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INTRODUCING OUR NEXT GENERATION e-BOOK LIBRARYFROM iMBA, Inc.
An e-book is an electronic or digital book that can be read on a computer or a handheld device.
Our new e-books consists of text, images, and are fixed to a specific spot on the page.
And, our e-books are a data files similar in content and structure to a word-processing document that comes in a PDF format. To use our e-books, you need to purchase and download it to a device that has a .pdf file reader app, such as ADOBE® or similar on a smartphone, tablet or computer. A PDF, also known as a portable document format, is the format most people are familiar with and used in our e-books. PDFs are known for their ease of use and ability to hold custom layouts. They are the most commonly used e-Book formats, especially by professionals and adult-learners.
You can then access the e-book and read it, or highlight pages and even take side notes.
e-Books Save Money
With no manufacturing, printing, binding or shipping costs, e-Books are cheaper than traditional hard or paper back books.The price of each specialized and highly niche focused e-Book [50-100 pages] is only $25, whereas similar paperback printed books of this type generally cost $145, or more!
INTRODUCING OUR NEXT GENERATION e-BOOK LIBRARYFROM iMBA, Inc.
An e-book is an electronic or digital book that can be read on a computer or a handheld device.
Our new e-books consists of text, images, and are fixed to a specific spot on the page.
And, our e-books are a data files similar in content and structure to a word-processing document that comes in a PDF format. To use our e-books, you need to purchase and download it to a device that has a .pdf file reader app, such as ADOBE® or similar on a smartphone, tablet or computer. A PDF, also known as a portable document format, is the format most people are familiar with and used in our e-books. PDFs are known for their ease of use and ability to hold custom layouts. They are the most commonly used e-Book formats, especially by professionals and adult-learners.
You can then access the e-book and read it, or highlight pages and even take side notes.
e-Books Save Money
With no manufacturing, printing, binding or shipping costs, e-Books are cheaper than traditional hard or paper back books.The price of each specialized and highly niche focused e-Book [50-100 pages] is only $25, whereas similar paperback printed books of this type generally cost $145, or more!
Written by doctors and healthcare professionals, this textbook should be mandatory reading for all medical school students—highly recommended for both young and veteran physicians—and an eliminating factor for any financial advisor who has not read it. The book uses jargon like ‘innovative,’ ‘transformational,’ and ‘disruptive’—all rightly so! It is the type of definitive financial lifestyle planning book we often seek, but seldom find. —LeRoy Howard MA CMPTM,Candidate and Financial Advisor, Fayetteville, North Carolina I taught diagnostic radiology for over a decade. The physician-focused niche information, balanced perspectives, and insider industry transparency in this book may help save your financial life. —Dr. William P. Scherer MS, Barry University, Ft. Lauderdale, Florida This book was crafted in response to the frustration felt by doctors who dealt with top financial, brokerage, and accounting firms. These non-fiduciary behemoths often prescribed costly wholesale solutions that were applicable to all, but customized for few, despite ever-changing needs. It is a must-read to learn why brokerage sales pitches or Internet resources will never replace the knowledge and deep advice of a physician-focused financial advisor, medical consultant, or collegial Certified Medical Planner™ financial professional. —Parin Khotari MBA,Whitman School of Management, Syracuse University, New York In today’s healthcare environment, in order for providers to survive, they need to understand their current and future market trends, finances, operations, and impact of federal and state regulations. As a healthcare consulting professional for over 30 years supporting both the private and public sector, I recommend that providers understand and utilize the wealth of knowledge that is being conveyed in these chapters. Without this guidance providers will have a hard time navigating the supporting system which may impact their future revenue stream. I strongly endorse the contents of this book.—Carol S. Miller BSN MBA PMP,President, Miller Consulting Group, ACT IAC Executive Committee Vice-Chair at-Large, HIMSS NCA Board Member This is an excellent book on financial planning for physicians and health professionals. It is all inclusive yet very easy to read with much valuable information. And, I have been expanding my business knowledge with all of Dr. Marcinko’s prior books. I highly recommend this one, too. It is a fine educational tool for all doctors.—Dr. David B. Lumsden MD MS MA,Orthopedic Surgeon, Baltimore, Maryland There is no other comprehensive book like it to help doctors, nurses, and other medical providers accumulate and preserve the wealth that their years of education and hard work have earned them. —Dr. Jason Dyken MD MBA,Dyken Wealth Strategies, Gulf Shores, Alabama I plan to give a copy of this book written ‘by doctors and for doctors’ to all my prospects, physician, and nurse clients. It may be the definitive text on this important topic. —Alexander Naruska CPA,Orlando, Florida
Health professionals are small business owners who need to apply their self-discipline tactics in establishing and operating successful practices. Talented trainees are leaving the medical profession because they fail to balance the cost of attendance against a realistic business and financial plan. Principles like budgeting, saving, and living below one’s means, in order to make future investments for future growth, asset protection, and retirement possible are often lacking. This textbook guides the medical professional in his/her financial planning life journey from start to finish. It ranks a place in all medical school libraries and on each of our bookshelves. —Dr. Thomas M. DeLauro DPM,Professor and Chairman – Division of Medical Sciences, New York College of Podiatric Medicine
Physicians are notoriously excellent at diagnosing and treating medical conditions. However, they are also notoriously deficient in managing the business aspects of their medical practices. Most will earn $20-30 million in their medical lifetime, but few know how to create wealth for themselves and their families. This book will help fill the void in physicians’ financial education. I have two recommendations: 1) every physician, young and old, should read this book; and 2) read it a second time! —Dr. Neil Baum MD,Clinical Associate Professor of Urology, Tulane Medical School, New Orleans, Louisiana
I worked with a Certified Medical Planner™ on several occasions in the past, and will do so again in the future. This book codified the vast body of knowledge that helped in all facets of my financial life and professional medical practice. —Dr. James E. Williams DABPS, Foot and Ankle Surgeon, Conyers, Georgia
This is a constantly changing field for rules, regulations, taxes, insurance, compliance, and investments. This book assists readers, and their financial advisors, in keeping up with what’s going on in the healthcare field that all doctors need to know. —Patricia Raskob CFP® EA ATA, Raskob Kambourian Financial Advisors, Tucson, Arizona I particularly enjoyed reading the specific examples in this book which pointed out the perils of risk … something with which I am too familiar and have learned (the hard way) to avoid like the Black Death. It is a pleasure to come across this kind of wisdom, in print, that other colleagues may learn before it’s too late— many, many years down the road. —Dr. Robert S. Park MD, Robert Park and Associates Insurance, Seattle, Washington
Although this book targets physicians, I was pleased to see that it also addressed the financial planning and employment benefit needs of nurses; physical, respiratory, and occupational therapists; CRNAs, hospitalists, and other members of the health care team….highly readable, practical, and understandable. —Nurse Cecelia T. Perez RN, Hospital Operating Room Manager, Ellicott City, Maryland
Personal financial success in the PP-ACA era will be more difficult to achieve than ever before. It requires the next generation of doctors to rethink frugality, delay gratification, and redefine the very definition of success and work–life balance. And, they will surely need the subject matter medical specificity and new-wave professional guidance offered in this book. This book is a ‘must-read’ for all health care professionals, and their financial advisors, who wish to take an active role in creating a new subset of informed and pioneering professionals known as Certified Medical Planners™. —Dr. Mark D. Dollard FACFAS, Private Practice, Tyson Corner, Virginia As healthcare professionals, it is our Hippocratic duty to avoid preventable harm by paying attention. On the other hand, some of us are guilty of being reckless with our own financial health—delaying serious consideration of investments, taxation, retirement income, estate planning, and inheritances until the worry keeps one awake at night. So, if you have avoided planning for the future for far too long, perhaps it is time to take that first step toward preparedness. This in-depth textbook is an excellent starting point—not only because of its readability, but because of his team’s expertise and thoroughness in addressing the intricacies of modern investments—and from the point of view of not only gifted financial experts, but as healthcare providers, as well … a rare combination. —Dr. Darrell K. Pruitt DDS, Private Practice Dentist, Fort Worth, Texas This text should be on the bookshelf of all contemporary physicians. The book is physician-focused with unique topics applicable to all medical professionals. But, it also offers helpful insights into the new tax and estate laws, fiduciary accountability for advisors and insurance agents, with investing, asset protection and risk management, and retirement planning strategies with updates for the brave new world of global payments of the Patient Protection and Affordable Care Act. Starting out by encouraging readers to examine their personal ‘money blueprint’ beliefs and habits, the book is divided into four sections offering holistic life cycle financial information and economic education directed to new, mid-career, and mature physicians.
This structure permits one to dip into the book based on personal need to find relief, rather than to overwhelm. Given the complexity of modern domestic healthcare, and the daunting challenges faced by physicians who try to stay abreast of clinical medicine and the ever-evolving laws of personal finance, this textbook could not have come at a better time. —Dr. Philippa Kennealy MD MPH, The Entrepreneurial MD, Los Angeles, California Physicians have economic concerns unmatched by any other profession, arriving ten years late to the start of their earning years. This textbook goes to the core of how to level the playing field quickly, and efficaciously, by a new breed of dedicated Certified Medical Planners™. With physician-focused financial advice, each chapter is a building block to your financial fortress. —Thomas McKeon, MBA, Pharmaceutical Representative, Philadelphia, Pennsylvania An excellent resource … this textbook is written in a manner that provides physician practice owners with a comprehensive guide to financial planning and related topics for their professional practice in a way that is easily comprehended. The style in which it breaks down the intricacies of the current physician practice landscape makes it a ‘must-read’ for those physicians (and their advisors) practicing in the volatile era of healthcare reform. —Robert James Cimasi, MHA ASA FRICS MCBA CVA CM&AA CMP™, CEO-Health Capital Consultants, LLC, St. Louis, Missouri Rarely can one find a full compendium of information within a single source or text, but this book communicates the new financial realities we are forced to confront; it is full of opportunities for minimizing tax liability and maximizing income potential. We’re recommending it to all our medical practice management clients across the entire healthcare spectrum. —Alan Guinn, The Guinn Consultancy Group, Inc., Cookeville, Tennessee Dr. David Edward Marcinko MBA CMP™ and his team take a seemingly endless stream of disparate concepts and integrate them into a simple, straightforward, and understandable path to success. And, he codifies them all into a step-by-step algorithm to more efficient investing, risk management, taxation, and enhanced retirement planning for doctors and nurses. His text is a vital read—and must execute—book for all healthcare professionals and physician-focused financial advisors. —Dr. O. Kent Mercado, JD, Private Practitioner and Attorney, Naperville, Illinois
Kudos. The editors and contributing authors have compiled the most comprehensive reference book for the medical community that has ever been attempted. As you review the chapters of interest and hone in on the most important concerns you may have, realize that the best minds have been harvested for you to plan well… Live well. —Martha J. Schilling; AAMS® CRPC® ETSC CSA, Shilling Group Advisors, LLC, Philadelphia, Pennsylvania I recommend this book to any physician or medical professional that desires an honest no-sales approach to understanding the financial planning and investing world. It is worthwhile to any financial advisor interested in this space, as well. —David K. Luke, MIM MS-PFP CMP™, Net Worth Advisory Group, Sandy, Utah Although not a substitute for a formal business education, this book will help physicians navigate effectively through the hurdles of day-to-day financial decisions with the help of an accountant, financial and legal advisor. I highly recommend it and commend Dr. Marcinko and the Institute of Medical Business Advisors, Inc. on a job well done. —Ken Yeung MBA CMP™, Tseung Kwan O Hospital, Hong Kong I’ve seen many ghost-written handbooks, paperbacks, and vanity-published manuals on this topic throughout my career in mental healthcare. Most were poorly written, opinionated, and cheaply produced self-aggrandizing marketing drivel for those agents selling commission-based financial products and expensive advisory services. So, I was pleasantly surprised with this comprehensive peer-reviewed academic textbook, complete with citations, case examples, and real-life integrated strategies by and for medical professionals. Although a bit late for my career, I recommend it highly to all my younger colleagues … It’s credibility and specificity stand alone. —Dr. Clarice Montgomery PhD MA,Retired Clinical Psychologist In an industry known for one-size-fits-all templates and massively customized books, products, advice, and services, the extreme healthcare specificity of this text is both refreshing and comprehensive. —Dr. James Joseph Bartley, Columbus, Georgia
My brother was my office administrator and accountant. We both feel this is the most comprehensive textbook available on financial planning for healthcare providers. —Dr. Anthony Robert Naruska DC,Winter Park, Florida
In this episode we are joined by Dr. Brent Jackson, Chief Medical Officer for Mercy General in Sacramento, CA to discuss the physician life-cycle, burnout, and transitioning into leadership within healthcare.
Entrepreneurs, their Styles and the Drive Behind Them!
[By staff reporters]
It goes without saying that it takes a special kind of person to become a doctor, and an entrepreneur.
Driven, motivated, innovative – these are just a few of the many ways to describe individuals who risk everything to transform their vision into reality; or to save lives.
We created this infographic to celebrate the entrepreneur, not only for their individual, quirky styles, but also for their contributions to the global economy.
Are medical professionals the same or different today -OR- in the health 2.0 future?
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:
Several potential benefits are associated with the integration of companies in the same or related industries. These synergistic benefits depend upon the type of companies and their integration strategies, as well as whether the anticipated transaction is a manifestation of horizontal consolidation or vertical integration.
Horizontal consolidation is “the acquisition and consolidation of like organizations or business ventures under a single corporate management, in order to produce synergy, reduce redundancies and duplication of efforts or products, and achieve economies of scale while increasing market share.”
Vertical integration involves the joining of organizations that are fundamentally different in their product and/or services offerings, i.e., “the aggregation of dissimilar but related business units, companies, or organizations under a single ownership or management in order to provide a full range of related products and services.”
Healthcare Locality
As healthcare is essentially a local business, horizontal integration within the local market has been limited by antitrust laws. Therefore, in order to control greater market share, a hospital’s strategy has required vertical integration. Healthcare providers and organizations have placed much emphasis on the benefits of vertical system integration in the last 10 or more years, whereby a single healthcare organization owns all of the elements needed to provide a continuum of care for all the needs of a given patient population. Much of this effect has stemmed from the desire to be able provide a “continuum of care,” i.e., to be able to single source contract for the healthcare needs of a patient population and to profit from implementing preventative healthcare and utilization management measures. The relative economic benefits of this type of vertical integration versus horizontal integration strategies remain the subject of great debate in academia and among the strategic managers of other industries. One lesson that may be drawn from other industries is that neither of these forms of integration is universally applicable or beneficial to every organization and market. There are also great costs to integration, which must be outweighed by the benefits. Each specific benefit should be identified and researched when examining the probable effects of integration, consolidation, mergers or divestitures as a competitive strategy.
Rapid Consolidation Periods
During the rapid consolidation and integration of healthcare providers, insurers, and purchasers, in recent years, there was much discussion of a concept termed “managed competition.” This term appears to have been an outgrowth of the term “managed care” and was viewed by many as the logical result of the integration of healthcare markets nationally. The concept of “managed competition” apparently related to an idealized vision of competition between very large, integrated providers (organized into integrated delivery systems), large, national managed care payors, and purchasing group coalitions that could achieve a balance of power between these interacting groups. However, many believe that the result of such an arrangement would more likely be a reduction in competition between members of each of these three groups and the creation of powerful bureaucratic and intractable organizations. Further, this scenario does not appear to effectively remove any of the existing barriers to competition and therefore doesn’t introduce any additional incentives for innovation to produce value for consumers which, of course, is the “sine qua non” of competition.
Disadvantages
The disadvantages of integration are becoming apparent, including:
the loss of autonomy;
increased bureaucracy;
difficulty in aligning incentives; and
other failed expectations.
Many organizations that sought strategic advantage through integration are ending those arrangements and now divesting acquired organizations.
Other Industries
In other industries, specialized providers of goods and services are increasingly able to offer customers a full range of services through affiliation and affinity with other independent specialists, made more seamless through the use of increasingly sophisticated communications and computing technologies. However, this move to “dis-integration” must also be carefully considered if organizations are not to make further costly organizational changes inspired by a rushed judgment of general market trends.
Porter Speaks
Michael Porter (et al.) wrote in the Harvard Business Review that,
In industry after industry, the underlying dynamic is the same: competition compels companies to deliver increasing value to customers. The fundamental driver of this continuous quality improvement and cost reduction is innovation. Without incentives to sustain innovation in health care, short-term cost savings will soon be overwhelmed by the desire to widen access, the growing health needs of an aging population, and the unwillingness of Americans to settle for anything less than the best treatments available. Inevitably, the failure to promote innovation will lead to lower quality or more rationing of care — two equally undesirable results.
Assessment
Therefore, if the emerging healthcare industry is to respond successfully to the Affordable Care Act [ACA] and related market pressures to reduce costs, then the healthcare market must first create incentives for innovation. The barriers to competition cannot include barriers to innovation as many do now. Physicians, nurses, healthcare purchasers, managers, and legislators must ensure innovation takes the forefront of any reform, if it is to be effective.
Conclusion
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
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Many times, individuals will use the terms management and leadership synonymously. In actuality the terms have significantly different meanings.
For example, Warren Bennis describes the difference between managers and leaders as “Managers do things right, Leaders the right thing.”
Managers are those individuals who have as their primary function managing a team of people and their activities. In effect, managers are those who have been given their authority by the nature of their role and ensure that the work gets done by focusing on day to day tasks and their activities.
On other hand, a leader’s approach is generally innate in its approach. Good leadership skills are difficult to learn because they are far more behavioral in nature than those skills needed for management. Leaders are also very focused on change recognizing that continual improvement can be achieved in their people and their activities can be a great step towards continued success.
Training Camps
Perhaps some of the best training grounds for the development of leaders are the military. The Marine Corps slogan is “A Few Good Men” and the military academies at Annapolis (Navy), New London, Connecticut (Coast Guard), Colorado Springs (Air Force), and West Point (Army) all have as their main mission, the development of leaders.
This is done by a number of different techniques. At graduation, the new officers, regardless of the branch of service, have been taught, and more importantly, have internalized the following: communicate the missions, sensitivity matters, real respect is earned, trust and challenge your soldiers. It is due to these lessons that many graduates of the military academies go on to positions of leadership in the private sector as well as in government. Communicating the mission refers to conveying to those who work with us what are practice is hoping to accomplish and the role of each employee in achieving that goal. Given an understanding and awareness of the mission, when confronted with a barrier, employees are able to face hard problems when there is no well-defined approach by which to deal with them.
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Sensitivity Does Matter
This is my area to improve; as I can be glib on occasion.
A leader treats each employee with respect and dignity, regardless of race, gender, cultural background or particular role they actually perform in the practice. Consider how many legal suits are filed against any type of organization, whether it is a medical practice or a large manufacturing facility due to perceived disparate treatment towards the employee based on race, religion, gender sexual preference or other non-work related issues.
Real respect is earned – Having initials after one’s name and the wearing of a lab coat does not automatically entitle an individual to respect. Formal authority has been found to be one of the least effective forms of influence. Only by earning the respect of your staff as well as your patients can you be sure that your intent will be carried out when you are not present. Setting the example in performance and conduct, rather than ‘do as I say, not as I do,” level of activity enables one to exert influence far greater than titles.
Trust and challenge your employees – How many times have practices sought to hire the best and brightest only to second guess the employee. Eric Schmidt, the CEO of Google, describes his management philosophy as having “… an employee base in which everybody is doing exactly what they want every day.” Obviously there are certain policies and procedures, but at the same time, the leader enables decision making to the lowest possible level. This also enables employees to question why certain policies and procedures are still being followed when more effective and efficient methods are available. (How the Army Prepared Me to Work at Google, Doug Raymond, Harvard Business)
The phrase “Physician, heal thyself” (Luke 4:23, King James Version) means that we have to attend to our own faults, in preference to pointing out the faults of others. The phrase alludes to the readiness of physicians to heal sickness in others while sometimes not being able or will to heal themselves.
By the same token, it now is necessary for us to learn how to manage ourselves. It suggests that physicians, while often being able to help the sick, cannot always do so, and when sick themselves are no better placed than anyone else (Gary Martin, phrases.org.uk/meanings/281850.html, 2010).
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Self-Development
“We will have to learn how to develop ourselves. We will have to place ourselves outside the boundaries where we can make the greatest contribution. And we will have to stay mentally alert and engaged during a 50-year working life, which means knowing how and when to change the work we do” (Managing Oneself, Harvard Business Review – Jan. 2005 – pp 100-109, by Peter Drucker).
Although one’s IQ and certain personality characteristics are more or less innate and appear to remain stable over time there are individual capabilities that enable leadership and can be developed. Enhancement of these capabilities can lead to the individual being able to carry out the leadership tasks of setting direction, gaining commitment, and creating alignment. These capabilities include self-management capabilities, social capabilities and work facilitation capabilities.
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Assessment
Without question, while it is possible to cram for at test and graduate at the top of one’s class, that does not assure leadership ability. We all know at least one person who scores at the highest levels on cognitive measures but would be incapable of pouring liquid out of a boot if the instructions were written on the heel.
So, here is my philosophy:
Leadership: By example and thru transparency with collaboration [Do the right thing]
Management: By walking-around thru tangible / intangible metrics [Doing things right].
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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
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The Eisenhower Matrix is a business management and strategic planning productivity tool that helps to sort tasks and spread them reasonably over time.
The sort out is based on the principals of urgency and importance. When assigned to each task, those two factors place the task to the relevant quadrant of the matrix.
After this routine is done, it’s enough to take a look at the matrix to visually estimate what you should start with.
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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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All about the Medical Executive-PostBusiness Model
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One of the questions we receive most often from readers of the Medical Executive-Post is how can we “afford” to give away so much content for free. Or stated another way, “how do we get paid for all of this?”
The simple answer is that we know many (or even most) of you will simply take the ideas that we share and implement them yourself. Do-It-YourSelfers can always simply purchase our texts, books and peer reviewed handbooks redacted in more than a thousand, medical, law, business and graduate schools, as well as the Library of Congress,Institute of Health and Library of Congress.
On the other hand, some of you will realize you need some additional help.
For example:
Maybe as a financial advisor you’re “stuck” in your financial planning business and recognize that some outside assistance is necessary to help you get to the next level of niche specificity thru our Certified Medical Planner™ chartered certification program designation. Helping physicians of all specialty types in a fiduciary focused manner is the proverbial Win-Win for all concerned.
OR, perhaps you are seeking a glossary of terms and definitions in heath economics, finance, accounting, insurance, managed care, health information technology and security; found in our Health Dictionary Series Wiki Project? Free and print versions are available.
OR, as a doctor maybe your medical practice is growing so much you just hit a wall where you don’t have time to do it all for your patients. After all, with only “so much” time available every day and week, it’s vital to delegate or outsource anything that isn’t really core to your practice and management skill set.
OR, maybe you are even starting, buying or selling your medical practice and need our financial and valuation services. Part (1) – Part (2) – Part (3) Financial, estate, investing and retirement planning services are also available.
OR, you may just need a second informed opinion about a topic not listed; there are a myriad of issues to consider in the competitive ecosystem today.
So, in the meantime, I hope that the ME-P content continues to be helpful food for thought, and perhaps we’ll have an opportunity to cross paths soon at a future conferences or podcasts. Feel free to invite us to speak at your own seminar/podcast online V-log, as well.
Colleagues know that I enjoy personal coaching and public speaking and give as many talks each year as possible, at a variety of medical society and financial services conferences around the country and world. All in a Corona safe environment.
MARCINKO in the METAVERSE
These include lectures and visiting professorships at major academic centers, keynote lectures for hospitals, economic seminars and health systems, end-note lectures at city and statewide financial coalitions, and annual lectures for a variety of internal yearly meetings.
CVS expects to finalize its $8 billion acquisition of Signify Health this week, the retail pharmacy giant said yesterday. CVS beat out both Amazon and UnitedHealth Group to buy Signify, a value-based provider network. The company announced the deal last September, and executives said they expect it to close “on or around March 29th.”
In a phone call following the deal announcement, Shawn Guertin, EVP and CFO at CVS, said the company anticipates that acquiring Signify will “generate attractive returns” for CVS. The acquisition strengthens CVS’s goal of becoming a value-based healthcare company and could give it a leg up over rival Walgreens. Both companies have doubled down on value-based care in the last couple of years, making several multi-billion dollar deals, such as Walgreens’s $5.2 billion VillageMD acquisition in 2021 and CVS’s $10.6 billion takeover of Oak Street Health.
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The U.S. Food and Drug Administration has approved NARCAN, an overdose-reversing nasal spray, for over-the-counter, non-prescription sale, the agency just announced. The FDA green light marks the first naloxone product approved for use without a prescription. Naloxone rapidly reverses the effects of an opioid overdose, including situations where fentanyl is involved. In the 12-month period ending in October 2022, the United States recorded 101,750 overdose deaths, primarily from opioids including fentanyl, according to the FDA.
“Today’s action paves the way for the life-saving medication to reverse an opioid overdose to be sold directly to consumers in places like drug stores, convenience stores, grocery stores and gas stations, as well as online,” the agency said in a news release.
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Here’s how the major indexes performedyesterday:
The S&P 500® Index rose roughly 57 points (1.42%) to 4027.83; the Dow Jones industrial average was up 323 points (1.0%) at 32717.73; the NASDAQ Composite was up 210 points (1.79%) at 11926.24.
The 10-year Treasury yield was little changed at 3.575%.
CBOEs Volatility Index was down 80 basis points (4.01%) at 19.17.
There is no way to eliminate all the risks associated with starting a medical practice, or launching any innovative concept in the health 2.0 ecosystem. However, entrepreneurial focused doctors can improve their chance of success with good planning and preparation. So, prior to starting your practice, merging, franchising or purchasing an existing one, ask yourself the following sobering questions. Hopefully, such reflection will enhance success, or at least prevent an unmitigated catastrophe. (www.sba.gov)
The Questions to Consider
1. Is medical practice ownership and physician entrepreneurship right for you?
It will be up to you, and your consultants; not someone else telling you to develop projects, organize your time or follow through on details. Your must be self motivated.
2. Do you like people and get along with different personality types?
Practice owners need to develop working relationships with a variety of people including patients, customers, vendors, staff, other physicians, and professionals like lawyers, accountants, consultants and bankers. Can you deal with a demanding patient, an unreliable vendor or cranky staff person in the best interest of your practice?
3. Can you make decisions and leave with ambiguity?
Practice owners are required to make independent decisions constantly; often quickly, under pressure and without all the facts. Ambiguity is a constant.
4. Do you have the physical and emotional stamina?
Practice ownership can be challenging, fun and exciting. But it’s also a lot of work. As a physician-owner, can you face twelve hour work days? As a doctor, can you offer advice, service, care and moral support 24/7?
5. How long can you live on your current savings?
Most small medical practice startups induce a declining bank balance in the early going. So, it’s wise to look at your expenses and determine how long you can live on your savings, and what personal costs you can temporarily eliminate. Emotionally, it’s easier to tighten expenses when you’re contemplating a new practice, than it is to cut back after you’ve started. Financial consultants and accountants that perform consolidated financial statement preparation and analysis are vital in this regard. A two to five year margin of safety is not unusual and may be needed
6. How deeply in debt can you go?
Medical practice business debt can be good. It can fund expansion, improve profit ratios and cash flow. For physician entrepreneurs, business debt is often personal debt. Many start a practice by deferring payments for their own labor. Although lenders may make loans to a practice, the physician-owner will often be required to personally guarantee the loan. So, although the debt is on the business’s books, is ultimately the doctors’ debt should the practice fail.
7. What about health insurance?
If your current residency, fellowship or job offers health insurance, and is subject to the Consolidated Omnibus Budget Reconciliation Act (COBRA), you might be able to keep your coverage by paying the premiums, plus another 2% for administrative costs. You may keep your coverage under COBRA for up to 18 months and is a useful stopgap. For example, pay the premiums for six months or until another health insurance plan is obtained. Others suggestions are working spouse coverage with family benefits, or an HMO; or Medical or Health Savings Account (HSA/MSA).
8. Can you line up credit in advance?
Some new practice owners may set up a home equity line of credit that will let them borrow money at 1-2 percentage points over the prime rate or less. Lenders are more willing to make loans to someone who has a steady paycheck than to a new practice entrepreneur. If you have an excellent credit rating, you can probably get a home equity or other secured loan, but with more paperwork than in the recent past. Once you’re a self-employed practice owner, you’ll probably have to provide your most recent tax returns before getting approval. But, today, the biggest obstacle to a practice loan is a home mortgage. Domestic credit has been very tight since 2007, even for physicians.
9. What if you can’t manage the practice?
Disability insurance, unlike health insurance, usually cannot be transferred to an individual policy when you leave your job to start a new venture. So, get your own disability policy while you are still employed. Once you have the policy established and are paying the premiums, you should be able to keep the policy when you go out on your own. Remember, benefits received on a policy paid by you are free of federal income tax. Benefits on a policy paid for by a previous employer were taxable.
10. How well do you plan and organize?
Research indicates that many medical practice failures could have been avoided through better planning. Good organization of financials, inventory, schedules, information technology, medical services and human resources can help avoid many pitfalls.
11. Is your determination and drive strong enough to maintain your motivation?
Running a practice can wear you down. Some doctor-owners feel burned out by having to carry all the responsibility on their shoulders. Strong motivation can make the practice succeed and will help you survive slowdowns as well as periods of burnout.
12. How will the practice affect your family?
The first few years of practice startup can be hard on family life. The strain of an unsupportive spouse may be hard to balance against the demands of starting a medical business. There also may be financial difficulties until the business becomes profitable, which could take years. You may have to adjust to a lower standard of living or put family assets at risk.
13. How do you feel about the Patient Protection and Affordable Care Act of 2010?
Most provisions of the PPACA take effect over the next four to eight years, including expanding Medicaid eligibility, subsidizing insurance premiums, providing incentives for businesses to provide health care benefits, prohibiting denial of coverage/claims based on pre-existing conditions, establishing health insurance exchanges, and support for medical research. The expense of these provisions are offset by a variety of taxes, fees, and cost-saving measures, such as new Medicare taxes for high-income brackets, cuts to the Medicare Advantage program in favor of traditional Medicare, and fees on medical devices and pharmaceutical companies. There is also a tax penalty for citizens who do not obtain health insurance. Decreased physician reimbursement is a component, as well.
Are you a medical innovator or healthcare entrepreneur? I am available for queries – thanks again for your interest.
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Malpractice Allegations Alter Practice Patterns of Emergency Department Doctors
QUERY: When physicians are accused of malpractice, how does this experience affect their practice of medicine?
Researchers Caitlin Carroll, David M. Cutler and Anupam Jena use administrative data on all emergency medicine physicians in Florida to answer this question in How Do Physicians Respond to Malpractice Allegations? Evidence from Florida Emergency Departments (NBER Working Paper 28330).
The undersigned acknowledges that Hamilton Family Clinic (HFC) has furnished to the undersigned potential Investor (“Investor”) certain proprietary data (“Confidential Information”) relating to the business affairs and operations of Hamilton Family Clinic (HFC) for study and evaluation by Investor for possibly investing in Hamilton Family Clinic (HFC).
It is acknowledged by Investor that the information provided by Hamilton Family Clinic (HFC) is confidential; therefore, Investor agrees not to disclose it and not to disclose that any discussions or contracts with Hamilton Family Clinic (HFC) have occurred or are intended, other than as provided for in the following paragraph.
It is acknowledged by Investor that information to be furnished is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by Investor, except as provided in this agreement, may cause serious harm or damage to Hamilton Family Clinic (HFC), and its owners and officers.
Therefore, Investor agrees that Investor will not use the information furnished for any purpose other than as stated above, and agrees that Investor will not either directly or indirectly by agent, employee, or representative, disclose this information, either in whole or in part, to any third party; provided, however that (a) information furnished may be disclosed only to those directors, officers and employees of Investor and to Investor’s advisors or their representatives who need such information for the purpose of evaluating any possible transaction (it being understood that those directors, officers, employees, advisors and representatives shall be informed by Investor of the confidential nature of such information and shall be directed by Investor to treat such information confidentially), and (b) any disclosure of information may be made to which Hamilton Family Clinic (HFC) consents in writing. At the close of negotiations, Investor will return to Hamilton Family Clinic (HFC) all records, reports, documents, and memoranda furnished and will not make or retain any copy thereof.
No intent to practice law; sample customizable template only. Always consult an attorney or competent consultant familiar with your individual circumstances before use.
Conclusion
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Managed Care Organizations (MCOs) that accept capitated risk contracts face a potentially significant tax burden for Incurred but Not Reported (IBNR) claims. It is not uncommon that IBNR claims at the end of a reporting period equal one to two months premiums for MCOs under a fee-for-service model. The Internal Revenue Service (IRS) has taken a very strong position relative to the deductibility of these claims by saying that an MCO cannot deduct such losses if they are based on estimates.
Incurred But Not Reported [IBNR]Claims
IBNR is a term that refers to the costs associated with a medical service that has been provided, but for which the carrier has not yet received a claim. The carrier to account for estimated liability based on studies of prior lags in claim submission records IBNR reserves. In capitated contracts, MCOs are responsible for IBNR claims of their enrollees (Kennedy, 1).
For example, if an enrollee is treated in an emergency room, a plan may not know it is liable for this care for at least 30-60 days. Well-run plans devote considerable attention to accurately estimating such claims because a plan can look healthy based on claims submitted and be financially unhealthy if IBNR claims experience is increasing substantially but is unknown.
Why a Problem for HMO’s/MCOs
Section 809(d)(1) of the Code provides that, for purposes of determining the gain and loss from operations, a insurance company shall be allowed a deduction for all claims and benefits accrued, and all losses incurred (whether or not ascertained), during the taxable year on insurance and annuity contracts. Section 1.809-5(a) (1) of the Income Tax Regulations provides that the term “losses incurred (whether or not ascertained)” includes a reasonable estimate of the amount of the losses (based upon the facts in each case and the company’s experiences with similar cases) incurred but not reported by the end of the taxable year as well as losses reported but where the amount thereof cannot be ascertained by the end of the year. By taking into account for its prior years only the reported losses but not the unreported losses, the taxpayer has established a consistent pattern of treating a material item as a deduction. The effect of the taxpayer’s claim for the first time of a deduction for an estimate of losses incurred but unreported under section 809(d)(1) of the Code, was to change the timing for taking the deduction for the incurred but unreported losses.
Due to the taxpayer consistently deducting losses incurred in the taxable year in which reported, a change in the time for deducting losses incurred under section 809(d)(1) is a change in the method of accounting for such losses to which the provisions of section 446(e) apply (IRS, 14-30).
In order to qualify for an insurance company under the current IRS regulations, the MCO must have the following criteria (Kongstvedt, 235-256):
· At least 50% of the MCO must come from insurance related activities.
· The MCO must have an insurance company license.
If an MCO did not have these two criteria, the IRS will not deem the manage care company as an eligible insurance company. Therefore, the MCO would not be able to file for IBNRs with the IRS.
How MCOs/HMOs Intensify IBRN Claims
There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims. The only reason the IRS would not allow an MCO to deduct IBNR because the financial statements is based on an estimate (IRS, 134-155).
Except through the insurance company exclusion IRS does not allow any taxpayer to deduct losses based on estimates. There has been some precedence set that the IRS will accept an amount for incurred but not reported claims if the amount is supported by valid receipts of claims that the company has in-house prior to the filing of the tax return.
There has been some controversy as to how long of a period of reporting time the IRS will allow you to include in those estimates. There are ranges from 3-6 months to file a claim (IRS, 137). The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including the business’ experience with similar cases and historical trends involving claim payment patterns, claim payments, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions and public attitudes.
There has been no clear indication from the IRS that it will accept an accrual for these losses and entities. Therefore, companies deducting such losses may eventually find themselves in a position where the IRS may challenge the relating deductibility of those losses.
Evaluating IBNRs from a New Present Value Perspective
The best measure of whether or not a stream of future cash flows actually adds value to the organization is the net present value (NPV). The best decision rule for NPV to accept or reject a decision problem is if the NPV is greater than zero, the project adds value to the organization. Although – if the NPV is exactly zero it neither adds nor subtracts value from the organization (McLean 193). In either case, the project is acceptable. In addition, if the NPV is less than zero, the project subtracts value from the organization and should not be undertaken (McLean, 193).
The provision for unpaid claims represents an estimate of the total cost of outstanding claims to the year-end date. Included in the estimate are reported claims, claims incurred but not reported and an estimate of adjustment expenses to be incurred on these claims. The losses are necessarily subject to uncertainty and are selected from a range of possible outcomes (Veal, 11). During the life of the claim, adjustments to the losses are made as additional information becomes available. The change in outstanding losses plus paid losses is reported as claims incurred in the current period.
All but the smallest organizations have predictable and unpredictable losses. It is important mentally to separate the two since predictable losses are not risks but normal business expenses. Risk is the degree to which losses vary from the expected. If losses average $85,000 per year but could be as much as $20 million, the risk is $20 million minus $85,000. The $85,000 figure represents reasonably predictable losses (Veal, 12).
IBNR Challenges and Solutions
While I was unable to find an actual amount of the cost of the penalties that can be incurred, the IRS is able to impose penalty fees under Section 4958 of the IRS code (IRS, 255). While penalties differ depending on individual bases, MCOs will be penalizing for any misconduct either by IRS Codes or Court Jurisdiction.
It is prudent that MCOs ensure their organization that they will not incur a financial “meltdown”. They further need to ensure IBNR is funded for period of at least 2-3 months. In some states, the state laws make the MCO financially responsible to pay the providers for a second time if the intermediary fails to pay or becomes insolvent (Cagle, 1).
Paid losses, paid expenses and net premiums are usually deductible; reserves for incurred-but-unpaid losses generally are not, unless the taxpaying entity is an insurance company. Consequently, if a corporation has a high effective tax rate and concedes that it cannot deduct self-insured loss reserves, some of its more cost-effective options may be a paid-loss retro (if state rules are not too restrictive), a compensating balance plan, or the formation of a pool or industry captive. Even these plans may be subject to IRS challenge. To qualify as a tax-deductible expense, a premium or other payment must satisfy two criteria (Cagle, 2):
There must be transfer of risk: an insurance risk. This differs from investment risk, but there is no authoritative definition of “risk transfer” other than various court decisions (primarily Helvering v. Le Gierse, 312 US 531 — U.S. Supreme Court 1941).
There must be both risk shifting and risk distribution. “Risk shifting” means that one party shifts the risk of loss to another, generally not in the same corporate family. “Risk distribution” means that the party assuming the risk distributes the potential liability, in part, among others.
The deductibility of an insurance expense may also be questioned if it is contingent upon a future happening, such as a loss payment, right to a dividend or other credit, or possible forgiveness of future loans or notes (Cagle, 3). This may seem a broad statement, but the Cost Accounting Standards Board states in its Standards for Accounting for Insurance Expense that any expense which is recoverable if there are no losses shall be accounted as a deposit, not an expense. This is essentially the IRS position (IRS, 145).
Assessment
While there are a few solutions to this matter, the IRS is making sure that MCOs will be penalized if MCOs improperly handle IBNRs. It is also important for organizations to understand the MCO’s policies regarding IBNR reserves and their contractual obligations. And, while the IRS has set limitations for MCOs to file their IBNR claims, MCOs have the major responsibility of allocating these IBNR claims appropriately. There are severe penalties for not properly filing the IBNR claims appropriately. However, there is several tax saving strategies to help MCOs properly file their IBNR claims with the IRS. It imperative that MCO executives and accounting manager consult an expert to properly plan an ethical strategy that will help them build a stable business that is trustworthy and reliable.
Bibliography
1. Cagle, Jason, Esq., Interview, June 8, 2004, interview performed by Ana Vassallo.
2. McLean, Robert A., Net Profit Value, Pages 193-194, 2nd Edition, Thomson/Delmar Learning, Financial Management in Heath Care Organization, 2003.
3. Patient-Physician Network, Managed Care Glossary, Printed 6/11/04 http:/www.drppg.com/managed_care.asp.
6. Kongstvedt, Peter R., Managed Care – What It Is and How it Works, Pages 235-256, Jones and Bartlett Publishers, 2003.
7. Veale, Tom, The Return of Captives in the Hard Market, Tristar Risk Management Aug. 22, 2002, San Diego RIMS.
Conclusion
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Getting a new medical practice or healthcare business up and running sometimes means investing large sums of money, and when physician entrepreneurs don’t have the cash to make their visions reality, many turn to venture capitalists.
Here is a look at where these deals are being approved, and which industries are commanding the highest investments. Brought to you by focus.com in collaboration with Column Five
Conclusion
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One of the most iconic symbols of the COVID economy was the epic backlog of container ships waiting to dock at the ports of Los Angeles and Long Beach. At one point this year, that backup was longer than the line at Trader Joe’s on a Saturday, stretching 109 ships deep and almost 60 miles from the coast.
But now, the shipping situation is almost back to normal. As of last week, the number of ships waiting to drop off their goods stood at just four, according to the WSJ. Plus, the cost of sending a 40-foot container from Shanghai to LA has plummeted from its peak of more than $12,000 to almost $2,000, nearing its pre-COVID average.
The fact that goods are once again flowing smoothly through US ports is a hopeful sign that inflation, which was instigated in part by supply chain snarls, could start to abate.
By: Christian Hernandez MBA – Apple Health Care Services
Richard Melnyck MBA MS
Mark Friedman PhD Department of Accounting
Howard Gitlow PhD Department of Management Science University Miami
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BACKGROUND
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Homecare has long been one the most cost-effective methods of treating patients. Yet today, homecare providers face significant challenges: reimbursement cuts, mandatory accreditation, and influencing policy changes. So, how can homecare managers efficiently sustain a cutting edge, consistent and quality focused practice amidst this changing landscape?
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It is time the homecare industry tap into the high-tech tools and proven management theories that together make up “Six sigma” management. This article will provide a solid point of reference for managers interested in adopting “Six Sigma” management. In today’s stiff economic climate, organizations are once again turning to “Six Sigma”strategies as a means to reduce their bottom lines.
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However, its cost cutting aspect is technically more of a by product than the core of its theory. “Six Sigma” management is practiced in many organizations across all sectors of the global economy. Companies such as drug giant Merck, Cadbury, and Dunkin’ Brands are increasingly turning to Six Sigma to lift their bottom lines.
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The term “Lean Management” is an old buzz word that still excites managers. Lean Management stems from the term Lean Manufacturing, which was a derivative of Total Quality Management (TQM) —considered one of the earlier versions of “Six Sigma”.
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Over the years, “Six Sigma” has evolved from a ground-breaking management system to one of the most proven methods for instituting change, reducing errors and eliminating inefficiencies. These management utilities run through the entire spectrum of organizational applications, from confronting the serious issues mentioned above to routine business functions.
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The resurgence of Japan’s economy in the 70’s and 80’s is largely attributed to TQM. “In the auto industry, manufacturers such as Toyota and Honda became major players. In the consumer goods market, companies such as Toshiba and Sony led the way. These foreign competitors were producing lower-priced products with considerably higher quality.”
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As some MedicalExecutive-Post readers and subscribers are aware, hospitals that filed bankruptcy recently include: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, and four hospital system Hospital Partners of America, in Charlotte.
One can only wonder about the impact of Incurred But Not Reported claims on their plight?
IBNR Definition
According to the www.CertifiedMedicalPlanner.org, an IBNR claim is a concept that signifies healthcare services have been rendered but not invoiced or recorded by the healthcare provider, clinic, hospital, or organization.
Cause and Affect
IBNRs are usually the result of a commercial prospective payment risk contract between managed care organizations and healthcare providers, an IBNR claim refers to the estimated cost of medical services for which a claim has not been filed, or monitored by an IBNR collection systems or control sheet.
IBNR Types
More formally, IBNRs are a financial accounting of all services that have been performed but, as a result of a short period of time or “lag,” have not been invoiced or recorded. The medical services that will not be collected should be accounted for using the following accrued but not recorded (ABNR) entry:
Debit — accrued payments to medical providers or healthcare entity
Credit — IBNR accrual account
Example:
An example of an IBNR is hospital Coronary Artery Bypass Graft [CABG] surgery for a managed care plan member. Out of the capitated or prospective payment funds, the surgeon and/or healthcare organization has to pay for all related physical and respirator therapy, and rehabilitation services, as well as ancillary providers, drugs, and durable medical equipment [DME], as contractually obligated. This may also include complication diagnosis and extensive follow-up treatment.
Accordingly, the health plan will not be completely billed until several weeks, months, or quarters later or even further downstream in the reporting year after the patient is discharged. In order to accurately project the health plan’s financial liability, however, the health plan and hospital must estimate the cost of care based on past expenses.
Accounting Cost Controls
Since the identification and control of costs are paramount in financial healthcare management, an IBNR reserve fund (an interest bearing account) must be set up for claims that reflect services already delivered but, for whatever reason, not yet reimbursed.
From the accounting perspective, IBNR is accrued as an expense and is related as a short-term liability each fiscal month or accounting period.
Otherwise, the organization may not be able to pay the claim, if the associated revenue has already been spent. The proper handling of these “bills in the pipeline” is crucial for proactive providers and health organizations that are exploring arrangements that put them in the role of adjudicating claims or operating in a sub-capitated system.
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Assessment
IBNRs are especially important with newer patients who may be sicker than prior norms.
Recoverables that hospitals post as part of their large reserve charges are also, in many cases, IBNR losses. They may be recorded as IBNR claims on their balance sheets. Once these losses start becoming actual losses, the hospital may look to the insurer to pay a part of the claim. This causes disputes between the payor, provider, and/or healthcare organization.
Conclusion
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Confidence in the caliber of the American health system has never been lower
A GALLUP POLL
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ANNUAL GALLUP HEALTHCARE QUALITY REPORT
More than one in five adults (21%) living in the US now rate the country’s healthcare as “poor” quality—a record high, according to Gallup’s annual health and healthcare poll.
Less than half of all respondents (48%) surveyed in 2022 said they’d rank the quality of healthcare in the US as “excellent/good”—a new low since Gallup began tracking the issue in 2001. (That’s down from 50% in 2021 and a record high of 62% in 2010 and 2012.) About a third (31%), meanwhile, said they’d rate the quality of US healthcare as “only fair,” a slight drop from 35% in 2021.
Gallup partially attributed the drop in perceived quality to politics, noting that “Republicans’ positive ratings have been subdued since President Donald Trump left office.” Other likely factors, the organization offered, could be “changes to healthcare that have taken place amid the Covid-19 pandemic or curtailed access to abortion since the Supreme Court’s Dobbs decision.”
Survey Reports:
Respondents reported a rosier take on the care they personally receive. Over 70% rated it as “excellent/good” compared to 6% who rated it as “poor.” But that high “excellent/good” mark is still down from 76% in 2021 and 82% in 2020.
Costs remained a point of contention in 2022. Less than a quarter (24%) of respondents said they were “satisfied” with the total cost of healthcare in the US, and this proportion is on par with rates from the past two decades. But only 56% of those surveyed reported being satisfied with the total cost they pay for care—the lowest level since 2016.
One in five respondents think the US healthcare system is in a “state of crisis” (20%) or has “major problems” (48%).
EDITOR’S NOTE: As a former CPHQ [Certified Physician in Healthcare Quality], I find this report alarming and confusing – David EdwardMarcinko MBA CMP
Enabled by information, software, and community that we collect or create, we the patients can be effective partners in our own health care, and we the people can participate in reshaping the health system itself.
— Dr. Ted Eytan, Director, Permanente Federation, LLC
Potential
Health 2.0’s potential lies in enabling, catalyzing, and sustaining changes in the practice of healthcare.
Dr. Ted Eytan, a nationally recognized proponent of digitally-enhanced patient care with a particular interest in preventive care, has blogged the above “declaration of health care independence,” which we will use as our own working definition of Health 2.0.
We see Health 2.0 as a human space defined by engagement, aided by technology, in which information and accountability can flow between individuals and their care teams and between individuals and their social networks.
The “practice” of healthcare can be understood as a set of “behaviors” that becomes embedded in daily life, plus the “supports” that provide the appropriate resources to achieve the desired outcomes.
Thus, changing a current practice (in pursuit of a different outcome) requires enabling the behavior you want to encourage by providing the necessary supports to make it happen. Health 2.0 has made new supports available for people to embed health-seeking behaviors and sustain practices that increase their involvement in their own health.
NOTES:
[i] Eytan T. “The Health2.0 Definition: Not just the Latest, The Greatest!,” Ted Eytan, MD (Blog).Online 13 Jun 2008. Accessed 1 Nov 2012. <http://www.tedeytan.com/2008/06/13/1089>
[ii] Hawn C. “Take Two Aspirin and Tweet Me in the Morning: How Twitter, Facebook, and Other Social Media Are Reshaping Health Care.” Health Affairs 2009;28(2):361-8.
[iii] Moussa M, Tomasik JL. “Doctor-Patient Relationships in the Modern Era: Can We Talk—A Collaborative Shift in Bedside Manner.” Ch. 15 in Marcinko D.E. and Hope R. Hetico. The Business of Medical Practice: Transformational Health 2.0 Skills for Doctors. New York: Springer Pub. Co., 2011.
Conclusion
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Bridging the Medical School – Financial Services Industry & Business Education Gap
[By Ann Miller RN MHA]
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iMBA Inc., routinely presents to residents and fellows across the country on a variety of medical, financial, accounting and practice management related topics.
Whether on-site or via webinar, our educational sessions are tailored to fill the finance, economic, practice management, business and practice management educational gap and to provide physicians and allied healthcare professionals with practical advice and strategies to help make sound financial and business decisions.
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Our firm works exclusively with physicians and their advisors, and we understand the stresses and financial pitfalls that are unique to the medical profession. We are doctors who are passionate about equipping, training, and advising physicians so they can work toward achieving their professional and financial goals.
We can tailor our presentations to the needs of the program or group. Above all, we aim to empower residents and fellows with the knowledge they’ll need to succeed financially as they begin their career in private practice or in academics.
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In addition to speaking with individual programs, we speak with House Officers Associations, Fellowship & Residency Associations, Spouse Support Groups, etc. We are regularly invited to present at Grand Rounds, weekly practice management gatherings, and after-hours dinners.
Educational sessions can be done either on-site or via webinar.
Assessment
To see a list of presentations and topics, click here:
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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:
Bridging the Medical School – Financial Services Industry & Business Education Gap
[By Ann Miller RN MHA]
***
iMBA Inc., routinely presents to residents and fellows across the country on a variety of medical, financial, accounting and practice management related topics.
Whether on-site or via webinar, our educational sessions are tailored to fill the finance, economic, practice management, business and practice management educational gap and to provide physicians and allied healthcare professionals with practical advice and strategies to help make sound financial and business decisions.
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Our firm works exclusively with physicians and their advisors, and we understand the stresses and financial pitfalls that are unique to the medical profession. We are doctors who are passionate about equipping, training, and advising physicians so they can work toward achieving their professional and financial goals.
We can tailor our presentations to the needs of the program or group. Above all, we aim to empower residents and fellows with the knowledge they’ll need to succeed financially as they begin their career in private practice or in academics.
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In addition to speaking with individual programs, we speak with House Officers Associations, Fellowship & Residency Associations, Spouse Support Groups, etc. We are regularly invited to present at Grand Rounds, weekly practice management gatherings, and after-hours dinners.
Educational sessions can be done either on-site or via webinar.
Assessment
To see a list of presentations and topics, click here:
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Conclusion
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
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It is a healthcare investor conference where investors meet with digital health companies, not-for-profit hospital systems, insurance carriers, biotech and med device companies.
The J.P. Morgan Healthcare Conference is invite-only. There is no large exhibition hall. The agenda is not published.
Most of the ‘action’ happens outside the conference with private meetings across the city.
Most people who attend are not invited and they just go for the private meeting opportunities.
Hear a summary of the 2023 J.P. Morgan Healthcare Conference from This Week Health‘s Bill Russell and his guest Rob, DeMichiei–the former CFO of UPMC.
Hospital systems actually have a plan to cut costs for the first time in AGES.
Insurance carriers are going to become healthcare providers themselves.
Will insurance carriers eat hospitals’ lunch? etc.
In this episode, host Christopher Hughey talks to Steven Huskey about the financial, management and planning mistakes many independent doctors make when setting up their own medical practice.
Not even the healthcare industry is recession-proof
By Staff Reporters
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According to Kristine White of Healthcare Brew, New York City-based Memorial Sloan Kettering Cancer Center (MSK), one of the country’s top cancer treatment facilities, laid off 337 employees on Jan. 17 in response to ongoing financial challenges, according to a New York State Department of Labor filing.
The 337 employees, who worked across 14 sites and in multiple departments, represent about 1.5% of MSK’s 22,500 employees. This is a slight decrease from the expected 3% of layoffs announced in November 2022.
“This reduction was necessary to ensure that MSK can continue to invest in the future of cancer care, research, and education for the benefit of generations to come, and every effort has been made to ensure that patient care is not impacted,” spokesperson John Connolly said in a statement shared with Healthcare Brew.
The institution’s operating losses totaled $116.1 million for Q3 of 2022, compared to a loss of $8.7 million during the same period in 2021, according to a quarterly financial report released in November last year.
Factors such as increased patient activity, wages, and supply costs from inflation pushed the system’s operating expenses up by 7.5% from Q3 of 2021 to Q3 of 2022. The cancer center hired more staff in 2022 with the expectation that patient volume would increase, according to the financial report.
Health systems like MSK often reevaluate their biggest expense (workers) when business is down, Lori Kalic, a healthcare senior analyst at consulting firm RSM, told Healthcare Brew.
Just this year, multiple hospitals and health systems have also announced layoffs, including Tufts Medicine in Boston and Integris Health in Oklahoma, according to White.
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.
Conclusion
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The fact that every physician in private medical practice, without a business education, leaves approximately a million dollars on the table and is unaware of it is well known to business experts who work with medical doctors experiencing financial difficulties.
Business experts such as Dan S. Kennedy, Peter Drucker, Michael Gerber, Maxwell Maltz, Neil Baum, William Hanson, Huss and Coleman, Steven Hacker, Thomas Stanley, Chris Hurn, Napoleon Hill, and Dave Ramsey, among others, understand the financial problems faced by medical practices and how to solve them.
RAND and Harvard University Researchers Recently Published a Study in the Journal of the American Medical Association Examining How Doctors are Paid by Hospital System-Owned Practices. The Study Found that only 9% of Primary Care Physician Compensation was Based on Value (Quality and Cost-Effectiveness) and only 5.3% of Specialist Compensation was Based on Value.
The Study Concluded: “The results of this cross-sectional study suggest that PCPs and specialists despite receiving value-based reimbursement incentives from payers, the compensation of health system PCPs and specialists was dominated by volume-based incentives designed to maximize health systems revenue.”
Private equity acquisition of physician practices continues to grow nationwide. New research focused on specialists in dermatology, gastroenterology, and ophthalmology shows the impact of the trend.
Novel evidence by NIHCM grantee Jane Zhu, MD, and her team, reveals shifts in workforce composition and hiring patterns after private equity firms obtain physician practices. The researchers’ findings are particularly important for policymakers and practices considering selling to private equity firms. Highlights include:
A significant yearly increase in the number of advanced practice providers at private equity-acquired practices, specifically nurse practitioners and physician assistants.
In acquired practices, entering clinicians replaced exiting clinicians at a higher rate than at non-private equity-acquired practices.
This work adds to the research team’s previous findings, including the geographic variations in private equity ownership across six medical specialties, and the impact of private equity on health care costs and utilization.
Our guest on this episode is Dr. Farzad Mostashari. Farzad is the co-founder and CEO of Aledade, a primary care enablement company that partners with independent PCPs to transition to value-based care and, as a result, maintain their independence.
Founded in 2014, Aledade works with 11,000 physicians across 40 states and DC, accounting for 1.7M patients under management in Medicare, Medicare Advantage, Commercial and Medicaid contracts. Farzad previously served as the National Coordinator for Health IT in the Department of Health and Human Services, he completed medical school at the Yale School of Medicine and a Master’s in Population Health from Harvard’s T.H. Chan School of Public Health. Earlier this year, Aledade raised a $123M Series E round of funding led by OMERS Growth Equity.
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In this episode, colleague Shahid N. Shah will discuss with Farzad about (1) his journey to starting Aledade and the role policy expertise and evidence have played in the company’s success (2) why he and the company are betting on independent physicians as the drivers of change in value-based care and (3) how Aledade became the rare profitable health tech company.
In the evolutionary shifts in models for medical care, physicians have been asked to embrace business values of efficiency and cost effectiveness, sometimes at the expense of their professional judgment and personal values.
While some of these changes have been inevitable as our society sought to rein in out-of-control costs, it is not unreasonable for physicians to call on payers, regulators and other business parties to the health care delivery system to raise their ethical bar.
Tit-for-Tat
Harvard University physician-ethicist Linda Emmanuel noted that “health professionals are now accountable to business values (such as efficiency and cost effectiveness), so business persons should be accountable to professional values including kindness and compassion.”
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[Medicine versus Business]
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Assessment
Within the framework of ethical principles, John La Puma, M.D., wrote in Managed Care Ethics, that “business’s ethical obligations are integrity and honesty.
Medicine’s are those plus altruism, beneficence, non-maleficence, respect, and fairness.”
About the Author
Render Davis was a Certified Healthcare Executive, now retired from Crawford Long Hospital at Emory University, in Atlanta, GA He served as Assistant Administrator for General Services, Policy Development, and Regulatory Affairs from 1977-95. He is a founding board member of the Health Care Ethics Consortium of Georgia and served on the consortium’s Executive Committee, Advisory Board, Futility Task Force, Strategic Planning Committee, and chaired the Annual Conference Planning Committee, for many years.
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
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A Medical Practice business valuation is a set of procedures to estimate the economic value of a physician owner’s interests. Valuation is used to determine the price they are willing to pay or receive to affect a sale of the practice.
The same valuation tools are often used to resolve disputes related to estate and gift taxation, divorce litigation, allocated purchase price among business assets, establish a formula for estimating the value of partners’ ownership interest for buy-sell agreements, and other business and legal purposes.
QUERY: But, what are the most common medical practice valuation blunders to avoid? Written over a decade ago, this white paper highlights the most common mistake still seen today.
As technology continues to rapidly evolve, a corresponding transformation in the healthcare industry is occurring. One of the most significant changes is the shift from traditional healthcare to healthcare consumerism. Patients now have more information available to them than ever before, and they are using this information to make more informed healthcare decisions. Patients are no longer passively accepting the care that is provided to them.
Instead, they are actively choosing the care that they receive, and are more selective about the providers that they use. As a result, healthcare providers must now focus on providing a better patient experience to attract and retain patients.
Source: Hari Prasad, Physicians Practice [12/8/22]
Busting another Myth of Medical Practice Appraisal
[By Dr. David Edward Marcinko; MBA, CMP™]
[Publisher-in-Chief]
For doctors, buying or selling a practice may be the biggest financial transaction of their lives.
Reasons for appraising practice worth include: succession, retirement and estate planning; partnership disputes and divorce; or as an important tool for organic growth and strategic planning.
However, the transaction is fraught with many pitfalls to avoid and no medical specialty seems immune.
Valuation Difficulties
For example, we recall the MD who asked her accountant for the “value” of her practice and was correctly given its lower “book value”, rather than its higher “fair-market-value” as a profitable ongoing-concern. The doctor lost tens-of-thousands-of-dollars in a subsequent attorney-driven sales transaction.
Although her CPA produced correct figures for exactly what was requested, the doctor and attorney did not differentiate between the two terms-of-art. Later legal mediation determined that neither was responsible for the linguistic error, as both parties acted in good-faith.
Of course, it was the doctor who paid dearly for her mistake in communication and business acumen.
“Rules-of-Thumb” [aka: benchmark formulas or calculations]
And so, in the stable distant past, physicians occasionally used “rules of thumb” formulas to value their medical practices.
“Rules” typically were expressed as benchmark calculations, formulas or multipliers (e.g. “one times revenues” or “five times cash flow”).
Today, because of the economic volatility in the healthcare industrial complex, “rules of thumb” should not be used to value any medical practice (other than as general internal managerial sanity checks).
Moreover, they are fraught with legal liability should the deal sour, and such benchmarks general hold little to no weight with the IRS.
Case example [the tale of two identical medical practices]
Economically, for example, consider two medical offices, each earning $1 million in gross revenues; both worth $1.5 million (according to a “rule of thumb” that a medical practice is worth 1½ times annual revenues). Yet, in reality Medical Office #1 is worth twice Medical Office #2.
How is this possible?
The answer is because Medical Office #1 is a newer practice in a hot neighborhood that did $500,000 last year, $1 million this year; and projects to do even more next year. Its property, instruments, HIT and medical equipment is new; aggressive young physician-executive management and medical training is excellent.
Medical Office #2 is an older practice located in a low-income area, revenues were $2 million a few years ago and have fallen to the current level; the practice has a leaky roof, old equipment and lots of deferred maintenance, etc. HMO patients abound, with declining reimbursement rates and an older practitioner.
Assessment
So, although much more complicated than the above simple example, we can now see how “rule-of-thumbs” can mislead more often than inform.
Yet, we might also ask why they are still used by some misinformed doctors?
Simplicity and inertia is the answer, according to Hope Rachel Hetico; RN, MHA a valuation professional and Certified Medical Planner™ from the Institute of Medical Business Advisors Inc, in Atlanta GA www.MedicalBusinessAdvisors.com
And, the cost of a benchmark “rule-of-thumb” valuation is hard to beat; $0. Keep in mind that in most cases, you will want to ensure the value determination will stand up to IRS scrutiny, so the $0 rule-of-thumb is not really an option
The Case of Edgar versus Berg
Legalistically, a landmark legal case in business valuation was the Estate of Edgar A. Berg v. Commissioner (T. C. Memo 1991-279). The Court criticized the CPAs as not being qualified to perform valuations, failing to provide analysis of an appropriate discount rate, and making only general references to justify their “Opinion of Value.”
In rejecting these experts, the Court accepted the IRS’s expert because he possessed the background, education and training; and developed discounts, and demonstrating how reproducible evidence applied to the assets being examined.
Assessment
The Berg decision marked the beginning of the Tax Court leaning toward the side with the most comprehensive appraisal. Previously, it had a tendency to “split the difference.”
Now, some feel the Berg case launched the business valuation profession.
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As a medical professional, are you looking for ways to make your practice more profitable and boost your efficiency?
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Get all the benefits of a personal consultant without the hassle and expense of traveling. Subscribe today. Read posts and comment on more than 50 topical channels addressing the hottest topics in medical practice and financial management today.
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The impact of medical workplace violence became widely exposed on November 6, 2009 when 39 year old Army psychiatrist Maj. Nidal M. Hasan MD, a 1997 graduate of Virginia Tech University who received a medical doctorate in psychiatry from the Uniformed Services University of the Health Sciences in Bethesda, Maryland, and served as an intern, resident and fellow at the Walter Reed Army Medical Center in the District of Columbia, went on a savage 100 round shooting spree and rampage that killed 13 people and injured 32 others. In April 2010 he was transferred to Bell County Jail in Belton, Texas awaiting trial.
Federal Government Guidelines
The federal government and some states have developed guidelines to assist employers with workplace violence prevention. For instance, one of the earliest sets of guidelines for a comprehensive workplace violence prevention program was published in 1993 by California OSHA. This resulted from the murder of a state employee. In 1996, Guidelines for Preventing Workplace Violence for Healthcare and Social Service Workers was published by OSHA.
In its guidelines, OSHA sets forth the following essential elements for developing a violence prevention program:
Management commitment — as seen by high-level management involvement and support for a written workplace violence prevention policy and its implementation.
Meaningful employee involvement — in policy development, joint management-worker violence prevention committees, post-assault counseling and debriefing, and follow-up are all critical program components.
Worksite analysis — includes regular walk-through surveys of all patient care areas and the collection and review of all reports of worker assault. A successful job hazard analysis must include strategies and policies for encouraging the reporting of all incidents of workplace violence, including verbal threats that do not result in physical injury.
Hazard prevention and control — includes the installation and maintenance of alarm systems in high-risk areas. It may also include the training and posting of security personnel in emergency departments. Adequate staffing is an essential hazard prevention measure, as is adequate lighting and control of access to staff offices and secluded work areas.
Pre-placement and periodic training and education — must include educationally appropriate information regarding the risk factors for violence in the healthcare environment and control measures available to prevent violent incidents. Training should include skills in aggressive behavior identification and management, especially for staff working in the mental health and emergency departments.
On May 17, 1999, Governor Gary Locke signed the New Workplace Violence Prevention Act for the state of Washington. This act mandates that each healthcare setting in the state implement a plan to reasonably prevent and protect employees from violence.
New Washington Workplace Violence Prevention Act
According to this act, prevention plans need to address security considerations related to:
physical attributes of the healthcare setting;
staffing, including security staffing;
personnel policies;
first aid and emergency procedures;
reporting of violent acts; and
employee education and training.
Prior to the development of an actual plan, a security and safety assessment needs to be conducted to identify existing or potential hazards. The training component of the plan must include the following topics:
general safety procedures;
personal safety procedures;
the violence escalation cycle;
violence-predicting factors;
means of obtaining a patient history form from a patient with violent behavior;
strategies to avoid physical harm;
restraining techniques;
appropriate use of medications as chemical restraints;
documenting and reporting incidents;
the process whereby employees affected by a violent act may debrief;
any resources available to employee for coping with violence; and
the healthcare setting’s workplace violence prevention plan.
Assessment
The act further mandates that any hospital operated and maintained by the State of Washington for the care of the mentally ill is required to provide violence prevention training to affected employees identified in the plan on a regular basis and prior.
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Did you know that most experts recommend against naming a practice with your own name because it limits future growth and you may lose the benefits that a more descriptive name would bring?
Your business name will likely be incorporated using your practice’s name, although larger (multi-specialty group) practices may use a more general name for the entire enterprise; and then having multiple “dba’s” (”Doing Business As”) for the individual practices under the umbrella. It is important to discuss these options with an attorney if you believe this arrangement has advantage; others find it confusing.
Usually, your medical specialty can be used as a base-name, and then some descriptor to differentiate it from local competing practices. Selecting a name like “The Allegiance Partners” does not indicate that medicine is your service. On the other hand, naming your practice “Podiatry Associates of Your Town” won’t be helpful to patients looking for you in the yellow pages, health insurance provider network list, or internet search engines, and finding your practice listed just before “Your Town Podiatry Partners”. It is therefore good to be cognizant of your competitors’ names when choosing your own. And, you should select a name that will hopefully grow with you into a larger enterprise.
For example, are you a solo doctor, but are pretty sure you’ll take on one or more partners in the future? Then besides not naming your practice after yourself, you may choose to add “Group” or “Partners” to your name initially even if you’re the only doctor. Is there any possibility you’ll open a second office in another town? Naming your medical practice something like the ”Apple Street Internal Medicine Group” may not make sense when your second office is opened on Main Street in a nearby city, in a few years.
Order Forms and Practice Stationary
Orders forms, invoices, purchase and estimate forms, business cards, envelopes, stationary and specialty labels can all be personalized for your medical practice name, script, colors and logo. Often, local or regional printers are the most cost effective and you support another entrepreneur, as well.
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