MEDICARE: Part “C” Plans = Double Standard

By Anonymous

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The HHS OIG Fall 2022 report was recently released to Congress. On page 20, there are many referrals to seven inappropriate payments to a variety of Medicare “Advantage” Plans. Topping the list is Humana. The OIG claims that Humana in the time period studied falsified records to receive $34.4M worth of payments they received from CMS for risk diagnosis code risk assessments. If even half this amount is true, it is unconscionable that Humana is not severely fined, their executives terminated and subjected to criminal proceedings, and they should be banned from the Medicare program for ten years. This is no different from how other healthcare providers are criminalized, so the question is, why is the insurance industry treated different and preferentially when they commit fraud?

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

These OIG studies are great reads, but up until now, they have done nothing to stop the insurance industry’s abusive practices of denying “clean claims”, denying claims after prior authorization, ignoring CCI edits, “losing” charts sent for review and then claiming higher error rates to Congress, paying providers often less than 50% of Medicare, and this the last draw… falsifying data so they can be paid more from CMS. When will this madness stop? When will providers have the gumption to actually act out the famous quote, “I’m mad as hell and I’m not going take it anymore!” (from the movie Network), and Peter Finch it!

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What is a Financial CDO and CMO?

Collateralized Debt Obligations

versus

COLLATERALIZED MORTGAGE OBLIGATIONS

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BY DR. DAVID E. MARCINKO MBA CMP®

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A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS).

Like other private label securities backed by assets, a CDO can be thought of as a promise to pay investors in a prescribed sequence, based on the cash flow the CDO collects from the pool of bonds or other assets it owns. Distinctively, CDO credit risk is typically assessed based on a probability of default (PD) derived from ratings on those bonds or assets.

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

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Collateralized Debt Obligation (CDO) - Assignment Point

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Collateralized Mortgage Obligation

A CMO is a debt security backed by mortgages. These mortgage pools are usually separated into different maturity classes called tranches (from the French word for “slice”). The securities were issued by private issuers, as well as the Federal Home Loan Mortgage Corporation (Freddie Mac). As the mortgages were usually government-guaranteed, CMOs usually carried AAA ratings until their current financial meltdown. The early versions of CMOs were known as “plain vanilla,” but recent developments gave us PACs (planned amortization certificates) and TACs (targeted amortization certificates); among too many others. They were all variations on how principal repayments in advance of maturity date were treated.

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

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CMO vs CDO | What is the difference between them? - Fintelligents

RELATED: https://medicalexecutivepost.com/2011/07/06/merrill-lynch-investigated-for-cdo-deal-involving-magnetar/

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Digital Health Insurance Tracking Devices

By Staff Reporters

Blue Cross Blue Shield has deployed several trackers on its website, according to the web extension Ghostery, a tool that can tell you what kind of technology web pages are using.

  • Ghostery returned a list of trackers from Twitter, Google, and LinkedIn.

Though we don’t know specifically what kind of data is being transferred, these pixels are usually installed to help marketing departments. Tracking pixels, for the uninitiated, are hidden or embedded graphics that can give a more complete picture of a customer’s journey: what they’ve clicked on, if they’ve searched for something specific, if they’ve put something in a shopping cart, or whether an advertisement drove them to, say, Blue Cross Blue Shield’s homepage. For example, if an insurer wants to show that its ads are working, it can use a pixel to determine that it was their ad that got someone to finally sign up for health insurance, not Susan in HR.

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

Trackers are ubiquitous, but experts and consumers have raised serious questions about the data that’s shared between companies. For example, investigative reporting outlet The Markup found that hospitals shared sensitive information with Facebook through the Meta pixel. And just this month, Indianapolis-based Community Health Network reported that pixels may have affected 1.5 million of its patients.

For more, read Marketing Brew’s interview with sociologist Mary F.E. Ebeling, who wrote a book about the collection of sensitive health data.

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RISK MANAGEMENT & LIABILITY PROTECTION FOR PHYSICIANS

And … Their Insurance Agents and Financial Advisors

INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-

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BOOK REVIEW

It is not uncommon for practicing physicians to have more than a dozen separate insurance policies to protect their medical practice and personal assets. Yet, most doctors understand very little about their policies.BOOK REVIR

Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™explains to physicians and insurance professionals the background, theory, and practicalities of medical risk management, asset protection methods, and insurance planning.

The book presents information in a manner that is convenient and highly useful for busy medical practitioners. It discusses the medical records revolution and addresses concerns regarding cloud computing, data security, and technological threats.

The book covers modern health law and policy, including fraud and abuse, workplace-violence, Medicare compliance, HIPAA regulations, AR protection strategies with internal controls, P4P and value based care, insurance and reputation management, and how the ARA legislation is impacting physician practices. It also includes case models and examples that provide you with a real-world understanding of how to recognize and reduce personal and medical practice risks.

With time at a premium for all, and so much information packed into one well-organized resource, this book is a must-read for every physician and financial advisor that serves the health care sector. The book will help physicians make better decisions about the risks they face and will help financial advisors improve the value they provide to their clients who are doctors.

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

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The Modern US Monetary System

On Modern Monetary Realism

By Rick Kahler MS CFP® ChFC CCIM www.KahlerFinancial.com

In a previous ME-P column I explained why any currency-issuing country, like the US, will never default on its obligations or run out of money with which to purchase goods and services priced in its own currency. Sovereign nations that are currency issuers have no solvency constraints, unlike currency users such as individuals, corporations, and government entities that don’t issue currency.

Why the Government is Not-Like Medical Professionals

On Modern Monetary Realism

To follow up, let’s look at what has become known as Modern Monetary Realism (MMR).  Economist Cullen O. Roche describes it in a 2011 article on his Pragmatic Capitalism website titled “Understanding the Monetary System.”

This theory came into existence in 1971 when President Nixon eliminated the gold standard and allowed the government to print money at will. This was a paradigm shift in our monetary policy that’s gone largely unnoticed for decades by many educators, economists, and politicians.

Guiding MMR Principles

The principles of MMR are:

  • The Federal Reserve works in partnership with the US Treasury to issue currency. All other units of government, private entities, and individuals are users of the currency.
  • The government creates money by minting coins, printing cash, and issuing reserves. The private banking sector creates money by creating loans and bank deposits.
  • The Federal Government cannot “go broke.” It is inaccurate to compare it to households, companies, and local governments, which all are users of money and can go bankrupt.
  • The major constraint on currency issuers (sovereign governments like the US) is inflation. It behooves governments to manage the money supply prudently in order to avoid impoverishing their citizens through devaluing the currency.
  • Floating exchange rates between countries are a necessity to help maintain equilibrium and flexibility in the global economy. Nations that unduly inflate their currency suffer the consequences of devalued currency, shrinking purchasing power, and contracting lifestyles.
  • The debt of a sovereign currency issuer is default-free. The issuer can always meet debt obligations in the currency which it issues.

Cullen O. Roche Speaks

Roche suggests that a functional government supports the country’s financial system in four ways:

  1. The US government was created by the people, for the people. “It exists to further the prosperity of the private sector—not to benefit at its expense.” Roche argues that when government becomes corrupt by obtaining too much power or issuing too much currency that results in high inflation, it then becomes susceptible to a revolt and dissolution.
  2. Government’s role is to be actively involved in regulating and helping to build an infrastructure within which the private sector can generate economic growth. Roche views regulation as not only beneficial, but necessary to temper the inevitable irrationality that can disrupt markets. Still, he emphasizes that it is the private sector, not the public sector, which drives innovation, productivity, and economic growth.
  3. Money, while a creation of law, must be accepted by the private sector while prudently regulated by the federal government, keeping in mind that the purpose of the regulation is to maximize private sector prosperity.
  4. “Because the Federal government is not a business or a household it should not manage its balance sheet for its own benefit,” notes Roche, “but in a way that most benefits the private sector and encourages private sector prosperity, productivity, innovation and growth.”

Assessment

Like me, you may need to re-read this a couple of times to begin to grasp the concepts. Once you throw off the outdated pre-1971 model of the monetary system, understanding the basics of MMR isn’t difficult. Knowing the basics of how our monetary system works will help physicians, and all of us, frame the important issues in the turmoil unfolding in Europe and in our own upcoming elections. 

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.

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MANUAL MORTGAGE UNDERWRITING FOR DOCTORS: What is it, Really?

By Staff Reporters

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

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

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

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

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

Automated Decision Making

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

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So, Why Manual Underwriting?

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

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

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

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

Manual Underwriters

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

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

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

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

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

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

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What is “Clinical Equipoise” in Medicine?

Equipoise

[By staff reporters]

Clinical equipoise, also known as the principle of equipoise, provides the ethical basis for medical research that involves assigning patients to different treatment arms of a clinical trial.

The term was first used by Benjamin Freedman in 1987, although references to its use go back to 1795 by Dr. Edward Jenner. In short, clinical equipoise means that there is genuine uncertainty in the expert medical community over whether a treatment will be beneficial. This applies also for off-label treatments performed before or during their required clinical trials.

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READ: https://www.ahajournals.org/doi/full/10.1161/CIRCRESAHA.116.309594

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BREAKING NEWS: Oil, Distressed Banks and Banking

By Staff Reporters

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Saudi Aramco made what is s probably the “highest net income ever recorded in the corporate world,” Saudi Aramco’s CEO Amin Nasser just said. The state-owned oil giant brought in an astonishing $161.1 billion in net income in 2022, up 46.5% from the previous year. Rising oil prices lifted all energy companies last year, but Aramco raked in almost triple ExxonMobil’s 2022 profits (record for any Western oil company).

So, after getting mixed signals about the economy from Friday’s jobs report, the Fed will take a fine-toothed comb to the consumer price index, which drops tomorrow.

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

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Banks: At the end of an extremely stressful weekend, depositors of collapsed Silicon Valley Bank were told they would be made whole. Yesterday evening, the US government informed anxious SVB depositors that they’d have access to all the money they stashed with the lender today, even if the amount exceeded the $250,000 limit insured by the FDIC. In addition to backstopping depositors, the Fed is offering additional funding to some banks to limit the contagion from spreading across the banking sector.

And, according to MorningBrew, the Fed’s aggressive action shows how the implosion of Silicon Valley Bank on Friday could have quickly turned into a full-blown banking crisis when markets open this morning.

  • Banking is a confidence game, and if people and businesses felt their uninsured deposits were at risk, they could start pulling money from other banks in a catastrophic bank run.
  • The government had a hard deadline of 9:30am ET this morning to restore confidence in the banking system, and it beat it.
  • However, in their announcement, regulators also noted the closure of a second bank, New York-based Signature Bank, over “systemic risk.” All of Signature’s depositors will be made whole, they said.

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ALERT: HSBC Holdings PLC just said that it purchased Silicon Valley Bank UK Ltd., the U.K. arm of the collapsed Silicon Valley Bank, for 1 pound ($1.20). HSBC said the acquisition will help strengthen its franchise in the U.K. As of March 10th, SVBUK had loans of around GBP5.5 billion and deposits of around GBP6.7 billion, while tangible equity is expected to be around GBP1.4 billion. The acquisition was completed immediately.

The Bank of England said it took the decision to sell SVBUK to stabilize the business, ensure continuity of banking services, minimize disruption to the country’s technology sector and support confidence in the financial system.

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What is Financial Portfolio “DI-WORSIFICATION”

Versus Di-Versification

BUSINESS MANAGEMENT: The term “diworsification” was coined by legendary investor Peter Lynch in his book, One up on Wall Street, to describe the over-expansion of a company into new growth projects and businesses they do not fully understand and which do not align with the company’s core competencies.

See the source image

PORTFOLIO MANAGEMENT: The term diworsification has since grown to also refer to over-diversifying an investment portfolio in such a way that it reduces the overall risk-return characteristics.

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INVESTOPEDIA: https://www.investopedia.com/terms/d/diworsification.asp

READ: https://medicalexecutivepost.com/2014/11/12/the-negative-short-term-implications-of-diversification/

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PODCAST: Health Insurance “Medical Policy” Explained

MEDICAL NECESSITY

By Eric Bricker MD

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What is a Stock Market Index IMPLIED OPEN?

FINANCIAL TERMS AND DEFINITIONS FOR PHYSICIANS AND ALL INVESTORS

By Dr. David E. Marcinko MBA CMP®

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The stock markets have been near all time highs, lately. Physician colleagues and clients are so excited that they are even checking the overnight status of favorite stocks and/or the domestic/overseas markets.

Some colleagues are even becoming a bit OCD by checking the implied open of various markets the night before. But, what exactly is the Implied Open? How is it calculated?

DEFINITION: The Implied Open attempts to predict the prices at which various stock indexes will open, at 9:30am New York time. It is frequently shown on various cable television channels prior to the start of the next business day.

Product Details

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

EXAMPLE: Considering the DJIA as an example, the basis of calculating implied open is the price of a “DJX index option futures contract”. This is not the price of the DJIA itself but rather the current ticker price of an option issued by the Chicago Board Options Exchange.

CBOE: The Chicago Board Options Exchange, located at 400 South LaSalle Street in Chicago, is the largest U.S. options exchange with annual trading volume that hovered around 1.27 billion contracts at the end of 2014. CBOE offers options on over 2,200 companies, 22 stock indices, and 140 exchange-traded funds.

CALCULATION: https://www.quora.com/How-do-you-calculate-the-implied-open-from-futures

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NOTE: We would like to remind you that new amendments adopted by the U.S. Securities Exchange Commission (SEC) have gone into effect as of September 28, 2021. These amendments restrict the ability of market makers to publish OTC quotations for those companies that have not made required current financial and company information available to regulators and investors.

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CORRELATION in Modern Portfolio Theory Investing

“Correlation” has been used over the past twenty years by institutions, [physician] investors and financial advisors to assemble portfolios of moderate INVESTMENT risk

By Dr. David Edward Marcinko MBA CMP®

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Modern Portfolio Theory approaches investing by examining the complete market and the full economy. MPT places a great emphasis on the correlation between investments. 

DEFINITION: Correlation is a measure of how frequently one event tends to happen when another event happens. High positive correlation means two events usually happen together – high SAT scores and getting through college for instance. High negative correlation means two events tend not to happen together – high SATs and a poor grade record. No correlation means the two events are independent of one another.

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

CORRELATION: https://medicalexecutivepost.com/2021/02/05/correlation-is-not-causation/

In statistical terms two events that are perfectly correlated have a “correlation coefficient” of 1; two events that are perfectly negatively correlated have a correlation coefficient of -1; and two events that have zero correlation have a coefficient of 0.

In calculating correlation, a statistician would examine the possibility of two events happening together, namely:

  • If the probability of A happening is 1/X;
  • And the probability of B happening is 1/Y; then
  • The probability of A and B happening together is (1/X) times (1/Y), or 1/(X times Y).

There are several laws of correlation including;

  1. Combining assets with a perfect positive correlation offers no reduction in portfolio risk.  These two assets will simply move in tandem with each other.
  2. Combining assets with zero correlation (statistically independent) reduces the risk of the portfolio.  If more assets with uncorrelated returns are added to the portfolio, significant risk reduction can be achieved.
  3. Combing assets with a perfect negative correlation could eliminate risk entirely.   This is the principle with “hedging strategies”.  These strategies are discussed later in the book.

In the real world, negative correlations are very rare.  Most assets maintain a positive correlation with each other.  The goal of a prudent investor is to assemble a portfolio that contains uncorrelated assets.  When a portfolio contains assets that possess low correlations, the upward movement of one asset class will help offset the downward movement of another.  This is especially important when economic and market conditions change.

As a result, including assets in your portfolio that are not highly correlated will reduce the overall volatility (as measured by standard deviation) and may also increase long-term investment returns. This is the primary argument for including dissimilar asset classes in your portfolio. Keep in mind that this type of diversification does not guarantee you will avoid a loss.  It simply minimizes the chance of loss. 

In this table provided by Ibbotson, the average correlation between the five major asset classes is displayed. The lowest correlation is between the U.S. Treasury Bonds and the EAFE (international stocks).  The highest correlation is between the S&P 500 and the EAFE; 0.77 or 77 percent. This signifies a prominent level of correlation that has grown even larger during this decade.   Low correlations within the table appear most with U.S. Treasury Bills.

Historical Correlation of Asset Classes

Benchmark                             1          2          3         4         5         6            

1 U.S. Treasury Bill                  1.00    

2 U.S. Bonds                          0.73     1.00    

3 S&P 500                               0.03     0.34     1.00    

4 Commodities                         0.15     0.04     0.08      1.00      

5 International Stocks              -0.13    -0.31    0.77      0.14    1.00       

6 Real Estate                           0.11      0.43    0.81     -0.02    0.66     1.00

Table Source: Ibbotson 1980-2012

ASSESSMENT: Your thoughts are appreciated.

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

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ECONOMICS: What is the “Golden Rule” Savings Rate?

And … the Solow capital motion growth model?

[By staff reporters]

In economics, the Golden Rule savings rate is the rate of savings which maximizes steady state level or growth of consumption, as for example in the Solow growth model.

Although the concept can be found earlier in John von Neumann and Maurice Allais‘s works, the term is generally attributed to Edmund Phelps who wrote in 1961 that the golden rule “do unto others as you would have them do unto you” could be applied inter-generationally inside the model to arrive at some form of “optimum“, or put simply “do unto future generations as we hope previous generations did unto us.”

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The Solow growth model

In the Solow growth model, a steady state savings rate of 100% implies that all income is going to investment capital for future production, implying a steady state consumption level of zero. A savings rate of 0% implies that no new investment capital is being created, so that the capital stock depreciates without replacement. This makes a steady state unsustainable except at zero output, which again implies a consumption level of zero.

Somewhere in between is the “Golden Rule” level of savings, where the savings propensity is such that per-capita consumption is at its maximum possible constant value.

Assessment

Put another way, the golden-rule capital stock relates to the highest level of permanent consumption which can be sustained.

Conclusion

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

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

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Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

DOCTORS:

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

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

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

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

HOSPITALS:

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

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

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What is Stock Brokerage Company “Payment For Order Flow”?

By Staff Reporters

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Payment for order flow, or PFOF, is a tactic some brokerages use to rake in piles of cash. Payment for order flow (PFOF) is a form of compensation, usually in terms of fractions of a penny per share, that a brokerage firm receives for directing orders for trade execution to a particular market maker or exchange. Payment for order flow is common in options markets, and is increasingly found in equity (stock market) transactions.

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

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How does it impact everyday investors?

The “P” in PFOF stands for “payment.” That’s because PFOF gets stock brokers paid. It starts when brokers direct trade orders to a particular e-trading firm (like Mountain Securities, for example) instead of routing the trades straight to exchanges. At that point, the e-trading firm may be able to collect the difference between the bid and the ask price, and the brokerages get a cut of that profit. It’s the proverbial “You scratch your broker’s back through their bespoke Ermenegildo Zegna suit, and they’ll scratch yours.”

According to Lillian Stone, some industry experts argue that PFOF is a conflict of interest. (The practice came under scrutiny last year when US brokers made billions on meme stock trading.) You want your broker to get you the best possible prices during a trade, right? Well, if your broker is incentivized to work with one specific e-trading firm, there’s a chance you may not get the sweetest deal—but they’ll line their pockets all the same.

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What is ABSOLUTE [Intrinsic] VALUE?

A MATH AND FINANCIAL-INVESTING TERM

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By Dr. David E. Marcinko MBA CMP®

CMP logo

SPONSOR: http://www.CertifiedMedicalPlanner.org

In mathematics, the absolute value or modulus of a real number x, denoted |x|, is the non-negative value of x without regard to its sign. Namely, |x| = x if x is positive, and |x| = −x if x is negative (in which case −x is positive), and |0| = 0. For example, the absolute value of 3 is 3, and the absolute value of −3 is also 3. The absolute value of a number may be thought of as its distance from zero.

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In finance, absolute value, also known as an intrinsic value, refers to a business valuation method that uses discounted cash flow (DCF) analysis to determine a company’s financial worth. The absolute value method differs from the relative value models that examine what a company is worth compared to its competitors. Absolute value models try to determine a company’s intrinsic worth based on its projected cash flows.

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

In investing, the key issues are as follows:

  • Absolute value refers to a business valuation method that uses discounted cash flow analysis to determine a company’s financial worth.
  • Investors can determine if a stock is currently under or overvalued by comparing what a company’s share price should be given its absolute value to the stock’s current price.
  • There are some challenges with using the absolute value analysis including forecasting cash flows, predicting accurate growth rates, and evaluating appropriate discount rates.
  • Absolute value, unlike relative value, does not call for the comparison of companies in the same industry or sector.

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ESG Investing: Not So Hot … Anymore?

By Staff Reporters

Environmental, Social, and Corporate Governance

Florida is pulling $2 billion from BlackRock in the largest divestment ever made as part of the growing vendetta against Environmental, Social, and Governance (ESG) investing practices. Florida Governor Ron DeSantis and other Republican leaders claim that by taking ESG standards into account when making investment decisions, the firm isn’t prioritizing the bottom line. But, for a few years, things were good. In 2020 and 2021, ESG funds outperformed the market by ~4.3%.

DEFINITION: According to Wikipedia, ESG (environmental, social, and corporate governance) data reflect the externalities (costs to others) an organization is generating with respect to the environment, to society and to corporate governance. ESG data can be used by investors to assess the material risk the organization is taking and by the organization itself as metrics for strategic and managerial purposes. Investors may also use ESG data beyond assessing material risks to the organization in their evaluation of enterprise value, specifically by designing models based on assumptions that the identification, assessment and management of sustainability-related risks and opportunities in respect to all organizational stakeholders leads to higher long-term risk-adjusted return. Organizational stakeholders include but not limited to customers, suppliers, employees, leadership, and the environment.

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

Since 2020, there has been accelerating interest in overlaying ESG data with the Sustainable Development Goals (SDGs), developed based on work by United Nations beginning in the 1980s.

LINK: http://www.ESG.org

The term ESG was popularly used first in a 2004 report titled “Who Cares Wins”, which was a joint initiative of financial institutions at the invitation of UN. In less than 20 years, the ESG movement has grown from a corporate social responsibility initiative launched by the United Nations into a global phenomenon representing more than US$30 trillion in assets under management. In the year 2019 alone, capital totaling US$17.67 billion flowed into ESG-linked products, an almost 525 percent increase from 2015, according to Morningstar, Inc.. Critics claim ESG linked-products have not had and are unlikely to have the intended impact of raising the cost of capital for polluting firms, and have accused the movement of greenwashing.

PODCAST: https://medicalexecutivepost.com/2022/10/10/podcast-what-is-financial-green-washing/

Now All Mad

DeSantis ran his most recent campaign on fighting the “woke ideology” he believes is infiltrating the state. As part of the fight, Florida passed a resolution in August that said ESG standards should be ignored when investing state funds.

And he’s not the only one:

  • Other Republican-controlled states, including Missouri and Louisiana, have moved almost $1.3 billion away from BlackRock for similar reasons.
  • Texas flagged BlackRock as a financial firm that boycotts the state’s energy industry (something BlackRock has denied).

Meanwhile, Democrats aren’t happy either…they criticize BlackRock and ESG investing in general for not going far enough (and for using lax standards that let oil giants onto lists of ESG investments).

Bottom line: According to the Morning Brew, BlackRock and Florida are now cursed to yell “How could you prioritize politics over returns?” back and forth for eternity, and the debate over ESG investing is far from over. Republicans are poised to take over the House—after a campaign season that BlackRock poured record cash into—so we’re likely to see more drama play out at the federal level soon.

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What is an “INTERVAL” Mutual Fund?

By Staff Reporters

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An interval fund is a closed-end mutual fund that buys back shares only during specific intervals. Shares of the First Eagle Credit Opportunities Fund aren’t traded on public exchanges, and purchases or sales take place at the close of business, at the net asset value (NAV).

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

A fund’s NAV is simply the sum of its assets divided by the number of shares. A traditional open-ended mutual fund isn’t publicly traded either, and investors can buy or sell at NAV at the market close every business day. This means the manager of an open-ended fund has limited investment choices because a relatively high level of liquidity is needed to handle daily re-demptions.

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Understanding interval funds - Griffin Capital

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An interval fund sets intervals (time periods) during which shares can be sold back to the fund manager and the number of shares it is willing to redeem during any interval. This makes it possible for the manager to go for higher yields by participating in less liquid markets.

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RELATED: https://www.investopedia.com/articles/investing/120516/what-interval-fund.asp

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PODCAST: What is “SWARM” Learning?

By Dr. David E. Marcinko MBA

SWARM INTELLIGENCE IN MEDICINE

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Swarm learning, or swarm intelligence, is how swarms of bees or birds move in response to their environment.

When applied to data there is “more peer-to-peer communications, more peer-to-peer collaboration, more peer-to-peer learning and that’s the reason why swarm learning will become more and more important as … as the center of gravity shifts” from centralized to decentralized data.

DZNE : AI with Swarm Intelligence

Medicine Example:

Consider this example,  “A hospital trains their machine learning models on chest X-rays and sees a lot of tuberculosis cases, but very little of lung collapsed cases. So therefore, this neural network model, when trained, will be very sensitive to what’s detecting tuberculosis and less sensitive towards detecting lung collapse.”

“However, we get the converse of it in another hospital. So what you really want is to have these two hospitals combine their data so that the resulting neural network model can predict both situations better. But since you can’t share that data, swarm learning comes in to help reduce that bias of both the hospitals.”

And this means, “each hospital is able to predict outcomes, with accuracy and with reduced bias, as though you have collected all the patient data globally in one place and learned from it.”

Moreover, it’s not just hospital and patient data that must be kept secure. What swarm learning does is to try to avoid or reduce the sharing of data, or totally prevent the sharing of data, to [a model] where you only share the insights, or you share the learnings.

So, that’s why it is fundamentally more secure.

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DR. GOH PODCAST: https://www.technologyreview.com/2021/08/16/1031738/a-new-age-of-data-means-embracing-the-edge/?mc_cid=30af99395f&mc_eid=72aee829ad

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

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“ENTERPRISE METAVERSE” Innovation and Entrepreneurship

WHAT IS IT?

On an earnings call last year Microsoft CEO Satya Nadella said the term “enterprise metaverse.”

By [Avatar] Dr. David Edward Marcinko MBA

DEFINITION: The Metaverse is a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet.

The word “metaverse” is made up of the prefix “meta” (meaning beyond) and the stem “verse” (a back formation from “universe“); the term is typically used to describe the concept of a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked into a perceived virtual universe.

INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

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

PODCAST: Direct Primary Care Entrepreneurship and Innovation

By Free Market Medical Association

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DEFINITION:
Direct Primary Care (DPC) is an innovative alternative payment model improving access to high functioning healthcare with a simple, flat, affordable membership fee.  No fee-for-service payments.  No third party billing.  The defining element of DPC is an enduring and trusting relationship between a patient and his or her primary care provider.  Patients have extraordinary access to a physician of their choice, often for as little as $70 per month, and physicians are accountable first and foremost their patients.  DPC is embraced by health policymakers on the left and right and creates happy patients and happy doctors all over the country!

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

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

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

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HEDGE FUNDS: A Growing Sector of Investing?

By Staff Reporters

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ME-P readers might believe the hedge fund industry is a small, exclusive club of elites, rich investors. But a new count by Preqin shows that it’s actually a large—and growing—sector of investing.

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

In fact, there may be more hedge funds globally (30,000+) than Burger King locations (18,700), and more more hedge fund managers than Taco Bell managers, per the FTE

HISTORY HEDGE FUNDS: https://medicalexecutivepost.com/2022/06/22/hedge-funds-history/

REG D: https://medicalexecutivepost.com/2022/01/14/the-private-placement-regulation-d-securities-exemption/

PODCAST: https://medicalexecutivepost.com/2023/02/22/video-on-hedge-fund-manager-michael-burry-md/

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PODCAST: WHAT IS AN “ENTREPRENEUR” ACCORDING TO AUSTRIAN ECONOMISTS

The Methodology of Thinking on Your Own

Courtesy: http://www.CertifiedMedicalPlanner.org

cropped-dem

By Dr. David E. Marcinko MBA CMP

The Austrian school of Economics uses the logic of a priori thinking—something a person can think on their own without relying on the outside world—to discover economic laws of universal application.

The other mainstream schools of economics, like the neoclassical school, the new Keynesians and others, make use of data and mathematical models to prove their point objectively.

In this respect, the Austrian school can be more specifically contrasted with the German historical school that rejects the universal application of any economic theorem.

PODCAST: https://www.youtube.com/watch?v=MxK8FKU3BPs

And so, colleague Peter Quinones Free Man Beyond The Wall – welcomes Per in this podcast presentation. Per talks about the role of the entrepreneur, not only in society, but according to the Austrian School of Economics!

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PODCAST: http://freemanbeyondthewall.libsyn.com/episode-312

Assessment: Your thoughts and comments are appreciated.

THANK YOU

Product DetailsProduct DetailsProduct Details

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PODCAST: What is the Corporate Bankruptcy ZETA Model?

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By Dr. David Edward Marcinko MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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What Is the Zeta Model Altman Score?

The Zeta Model is a mathematical model that estimates the chances of a public company going bankrupt within a two-year time period. The number produced by the model is referred to as the company’s Z-score (or zeta score) and is considered to be a reasonably accurate predictor of future bankruptcy.

REF: https://c996d1545ece1ca2b7ff440941e7b83b.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

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

The model was published in 1968 by New York University professor of finance Edward I. Altman. The resulting Z-score uses multiple corporate income and balance sheet values to measure the financial health of a company.

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Altman's Z-Score Model - Overview, Formula, Interpretation

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READ: https://pages.stern.nyu.edu/~ealtman/ZETA-Analysis.pdf

PODCAST: https://www.bing.com/videos/search?q=altman+z-score&&view=detail&mid=A638789D96F2C2946170A638789D96F2C2946170&&FORM=VRDGAR&ru=%2Fvideos%2Fsearch%3Fq%3Daltman%2Bz-score%26FORM%3DHDRSC3

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

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Mutual Fund Terms and Definitions for Physicians

A “Need-to-Know” Glossary for all Medical Professionals

http://www.HealthDictionarySeries.org

HDS

[ME-P Staff Writers] 

ADV: A two-part form filed by investment advisors who register with the Securities and Exchange Commission (SEC), as required under the Investment Advisers Act. ADV Part II information must be provided to potential investors and made available to current investors.

Alpha: A measure of the amount of a portfolio’s expected return that is not related to the portfolio’s sensitivity to market volatility. A benchmark that uses beta as a measure of risk, a benchmark and a risk free rate of return (usually T-bills) to compare actual performance with expected performance.

For example, a fund with a beta of .80 in a market that rises 10% is expected to rise 8%.

If the risk-free return is 3%, the alpha would be –.6%, calculated as follows: (Fund return – Risk-free return) – (Beta x Excess return) = Alpha   (8% – 3%) – [.8 × (10% – 3%)] = (–) .6%   

Note: A positive alpha indicates out-performance while a negative alpha means underperformance. 

Asset allocation: Strategic asset allocation refers to the long-term targets for allocation of a percentage of a portfolio among different asset classes. In contrast, tactical asset allocation refers to short-term targets.

Average maturity: The average weighted maturity of the bonds in a portfolio providing an indication of interest rate risk.

Benchmark: An index, managed portfolio, or fund used to compare performance characteristics with the targeted portfolio or fund.

Beta: A statistically computed measure of the portfolio’s relationship to changes in market value. If, compared to the S&P 500, a fund has a beta of .80; it is expected to underperform a rising market by 20% and outperform a falling market by 20%. 

Bond: Publicly traded debt instruments that are issued by governments and corporations. The issuer agrees to pay a fixed amount of interest over a specified time period and to repay the principal at maturity.

Closed-end mutual fund: An investment company that registers shares in accordance with SEC regulations and is traded in securities markets at prices determined by investments. 

Diversification: Buying a number of different investment vehicles to protect against default of a single vehicle, thereby reducing the risk of the portfolio.

Duration: A more technical calculation of interest rate risk exposure that uses the present value of expected cash flows to be returned to the bond holder over the term of the bond. 

Fundamental analysis: An analysis of a company’s stock that focuses on the economic environment, the industry the company is in, and the company’s financial situation and operating results.

Mutual fund: A regulated investment company that manages a portfolio of securities for its shareholders.

Net asset value (NAV): The value of fund assets fewer liabilities divided by outstanding shares. 

Open-end mutual fund: An investment company that invests money in accordance with specific objectives on behalf of investors. Fund assets expand or contract based on investment performance, new investments and redemptions.

Portfolio manager: The person(s) who is/are responsible for managing the portfolio in accordance with the objectives dictated by an investor or a fund’s prospectus.

Prospectus: A disclosure document filed with the SEC and made available to prospective and current investors. The prospectus covers sales charges, expenses, investment objectives and restrictions, management fees, financial highlights, and other information. 

R-squared (R2): Relationship of a fund or portfolio’s performance to a benchmark index.

For example, a fund R-squared of .5 means only 50% of its return is explained by the index. Other factors are responsible for the balance of performance. 

SEC yield: A standardized calculation of yield over a 30-day period, sometimes quoted as the “30-day yield.” It takes into account yield-to-maturity rather than current dividends. 

Standard deviation: A statistic that looks at a series of returns and expresses the average deviation from the mean return.

Statement of additional information: A disclosure document filed with the SEC that supplements the prospectus. It is made available to investors upon request. 

Technical analysis: An analysis that focuses on trends in financial markets generally.

For example, a technical analyst may view an entire industry’s group of stocks to be declining. Although the analyst may be correct about the group of stocks as a whole, there may be exceptions represented by specific, individual companies.

Total return: The combination of investment return from income, such as dividends and interest, and appreciation or depreciation in the value of the investment (Income returns plus capital return.) 

Turnover: Under SEC rules, a figure computed that indicates how often securities in the portfolio are bought and sold. For example, if turnover is 100% over a one-year period, the securities (on average) were replaced once. 

12b-1 fee: The maximum annual fee payable from fund assets for distribution and sales costs as allowed by the SEC. 

MORE: Glossary Terms Ap 3

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What is an Unregistered Security?

By Staff Reporters

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A security, most simply, is a financial instrument traded for profit. They form the basis of investment contracts for thinks like equities, debt, and derivatives.

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

The SEC points to the Howey Test to determine if an asset can be classed as a security. This test has four prongs, all of which need to be passed to be determined a security: [1] An investment of money [2] in a common enterprise [3] with expectations of a profit [4] to be derived from the efforts of others.

In the US, if an asset is deemed to be a security it needs to be registered with the SEC. For example, an initial public offering (IPO) of a stock newly listed on the stock exchange represents the first offering of its freshly registered securities. Securities need to be registered as it gives the issuing company the relevant shareholder information to pay dividends and provide relevant stock-related information. It also helps reduce fraud by keeping on record the legitimate owner of the security.

According to the SEC, an unregistered security is simply one that hasn’t been rubber-stamped by the regulator. 

Unregistered securities have been the subject of several scams, with the SEC saying their hallmarks include the promise of high yields with no risk, aggressive sales tactics, and are backed by unqualified investment professionals. As such, their use is limited.

Only accredited investors, defined as those with a net worth higher than $1 million or an annual income exceeding $200,000, can trade unregistered securities, essentially locking out most retail investors. The threshold is seen as a gauge of financial sophistication and suggests a buffer for eligible investors against potential losses.

RELATED: https://medicalexecutivepost.com/2022/01/14/the-private-placement-regulation-d-securities-exemption/

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What is the Elderly CPI?

The CPI-E

[By staff reporters]

We’ve written about the CPI and Chained CPI before on this ME-P.
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Q = So, what is the Elderly CPI?
A = It is experimental CPI for the elderly called the CPI-E.
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Mature Woman
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MORE:
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According to the Bureau of Labor Statistics, or BLS, the CPI-E includes households whose reference person or spouse is 62 years of age or older.
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Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™
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The “NO LANDING ECONOMY” – Defined?

By Staff Reporters

FINANCIAL JARGON

The notion of a “no landing” scenario for the U.S. economy — as opposed to a hard or soft landing — is the latest topic to dominate discussions among economists and strategists.

DEFINITION?

According to Michael B. Kelley Editorial Director of Yahoo Finance, says that a “no landing” scenario involves the economy continuing to grow despite the Federal Reserve’s best efforts to tamp down inflation with interest rate hikes. And, what does that does it mean? “It’s all about inflation,” Bianco Research President Jim Bianco told Yahoo Finance Live.

“What they want or what they’re hoping for, both at the Fed and on the Street, is that the inflation rate is going to hit 2%,” he explained. “Well, the only way that it’s going to do that — at least the belief is — the economy has to slow. And if it doesn’t slow, then the inflation rate stays up. And if the inflation rate stays up, the Fed keeps hiking.”

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

Breaking down the 'no landing' buzz: What it means for investors

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LINK: https://flo.uri.sh/visualisation/6180194/embed?auto=1

Given the implication the Fed will continue raising rates until inflation subsides — and, in turn, the economy cools off — some observers argue that there’s no such thing as a “no landing” scenario.

“Because we’re in this highly volatile environment, and because there is so much uncertainty, we’ve now seen a number of different ways to interpret or call what we’re seeing in the economy,” EY Parthenon Chief Economist Gregory Daco told Yahoo Finance this week.

“No landing does not make any sense, because it essentially means the economy continues to expand, and it’s part of an ongoing business cycle and it’s not an event — it’s just ongoing growth,” Daco added. “Doesn’t that entail that the Fed will have to raise rates more, and doesn’t that increase the risk of a hard landing?”

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What is a Federally Qualified Health Center?

ABOUT F.Q.H.C.s

By Dr. David E. Marcinko MBA CMP®

CMP logo

SPONSOR: http://www.CertifiedMedicalPlanner.org

I worked at several FQHCs as a medical student and intern, back in the day, both in urban and suburban settings. But, I never was sure what this entity was, exactly. Probably because I was from an under served area, myself.

DEFINITION:

A Federally Qualified Health Center (FQHC) is a reimbursement designation from the Bureau of Primary Health Care and the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services. This designation is significant for several health programs funded under the Health Center Consolidation Act (Section 330 of the Public Health Service Act).

It is a community-based organization that provides comprehensive primary care and preventive care, including health, oral, and mental health/substance abuse services to persons of all ages, regardless of their ability to pay or health insurance status.

Thus, they are a critical component of the health care safety net. FQHCs are called Community/Migrant Health Centers (C/MHC), Community Health Centers (CHC), and 330 Funded Clinics. FQHCs are automatically designated as health professional shortage facilities.

CMS: https://www.cms.gov/Center/Provider-Type/Federally-Qualified-Health-Centers-FQHC-Center

FQHC.org: https://www.fqhc.org/what-is-an-fqhc/

Your thoughts are appreciated.

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What is an ADR / SPDR Receipt?

AMERICAN DEPOSITORY RECEIPTS AND S&P RECEIPTS

By Dr. David E. Marcinko MBA CMP®

CMP logo

SPONSOR: http://www.CertifiedMedicalPlanner.org

AMERICAN DEPOSITORY RECEIPT (ADR) = A receipt evidencing shares of a foreign corporation held on deposit or under the control of a U. S. banking institution; it is used to facilitate transactions and expedite transfer of beneficial ownership for a foreign security in the U.S. Everything is done in dollars and the ADR holder doesn’t have voting rights; essentially the same as an American Depository Share (ADS).

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

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A Standard & Poor’s Depositary Receipt, or SPDR, is a type of exchange traded fund that began trading on the American Stock Exchange (AMEX) in 1993 when State Street Global Advisors’ investment management group first issued shares of the SPDR 500 Trust (SPY).

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

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MORE: https://medicalexecutivepost.com/2008/02/15/about-american-depository-receipts/

S&P: https://medicalexecutivepost.com/2011/01/12/on-standard-poors-depository-receipts/

S&P Index: https://medicalexecutivepost.com/2011/01/15/spdrs-vs-index-mutual-funds/

S&P TAX: https://medicalexecutivepost.com/2011/01/30/do-spdrs-yield-tax-advantages/

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FINANCIAL HEALTH INSURANCE CO-PAY CARDS & DRUG COUPONS?

The “Real Deal”

A co-payment is a fixed amount ($20, for example) you pay for a covered health care service after you’ve paid your deductible.

Let’s say your health insurance plan’s allowable cost for a doctor’s office visit is $100. Your copayment for a doctor visit is $20.

  • If you’ve paid your deductible: You pay $20, usually at the time of the visit.
  • If you haven’t met your deductible: You pay $100, the full allowable amount for the visit.
  • Partial deductible payments incur hybrid fees.

Copayments (sometimes called “copays”) can vary for different services within the same plan, like drugs, lab tests, and visits to specialists. Generally plans with lower monthly premiums have higher copayments. Plans with higher monthly premiums usually have lower copayments.

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

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Co-Pay Cards May Be Creating More Controversy Instead of Solutions

Instead of reducing the actual price of their excessively priced medications, many companies have opted to provide co-pay cards / coupons as an affordable solution. However, co-pay cards may only lower the cost for some consumers and patients.

Novartis: https://www.copay.novartispharma.com/nvscopay/#

Pfizer: https://www.pfizerpro.com/co-pay-cards-patient-savings-offers

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See the source image

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But – The insurer is still left to pay the high price, which will eventually be passed back on to the patient / consumers in the form of higher health insurance deductibles. So – It doesn’t really seem like much of a solution when we all end up paying for these co-pay cards / coupons; does it?

Find out more here. (Source: Rebecca Mayer Knutsen, MM&M, 8/26/16)

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MEDICAL OFFICE CREDIT CARDS:

We stopped taking credit cards altogether. The only credit cards we take are for call-in payments of balances. We have placed ATM machines in our lobbies and we educate patients in advance of their visits that we only take cash or check. Our cash income has increased, our credit card fees have decreased, and we make $1.50 from each transaction through our ATM. Our patients have taken to the idea so much that they use the ATM for personal cash for other transactions because our fee is the lowest of any ATM. It has been a win-win-win.  

Dr. Farshid Nejad, Beverly Hills, CA [PM Magazine]

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For anyone contemplating taking credit cards for payments or copayments in your office, please be aware that some of the credit card companies require you to sign a contract. Don’t do that! If you do and you either have a problem with the company or find out that they are overcharging you, they will hold you responsible for the contract and may take you to court. There are enough credit card companies out that that do not require contracts and are highly competitive. 

-Dr. Elliot Udell, DPM, Hicksville, NY [PM Magazine]

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PODCAST: What is Public Health?

By American Journal of Public Health

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Public health is now part of the political conversation but everyone doesn’t understand it in the same way. Hence the idea of interviewing Governor John Kasich, former governor of Ohio, who has been promoting a greater attention to public health, about what is public health for him.

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

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

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

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ETFs: Happy 30th Birthday Launch

EXCHANGE TRADED FUNDS

By Staff Reporters

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Thirty years ago yesterday, the first exchange-traded fund (ETF) in the US launched. In the decades since, these once-niche investment products have become ubiquitous on Wall Street, disrupting the mutual fund industry and transforming people’s relationship with the stock market.

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

Exchange Traded Funds

On January 29th, 1993, a spider decoration hanging in the American Stock Exchange heralded the arrival of the first US ETF—what’s now called the SPDR S&P 500 ETF Trust. It had a measly $6.5 million in assets and no one really paid much attention to it. The first US ETF is now the world’s biggest, with $375 billion in assets, and the ETF sector in total had amassed $6.5 trillion in assets by the end of 2022. While mutual funds still have 3x the amount of assets that ETFs have, the tide is turning: Investors poured $600 billion into US ETFs on a net basis last year, but pulled out almost $1 trillion from mutual funds.

Definition: An ETF is simply a security that tracks the performance of a particular basket of investments, like stocks. The SPDR S&P 500 ETF, for example, tracks the performance of companies in the S&P 500. Many other ETFs also track indexes, allowing people to park their money in funds that follow the ebbs and flows of the broader market.

If that sounds like a mutual fund…it’s similar. But ETFs have a few advantages over its stuffy, older cousin.

  • ETFs generally have lower fees than mutual funds.
  • They have built-in tax benefits.
  • They’re accessible to anyone with a brokerage account—you can buy or sell them like you would a stock.

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

Finally, all these advantages aside, the rise of ETFs has been also fueled by the growing recognition that trying to invest in individual stocks is foolish. Passive index funds, which aren’t designed for frequent trading, have surged to represent almost half of US fund assets, compared to less than 2% in the early ’90s.

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ADVISOR MARKETING: Meaningful “Tchotchkes” for Doctor Prospects

HDS

SPONSOR: www.CertifiedMedicalPlanner.org

According to Wikipedia, a tchotchke is a small bauble, doodad, doohickey, gewgaw, gismo knickknack, swag, thingamabob, thingamajig, toy, trinket, whatchamacallit, whosie-whatsit, widget, etc. Drug representative, various trade vendors and even prospecting financial advisors that give such cheap souvenirs to potential clients are even sometimes called “tchotchke dukes.” This industry practice is well known and wide spread.

Value-Less

Depending on context, the term has a connotation of worthlessness or disposability as well as tackiness, and has long been used in the regional speech of New York City and elsewhere.

The word may also refer to swag, in the sense of the logo pens, key rings and FOBs, t-shirts, golf balls, and other promotional freebies dispensed at trade shows, conventions, and similar large events. Most are largely value-less promotional pieces.

Valuable

Medical professionals of all types are fertile prospects for pharmaceutical representatives, insurance agents, financial advisors and like minded vendors. Most of these commissioned salesmen offer tchotchkes to their doctor clients and prospects as a reminder of their wares.

Product DetailsProduct DetailsProduct Details

Assessment

And so, wouldn’t it be interesting for these vendors to offer their doctors something of real value?  How about one of our Dictionaries of Health … in our series of three non-clinical handbooks? Affordable, memorable and valuable!

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.

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What is the “S” Logistics Chart Curve?

SIGMOID CURVE

By Staff Reporters

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DEFINITION

The S curve refers to a chart that is used to describe, visualize, and predict the performance of a project or business overtime. More specifically, it is a logistic curve that plots the progress of a variable by relating it to another variable over time. 

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

The term S curve was developed as a result of the shape that the data takes. Projects on the S curve often experience a slow growth at the beginning, rapid growth in the middle, and slow growth and at the end. The maximum point of acceleration is called the point of inflexion. It is at this point that the project or business returns to the initial slow growth it started from. 

MATH PROOF: https://mathworld.wolfram.com/SigmoidFunction.html

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PHYSICIANS BEWARE: Traditional Financial Planning “Rules of Thumb”

DOCTORS AND MEDICAL PROFESSIONALS BEWARE?

We ARE Different

By Dr. David E. Marcinko MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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  • While financial planning rules of thumbs are useful to people as general guidelines, they may be too oversimplified in many situations, leading to underestimating or overestimating an individual’s needs. This may be especially true for physicians and many medical professionals. Rules of thumb do not account for specific circumstances or factors occurring at a particular time, or that could change over time, which should be considered for making sound financial decisions.
  • Great Health Industry Resignation: https://medicalexecutivepost.com/2021/12/12/healthcare-industry-hit-with-the-great-resignation-retirement/

For example, in a tight job market, an emergency fund amounting to six months of household expenses does not consider the possibility of extended unemployment. I’ve always suggested 2-3 years for doctors. Venture capitalist lay-offs of physicians during the pandemic confirm this often criticized benchmark opinion of mine.

As another example, buying life insurance based on a multiple of income does not account for the specific needs of the surviving family, which include a mortgage, the need for college funding and an extended survivor income for a non-working spouse. Again a huge home mortgage, or several children or dependents, may be the financial bane of physician colleagues and life insurance.

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

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EXAMPLES: Old/New Rules

  • A home purchase should cost less than an amount equal to two and a half years of your annual income. I think physicians in practice for 3-5 years might go up to 3.5X annual income; ceteras paribus.
  • Save at least 10-15% of your take-home income for retirement. Seek to save 20% or more.
  • Have at least five times your gross salary in life insurance death benefit. Consider 10X this amount in term insurance if young, and/or with several children or other special circumstances.
  • Pay off your highest-interest credit cards first. Agreed.
  • The stock market has a long-term average return of 10%. Agreed, but appreciated risk adjusted rates of return..
  • You should have an emergency fund equal to six months’ worth of household expenses. Doctors should seek 2-3 years.
  • Your age represents the percentage of bonds you should have in your portfolio. Risk tolerance and assets may be more vital.
  • Your age subtracted from 100 represents the percentage of stocks you should have in your portfolio. Risk tolerance and assets may still be more vital.
  • A balanced portfolio is 60% stocks, 40% bonds. With historic low interest rates, cash may be a more flexible alternative than bonds; also avoid most bond mutual funds as they usually never mature.

There are also rules of thumb for determining how much net worth you will need to retire comfortably at a normal retirement age. Here is the calculation that Investopedia uses to determine your net worth:

Compensation in the Physician Specialties: Mostly Stable - NEJM  CareerCenter Resources

RULES 72, 78 and 115: https://medicalexecutivepost.com/2022/01/30/the-rules-of-72-78-and-115/

INVITATION: https://medicalexecutivepost.com/2021/05/08/invite-dr-marcinko-to-your-next-big-event/

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Defining the Standard of Medical Practice Business Value

Understanding Terms and Definitions

Dr. David E. Marcinko; MBA, CMP™

[Editor-in-Chief]

The term “value” in and of itself is too broad to be useful in the business appraisal of a medical practice, ASC or clinic, etc.  It must be given a context. As a medical practice appraiser, the industry generally refers to four standards of value. 

Fair Market Value

This is the most common context given to the term value. Fair Market Value [FMV] is defined by the IRS through Revenue Ruling 59-60 as:

“the amount at which property would exchange hands between a willing buyer and a willing seller when the former is not under compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of the relevant facts.”

It is generally agreed that fair market value is based upon a hypothetical arm’s length transaction before direct consideration of taxes to be paid as a result the transaction.  That does not imply that taxes are not part of the relevant fact set that a willing doctor-buyer considers when determining the value.  Fair Market Value is the standard of value that is used in valuations for estate tax and generally for valuations related to divorce.

Investment Value        

Investment Value focuses on value to a specific buyer rather than value to a hypothetical buyer. For example, let us examine an owner of a medical office who is considering the acquisition of a competitor practice that operates in the same geographic market.  The doctor owner might calculate value based upon the knowledge that the combination of the two entities will create economies of scale and less competition. This would result in greater profitability per dollar of revenue.  Therefore, such a buyer, all else equal, may assess a greater value to the practice than a buyer who would expect to operate the office in its current free standing situation, without the expected cost saving and corresponding expectation of increased cash flow.

Intrinsic Value

Intrinsic Value is similar to investment value however the practice is typically viewed in a stand-alone mode as a going concern.  That is, value is based upon the expected cash flows of the firm based upon its current operating configuration.  However, changes in operating policy such as changing its financial structure can have an impact on its intrinsic value. 

Going Concern Value vs. Liquidation Value

A medical business cannot be worth less than its liquidation value. Thus, liquidation value sets a floor for value. Liquidation value assumes that a practice’s operations cease and assets are sold either piecemeal or in groups and obligations are satisfied. Liquidation value is generally based on an “orderly liquidation” process where assets are sold in manner to realize the greatest possible value for them. 

In contrast, a “forced liquidation” process is where practice assets are sold as quickly as possible often through an auction. Going Concern Value views a firm as a holistic combination of tangible and intangible assets in which the sum is often greater than its parts. This synergistic view of the practice is typically what is being valued.     

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Conclusion

Feel free to comment, opine and review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

Speaker: Dr. Marcinko is a highly sought after futurist and speaker in the areas of health economics, financial planning, medical practice management and related entrepreneurial e-insights for many intersecting sectors in the healthcare industrial complex. Contact the ME-P for availability and scheduling. 

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US Unemployment Benefits Fall

INFLATION STILL LOOMING?

By Staff Reporters

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According to Bloomberg, applications for US unemployment benefits fell for the fourth time in five weeks, underscoring the broad resilience of the job market that threatens to keep inflation elevated. Initial unemployment claims ticked down by 3,000 to 183,000 in the week ended January 28th, the lowest since April, Labor Department data showed Thursday. The median forecast in a Bloomberg survey of economists called for 195,000 applications.

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

Continuing claims, which include people who have already received unemployment benefits for a week or more, fell to 1.66 million in the week ended January 21st. The labor market, while cooling at the margins, is still tight by many measures and remains one of the key hurdles in the Federal Reserve’s fight against inflation. Even though payrolls growth has slowed and companies in technology and banking have laid off staff in recent months, demand for workers still far exceeds supply, which could put upward pressure on wages and broader prices.

RELATED: https://medicalexecutivepost.com/2023/02/02/stock-market-trifecta-a-good-january-launch-for-2023/

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INDUSTRY STATURE: Certified Medical Planner®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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OUR OEUVRE’ OF TEXT BOOKS IS GROWING WITH OUR INDUSTRY STATURE

We believe that by writing and sharing our experiences in standard textbook, white-paper and new media electronic format, our experts are able to address most areas of physician-focused financial planning, business or medical practice management needs in an understandable and unbiased manner.

But, we recognize that some consultants and financial advisors may appreciate reading current medical business management theory, healthcare economics, technology or financial planning information privately, prior to becoming a Certified Medical Planner® professional.

However, there is a virtual information overload out there, little of which addresses the pragmatic concerns of the modern medical provider or healthcare industry. None imparts the wisdom to become a better financial advisor or medical management consultant. All motivate the purchase of products.

Therefore, as part of the iMBA Research Library for the Certified Medical Planner® program, we highly recommend the following in-house produced books. You may even recognize some of our nationally known contributing authors and CMPs®.

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

TEXT BOOKS AND HAND BOOKS

iMBA Inc offers links to these publications, to members, and non-members, alike:

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ENJOY THEM ALL

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FOMC: Interest Rates Up?

By Staff Reporters

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DEFINITION:

According to Wikipedia, the Federal Open Market Committee (FOMC), a committee within the Federal Reserve System (the Fed), is charged under United States law with overseeing the nation’s open market operations (e.g., the Fed’s buying and selling of United States Treasury securities). This Federal Reserve committee makes key decisions about interest rates and the growth of the United States money supply. Under the terms of the original Federal Reserve Act, each of the Federal Reserve banks was authorized to buy and sell in the open market bonds and short term obligations of the United States Government, bank acceptances, cable transfers, and bills of exchange. Hence, the reserve banks were at times bidding against each other in the open market. In 1922, an informal committee was established to execute purchases and sales. The Banking Act of 1933 formed an official FOMC.

The FOMC is the principal organ of United States national monetary policy. The Committee sets monetary policy by specifying the short-term objective for the Fed’s open market operations, which is usually a target level for the federal funds rate (the rate that commercial banks charge between themselves for overnight loans).

The FOMC also directs operations undertaken by the Federal Reserve System in foreign exchange markets, although any intervention in foreign exchange markets is coordinated with the U.S. Treasury, which has responsibility for formulating U.S. policies regarding the exchange value of the dollar.

The Federal Reserve is set to announce today whether it will impose another interest rate hike, the central bank’s latest move in a months long fight that has eased inflation but risks plunging the U.S. into a recession.

The Fed [FOMC] has put forward a string of borrowing cost increases as it tries to slash price hikes by slowing the economy and choking off demand. The approach, however, risks tipping the U.S. economy into a downturn and putting millions out of work.

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

And so, at a meeting in December 2022, the Fed raised its short-term borrowing rate a half-percentage point, pulling back from three consecutive 0.75% increases and signaling confidence that sky-high inflation could be brought down to normal levels.

Economists expect the Fed to continue softening its approach with a 0.25% rate hike today? The decision comes weeks after a government report showed that inflation slowed in December, marking six consecutive months of easing price increases.

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HEALTHCARE: Top A.I. Companies to Watch!

By Bertalan Mesko MD PhD

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TOP ARTIFICIAL INTELLIGENCE COMPANIES IN HEALTHCARE TO KEEP AN EYE ON 

More and more companies set the purpose to disrupt healthcare with the help of artificial intelligence. Given how fast these companies come and go, it can prove to be hard to stay up-to-date with the most promising ones.

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

So, I collected the most prominent names currently on the market ranging from start-ups to tech giants to keep an eye on in the future.

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Artificial Intelligence Passes U.S. Medical Licensing Exam

ChatGPT

By Staff Reporters

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Two papers show that large language models, including ChatGPT, can pass the USMLE. The papers highlighted different approaches to using large language models to take the USMLE, which is comprised of three exams: Step 1, Step 2 CK, and Step 3. ChatGPT is an artificial intelligence (AI) search tool that mimics long-form writing based on prompts from human users. It was developed by OpenAI, and became popular after several social media posts showed potential uses for the tool in clinical practice, often with mixed results.

According to Victor Tseng, MD, of Ansible Health in Mountain View, California, and colleagues, the results showed “new and surprising evidence” that this AI tool was up to the challenge. Tseng and team noted that ChatGPT was able to perform at >50% accuracy across all of the exams, and even achieved 60% in most of their analyses. While the USMLE passing threshold does vary between years, the authors said that passing is approximately 60% most years.

Source: Michael DePeau-Wilson, Medpage Today [1/19/23]

RELATED: https://medicalexecutivepost.com/2013/06/21/will-future-doctors-need-a-medical-license/

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PODCAST: Hospital Money Problems 2023

INFLATION AND COMPETITION

By Eric Bricker MD

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RECESSION INDICATOR: Inverted Yield Curve?

By Staff Reporters

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When economic trouble and/or uncertainty is brewing, it’s not uncommon for the US Treasury yield curve to flatten or even invert. A yield curve inversion, like we’re experiencing now, involves short-term-maturing bonds sporting higher yields than longer-dated Treasury bonds. It’s an indication that investors are worried about the U.S. economic outlook.

For the past 64 years, the Federal Reserve Bank of New York has used the Treasury yield spread between the 10-year bond rate and three-month bond rate to calculate the probability of a U.S. recession occurring within the next 12 months. Over these 64 years, the probability of a recession has topped 25% a dozen times and 40% on eight occasions. 

With the exception of a peak probability of a recession of 41.14% in October 1966, the New York Fed’s recession-forecasting tool hasn’t been wrong if it’s surpassed 40%. In other words, if the New York Fed’s recession probability indicator surpasses 40%, we’ve had a recession within 12 months, without fail, for more than a half-century.

In December 2022, this recession probability tool hit 47.31%. That’s the highest reading since 1981, and a very clear indication that economic activity is expected to slow at some point in 2023.

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

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HEALTHCARE FRAUD: Predatory Senior Medicare Scams

By Staff Reporters

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As you likely know, the US spends much on healthcare ($4.3 trillion in 2021, to be exact). But did you also know that healthcare fraud makes up a not-so-small piece of that pie?

The National Health Care Anti-Fraud Association (NHCAA), a national organization that works to prevent health insurance fraud, conservatively estimates that 3% of the US’s total annual healthcare spend—a hearty $129 billion—is lost to healthcare fraud. Some government agencies estimate that percentage to be as high as 10% (that’s $430 billion), according to the NHCAA.

Overall, Medicare fraud costs the US about $60 billion each year, Nicole Liebau, national resource center director for Senior Medicare Patrol, a government-funded organization designed to help prevent Medicare fraud, told Healthcare Brew, though she added that “the exact figure is impossible to measure.”

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

While Medicare fraud isn’t new, the US saw a rise in one particular tactic during the pandemic: a durable medical equipment (DME) scheme.

How the schemes work.

In a DME scheme, scammers target Medicare patients—often after a procedure or an injury—and cold-call them to offer free equipment, said Jennifer Stewart, senior associate general counsel and senior director of fraud prevention and investigation at Blue Cross Blue Shield of Massachusetts. The scammers offer consumers items like lidocaine, wheelchairs, walkers, or braces.

The scammers have roped in doctors—who are often unaware they’re working with scammers instead of legitimate medical companies—to sign off on prescriptions that are then used to bill Medicare for the equipment, Stewart said. Sometimes patients actually receive the products, and sometimes they don’t.

“It’s really dangerous because [a prescription like lidocaine] could have reactions with other medications. The durable medical equipment isn’t sized for them, and certainly the doctor who treated their injury didn’t prescribe it […] There is a lot of patient harm involved,” Stewart said. Keep reading here.

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