of respondents said they’d feel wealthy if they had $1 million in the bank. But for many people, like doctors, that may not be enough.
Among those with $500,000 and $3 million in assets, 53% said it would take over $3 million in the bank for them to feel wealthy, and 33% said it would take over $5 million. Given that these are amounts some people will never even come close to amassing in their lifetimes, it may be hard to wrap your head around these answers.
Posted on April 7, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
Since 2013 – Americans believe they now need $1.46 million to retire in style
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The new magic number for retirement, found in a study by Northwestern Mutual, is 15% higher than what people thought they needed last year—and 53% higher than the amount people in 2020 pictured themselves needing to feel comfortable leaving the workforce to sit on a beach in Florida.
In fact, it’s also more than most people have socked away: On average, US adults have $88,400 saved for retirement.
Posted on April 6, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here’s where the major benchmarks ended:
Markets: Stocks pulled it out for a Friday win after the government dropped encouraging economic data. But all three major indexes were still down for the week, with the Dow enduring its worst of 2024.
Stock spotlight:Tesla took a wild ride, plunging after Reuters reported it had scrapped plans to produce its long-awaited Model 2 affordable EV only to regain some ground after Elon Musk denied it. The company then jumped after hours because Musk said it’ll debut a robotaxi on August 8.
The S&P 500 index gained 57.13 points (1.1%) to 5,204.34, down 1.0% for the week; the Dow Jones Industrial Average added 307.06 points (0.8%) to 38,904.04, down 2.3% for the week; the NASDAQ Composite® ($COMP) rose 199.44 points (1.2%) to 16,248.52, down 0.8% for the week.
The 10-year Treasury note yield (TNX) rose more than 8 basis points to 4.392%.
The CBOE Volatility Index® (VIX) fell 0.32 to 16.03.
Meta Platforms (META) and Netflix (NFLX), two members of the “Magnificent Seven” mega-cap group, both jumped around 3% Friday, helping lift the S&P 500 Communication Services Index ($SP500#50) 1.6% to lead top-performing sectors. Meta shares closed at a record above $527, up 49% for the year.
Posted on April 6, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Intel revealed that its semiconductor-making unit lost $7 billion last year. The news sent the company’s stock down.
And, Amazon is laying off hundreds of employees from its cloud computing division, including the team overseeing its cashierless tech (and not just the Just Walk Out feature it’s pulling from stores), as well as people sales and marketing roles.
Posted on April 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Ulta and other major beauty companies that thrived during the past few years of economic instability provided good fodder for the “lipstick index”—a duct-tape economic measure that assumes people still buy small indulgences (like lipstick) during tough times, keeping the beauty industry recession-proof.
However…it’s not. Ulta’s full-year sales growth target is just 4% to 5%, which falls below Wall Street’s estimates, and Estée Lauder announced in February it was laying off 3% to 5% of its workforce after some difficult months.
And, other consumer goods powerhouses are bracing for a slowdown, too. The parent company of Calvin Klein and Tommy Hilfiger said this week that it’s preparing for a 6% to 7% revenue drop this year.
The S&P 500 index dropped 64.28 points (1.2%) to 5,147.21; the Dow Jones Industrial Average® ($DJI) tumbled 530.16 points (1.4%) to 38,596.98; the NASDAQ Composite® ($COMP) sank 228.38 points (1.4%) to 16,049.08.
The 10-year Treasury note yield (TNX) fell more than 5 basis points to 4.303.%.
The CBOE Volatility Index® (VIX) surged 2.07 to 16.39.
Semiconductors were among Thursday’s weakest performers as a drop of more than 8% in Advanced Micro Devices (AMD) helped send the Philadelphia Semiconductor Index (SOX) down 3% to a two-week low. Retail shares were also soft. WTI Crude Oil futures rose for the sixth consecutive day and topped $87 per barrel, marking a gain of 4.3% so far this week. Volatility based on the VIX ended at its highest level since early November. Brent Crude Oil (/BZ) futures, the global benchmark, topped $90 for the first time since October.
Private equity and venture capital investments typically involve ownership of shares in a company and represent title to a portion of the company’s future earnings. However, private equity is an equity interest in a company or venture whose stock is not yet traded on a stock exchange.
Venture capital is typically a special case of private equity in which the investment is in a company or venture that has little financial history or is embarking on a high risk/high potential reward business strategy.
Like real estate, private equity and venture capital investments generally share a general lack of liquidity and a lack of comparability across different individual investments. The lack of liquidity comes from the fact that private equity and venture capital investments are typically not tradable on a stock exchange until the company has an IPO.
The lack of comparability is due to the fact that most private equity and venture capital investments are the result of direct negotiation between the investor/venture capitalist and the existing owners of the company /venture.
With widely divergent terms and provisions across different investments, it is difficult to make general claims regarding the characteristics of private equity and venture capital investments.
Posted on April 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Health Capital Consultants, LLC
On March 5th, 2024, the Department of Justice’s (DOJ’s) Antitrust Division, the Federal Trade Commission (FTC), and the Department of Health and Human Services (HHS), announced the launch of a multi-agency inquiry – in the form of a request for information (RFI) and public workshop – focusing on the increasing control of private equity (PE) and other corporations over the healthcare industry.
This Health Capital Topics article discusses the agencies recent actions and how it appears to be in line with the government’s recent moves to crack down on anti-competitive actions in healthcare. (Read more…)
Posted on April 4, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Ulta Beauty plunged after its CEO revealed that, despite the resilience of the beauty category, sales have slowed.
And, Walt Disney’s current rulers will continue to oversee the kingdom. The company’s board, helmed by CEO Bob Iger,defeated activist investors and Nelson Peltz who had hoped to replace current board members and steer the company in a new direction.
Here’s where the major benchmarks ended:
The S&P 500 index rose 5.68 points (0.1%) to 5,211.49; the Dow Jones Industrial Average lost 43.10 points (0.1%) to 39,127.14; the NASDAQ Composite® ($COMP) added 37.01 points (0.2%) to 16,277.46.
The 10-year Treasury note yield fell more than 1 basis point to 4.351%.
The CBOE Volatility Index® (VIX) declined 0.28 to 14.33.
Energy shares remained one of the market’s strongest performers behind strength in WTI Crude Oil (/CL) futures, which rose a fifth consecutive day and ended above $85 per barrel, the highest since October. The Philadelphia Oil Service Index (OSX) jumped1.6%, extending its year-to-date gain to almost 14%.
Posted on April 3, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Medicare Part C papers, glasses and stethoscope.
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Humana and other managed-care stocks were down sharply in trading Tuesday after the Centers for Medicare and Medicaid Services announced an average 3.7% increase in revenue for Medicare Advantage plans in 2025. That amount is the same as the proposed increase the government had announced in January, but it came as a shock to investors who were hoping for a slight bump.
Humana (HUM) shares fell sharply in early Tuesday trading, while rivals UnitedHealth UNH and CVS Health (CVS) traded firmly in the red, as the health insurance industry received yet another blow to its 2024 profit forecasts. All three major health insurance groups have trailed the broader market this year, with Humana down nearly 25%, amid concern that profit margins will be hit by a surge in medical costs tied to a rise in elective procedures. Those procedures had been delayed by the Covid pandemic.
The S&P 500 index fell 37.96 points (0.7%) to 5,205.81; the Dow Jones Industrial Average lost 396.61 points (1.0%) to 39,170.24; the NASDAQ Composite slipped 156.38 points (1.0%) to 16,240.45.
The 10-year Treasury note yield was up almost 3 basis points to 4.357%.
The CBOE Volatility Index® (VIX) rose 0.96 to 14.61.
Retailer, biotechnology, and regional bank shares were among the weakest performers Tuesday, leading a broad market slump in which declining stocks outnumber advancers by a greater than three-to-one ratio. The small-cap Russell 2000® Index (RUT) lost 1.8% and settled at a two-week low.
Energy companies, by contrast, extended recent strength behind an ongoing climb in WTI Crude Oil (/CL) futures, which surpassed $85 per barrel for the first time since late October. The Philadelphia Oil Service Index (OSX) advanced 2.1% and ended at a 5-½-month high. Oil prices have surged this year due to OPEC production cuts and concern over supply disruptions stemming from the Middle East conflict.
Posted on April 3, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
PATIENT COMPLICATION RATES
By Staff Reporters
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Hospitals under private equity (PE) ownership reported higher rates of patient complications when compared to other facilities, according to a recent JAMA study—raising questions about how the business model might affect staffing and subsequent quality of care.
The surveyed Medicare beneficiaries saw a 25.4% increase in “hospital-acquired conditions,” which the Centers for Medicare and Medicaid Services defines as falls, infections, and other adverse events, when they received treatment at a PE-acquired hospital compared to those run under other forms of ownership.
On the whole, the study found that Medicare enrollees at hospitals under PE control were not only younger and less likely to additionally qualify for Medicaid but also more likely to experience complications.
Posted on April 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Quote: “This is a very unusual situation. The stock is pretty much divorced from fundamentals.”—Jay Ritter, finance professor and IPO expert at the University of Florida, on the surging value of the newly public Trump Media. Truth Social,its only active product, has been shedding both users and cash. (CNN)
Shares of Truth Social owner Trump Media & Technology Group plunged Monday after the company disclosed that it lost more than $58 million and generated very little revenue in 2023. Former President Donald Trump is the company’s majority shareholder, and his net worth tumbled by more than $1 billion Monday as a result.
Stocks started Q2 off soft yesterday, as investors continued to fret about inflation. Stock spotlight: Trump Media, the newly public company that owns Truth Social, plunged yesterday after revealing that it lost $58 million last year, generated just $4.1 million in revenue, and had 10 times fewer users than Threads.
The S&P 500 index fell 10.58 points (0.2%) to 5,243.77; the Dow Jones Industrial Average® ($DJI) shed 240.52 points (0.6%) to 39,566.85; the NASDAQ Composite® ($COMP) added 17.37 points (0.1%) to 16,396.83.
The 10-year Treasury note yield jumped 13 basis points to 4.323%.
The CBOE Volatility Index® (VIX) rose 0.64 to 13.65.
Banks were among the market’s weakest performers Monday, likely reflecting concern that elevated interest rates could pinch margins. The KBW Regional Bank Index (KRX) sank 2% after ending at a two-month high last week. The small-cap Russell 2000® Index (RUT) was also soft, dropping 1% after closing at a two-year high last week.
Communication services and semiconductor shares turned in strong performances, as did energy, lifted by WTI Crude Oil (/CL) futures’ extending a rally to its highest level since late October. WTI Crude Oil is up almost 18% so far this year amid concern over supply disruptions stemming from the Russia-Ukraine war and Middle East conflict.
In other markets, the U.S. dollar index ($DXY) strengthened for the fourth straight day and reached its highest point since mid-November behind expectations the Fed will keep interest rates high.
Posted on April 1, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
APRIL FOOL’S DAY
April Fools’ Day customs date back to at least Renaissance Europe, but it’s likely the tradition originated long before then. Some historians have linked April Fools’ Day to the ancient Roman festival of “Hilaria,” where at the end of March, people would come together to commemorate the resurrection of the god Attis. It was a celebration of renewal in which revelers would dress up in disguises and imitate others.
It’s also possible that the medieval celebration of the Feast of Fools, where a mock bishop or pope was elected and church customs were parodied, could have inspired the day.
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Stocks had their best Q1 in five years. The S&P 500 ended Thursday—the last trading day of the quarter—up by more than 10%, marking its best start to a year since 2019.
The AI craze, record corporate profits, and optimism around cooling inflation are all contributing to the stock boom. The economy got more good news yesterday when theStocks had their best Q1 in five years reported that several key gauges, including GDP and consumer spending, grew in Q4 of last year.
And, that’s not all: Home sales bounced back after a January slump, jobless claims fell, and advertisers raised their full-year forecast. Consumer sentiment is now at its highest level since 2021.
Posted on March 31, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
HAPPY EASTER
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Tesla had a rough quarter
The company’s stock was the worst performing in the S&P 500 in Q1, dropping 29%, amid fierce competition from Chinese electric carmakers, slowdowns from Red Sea shipping routes, arson at its German factory, Nordic labor battles, and controversies surrounding CEO Elon Musk.
Now, investors are warily watching to see what delivery numbers Tesla reports. But one group did make lots of money off the company as it lost over $230 billion in value last quarter: short sellers.
Donald Trump’s namesake social media company burst out of the gate on its first day of trading Tuesday, opening at $70.90 and soaring as high as $79.38 as Trump fans and opportunistic traders bought up shares. But the price faded late in the session and has bounced along at lower levels ever since, ending Thursday down $4.26 at $61.96 on the NASDAQ. The stock exchange was closed Friday in observance of Good Friday.
Posted on March 29, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
DIVIDEND REINVESTMENT PLANS
By Staff Reporters
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DEFINITION
DRIPs are merely an automated strategy in which a company’s dividends are reinvested into additional shares of that company. Instead of being paid dividends in cash, you get additional shares of ownership in the company.
There are three ways to get involved in DRIPs: directly through the company, through your broker, or through a transfer agent.
Company-run DRIPs are generally only available through large, blue-chip dividend stocks.That’s because smaller companies don’t want to take on the overhead costs of tracking all their shareholders and going through the paperwork headache of calculating how much each one gets in dividends and additional fractional shares. The company benefits from gaining an additional source of capital, but most of all in creating a more stable base of shareholders, ones who are less likely to panic and sell during a market decline. This can help decrease the volatility of a company’s shares.
Finally, most large discount brokers, such as Scottrade, TD Ameritrade, and E*Trade, also offer DRIPs, though with different requirements and limitations.
While dividend reinvestment is powerful, there are a couple reasons why you might not want to reinvest your dividends.
DRIPs Drawback 1: You may need the dividend income The most obvious reason is that you need the income. If you’re in the “distribution” phase of your investing life, dividends are a perfect source of passive income. Income from qualified dividends is taxed at the long-term capital gains rate (currently 15% for investors who are in the 25% to 35% tax bracket for ordinary income, 0% for taxpayers in a lower bracket and 20% for those in the highest bracket). So if you’re going to be looking to your portfolio for income every month anyway, it makes sense to have that cash deposited in your account.
DRIPs Drawback 2: You may need to reallocate your positions You might also choose to stop reinvesting your dividends for allocation reasons. Reinvesting your dividends, through DRIP plans or otherwise, will cause your stock positions to grow over time, and if you’ve owned a particular issue for a long time, it may already be a large enough percentage of your portfolio. Higher-yielding positions will grow faster, which can throw your allocations out of whack pretty quickly. So once a stock position is as big as you want it to get (for now) feel free to turn off dividend reinvestment for that position, and either enjoy the extra income or save up the cash to invest in other stocks.
DRIPs Drawback 3: You may not want to buy that stock at that time Finally, you may also have stock-specific reasons not to reinvest dividends—if a stock is temporarily overvalued, or you simply don’t want to buy any more of it at current prices.
But bottom line, reinvesting dividends through a broker or by signing up for DRIP plans directly through the dividend-paying companies, is a surprisingly powerful tool to passively improve your investment returns.
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NOTE: Former Microsoft CEO Steve Ballmer is on pace to earn $1 billion in dividends annually from his massive 4% stake in the software company.
Steve Ballmer is on pace to collect annual dividend payments of $1 billion from Microsoft.
He is the former CEO of Microsoft and is the largest individual shareholder of the software giant.
Ballmer’s Microsoft stake has surged to a value of $128 billion this year following Microsoft’s 55% stock rally.
Posted on March 29, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The stock market will be closed Friday, March 29th, for Good Friday. While Good Friday is a stock market holiday, it is not a federal holiday. As a result, the February Personal Consumption and Expenditures (PCE) Price Index will be released this Friday morning.
Yesterday, on the final trading session of March and the first quarter, the returns for major stock indexes are impressive, with the Dow Jones Industrial Average up 5% this quarter or 2,000 points and the S&P 500 and the tech-heavy NASDAQ up 11% apiece. Stock superlatives for 2024’s opening stretch are numerous, including each of the three indexes setting respective all-time highs and the benchmark S&P heading toward its best first-quarter return since 2019 and its second consecutive quarter of double-digit percentage gains since 2011-12.
The S&P 500 index added 5.86 points (0.1%) to 5,254.35, up 0.4% for the week; the Dow Jones Industrial Average climbed 47.29 points (0.1%) to 39,807.37, up 0.8% for the week; the NASDAQ Composite lost 20.06 points (0.1%) to 16,379.46, down 0.3% for the week.
The 10-year Treasury note yield rose one basis point to just under 4.21%.
The CBOE Volatility Index® (VIX) rose 0.22 to 13.00.
For the month, the S&P 500 index gained 3.1%, the Dow Jones Industrial Average rose 2.1%, and the NASDAQ Composite added 1.8%. For the quarter, the three indexes rose 10.3%, 5.6%, and 9.2%, respectively.
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.
Assessment
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
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