PERSONAL COACHING: Dr. Marcinko at Your Service!

By Ann Miller RN MHA

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Dr. David Edward Marcinko works with doctors, nurses, technicians and healthcare professionals who struggle with professional disillusionment, burnout, financial distress and an unbalanced life–all of which can happen at any stage of a medical career. Through our coaching sessions, medical and healthcare professionals can achieve a more meaningful, purposeful, and flourishing life.

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CONTACT: Ann Miller RN MHA

MarcinkoAdvisors@cmps

Ph: 770-448-0769

MORE: https://medicalexecutivepost.com/coach/

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Money to BURN on the Fourth of July

The Complete Guide to July 4th Fireworks

Gather your novelty flag apparel and preheat your grills: Independence Day 2022 is upon us. And, what’s a July 4th celebration without some explosions in the sky?

Assessment

This infographic takes a closer look at the less glamorous side of fireworks — from the dollars that go up in smoke to the fingers we burn.

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[via MedPub]

Happy Fourth ME-P readers; please light responsibly!

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What is “Prudence” in Finance and Investment Management?

ON “PRUDENCE” IN FINANCE AND INVESTMENT MANAGEMENT
Courtesy: http://www.CertifiedMedicalPlanner.org

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TERMS & DEFINITIONS FOR PHYSICIANS AND ALL INVESTORS:

PRUDENT BUYER: The efficient purchaser of market balance between value and cost.

PRUDENT MAN RULE: An 1830 court case stating that a person in a fiduciary capacity (a trustee, executor, custodian, etc) must conduct him/herself faithfully and exercise sound judgment when investing monies under care. “He is to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent distribution of their funds, considering the probable income as well as the probable safety of the capital to be invested.” Allows for mutual funds and variable annuities.

PRUDENT INVESTOR RULE: A fiduciary is required to conduct him/herself faithfully and exercise sound judgment when investing monies and take measured and reasonable investment risks in return for potential future rewards. Allows for mutual funds, stocks, bonds, variable annuities asset allocation & Modern Portfolio Theory.

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

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UNIFORM PRUDENT INVESTOR ACT: https://medicalexecutivepost.com/2011/02/18/the-uniform-prudent-investor-act-versus-fiduciary-accountability/

EDITOR’S NOTE: We interviewed noted authority Ben Aikin AIF® on this topic more than a decade ago. He was ahead of his time regarding fiduciary accountability and we appreciate his insights.

Dr. David Edward Marcinko MBA CMP®

[Editor-in-Chief]

INTERVIEW: https://medicalexecutivepost.com/2009/03/01/an-interview-with-bennett-aikin-aif/

FIDUCIARY OATH: http://www.thefiduciarystandard.org/wp-content/uploads/2015/02/fiduciaryoath_individual.pdf

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HEDGE FUNDS: History in Brief

ABOUT | DAVID EDWARD MARCINKO

BY DR. DAVID E. MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

The investment profession has come a long way since the door-to-door stock salesmen of the 1920s sold a willing public on worthless stock certificates. The stock market crash of 1929 and ensuing Great Depression of the 1930s forever changed the way investment operations are run. A bewildering array of laws and regulations sprung up, all geared to protecting the individual investor from fraud. These laws also set out specific guidelines on what types of investment can be marketed to the general public – and allowed for the creation of a set of investment products specifically not marketed to the general public. These early-mid 20th century lawmakers specifically exempted from the definition of “general public,” for all practical purposes, those investors that meet certain minimum net worth guidelines.

The lawmakers decided that wealth brings the sophistication required to evaluate, either independently or together with wise counsel, investment options that fall outside the mainstream. Not surprisingly, an investment industry catering to such wealthy individuals, such as doctors and healthcare professionals, and qualifying institutions has sprung up.

EARLY DAYS

The original hedge fund was an investment partnership started by A.W. Jones in 1949. A financial writer prior to starting his investment management career, Mr. Jones is widely credited as being the prototypical hedge fund manager. His style of investment in fact gave the hedge fund its name – although Mr. Jones himself called his fund a “hedged fund.” Mr. Jones attempted to “hedge,” or protect, his investment partnership against market swings by selling short overvalued securities while at the same time buying undervalued securities. Leverage was an integral part of the strategy. Other managers followed in Mr. Jones’ footsteps, and the hedge fund industry was born.

In those early days, the hedge fund industry was defined by the types of investment operations undertaken – selling short securities, making liberal use of leverage, engaging in arbitrage and otherwise attempting to limit one’s exposure to market swings. Today, the hedge fund industry is defined more by the structure of the investment fund and the type of manager compensation employed.

The changing definition is largely a sign of the times. In 1949, the United States was in a unique state. With the memory of Great Depression still massively influencing common wisdom on stocks, the post-war euphoria sparked an interest in the securities markets not seen in several decades. Perhaps it is not so surprising that at such a time a particularly reflective financial writer such as A.W. Jones would start an investment operation featuring most prominently the protection against market swings rather than participation in them. 

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

Apart from a few significant hiccups – 1972-73, 1987 and 2006-07 being most prominent – the U.S. stock markets have been on quite a roll for quite a long time now. So today, hedge funds come in all flavors – many not hedged at all. Instead, the concept of a private investment fund structured as a partnership, with performance incentive compensation for the manager, has come to dominate the mindscape when hedge funds are discussed. Hence, we now have a term in “hedge fund” that is not always accurate in its description of the underlying activity. In fact, several recent events have contributed to an even more distorted general understanding of hedge funds.

During 1998, the high profile Long Term Capital Management crisis and the spectacular currency losses experienced by the George Soros organization both contributed to a drastic reversal of fortune in the court of public opinion for hedge funds. Most hedge fund managers, who spend much of their time attempting to limit risk in one way or another, were appalled at the manner with which the press used the highest profile cases to vilify the industry as dangerous risk-takers. At one point during late 1998, hedge funds were even blamed in the lay press for the currency collapses of several developing nations; whether this was even possible got short thrift in the press.

Needless to say, more than a few managers have decided they did not much appreciate being painted with the same “hedge fund” brush. Alternative investment fund, private investment fund, and several other terms have been promoted but inadequately adopted. As the memory of 1998 and 2007 fades, “hedge fund” may once again become a term embraced by all private investment managers.

Photo by Alexander Mils on Pexels.com

ASSESSMENT: Physicians, and all investors, should be aware, however, that several different terms defining the same basic structure might be used. Investors should therefore become familiar with the structure of such funds, independent of the label. The Securities Exchange Commission calls such funds “privately offered investment companies” and the Internal Revenue Service calls them “securities partnerships.”

Your thoughts are appreciated.

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

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The Real Economic Business Cycle?

REALLY?

By Dr. David Edward Marcinko MBA

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

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

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

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

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

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

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

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

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

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

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

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

And now, the REAL Cycle?

MORE: https://etonomics.com/2021/11/09/real-business-cycle-theory/

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ENTREPRENEURSHIP Rising Again!

Try (or learn about) Entrepreneurship

BY DR. DAVID EDWARD MARCINKO MBA CMP®

One of the greatest things about the virtual economy is the expanded opportunity for people to branch out on their own and create something using their own expertise. Related to this is the growing societal desire to have more free time and a more balanced, efficient life overall. 

In fact, years ago when I was in business school, I learned that during a recession when jobs were sparse – folks would either go back to school to re-engineer and re-educate OR start their own business.

Today – If the pandemic taught us anything, it’s that we need to be able to pivot when circumstances call for it. In the years ahead, there will be a premium on flexibility, portability, and improvisation; knowing how to earn income outside the traditional employer-employee relationship will continue to be an especially valuable skill. 

entrepreneur

ASSESSMENT: So, if you are a physician, nurse, medical professional or financial advisor in the healthcare space, think about what you’re naturally good at (or at least interested in), and determine if there’s an opportunity to monetize it in some way on your own. Your career might thank you for it!

Your thoughts and comments are appreciated.

http://www.CERTIFIEDMEDICALPLANNER.org

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Ph: 770-448-0769

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On the Society of Physician Entrepreneurs

Join Our Mailing List

About the SoPE

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See the source image

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By Dr. David Edward Marcinko MBA

The Society of Physician Entrepreneurs (SoPE) was established as a community of interest in 2008 by several members of the American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS), including Dr. Arlen Meyers, the President & CEO. SoPE became a separate and independent legal entity; incorporating in Washington, D.C. in January 2011.

It is a 501 (c) 6 member organization with the stated purpose of providing support; idea stage through funding, for physician entrepreneurs with ideas on how to improve healthcare. Currently there are over 1,000 members included in their LinkedIn site.

Vision

SoPE’s vision is to accelerate physician originated biomedical innovation.

Mission

The mission of SoPE is to foster scholarship in biomedical entrepreneurship and provide education, training and support; idea stage through funding, to primarily community-based physician entrepreneurs in the interest of better healthcare.

Membership

SoPE membership is open to all physicians and also accepts individuals as associate members; representatives of medical device, legal, venture capital, and other firms with an interest in serving and/or supporting physician entrepreneurs.

Assessment

www.sopenet.org

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A.I. Examiners and the CERTIFIED MEDICAL PLANNER® Professional Designation Program

Artificial Intelligence and “Robo-Examiners” Let Adult-Learners and Students Take Control of their Career Education and On-Line Matriculation

Dr. David Edward Marcinko MBA CMP®
[Academic Dean and CEO: Institute of Medical Business Advisors, Inc]

Enter the CMPs

[Course Curriculum]

The concept of a self-taught and student motivated, but automated outcomes driven classroom may seem like a nightmare scenario for those who are not comfortable with computers. Now everyone can breathe a sigh of relief, because the Institute of Medical Business Advisors just launched an “automated” final examination review protocol that requires no programming skill whatsoever.

cmp

In fact, everything is designed to be very simple and easy to use. Once a student’s examination “blue-book” is received, computerized “robotic reviewers” correct student assignments and quarterly test answers. This automated examination model lets the robots correct tests and exams, while the students concentrate on guided self-learning.

Get a robo advisor on board to help with your investment ...

http://www.CertifiedMedicalPlanner.org

Assessment

According to Eugene Schmuckler PhD MBA MEd, Academic Provost of the CERTIFIED MEDICAL PLANNER® professional designation and certification program,

“This option allows the modern adult-learner save both time and money as s/he progresses toward the ultimate goal of board certification as a CMP® mark holder.”

The trend is growing and iMBA, Inc., is leading the way.

COURSE TEXTBOOKS: https://medicalexecutivepost.com/2021/04/29/why-are-certified-medical-planner-textbooks-so-darn-popular/

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

ADMISSIONS CONTACT:

Ann Miller RN MHA CMP®

[Executive-Director]

PH: 770-448-0769

EM: MarcinkoAdvisors@msn.com

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JOIN & PARTNER with the Medical Executive-Post!

By Staff Reporters

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MEDIA / INTERVIEW REQUESTS

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Yes. We’re looking for writers & cross-posts.

Send them to us: MarcinkoAdvisors@msn.com

WHAT WE’RE LOOKING FOR

Op-eds. Cross and Re-Posts, Links and Columns. Great ideas for improving physician focused financial planning, health insurance, economics and the financial ecosystem; etc. Pitches for healthcare-focused startups and business. Write-ups of original research. Reviews of new health care products, DME and AI. Data driven analysis of health care trends. Policy proposals; etc.

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VALUATION: Approaches for Common Stocks

A BRIEF REVIEW FOR PHYSICIAN INVESTORS

By Dr. David Edward Marcinko MBA CMP™

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SPONSOR: http://www.CertifiedMedicalPlanner.org

QUESTION: We are in near bear market correction territory – especially for tech stocks – so what are the 2 major types of valuation approaches for common stock?

UPDATE: https://www.msn.com/en-us/money/markets/stock-market-news-live-updates-sandp-500-dow-fall-amid-mixed-bank-earnings-retail-sales-miss/ar-AASL74g?li=BBnb7Kz

TECH: https://www.msn.com/en-us/money/markets/nasdaq-near-a-10percent-correction-isnt-the-sell-signal-you-probably-think-it-is/ar-AASL22m?li=BBnbfcL

ANSWER: There are basically two different approaches for common stock valuation; top-down and bottom-up.  Under either of the two fundamental approaches, a physician investor will have to work with individual company data.  In reality, each of these approaches is used by investors and security analysts when doing fundamental analysis.  

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

With the bottom-up approach, investors focus directly on a company’s prospects. Analysis of such information as the company’s products, its competitive position, and its financial status leads to an estimate of the company’s earnings potential, and, ultimately, its value in the market.  Considerable time and effort are required to produce the type of detailed financial analysis needed to understand a firm’s standing. The emphasis in this approach is on finding companies with good long-term growth prospects, and making accurate earnings estimates. 

The top-down approach is the opposite of the bottom-up approach. Investors begin with the economy and the overall market, considering such important factors as interest rates and inflation. They next consider likely industry prospects, or sectors of the economy that are likely to do particularly well (or particularly poorly). Finally, having decided that factors are favorable for investing, and having determined which parts of the overall economy are likely to perform well, individual companies are analyzed.

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On Wall Street’s Suitability, Prudence and Fiduciary Accountability

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Financial Advisor’s are Not Doctors!

dr-david-marcinko1

Dr. David E. Marcinko FACFAS MBA CMP™ MBBS

THRIVE-BECOME A CMP™ Physician Focused Fiduciary

http://www.CertifiedMedicalPlanner.org

Financial advisors don’t ascribe to the Hippocratic Oath.  People don’t go to work on “Wall Street” for the same reasons other people become firemen and teachers.  There are no essays where they attempt to come up with a new way to say, “I just want to help people.”

Financial Advisor’s are Not Doctors

Some financial advisors and insurance agents like to compare themselves to CPAs, attorneys and physicians who spend years in training and pass difficult tests to get advanced degrees and certifications. We call these steps: barriers-to-entry. Most agents, financial product representatives and advisors, if they took a test at all, take one that requires little training and even less experience. There are few BTEs in the financial services industry.

For example, most insurance agent licensing tests are thirty minutes in length. The Series #7 exam for stock brokers is about 2 hours; and the formerly exalted CFP® test is about only about six [and now recently abbreviated]. All are multiple-choice [guess] and computerized. An aptitude for psychometric savvy is often as important as real knowledge; and the most rigorous of these examinations can best be compared to a college freshman biology or chemistry test in difficulty.

Yet, financial product salesman, advisors and stock-brokers still use lines such as; “You wouldn’t let just anyone operate on you, would you?” or “I’m like your family physician for your finances.  I might send you to a specialist for a few things, but I’m the one coordinating it all.”  These lines are designed to make us feel good about trusting them with our hard-earned dollars and, more importantly, to think of personal finance and investing as something that “only a professional can do.”

Unfortunately, believing those lines can cost you hundreds of thousands of dollars and years of retirement. 

More: Video on Hedge Fund Manager Michael Burry MD

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Suitability Rule

A National Association of Securities Dealers [NASD] / Financial Industry Regulatory Authority [FINRA] guideline that require stock-brokers, financial product salesman and brokerages to have reasonable grounds for believing a recommendation fits the investment needs of a client. This is a low standard of care for commissioned transactions without relationships; and for those “financial advisors” not interested in engaging clients with advice on a continuous and ongoing basis. It is governed by rules in as much as a Series #7 licensee is a Registered Representative [RR] of a broker-dealer. S/he represents best-interests of the firm; not the client.

And, a year or so ago there we two pieces of legislation for independent broker-dealers-Rule 2111 on suitability guidelines and Rule 408(b)2 on ERISA. These required a change in processes and procedures, as well as mindset change.

Note: ERISA = The Employee Retirement Income Security Act of 1974 (ERISA) codified in part a federal law that established minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by:

  • Requiring the disclosure of financial and other information concerning the plan to beneficiaries;
  • Establishing standards of conduct for plan fiduciaries ;
  • Providing for appropriate remedies and access to the federal courts.

ERISA is sometimes used to refer to the full body of laws regulating employee benefit plans, which are found mainly in the Internal Revenue Code and ERISA itself. Responsibility for the interpretation and enforcement of ERISA is divided among the Department Labor, Treasury, IRS and the Pension Benefit Guarantee Corporation.

Yet, there is still room for commissioned based FAs. For example, some smaller physician clients might have limited funds [say under $100,000-$250,000], but still need some counsel, insight or advice.

Or, they may need some investing start up service from time to time; rather than ongoing advice on an annual basis. Thus, for new doctors, a commission based financial advisor may make some sense. 

Prudent Man Rule

This is a federal and state regulation requiring trustees, financial advisors and portfolio managers to make decisions in the manner of a prudent man – that is – with intelligence and discretion. The prudent man rule requires care in the selection of investments but does not limit investment alternatives. This standard of care is a bit higher than mere suitability for one who wants to broaden and deepen client relationships. 

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Prudent Investor Rule

The Uniform Prudent Investor Act (UPIA), adopted in 1992 by the American Law Institute’s Third Restatement of the Law of Trusts, reflects a modern portfolio theory [MPT] and total investment return approach to the exercise of fiduciary investment discretion. This approach allows fiduciary advisors to utilize modern portfolio theory to guide investment decisions and requires risk versus return analysis. Therefore, a fiduciary’s performance is measured on the performance of the entire portfolio, rather than individual investments 

Fiduciary Rule

The legal duty of a fiduciary is to act in the best interests of the client or beneficiary. A fiduciary is governed by regulations and is expected to judge wisely and objectively. This is true for Investment Advisors [IAs] and RIAs; but not necessarily stock-brokers, commission salesmen, agents or even most financial advisors. Doctors, lawyers, CPAs and the clergy are prototypical fiduciaries. 

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More formally, a financial advisor who is a fiduciary is legally bound and authorized to put the client’s interests above his or her own at all times. The Investment Advisors Act of 1940 and the laws of most states contain anti-fraud provisions that require financial advisors to act as fiduciaries in working with their clients. However, following the 2008 financial crisis, there has been substantial debate regarding the fiduciary standard and to which advisors it should apply. In July of 2010, The Dodd-Frank Wall Street Reform and Consumer Protection Act mandated increased consumer protection measures (including enhanced disclosures) and authorized the SEC to extend the fiduciary duty to include brokers rather than only advisors, as prescribed in the 1940 Act. However, as of 2014, the SEC has yet to extend a meaningful fiduciary duty to all brokers and advisors, regardless of their designation.

The Fiduciary Oath: fiduciaryoath_individual

Assessment 

Ultimately, physician focused and holistic “financial lifestyle planning” is about helping some very smart people change their behavior for the better. But, one can’t help doctors choose which opportunities to take advantage of along the way unless there is a sound base of technical knowledge to apply the best skills, tools, and techniques to achieve goals in the first place.

Most of the harms inflicted on consumers by “financial advisors” or “financial planners” occur not due to malice or greed but ignorance; as a result, better consumer protections require not only a fiduciary standard for advice, but a higher standard for competency.

The CFP® practitioner fiduciary should be the minimum standard for financial planning for retail consumers, but there is room for post CFP® studies, certifications and designations; especially those that support real medical niches and deep healthcare specialization like the Certified Medical Planner™ course of study [Michael E. Kitces; MSFS, MTax, CLU, CFP®, personal communication].

Being a financial planner entails Life-Long-Learning [LLL]. One should not be allowed to hold themselves out as an advisor, consultant, or planner unless they are held to a fiduciary standard, period. Corollary – there’s nothing wrong with a suitability standard, but those in sales should be required to hold themselves out as a salesperson, not an advisor.

The real distinction is between advisors and salespeople. And, fiduciary standards can accommodate both fee and commission compensation mechanisms. However; there must be clear standards and a process to which advisors can be held accountable to affirm that a recommendation met the fiduciary obligation despite the compensation involved.

Ultimately, being a fiduciary is about process, not compensation.

More: Deception in the Financial Service Industry

Full Disclosure:

As a medical practitioner, Dr. Marcinko is a fiduciary at all times. He earned Series #7 (general securities), Series #63 (uniform securities state law), and Series #65 (investment advisory) licenses from the National Association of Securities Dealers (NASD-FINRA), and the Securities Exchange Commission [SEC] with a life, health, disability, variable annuity, and property-casualty license from the State of Georgia.

Dr.Marcinko was a licensee of the CERTIFIED FINANCIAL PLANNER™ Board of Standards (Denver) for a decade; now reformed, and holds the Certified Medical Planner™ designation (CMP™). He is CEO of iMBA Inc and the Founding President of: http://www.CertifiedMedicalPlanner.org

More: Enter the CMPs

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[PHYSICIAN FOCUSED FINANCIAL PLANNING AND RISK MANAGEMENT COMPANION TEXTBOOK SET]

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

[Dr. Cappiello PhD MBA] *** [Foreword Dr. Krieger MD MBA]

[Two Newest Books by Marcinko annd the iMBA, Inc Team]

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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[PRIVATE MEDICAL PRACTICE BUSINESS MANAGEMENT TEXTBOOK – 3rd.  Edition]

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  [Foreword Dr. Hashem MD PhD] *** [Foreword Dr. Silva MD MBA]

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Traditional Reasons for a Medical Practice Financial Valuation

Some economic reasons for a medical practice valuation 

By Dr. David Edward Marcinko MBA CMP™

http://www.CertifiedMedicalPlanner.org

The decision to sell, buy or merge a medical practice, while often financially driven, and is inherently an emotional one for these impact investors who went into the profession largely because of a deep seated zeal to help others.

Still, beyond impact investing musings, there are other economic reasons for a practice valuation that include changes in ownership, determining insurance coverage for a practice buy-sell agreement or upon a physician-owner’s death, organic growth meter, establishing stock options, or bringing in a new partner; etc.

Practice appraisals are also used for legal reasons such as divorce, bankruptcy, breach of contract and minority shareholder complaints. In 2002, the Financial Accounting Standards Board (FASB) issued rules that required certain intangible assets to be valued, such as goodwill. This may be important for practices seeking start-up, service segmentation extensions, or operational funding. Some other reasons for a medical practice appraisal, and the considerations that go along with them, are discussed here.

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

Estate Planning

Medical practice valuation may be required for estate planning purposes. For a decedent physician with a gross estate of more than current in-place tax limits, his or her assets must be reported at fair market value on an estate tax return. If lifetime gifts of a medial practice business interest are made, it is generally wise to obtain an appraisal and attach it to the gift tax return.

Note that when a “closely-held” level of value (in contrast to “freely traded,” “marketable,” or “publicly traded” level) is sought, the valuation consultant may need to make adjustments to the results. There are inherent risks relative to the liquidity of investments in closely held, non-public companies (e.g., medical group practice) that are not relevant to the investment in companies whose shares are publicly traded (freely-traded). Investors in closely-held companies do not have the ability to dispose of an invested interest quickly if the situation is called for, and this relative lack of liquidity of ownership in a closely held company is accompanied by risks and costs associated with the selling of an interest said company (i.e., locating a buyer, negotiation of terms, advisor/broker fees, risk of exposure to the market, etc.). Conversely, investors in the stock market are most often able to sell their interest in a publicly traded company within hours and receive cash proceeds in a few days. Accordingly, a discount may be applicable to the value of a closely held company due to the inherent illiquidity of the investment. Such a discount is commonly referred to as a “discount for lack of marketability.”

Discount for lack of marketability is typically discussed in three categories: (1) transactions involving restricted stock of publicly traded companies; (2) private transactions of companies prior to their initial public offering (IPO); and, (3) an analysis and comparison of the price to earnings (P/E) ratios of acquisitions of public and private companies respectively published in the “Mergerstat Review Study.”\

With a non-controlling interest, in which the holder cannot solely authorize and cannot solely prevent corporate actions (in contrast to a controlling interest), a “discount for lack of control,” (DLOC), may be appropriate. In contrast, a control premium may be applicable to a controlling interest. A control premium is an increase to the pro rata share of the value of the business that reflects the impact on value inherent in the management and financial power that can be exercised by the holders of a control interest of the business (usually the majority holders). Conversely, a discount for lack of control or minority discount is the reduction from the pro rata share of the value of the business as a whole that reflects the impact on value of the absence or diminution of control that can be exercised by the holders of a subject interest.\

Several empirical studies have been done to attempt to quantify DLOC from its antithesis, control premiums. The studies include the Mergerstat Review, an annual series study of the premium paid by investors for controlling interest in publicly traded stock, and the Control Premium Study, a quarterly series study that compiles control premiums of publicly traded stocks by attempting to eliminate the possible distortion caused by speculation of a deal.

Buy-Sell Agreements

The ideal situation is for physician partners to put in place a buy-sell agreement when practice relationships are amicable. This establishes the terms for departure before they are required, and is akin to a prenuptial agreement in the marriage contract. Disagreements most often occur when a doctor leaves the group, often acrimoniously. Business operations of the practice decline, employee and partner morale suffers, feuding factions develop spilling over into the office, and the practice begins to implode creating a downward valuation spiral. And so, valuations should be done every 2-3 years, or as the economic circumstances of the practice change. Independence and credibility are provided, and emotional overtones are purged from the transaction.

Physician Partnership Disputes

Medical practice appraisals are often used in partnership disputes, such as breach-of-contract or departure issues. Obvious revenue declinations are not difficult to quantify. But, revenues may not immediately fall since certain Current Procedural Terminology [CPT®] code reimbursements may actually increase. Upon verification however, lost business may be camouflaged as the number of procedures performed, or number of patients decrease after partner departure.

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

Divorce

Physicians getting divorced should get a practice appraisal, and either side may hire the appraiser, although occasionally the court will order an expert to provide a neutral valuation. Such valuations should be done in light of both court discovery rules and IRS requirements for closely held businesses. Generally, this requires the consideration of eight elements:

• Practice specialty and operating history
• Economic and healthcare industry condition
• Estimates of practice risks and future returns
• Book value and financial condition of the practice
• Practice future earning capacity
• Physician bonuses, dividends and distributions
• Intangible assets
• Comparable practice sales

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

Assessment

Sometimes, the non-physician spouse may even desire a lifestyle analysis to evaluate the potential for under reported income, by a forensic accountant, or appraiser. A family law judge is often the final arbiter of different valuations, and because of varying state laws there may be 50 different nuances of what the practice is really worth.

MORE: Valuation

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

***

Modern Portfolio Theory and Asset Allocation [Not Correlation]

THE CORRELATION HOT TOPIC

ACADEMIC C.V. | DAVID EDWARD MARCINKO

By Dr. David Edward Marcinko MBA CMP©

SPONSOR: http://www.CertifiedMedicalPlanner.org

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

DEFINITION:

Correlation is a measure of how frequently one event tends to happen when another event happens. High positive correlation means two events usually happen together – high SAT scores and getting through college for instance. High negative correlation means two events tend not to happen together – high SATs and a poor grade record.

No correlation means the two events are independent of one another. In statistical terms two events that are perfectly correlated have a “correlation coefficient” of 1; two events that are perfectly negatively correlated have a correlation coefficient of -1; and two events that have zero correlation have a coefficient of 0.

Correlation has been used over the past twenty years by institutions and financial advisors to assemble portfolios of moderate risk.  In calculating correlation, a statistician would examine the possibility of two events happening together, namely:

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

There are several laws of correlation including;

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

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

BUT – CORRELATION IS NOT CAUSATION

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

In the real world, negative correlations are very rare 

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

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

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

Historical Correlation of Asset Classes

Benchmark                             1          2          3         4         5         6            

1 U.S. Treasury Bill                  1.00    

2 U.S. Bonds                          0.73     1.00    

3 S&P 500                               0.03     0.34     1.00    

4 Commodities                         0.15     0.04     0.08      1.00      

5 International Stocks              -0.13    -0.31    0.77      0.14    1.00       

6 Real Estate                           0.11      0.43    0.81     -0.02    0.66     1.00

Table Source: Ibbotson 1980-2012

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

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FINANCIAL PLANNING: Strategies for Doctors and their Advisors

***

BY DR. DAVID E. MARCINKO MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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REVIEWS:

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

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Transformational Business Skills for Doctor Entrepreneurs

THE BUSINESS OF MEDICAL PRACTICE [Health 2.0]

Textbook Review

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Understanding investment banking rules, securities markets, brokerage accounts, margin and debt

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A Primer for Investors and Entrepreneurial Medical Professionals

Dr. David Edward Marcinko; MBA, CMP™

SPONSOR: http://www.CertifiedMedicalPlanner.org

[PART 1 OF 8]

BC Dr. Marcinko

NOTE: This is an eight part ME-P series based on a weekend lecture I gave more than a decade ago to an interested group of graduate, business and medical school students. The material is a bit dated and some facts and specifics may have changed since then. But, the overall thought-leadership information of the essay remains interesting and informative. We trust you will enjoy it.

Introduction

The history, function and processes of the investment banking industry, and the rules and regulations of the securities industry and their respective markets, as well as the use of  brokerage accounts, margin and debt, will be briefly reviewed in this ME-P series.

An understanding of these concepts is required of all doctors and medical professionals as they pursue a personal investment strategy.

INVESTMENT BANKING AND SECURITIES UNDERWRITING

New economy corporate events of the past several years have provided many financial signs and symptoms that indicate a creeping securitization of the for-profit healthcare industrial complex. Similarly, fixed income medical investors should understand how Federal and State regulations impact upon personal and public debt needs. For, without investment banking firms, it would be almost impossible for private industry, medical corporations and government to raise needed capital.

Introduction

When a corporation such as a physician practice management company (PPMC), or similar entity needs, to raise capital for growth or expansion, there are two methods. Raising debt or equity. If equity is used, the corporation can market securities directly to the public by contacting its current stockholders and asking them to purchase the new securities in a  rights offering, by advertising or by hiring salespeople. Although this last example is somewhat exaggerated, it illustrates that there is a cost to selling new securities, which may be considerable if the firm itself undertakes the task.

For this reason, most corporations employ help in marketing new securities by using the services of investment bankers who sell new securities to the general public.  Although the investment banking is an exciting and vital industry, many SEC rules regulating it are not. Nevertheless, it is important for all physician executives to understand basic concepts of the industry if raising public money is ever a possibility or anticipated goal. It is also important for individual healthcare investors  to understand something about securities underwriting to reduce the likelihood of fraudulent investment schemes or ill-conceived transactions which ultimately result in monetary loss.

Fundamentals of the Investment Banking Industry

Investment bankers are not really bankers at all. The fact that the word banker appears in the name is partially responsible for the  false impressions that exist in the medical community regarding the functions they perform.

For example, they are not permitted to accept deposit, provide checking accounts, or perform other activities normally construed to be commercial banking activities. An investment bank is simply a firm that specializes in helping other corporations obtain the money they need under the most advantageous terms possible.

When it comes to the actual process of having securities issued, the corporation approaches an investment banking firm, either directly, or through a competitive selection process and asks it to act as adviser and distributor.  Investment bankers, or under writers, as they are sometimes called, are middlemen in the capital markets for corporate securities.

The medical corporation requiring the funds discuss the amount, type of security to be issued, price and other features of the security, as well as the cost to issuing the securities. All of these factors are negotiated in a process known as known as negotiated underwriting. If mutually acceptable terms are reached, the investment banking firm will be the middle man through which the securities are sold to the general public. Since such firms have many customers, they are able to sell new securities, without the costly search that individual corporations may require to sell its own security. Thus, although the firm in need of  additional capital must pay for the service, it is usually able to raise the additional capital at less expense through the use of an investment banker, than by selling the securities itself.

The agreement between the investment banker and the corporation may be one of two types. The investment bank may agree to purchase, or underwrite, the entire issue of securities and to re-offer them to the general public. This is  known as a firm commitment.

When an investment banker agrees to underwrite such a sale,  it  agrees to supply the corporation with a specified amount of money. The firm buys the securities with the intention to resell them. If it fails to sell the securities, the investment banker must still pay the agreed upon sum. Thus, the risk of selling rests with the underwriter and not with the company issuing the securities.

The alternative agreement is a best efforts agreement in which the investment banker makes his best effort to sell the securities acting on behalf of the issuer, but does not guarantee a specified amount of money will be raised.

When a corporation raises new capital through a public offering of stock, on might inquire from where does the stock come? The only source the corporation has is authorized, but previously un-issued stock. Anytime authorized, but previously un-issued stock (new stock) is issued to the public, it is known as a primary offering. If it’s the very first time the corporation is making the offering, it’s also known as the Initial Public Offering (IPO). Anytime there is a primary offering of stock, the issuing corporation is raising additional equity capital.

A secondary offering, or distribution, on the other hand, is defied as an offering of a large block of outstanding stock. Most frequently, a secondary offering is the sale of a large block of stock owned by one or more stockholders. It is stock that has previously been issued and is now being re-sold by investors. Another case would be when a corporation re-sells its treasury stock.

Prior to any further discussions of investment banking, there are several industry terms that’s should  be defined.

For example, an agent buys or sells securities for the account and risk of another party, and charges a commission. In the securities business, the terms broker and agent are used synonymously. This is not true of the insurance industry.

On the other hand, a principal is one who acts as a dealer rather than an agent or broker. A dealer buys and sells for his own account Finally, the dealer makes money by buying at one price and selling at a higher price. Thus, it is easy to understand how an investment banking firm earns money handling a best efforts offering; they make a commission on every share they sell.

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

The Securities Act of 1933 (Act of Full Disclosure)

When a corporation makes a public offering of its stock, it is bound by the provisions of the Securities Act of 1933, which is also known as the Act of Full Disclosure. The primary requirement of  the Act is that the corporation must file a registration statement (full disclosure) with the Securities and Exchange Commission (SEC); containing some of the following items:

  • Description of the business entity raising the money.
  • Biographical data regarding officers and directors of the issuer.
  • Listing of share holdings of officers, directors, and holders of more than 10% of the issuer’s securities (insiders).
  • Financial statements including a breakdown of existing capitalization (existing debt and equity structure).
  • Intended use of offering proceeds.
  • Legal proceedings involving the issuer, such as suits, antitrust actions or strikes.

Acting in its capacity as an adviser to the corporation, the investment banking firm files out the registration statement with the SEC. It then takes the SEC a period of time to review the information in the registration statement. This is the “cooling off period” and the issue is said to be “in registration” during this time. When the Act written in 1933, Congress thought that 20 days would be enough time from the filing date, until the effective date the sale of  securities is permitted.

In reality, it frequently takes much longer than 20 days for the SEC to complete its review. But, regardless of how long it lasts, it’s known as the cooling off period. At the end of the cooling off period, the SEC will either accept the issue or they will send a letter back to the issuer, and the underwriter, explaining that there is incomplete information in the registration statement. This letter is known as a deficiency letter. It will postpone the effectiveness of the registration statement until the deficiency is remedied. Even if initially, or eventually approved, an effective registration does not mean that the SEC has approved the issue.

For example, the following well known disclaimer statement written in bold red ink, is required to be placed in capital letters on the front cover page of every prospectus:

###

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

###

During the cooling off period, the investment bank tries to create interest in the market place for the issue. In order to do that, it distributes a preliminary prospectus, more commonly known as a “red herring”. It is known as a red herring because of the red lettering on the front page.  The statement on the very top with the date is printed in red as well as the statements on the left hand margin of the preliminary prospectus.

The cost of printing the red herring is borne by the investment bank, since they are  trying to market it.. The red herring includes information from the registration statement that will be most helpful for potential medical investors trying to make a decision. It describes the company and the securities to be issued; includes the firm’s financial statements; its current activities; the regulatory bodies to which it is subject; the nature of its competition; the management of the corporation, and what the expected proceeds will be used for. Two very important items  missing from the red herring are the public offering price and the effective date of the issue, as neither are known for certain at this point in time.

The public offering price is generally determined on the date that the securities become effective for sale (effective date). Waiting until the last minute enables the investment bankers to price the new issue in line with current market conditions. Since the investment banker uses the red herring to try to create interest in the market place, stock brokers [aka: Registered Representatives (RRs) with a Series # 7 general securities license –  After a 2 hour multiple-choice computerize test, I held this license for a decade ) will send copies of the red herring to their clients for whom they feel the issue is a suitable investment. The SEC is very strict on what can be said about an issue, in registration.

In fact, during the pre-filing period (the time when the negotiations are going on between the issuer\and underwriter), absolutely nothing can be said about it to anyone.  For example, if the regulators find out that your stock broker discussed with you  the fact that his firm was negotiating with an issuer for a possible public offering, he could be fined, or jailed.

During the cooling off period (the time when the red herring is being distributed), nothing may be sent to you; not a research report, nor a recommendation from another firm, or even the sales literature. The only thing you are permitted to receive is the red herring. The red herring is used to acquaint prospects with essential information about the offering. If you are interested in purchasing the security, then you will receive an “indication of interest”, but you can still not make a purchase or send money.

No sales may be made until the effective date; all that can be used to generate interest is the red herring.

Conclusion

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About Securities “Shelf Registration”

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A Primer for Physician Investors and Medical Professionals

By: Dr. David Edward Marcinko; MBA, CMP™ http://www.CertifiedMedicalPlanner.org

[Editor-in-Chief]

[PART 5 OF 8]

Dr. Marcinko with ME-P Fans

NOTE: This is an eight part ME-P series based on a weekend lecture I gave more than a decade ago to an interested group of graduate, business and medical school students. The material is a bit dated and some facts and specifics may have changed since then. But, the overall thought-leadership information of the essay remains interesting and informative. We trust you will enjoy it.

Introduction

A relatively new method of registration under the Act of ’33 is known as shelf registration. Under this rule, an issuer may register any amount of securities that, at the time the registration statement becomes effective, is reasonably expected to be offered and sold within two years of the initial effective date of the registration. Once registered, the securities may be sold continuously or periodically within 2 years without any waiting period for a registration to clear issuers generally like shelf registration because of the flexibility it gives them to take advantage of changing market conditions.

In addition, the legal, accounting, and printing costs involved in issuance are reduced, since a single registration statement suffices for multiple offerings within the 2 year period. In effect, what the issuer does is register securities that will meet its financing needs for the next 2  years. It issues what it needs at the current time, and puts the balance on the shelf” to be taken off the shelf as needed.

SECURITIES MARKETS 

The purchase of common stock in an IPO (initial public offering) is facilitated through of the members an investment bank underwriting syndicate or selling group. This is known as the primary market and the proceeds of sale go directly to the issuing company. Six months later however, if a doctor wants to sell his shares, this would be accomplished in the secondary market. The term secondary market refers to trading in outstanding issues as the proceeds do not go to the issuer, but to the current owner of the securities, such as the physician investor.

Therefore, the secondary market provides liquidity to doctors who acquired securities in the primary market. After a doctor has acquired securities in the primary market, he wants to be able to sell the securities at some point in the future in order to acquire other securities, buy a house, or go on a vacation. Such a sale takes place in the secondary market. The medical investor’s ability to convert the asset (securities) into cash is heavily dependent upon the secondary market. All investors would be hesitant to acquire new securities if they felt they would not subsequently have the ability to sell the securities quickly at a fair price in the secondary market.

Securities Act of 1934

Every trade of stocks and bonds that is not a purchase of a new issue is a trade that takes place in the secondary market. The market place for secondary trading is the stock exchanges and the over-the-counter (OTC) market, and is governed by the Securities Act of 1934, which actually created the Securities and Exchange Commission (SEC) and outlines the powers of the SEC to interpret, supervise, and enforce the securities laws of the United States. The Act of 34 is very broad and governs the sales of securities, including the regulation of securities markets exchanges, OTC markets, broker/dealers, their employees, the conduct of secondary markets, the extension of credit in the purchase and sale of securities, and the conduct of corporate insiders (officers and directors and holders of more than 10% of the outstanding stock). The Act also prohibits fraud and manipulative and deceptive activities in securities transactions

The Stock Exchanges

A stock exchange is a private association of brokers. The main purpose of an exchange is to provide a central meeting place for its member-brokers. This central meeting place is called the floor. It is on the floor that the members trade in securities. It is important to remember that a stock exchange itself does not own any of the securities that are traded on its floor. Nor does it buy or sell any of the securities traded on the exchange. Instead, the securities are owned by member firms, customers, or perhaps, by the exchange member firm itself.

It is also important to remember that a stock exchange does not establish or fix the price at which any security is traded on the exchange. The price is determined in a free and open auction type of trading. It depends on the supply and  demand relationship of that security at a particular time. In other words, if sellers of a stock are offering to sell more shares of that stock than buyers want to buy, the price of that stock will tend to go down. On the other hand, if buyers want to buy more shares of a stock than the sellers are offering to sell, the price of that stock will tend to go higher because of the strong demand.

Any discussion of stock exchanges has to focus on the NYSE, which is by far the largest and most important of the exchanges. There are two exchanges referred to as national stock exchanges, the NYSE and the American Stock Exchange (AMEX). In addition to these two national exchanges, there are several regional stock exchanges including the Philadelphia Exchange, the Chicago Exchange (formerly Midwest), the Pacific Exchange, the Boston Exchange, and the Cincinnati Exchange. Stocks that are traded on an exchange are referred to as listed stocks. The term “listed on an exchange” means that the issue is eligible for trading on the floor of the exchange.

How does a stock become listed? The issuing company, having decided that they wish the prestige and broad visibility of being listed on the NYSE, applies to the exchange for listing. A critical condition for listing is that the issuer agrees to solicit proxies from those common stock shareholders unable to attend shareholder meetings. Once the securities have been accepted for listing (trading) on an exchange, the issuer must continue to meet certain requirements which are not quite as stringent as the original listing requirements, and may be de-listed if the firm ceases to solicit proxies on its existing voting stock, or meet other minimal requirements.

Physically, the exchange brings together buyers and sellers on a trading floor. The NYSE floor is larger than several football fields and is divided into 19 trading posts. Eighteen of the posts are horseshoe or U-shaped stations 100 square feet in area. The nineteenth post (post number 30) is in the northwest corer and really isn’t a post at all; it’s just an area where the inactive stocks trade.

The Specialist

Specialists are experts in trading one or more specific stocks at their particular post on the exchange floor. Their activity is vital to the maintenance of a free and continuous market in the specific issues they represent. They are responsible for conducting the auction at the post. Everyone interested in buying the stock calls out a price and the shares go to the highest bidder. The buyers compete, but there is only one seller. Unlike the usual auction market, the auction on the floor of the exchange is a two way auction with some brokers seeking to buy at the lowest possible price for their doctor clients and other brokers trying to sell at the highest possible price for their doctor clients. When two brokers, one representing a buyer and one a seller, agree on a price, a sale is made. The specialist functions in a dual capacity as a dealer and as a broker. As a dealer or principal, he buys and sells for his own account and risk to maintain a fair and orderly market in the stocks in which he specializes.

For example, if a commission broker approaches the specialist at the post with a buy or sell order, and there are no other brokers in the crowd, that is currently interested in buying or selling the stock, the specialist will buy the stock from that commission broker (if it’s a sell order) for his own account or sell the stock from his inventory (if it’s a buy order). Perhaps, he may even be able to fill the order from his specialist’s book?

Stock_Market

Specialist’s Book

This is done by using the specialist’s book of buy orders (bids), marked on the left hand page, or sell orders (offers) on the right. There is a book for each stock in which the specialist specializes. The pages are ruled and are usually printed with fractional stock points at regular intervals to permit easy insertion of orders. The orders are entered in the book by the specialist according to price and in the sequence in which they are received at the post. He notes the number of shares, putting down 1 for 100 shares, 2 for 200 shares, etc. He also notes the name of the member firm placing the order and if the order is Good Till Cancelled (GTC), or not. When orders are executed, they are executed in the same order recorded in the book at that particular price.

The specialist’s book also keeps track of all orders “away from the market ” (limit orders and stop orders) in his book. The book is organized with all buy orders on the left hand side of the page and all sell orders on the right hand side. In the absence of bids and offers from the “trading crowd” on the floor, the specialist can quote the best available market for the security by announcing the highest bid and the lowest offer (ask). The best bid is always the highest buy limit order on his book and the best offer (ask) is always the lowest sell limit on his book. In addition to quoting the best price, he will also give the “size of the market ” which is determined by the number of shares being bid for and offered at the respective best bid and best ask prices. The quote is price and size. When asked to quote the market for a security, the specialist disregards any stop orders on his book since those orders do not become activated until triggered by another trade. One thing to remember is that since most doctors place stop orders to hedge (protect) against a price movement adverse to their interests, most stop orders are entered with the fervent wish that they never be executed.

On stop and limit orders placed below the market, the specialist is required to reduce the price of those orders on the ex-dividend (ex-split, ex-rights) date. The two critical things to remember are: what types of orders are reduced and by how much? The specialist will reduce all GTC (open) buy limit and sell stop orders on an ex-date. You may remember this with the acronym BLISS where the BL equals buy limit and the SS equals sell stop. The only time either of these orders will not be reduced is if the medical client turned in DNR (do not reduce) instructions.

The price of the order is then reduced by enough to equal or exceed the amount of the dividend.

If we go back to the example approaching the specialist to buy or sell stock and there is no one in the “crowd”, the specialist will first give the commission broker a quote from his book. That quote will be the highest bid price (the highest priced limit order to buy on his books) and the best asked price {the lowest priced sell limit on his books). If the commission broker is willing to buy at the lowest ask or offering price on the specialist’s book, then a trade will take place; if the commission broker is looking to sell and is willing to accept the highest bid price on the specialist’s book then, again, a trade will take place. It is the responsibility of the specialist to maintain an orderly market and to keep the spread between the bid and asked prices as narrow as possible. If the spread between bid and asked is too wide to generate market activity, the specialist will act on his own account.

If the specialist is presented with sell orders at the post and he has no buyers, he must bid at least 1/8 of a point higher than the best bid on his books. If he has buyers and no sellers, then he must offer stock from his inventory at a price at least, 1/8 of a point below the lowest offer on his book.

Why? It’s because the specialist cannot “compete” with public orders and if his bid matched a customer’s bid or his offer matched a customer’s offering or ask price, he would be considered to be ” competing”.  Since the specialist is required to bid higher and ask lower than the best public orders on his book, the spread is narrowed. That is why it is said that the specialist acts in a dual capacity, as a dealer and as a broker. When buying and selling for his own account, he is acting as a dealer. The specialist acts as a broker when he executes limit orders left with him by commission brokers. When these limit orders are executed out of the specialist’s book (the doctor’s limit price is reached), the specialist uses a priority, parity, and precedence system, as to which order is executed first. These rules, like most others, are designed to give preference to the general public, not to members of the exchange, on a first come first served basis.

Walking Through a Trade

To see how the transactions are actually handled on the floor of an exchange, let us assume that an order to buy 100 shares of General Electric has been given by a doctor customer to the registered representative (stock broker), of a member firm in Atlanta. The order is a market order (an order to buy at the lowest possible price at the time the order reaches the floor of the exchange). This order is telephoned by direct wire, or computer, to the New York office of the member firm, which in turn telephones its order to its clerk on the floor of the exchange.

Each member firm has at least one member of the exchange representing them making trades on the floor. Each one of these members is assigned a number for identification. When the floor clerk receives the order to purchase the General Electric, he causes his member’s call number to appear on 3 large boards situated so that one is always in view. These boards are constantly watched brokers so that they will know when wanted at the phone, since there’s too much noise on the floor to use a paging system. Seeing his number on the board, the broker hurries to his telephone station or cell phone and receives the order to buy 100 shares of G.E. “at the market”. Acting as a commission broker, he immediately goes to the post where G.E. is traded and asks “how’s G.E”, of the specialist?

Part 4: Underwriting US Government Securities Issues

Conclusion

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

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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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New Medical Practice Entrepreneurial Business Rules for Young Physicians [circa 2022]

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Go “Out-of-Box” – OR – Go Employee

By Dr. David Edward Marcinko MBA CMP™ www.CertifiedMedicalPlanner.org

There are more than 950,000 physicians in the United States. Yet, the brutal supply and demand, and demographic calculus of the matter is that there are just too many aging patients chasing too few doctors. Compensation and reimbursement is plummeting as Uncle Sam becomes the payer-of-choice for more than 52% of us. More so, going forward with the PP-ACA OR, perhaps not so much after the Trump election.

Furthermore, many large health care corporations, hospitals, and clinical and medical practices have not been market responsive to this change. Some physicians with top-down business models did not recognize the changing health care ecosystem or participatory medicine climate. Change is not inherent in the DNA of traditionalists. These entities and practitioners represented a rigid or “used-to-be” mentality, not a flexible or “want-to-be” mindset.

Yet today’s physicians and emerging Health 2.0 initiatives must possess a market nimbleness that cannot be recreated in a command-controlled or collectivist environment. Going forward, it is not difficult to imagine the following rules for the new virtual medical culture, and young physicians of the modern era.

A. Rule 1

Forget about large office suites, surgery centers, fancy equipment, larger hospitals, and the bricks and mortar that comprised traditional medical practices. One doctor with a great idea, good bedside manners, or competitive advantage can outfox a slew of insurance companies, Certified Public Accountants, or the Associate Management Accountant, while still serving patients and making money. It is now a unit-of-one economy where “ME Inc.,” is the standard. Physicians must maneuver for advantages that boost their standing and credibility among patients, peers, and payers.

Examples include patient satisfaction surveys, outcomes research analysis, evidence-based-medicine, direct reimbursement compensation, physician economic credentialing, and true patient-centric medicine. Physicians should realize the power of networking, vertical integration, and the establishment of virtual offices that come together to treat a patient and then disband when a successful outcome is achieved. Job security is earned with more successful outcomes; not a magnificent office suite or onsite presence.

B. Rule 2

Challenge conventional wisdom, think outside the traditional box, recapture your dreams and ambitions, disregard conventional gurus, and work harder than you have ever worked before. Remember the old saying, “if everyone is thinking alike, then nobody is thinking.” Do traditionalists or collective health care reform advocates react rationally or irrationally?

For example, some health care competition and career thought-leaders, such as Shirley Svorny, PhD, a professor of economics and chair of the Department of Economics at California State University, Northridge, wonder if a medical degree is a barrier—rather than enabler—of affordable health care. An expert on the regulation of health care professionals, including medical professional licensing, she has participated in health policy summits organized by Cato and the Texas Public Policy Foundation. She argues that licensure not only fails to protect consumers from incompetent physicians, but, by raising barriers to entry, makes health care more expensive and less accessible.

Institutional oversight and a sophisticated network of private accrediting and certification organizations, all motivated by the need to protect reputations and avoid legal liability, offer whatever consumer protections exist today.

C. Rule 3

Differentiate yourself among your health care peers. Do or learn something new and unknown by your competitors. Market your accomplishments and let the world know. Be a non-conformist. Conformity is an operational standard and a straitjacket on creativity. Doctors must create and innovate, not blindly follow entrenched medical societies into oblivion.

For example, the establishment of virtual medical schools and hospitals, where students, nurses, and doctors learn and practice their art on cyber entities that look and feel like real patients, can be generated electronically through the wonders of virtual reality units.

D. Rule 4

Realize that the present situation is not necessarily the future. Attempt to see the future and discern your place in it. Master the art of quick change with fast, but informed decision making. Do what you love, disregard what you do not, and let the fates have their way with you.

Assessment

I receive a couple of phone calls each month from young doctors on this topic. I ask them to decide if they are of the philosophical ilk to adhere to the above rules; or become another conformist and go along … to get along? In other words, get fly!

Or, become an employed, or government doctor.  Just remember … the entity that gives you a job, can also take it away.

Sample fly: http://crossoverhealth.com/

MORE: Marriage Business

Conclusion

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

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

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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BLOG: www.MedicalExecutivePost.com

 

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UPDATE: Memorial Day 2022

By Dr. David Edward Marcinko MBA

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MORE: https://medicalexecutivepost.com/2021/05/30/some-memorial-day-thoughts-2021/

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PODCASTS: AMA to Teach Medical Students Health Economics?

AMA TO TEACH MEDICAL STUDENTS ABOUT HEALTH ECONOMICS?

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DICTIONARY: https://medicalexecutivepost.com/2009/06/08/dictionary-of-health-economics-and-finance/

Did you know that the American Medical Association is calling on medical schools and residency programs to include specific information about healthcare economics and financing in their curricula.

But, is health economics heterodoxic, or not? And; what about demand-derived economics in medicine?

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economic freedom

LINKS

ESSAY: https://medicalexecutivepost.com/2019/08/31/is-health-economics-heterodoxic-or-not/

ESSAY: https://www.modernhealthcare.com/education/ama-adopts-new-policy-training-physicians-healthcare-economics

MORE: https://medicalexecutivepost.com/2019/11/10/ricardian-derived-demand-economics-in-medicine/

MORE: https://medicalexecutivepost.com/2014/08/27/financial-and-health-economics-benchmarking/

MORE: https://healthcarefinancials.files.wordpress.com/2019/01/big-data.pdf

PODCAST: https://vimeo.com/ihe

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BUSINESS, FINANCE, INVESTING AND INSURANCE TEXTS FOR DOCTORS:

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Mental Health Entrepreneurial Start-Up Companies

Top Ten [10] Venture Capital Backed

PRE and POST Texas School Shooting MEMORIUM

By Dr. David Edward Marcinko MBA

By Carol Miller RN MBA

By http://www.MCOL.com

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Mental Health White Paper:

FILE: https://healthcarefinancials.files.wordpress.com/2019/05/mental-health-dr.-marcinko.pdf

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

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

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What is a Stock Market Index IMPLIED OPEN?

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FINANCIAL TERMS AND DEFINITIONS FOR PHYSICIANS AND ALL INVESTORS

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By Dr. David E. Marcinko MBA CMP®

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

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

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

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

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

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

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

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

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Invite Dr. Marcinko to Mask-Up and Speak at your Next Seminar, Webcast or Event?

Invite Dr. Marcinko

The Choice is Up to You

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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.

These include lectures and visiting professorships at major academic centers, keynote lectures for hospitals, economic seminars and health systems, keynote lectures at city and statewide financial coalitions, and annual keynote lectures for a variety of internal yearly meetings.

 Topics Link: imba-inc-firm-services

My Fond Farewell to Tuskegee University

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MEDICAL RISK MANAGEMENT, Liability Insurance and Asset Protection Strategies

FOR PHYSICIANS AND THEIR FINANCIAL ADVISORS

SPONSOR: http://www.CertifiedMedicalPlanner.org

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REVIEWS:

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


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

ASSESSMENT: Your thoughts are appreciated.

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MENTAL HEALTH Action Day 2022

By Staff Reporters

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As part of its Mental Health initiative, MTV’s second-annual Mental Health Action Day – an open-source movement of brands, organizations, government agencies, and cultural leaders to drive culture of mental health from awareness to action – will bring together more than 1,600 organizations in cities across the country to encourage and empower people to take action for mental health on Thursday, May 19, 2022.

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LINK: https://www.mentalhealthactionday.art/

COACHING: From Chaos to Calm: https://medicalexecutivepost.com/coach/
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DICTIONARY: Health Economics and Finance

10,000 TERMS, DEFINITIONS, ABBREVIATIONS AND RESOURCES

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What is the PRODUCER PRICE INDEX?

JUST RELEASED FOR APRIL 2022

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

DEFINITION: The PPI is a group of indexes that measure the change, over time, in the prices received by domestic producers of goods and services. It measures price changes from the perspective of the seller rather than the consumer, as with the CPI. The CPI would include imported goods, while the PPI is relevant to U.S. producers, and therefore would not include imports.

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

The PPI measures over 10,000 products and services. It reports the price changes prior to the retail level. This information is useful to the government in formulating fiscal and monetary policies. The data gathered from the PPI is often used in escalating purchase and sales contracts. That is the dollar amount to be paid at some time in the future.

NOTE: Long-term managed medical care contracts of the future will seek escalation clauses for increases in prices.

BLS: https://www.bls.gov/pPI/

full report: https://www.bls.gov/news.release/pdf/ppi.pdf

your comments are appreciated.

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The BUSINESS of Medical Practice

“NO MARGIN – NO MISSION”

Within Reason

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BY DR. DAVID E. MARCINKO MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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Fake Prescription Drug Rx Example

Altered and Poorly Written Rx for Vicodin

By Dr. David Edward Marcinko MBA

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Poorly-written Rx for vicodin

Drug: Rx Vicodin

Disp: # 10

Sig: Take I, as needed for pain.

Refills: 1 2 3 4 or 5

AM2685591

David Edward Marcinko, MBBS DPM MBA

The patient abuser may change drug quantity numbers, copy or remember the doctors’ DEA number, or take extra Rx pads. For this reason, a physician’s Rx pad should contain his/her name, address and telephone number. The doctor’s DEA number should not be pre-printed on the pad, for fear of mis-use.

Example:

  • Increase the quantity 10, to 100, by adding a zero, so that the additional capsules can be used, sold or bartered with on the street.
  • Change the directions to take 2 capsules, rather than 1 in order to produce greater euphoria.
  • Increase the Rx refills, from one to two, by extending the underline, or checking an additional quantity box.
  • Pre-printed DEA number can be stolen, sold or reused.
  • Pre-printed (not original) physician signature can be reproduced and widely distributed for more prescriptions.

Altered Rx for vicodin

Drug: Rx Vicodin

Disp: # 100

Sig: Take II, as needed for pain.

Refills: 1 2 3 4 or 5

AM2675591

David Edward Marcinko, MDBBS DPM MBA

 The doctor drug addict, or a doc in need of funds, may write for more narcotic agent than needed, and receive the additional pills back from the patient-shill for personal consumption, sell them on the street himself for money, or receive a monetary kickback from the patient-shill.

A pharmacist may also indirectly alter a prescription using the above methods, or simply short-change the patient with fewer narcotic capsules than the prescription intends. This is more difficult to do with pills or tablets in the out patient setting, but easy to do in the in-patient setting when liquid IV drugs are used, by dilution and placing less than the full amount in IV bottles or bags. The harm to patients, of course, may be fatal.

Well-written Rx for vicodin

Drug: Rx Vicodin

Disp: # 10 (ten) capsules

Sig: Take one or two capsules, po, prn pain.

Refills: 1 2 3 4 or 5

AM2685591

David Edward Marcinko, MBBS DPM MBA

Example:

  • Drug quantity can-not be changed.
  • Directions can-not be changed. Route of administration (by mouth) indicated.
  • Rx refills clearly indicated.
  • Handwritten, not pre-printed, DEA number.
  • Original physician signature, only.

Doctor Rx prescription abuse foibles are legendary in the DEA and include a Maryland podiatrist who wrote prescriptions for more than 1,235 Mepergan Fortis capsules ostensibly for his wife following minor foot surgery. Or, the Florida physician who prescribed more than 2,150 Vicodin capsules for a patient with whom he was having an extra-marital affair in order that his consort not disclose the fling to his wife. Or, the osteopath from New Jersey who wrote more than 100 narcotic prescriptions every 8 hour day, for more than a year, to any patient standing in a line in front of his office. And, finally the California dentist whose excuse for writing more than 1,845 narcotic tablet prescriptions in a six month period for the same patient was that they would be needed in his next reincarnation. Yes, all of these incidents are laughable if not for their serious consequences to the involved individuals, and society, alike. The bastards!

Fortunately, unlike drug local domestic drug kingpins or international narco-traffickers who ply their trade virtually undetected, these naive white-collared nerds, always get caught by the Drug Enforcement Agency. Their Rx abuse tactics are so amateurish!

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Prescription Drug Rx ABUSE

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By Dr. David Edwarrd Marcinko MBA

Rx DRUG ABUSE

Traditional medicinal agents come in a variety of ways, known as dispensing vehicles. Drugs may be in liquid, pill or inject able form, they may be compounded in capsules, caplets, gelatin tablets, powders or suppositories, or they may come in creams or ointments for the eye, anus and vagina. They may be ingested into the stomach, placed and dissolved under the tongue, put into the eyes, popped, injected or smeared and transported through the human skin from patches.   

A valid drug prescription is a written order, by a doctor, to a pharmacist. In this country, prescriptions are written by physicians, podiatrists, osteopaths, dentists. and some optometrists, physician assistants and nurse practitioners. In addition to the name of the patient and that of the medical prescriber, the prescription contains the name of the drug (not necessarily a narcotic), its quantity, instructions to the pharmacist, and directions to the patient. Narcotic prescriptions may not be prescribed to a drug addict to prevent withdrawal symptoms, as there must be some other therapeutic purpose for such an order.

The art of medicinal prescription writing, and pharmaceutical compounding, has declined in modern medicine for several reasons. Most drugs are made by pharmaceutical companies, and the role of the pharmacist, in most cases, consists only of compounding and error prevention. Many drugs are even automatically dispensed, and tracked, in the hospital setting with bar coding technology and modern inventory tracking mechanisms. Also, the practice of writing long and complicated prescriptions, containing many active ingredients, adjuvants, correctives, and elegant vehicles, has been abandoned in favor of using pure compounds.

Drugs may be prescribed by their official names, which were first given by the United States Pharmacopeia (USP), in 1920, or by the National Formulary (NF), since 1906. Unofficial or generic names may be used, known as New and Non-Official Drugs (NND) or by the United States Adopted Names (USAN), or by the manufactures trade name. For example, the generic narcotic meperidine or pithidine, is also known by the trade named, demerol. The designation USAN does not imply endorsement by the American Medical Association (AMA) Council on Drugs (CODs), or by the USP.

Of course, there is an advantage and disadvantages to prescribing drugs by their trade name, or generic names. Advantages of generics include economies of scale for both the patient and pharmacist, and although the active ingredient in generics are identical to trade drugs, they are often less expensive since research and development costs are absent, and various binders, colorizing agents, preservatives or dispersing agents are of an inferior quality, and hence cheaper for the patient. Appearance, size and taste issues are common. For the pharmacist, generics are cheaper since a multiplicity of very similar drugs need not be shelved.

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For example, the tablet or capsular form of many drugs contains inactive ingredients, such as: ammonio methacrylate copolymer, hydroxypropyl methylcellulose, lactose, magnesium stearate, povidone, red iron oxide, stearyl alcohol, talc, titanium dioxide, triacetin, yellow iron oxide, yellow iron oxide with FD&C blue No.2 (80 mg strength tablet only), FD&C blue No.2 and other ingredients. And yes, I’ve seen an addict do into shock, or die from acute anaphylaxis, after taking drugs containing ingredient he was highly allergic to.

Shock is a life-threatening condition where blood pressure falls too low to sustain life. It occurs when low blood volume (due to severe bleeding, excessive fluid loss or inadequate fluid uptake), inadequate pumping action of the heart or excessive dilation of the blood vessel walls (vasodilation) causes low blood pressure. This in turn results in inadequate blood supply to body cells, which can quickly die or be irreversibly damaged.

Anaphylactic shock is the severest form of allergy that is a medical emergency. It is a Type I reaction according to the Gell and Coombs medical classification, and is often severe and sometimes fatal systemic reaction in a susceptible individual upon exposure to a specific antigen (such as wasp venom or penicillin) following previous sensitization, or drug use. Characterized especially by respiratory symptoms, fainting, itching, itching and swelling of the throat or other mucous membranes and a sudden decline in blood pressure! The victim literally cannot breathe and drowns in its own congested and fluid filled lungs

So, patients in need of routine drugs for acute or chronic conditions like arthritis, high blood pressure, asthma, acne, hay fever, performance enhancing steroids or, so called life style drugs, like Viagra for a limp woody, or hair growth stimulator Rogaine, may get a good deal by going to Canada or Mexico for generics. But for important drugs, like nitroglycerine fro your heart, blood thinner coumadin, birth control pills or various anti-cancer agents, stick with brand names.

The main disadvantage of trade drugs is increased cost, due to R & D, patents, trademarks, marketing and company advertising expenses. Of course, trade drug are first to market, and hence may be beneficial as a new treatment modality, or injurious if significant side affects or other complications arise.

Today, the prime source for drug information is probably the well known, Physicians Desk Reference (PDR). Now, in its 58th edition, the PDR® provides the latest information on prescription, but not illegal street drugs. It is considered the standard reference that can be found in virtually every physician’s office, hospital and pharmacy in the United States. The current edition is over 3,000 pages long, and is where you can find data on more than 4,000 drugs, by brand and generic name, manufacturer and product categories. The PDR also provides usage information and warnings, drug interactions, plus full-size, full-color photos cross-referenced to specific drugs. For the layman, it also includes: phonetic spelling for each listing, a key to controlled substances, adverse reactions and contraindications, pregnancy ratings, dosages and all other FDA-required information. Of course, on the street, or in Mexico, none of this information matters.

Latin abbreviations, sometimes still used by doctors on prescription blanks include:

Rx = take thou (receipe)

po = by mouth (para orbis)

prn = as needed (pro re’nata)

hs = at bed time (hora somnae)

BID = twice daily

TID = three times daily

QID = four times daily

M = Mix

Traditionally, a medical prescription is written in a certain order, well known to drug abusers, and DEA agents, and consist of six basic parts:

  • Superscription: This is the Rx, or recipe. In Latin it means take thou.
  • Inscription: Represents the ingredients and amounts.
  • Subscription: Represent the description for drug dispensing, and may be represented by the letter M, for mix.
  • Signature:  Often abbreviated as Sig, and contains the directions for patient use.
  • Refill Status: Indicates the number of refills allowed.
  • DEA Number: This is nine-character alpha-numeric sequence, used by all licensed physicians who prescribe narcotic agents. An example is AM2685591. The second letter is the first letter of the doctor’s last name, (ie, Marcinko) and the first two digits add up to the third (ie, 2+6=8).

Finally, in addition to the basic parts of a prescription, it should have the patient’s name, and physician signature written in ink, followed by degree designation, such as MD, DPM, DO or DDS, etc.

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Perhaps the most egregious narcotic prescribing habits recently encountered by DEA agents have been by doctors of all degrees and medical designations. Reasons are generally two-fold. First, the doctor may become a drug addict himself, either by accident or through initial legitimate therapeutic use, and over-prescribe the narcotics. Or, increasing office costs, and decreased reimbursement fee reductions of many managed medical care have so economically destabilized the medical community, that economically impoverished doctors desperately sell prescriptions to finance their personal lifestyles, automobiles, clothes, fancy vacations or own addictions.

For example, a staggering medical student loan debt burden of  $100,000-$250,000 is not unusual for new practitioners. In fact, the federal Health Education Assistance Loan (HEAL) program reported that for the Year 2001, it squeezed significant repayment settlements from its Top 5 list of deadbeat doctor debtors. This included a $303,000 settlement from a New York dentist, $186,000 from a Florida osteopath, $158,000 from a New Jersey podiatrist, $128,000 from a Virginia podiatrist, and $120 from a Virginia dentist. The agency also excluded 303 practitioners from Medicare, Medicaid and other federal healthcare programs and had their cases referred for non-payment of debt.

These facts indicate that the current healthcare reimbursement climate has caused more pain and tumult to doctors than the pubic realizes. Older medical practitioners are retiring prematurely, mature providers are frustrated and in despair, and young physicians have no concept of the economic servitude to which they are about to be subjected. Frustration is high and physician suicides have been documented. Many doctors get divorced at the start of their careers. Even the U.S. Inspector General has declared healthcare providers to be public enemy  #2,behind international narco-traffickers, for their federal drug, fraud and abuse initiatives.  Still, the statistic above lends itself to narcotic drug prescription abuse, either on the part of the doctor or patient, since only these two parties that can directly alter a prescription for illicit drug use, as illustrated by this poorly written prescription for a narcotic pain killer, vicodin.

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On Psychology, Financial Planning and Investing Bias

Psychological Biases Affecting Financial Planning and Investing

Dr. Marcinko at Johns Hopkins University

By Dr. David Edward Marcinko MBA CMP®

[Editor-in-Chief]

Sponsored: http://www.CertifiedMedicalPlanner.org

CMP logo

The following are some of the most common psychological biases.  Some are learned while others are genetically determined (and often socially reinforced).  While this essay focuses on the financial implications of these biases, they are prevalent in most areas in life.

[A] Incentives

It is broadly accepted that incenting someone to do something is effective, whether it be paying office staff a commissions to sell more healthcare products, or giving bonuses to office employees if they work efficiently to see more HMO patients.  What is not well understood is that the incentives cause a sub-conscious distortion of decision-making ability in the incented person.  This distortion causes the affected person – whether it is yourself or someone else – to truly believe in a certain decision, even if it is the wrong choice when viewed objectively.  Service professionals, including financial advisors and lawyers, are affected by this bias, and it causes them to honestly offer recommendations that may be inappropriate, and that they would recognize as being inappropriate if they did not have this bias.  The existence of this bias makes it important for each one of us to examine our incentive biases and take extra care when advising physician clients, or to make sure we are appropriately considering non-incented alternatives.

[B] Denial

Denial is a well known, but under-appreciated, psychological force.  Physicians, clients and professionals (like everyone else) are prone to the mistake of ignoring a painful reality, like putting off an unpleasant call (thus prolonging a problematic situation and potentially making it worse) or not opening account statements because of the desire not to see quantitative proof of losses.  Denial also manifests itself by causing human beings to ignore evidence that a mistake has been made.  If you think of yourself as a smart person (and what professional doesn’t?), then evidence pointing to the conclusion that a mistake has been made will call into question that belief, causing cognitive dissonance.  Our brains function to either avoid cognitive dissonance or to resolve it quickly, usually by discounting or rationalizing the disconfirming evidence. Not surprisingly, colleagues at Kansas State University and elsewhere, found that financial denial, including attempts to avoid thinking about or dealing with money, is associated with lower income, lower net worth, and higher levels of revolving credit.

[C] Consistency and Commitment Tendency

Human beings have evolved – probably both genetically and socially – to be consistent.  It is easier and safer to deal with others if they honor their commitments and if they behave in a consistent and predictable manner over time. This allows people to work together and build trust that is needed for repeat dealings and to accomplish complex tasks.  In the jungle, this trust was necessary to for humans to successfully work as a team to catch animals for dinner, or fight common threats.  In business and life it is preferable to work with others who exhibit these tendencies.  Unfortunately, the downside of these traits is that people make errors in judgment because of the strong desire not to change, or be different (“lemming effect” or “group-think”).  So the result is that most people will seek out data that supports a prior stated belief or decision and ignore negative data, by not “thinking outside the box”.  Additionally, future decisions will be unduly influenced by the desire to appear consistent with prior decisions, thus decreasing the ability to be rational and objective.  The more people state their beliefs or decisions, the less likely they are to change even in the face of strong evidence that they should do so.  This bias results in a strong force in most people causing them to avoid or quickly resolve the cognitive dissonance that occurs when a person who thinks of themselves as being consistent and committed to prior statements and actions encounters evidence that indicates that prior actions may have been a mistake.  It is particularly important therefore for advisors to be aware that their communications with clients and the press clouds the advisor’s ability to seek out and process information that may prove current beliefs incorrect.  Since this is obviously irrational, one must actively seek out negative information, and be very careful about what is said and written, being aware that the more you shout it out, the more you pound it in.

[D] Pattern Recognition

On a biological level, the human brain has evolved to seek out patterns and to work on stimuli-response patterns, both native and learned.  What this means is that we all react to something based on our prior experiences that had shared characteristics with the current stimuli.  Many situations have so many possible inputs that our brains need to take mental short cuts using pattern recognition we would not gain the benefit from having faced a certain type of problem in the past.  This often-helpful mechanism of decision-making fails us when past correlations or patterns do not accurately represent the current reality, and thus the mental shortcuts impair our ability to analyze a new situation.  This biologic and social need to seek out patterns that can be used to program stimuli-response mechanisms is especially harmful to rational decision-making when the pattern is not a good predictor of the desired outcome (like short term moves in the stock market not being predictive of long term equity portfolio performance), or when past correlations do not apply anymore.

[E] Social Proof

It is a subtle but powerful reality that having others agree with a decision one makes, gives that person more conviction in the decision, and having others disagree decreases one’s confidence in that decision.  This bias is even more exaggerated when the other parties providing the validating/questioning opinions are perceived to be experts in a relevant field, or are authority figures, like people on television.  In many ways, the short term moves in the stock market are the ultimate expression of social proof – the price of a stock one owns going up is proof that a lot of other people agree with the decision to buy, and a dropping stock price means a stock should be sold.  When these stressors become extreme, it is of paramount importance that all participants in the financial planning process have a clear understanding of what the long-term goals are, and what processes are in place to monitor the progress towards these goals.  Without these mechanisms it is very hard to resist the enormous pressure to follow the crowd; think social media.

[F] Contrast

Sensation, emotion and cognition work by contrast.  Perception is not only on an absolute scale, it also functions relative to prior stimuli.  This is why room temperature water feels hot when experienced after being exposed to the cold.  It is also why the cessation of negative emotions “feels” so good.  Cognitive functioning also works on this principle.  So one’s ability to analyze information and draw conclusions is very much related to the context with in which the analysis takes place, and to what information was originally available.  This is why it is so important to manage one’s own expectations as well as those of clients.  A client is much more likely to be satisfied with a 10% portfolio return if they were expecting 7% than if they were hoping for 15%.

[G] Scarcity

Things that are scarce have more impact and perceived value than things present in abundance.  Biologically, this bias is demonstrated by the decreasing response to constant stimuli (contrast bias) and socially it is widely believed that scarcity equals value.  People who feel an opportunity may “pass them by” and thus be unavailable are much more likely to make a hasty, poorly reasoned decision than they otherwise would.  Investment fads and rising security prices elicit this bias (along with social proof and others) and need to be resisted.  Understanding that analysis in the face of perceived scarcity is often inadequate and biased may help professionals make more rational choices, and keep clients from chasing fads.

[H] Envy / Jealousy

This bias also relates to the contrast and social proof biases.  Prudent financial and business planning and related decision-making are based on real needs followed by desires.  People’s happiness and satisfaction is often based more on one’s position relative to perceived peers rather than an ability to meet absolute needs.  The strong desire to “keep up with the Jones” can lead people to risk what they have and need for what they want.  These actions can have a disastrous impact on important long-term financial goals.  Clear communication and vivid examples of risks is often needed to keep people focused on important financial goals rather than spurious ones, or simply money alone, for its own sake.

[I] Fear

Financial fear is probably the most common emotion among physicians and all clients. The fear of being wrong – as well as the fear of being correct! It can be debilitating, as in the corollary expression on fear: the paralysis of analysis.

According to Paul Karasik, there are four common investor and physician fears, which can be addressed by financial advisors in the following manner:

  • Fear of making the wrong decision: ameliorated by being a teacher and educator.
  • Fear of change: ameliorated by providing an agenda, outline and/or plan.
  • Fear of giving up control: ameliorated by asking for permission and agreement.
  • Fear of losing self-esteem: ameliorated by serving the client first and communicating that sentiment in a positive manner.

https://images.routledge.com/common/jackets/crclarge/978148224/9781482240283.jpg

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

Psychological Traps

Now, as human beings, our brains are booby-trapped with psychological barriers that stand between making smart financial decisions and making dumb ones. The good news is that once you realize your own mental weaknesses, it’s not impossible to overcome them. 

In fact, Mandi Woodruff, a financial reporter whose work has appeared in Yahoo! Finance, Daily Finance, The Wall Street Journal, The Fiscal Times and the Financial Times among others; related the following mind-traps in a September 2013 essay for the finance vertical Business Insider; as these impediments are now entering the lay-public zeitgeist:

  • Anchoring happens when we place too much emphasis on the first piece of information we receive regarding a given subject. For instance, when shopping for a wedding ring a salesman might tell us to spend three months’ salary. After hearing this, we may feel like we are doing something wrong if we stray from this advice, even though the guideline provided may cause us to spend more than we can afford.
  • Myopia makes it hard for us to imagine what our lives might be like in the future. For example, because we are young, healthy, and in our prime earning years now, it may be hard for us to picture what life will be like when our health depletes and we know longer have the earnings necessary to support our standard of living. This short-sightedness makes it hard to save adequately when we are young, when saving does the most good.
  • Gambler’s fallacy occurs when we subconsciously believe we can use past events to predict the future. It is common for the hottest sector during one calendar year to attract the most investors the following year. Of course, just because an investment did well last year doesn’t mean it will continue to do well this year. In fact, it is more likely to lag the market.
  • Avoidance is simply procrastination. Even though you may only have the opportunity to adjust your health care plan through your employer once per year, researching alternative health plans is too much work and too boring for us to get around to it. Consequently, we stick with a plan that may not be best for us.
  • Loss aversion affected many investors during the stock market crash of 2008. During the crash, many people decided they couldn’t afford to lose more and sold their investments. Of course, this caused the investors to sell at market troughs and miss the quick, dramatic recovery.
  • Overconfident investing happens when we believe we can out-smart other investors via market timing or through quick, frequent trading. Data convincingly shows that people who trade most often under-perform the market by a significant margin over time.
  • Mental accounting takes place when we assign different values to money depending on where we get it from. For instance, even though we may have an aggressive saving goal for the year, it is likely easier for us to save money that we worked for than money that was given to us as a gift.
  • Herd mentality makes it very hard for humans to not take action when everyone around us does. For example, we may hear stories of people making significant profits buying, fixing up, and flipping homes and have the desire to get in on the action, even though we have no experience in real estate.
https://images.routledge.com/common/jackets/crclarge/978149872/9781498725989.jpg

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

Your thoughts are appreciated.

THANK YOU

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HOSPITALS: Management, Operations and Strategies

Tools, Templates and Case Studies

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CELEBRATE: National Teacher Appreciation Week 2022

May 2nd to May 6th

DEALS AND FREEBIES

By Dr. David Edward Marcinko MBA

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In 1984, the National Parents Teachers Association designated the first week of May as Teacher Appreciation Week as a special time to honor the individuals who educated our children. It has become a tradition for restaurants and businesses to offer special deals during that week.

USA Today Deals: https://www.msn.com/en-us/money/companies/teacher-appreciation-week-brings-deals-and-freebies-for-educators-at-sonic-staples-more/ar-AAWPNPp?li=BBnbfcL

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PTA: https://www.pta.org/home/events/PTA-Teacher-Appreciation-Week

DEALS: https://www.cnet.com/culture/national-teacher-appreciation-week-deals-discounts-and-freebies-you-can-get-this-week/

My Teaching Philosophy: https://medicalexecutivepost.com/2022/03/15/my-pragmatic-philosophy-of-education/

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COMMENTS APPRECIATED

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Ambulance, Hearse or Both?

Join Our Mailing List

“Now and Then”

Dr David E Marcinko MBABy Dr. David Edward Marcinko MBA

[Editor-in-Chief]

I was recently at a car show and could not help but snap a photo of the beautiful black 1955 vehicle; below.

Ambulance Defined [Wikipedia]

An ambulance is a vehicle for transportation of sick or injured people to, from or between places of treatment for an illness or injury, and in some instances will also provide out of hospital medical care to the patient. The word is often associated with road going emergency ambulances which form part of an emergency medical service, administering emergency care to those with acute medical problems.

The term ambulance does, however, extend to a wider range of vehicles other than those with flashing warning lights and sirens. The term also includes a large number of non-urgent ambulances which are for transport of patients without an urgent acute condition (see functional types, below) and a wide range of urgent and non-urgent vehicles including trucks, vans, bicycles, motorbikes, station wagons, buses, helicopters, fixed-wing aircraft, boats, and even hospital ships (see vehicle types, also below).

The term ambulance comes from the Latin word ambulare, meaning to walk or move about which is a reference to early medical care where patients were moved by lifting or wheeling. The word originally meant a moving hospital, which follows an army in its movements. During the American Civil War vehicles for conveying the wounded off the field of battle were called ambulance wagons. Field hospitals were still called ambulances during the Franco-Prussian War of 1870 and in the Serbo-Turkish war of 1876 even though the wagons were first referred to as ambulances about 1854 during the Crimean War.

There are other types of ambulance, with the most common being the patient transport ambulance (sometimes called an ambulette). These vehicles are not usually (although there are exceptions) equipped with life-support equipment, and are usually crewed by staff with fewer qualifications than the crew of emergency ambulances. Their purpose is simply to transport patients to, from or between places of treatment. In most countries, these are not equipped with flashing lights or sirens. In some jurisdictions there is a modified form of the ambulance used, that only carries one member of ambulance crew to the scene to provide care, but is not used to transport the patient. Such vehicles are called fly-cars. In these cases a patient who requires transportation to hospital will require a patient-carrying ambulance to attend in addition to the fast responder.

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Ambulance DEM

[The Editor in Marquette, MI]

Hearse Defined [Wikipedia]

Originally, a hearse was an elaborate framework that was erected over a coffin or tomb to which memorial verses or epitaphs were attached. It was then put on the top of horse-drawn carriages, looking much like a luggage rack. Today, the original hearse remains acknowledged by the bit of scroll work or stretched-out “S” on the side of a funeral coach, called Landau bars.

Hearses were originally horse-drawn, but silent electric motorized carts were introduced as horses began to be phased out as transportation. Examples that were used in Paris were reported in the pages of Scientific American May 1907 and petrol-driven hearses began to be produced from 1909 in the United States.  Motorized hearses became more widely accepted in the 1920s.

The vast majority of hearses since then have been based on larger, more powerful car chassis, generally retaining the front end up to and possibly including the front doors but with custom bodywork to the rear to contain the coffin. Some early hearses also served as ambulances, owing to the large cargo capacity in the rear of the vehicle. A few cities experimented with funeral trolley cars and/or subway cars to carry both the casket and mourners to cemeteries, but these were not popular.

The only exception was Chicago, IL which operated 3 different funeral trolley cars over the elevated tracks in downtown Chicago to outlying cemeteries in the western suburbs. A special funeral bureau handled the funeral trains which sometimes operated 3-4 funeral trains a week over the ‘L’.

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$T2eC16Z,!)EE9s2uiQRyBRPl!lhiSw~~60_3

2013-05-18 14.21.19

[Courtesy Rucker Funeral Homes, Lawrenceville, GA. © iMBA, Inc.]

Combination Utility

Back in 1955, this Cadillac performed double-duty for a small town in North East Georgia. Both as ambulance for the still living, as well as hearse for the newly deceased. Notice the dual red [“cherry”] light and siren on the roof  A very utilitarian approach to both functions, don’t you think?

History [Wikipedia]

A combination car was a vehicle built upon a (usually Cadillac) “professional car” chassis which could be employed either as a hearse or as an ambulance, and had the capability of being swapped between those roles without much difficulty. These vehicles were upgraded by coachbuilders such as Superior, Miller-Meteor, and Cotner-Bevington, and were typical of the era when funeral homes offered emergency ambulance service in addition to their primary trade.

Even if a “combo” has no flashing lights (mounted or concealed), siren, or two-way radio installed, an experienced vehicle collector can recognize it as such by it having systems to carry either a gurney or a casket, one or more foldable seats on one side in the rear compartment where a first-aid person can sit while looking after a patient on their way to the hospital, and a cabinet where first-aid supplies can be stored.

Also, the presence of ambulance technology made combos useful in the first call role, as a gurney is also used in that function.

Some combos were equipped with rotating roof beacons that could flash either yellow lights in processional mode, or both red and yellow lights in emergency response mode. Alternately, a hole on the roof was often supplied where a beacon could be bolted on an intermittent basis, a wire passing through to the driver’s compartment where it could be plugged in when needed.

Combos employed more often or exclusively as ambulances were often fitted with ambulance markings and additional lighting. However, usage of passenger car or station wagon derived vehicles as ambulances became impractical in the US after c. 1980 due to upgraded equipment and interior measurement requirements imposed by US government regulators. Many such vehicles were donated or otherwise found their way to developing nations.

The Cadillac combination unit was made famous in Ghostbusters as the Ecto-1, a modified 1959 Miller-Meteor coach.

Note: The Hess & Eisenhardt company also produced luxury Jaguar automobiles; my favorites.

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jag346_SWHT

[My vintage 2000 Jaguar XJ-V8L Touring Sedan]

 

Conclusion

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FINANCIAL MANAGEMENT STRATEGIES: For Hospitals and Healthcare Organizations

Managerial Accounting

TOOLS, TECHNIQUES, CHECKLISTS AND CASE STUDIES

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Reviews

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

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

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

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What is Your Academic Teaching Philosophy?

 Here is My Teaching Philosophy

[By Dr. David Edward Marcinko MBA]

Although any learner-centered teaching philosophy, or Boyer Model of scholarship, is constantly in flux, the mission of a public or private educator is: [1] to promote positive learning; [2] to motivate students, staff and graduates; [3] to provide a strong foundation for lifelong learning; and in modernity [4] to enhance career and life-work opportunities; to [5] improve bottom-line financial metrics, and [6] to collaborate on a national and global basis.

However, because we are specifically operating in the rapidly changing healthcare, business management, investing, finance, economics and education milieu, even deeper experiential insight is needed.

Developing NEW Teaching AND Education Skills FOR Business and Healthcare 2.0

Medicine and healthcare business today is different than a generation ago, and all educators and healthcare professionals need new skills to be successful.

Traditionally, the physician – like the classroom professor – was viewed as the “captain of the ship”. Today, their role may be more akin to a ship’s navigator, utilizing clinical, teaching skills and knowledge to chart the patient’s, or student’s, course through a confusing morass of requirements, choices, rules and regulations to achieve the best attainable clinical or didactic outcomes.

This new teaching paradigm includes many classic business school principles, now modified to fit the PP-ACA, the era of health reform, and modern technical connectivity. Thus, a Professor, Chair or Dean must be a subtle guide on the side; not bombastic sage on the stage.

These, newer teaching philosophies must include:

  • Negotiation – working to optimize appropriate curricula, services and materials;
  • Team play – working in concert with others to coordinate education delivery within a clinically appropriate and cost-effective framework;
  • Working within the limits of competence – avoiding the pitfalls of the generalist teacher versus the subject matter expert that may restrict access to professors, texts and facilities by clearly acknowledging when a higher degree of didactic service is needed on behalf of the student;
  • Respecting different cultures and values – inherent in the support of the academic Principle of Autonomy is the acceptance of values that may differ from one’s own. As the US becomes more culturally heterogeneous, educators and medical providers are called upon to work within, and respect, the socio-cultural and/or spiritual framework of patients, students and their families; 
  • Seeking clarity on what constitutes marginal education – within a system of finite resources; providers and professors are called upon to openly communicate with students and patients regarding access to marginal education and/or treatments.
  • Supporting evidence-based practice – educators, like healthcare providers, should utilize outcomes data to reduce variation in treatments and curriculum to achieve higher academic efficiencies and improved care delivery;
  • Fostering transparency and openness in communications – teachers and healthcare professionals should be willing, and prepared, to discuss all aspects of care and academic andragogy; especially when disclosing problems or issues that arise;
  • Exercising decision-making flexibility – treatment algorithms, templates and teaching pathways are useful tools when used within their scope; but providers and professors must have the authority to adjust the plan if circumstances warrant;
  • Becoming skilled in the art of listening and interpretingIn her ground-breaking book, Narrative Ethics: Honoring the Stories of Illness, Rita Charon, MD PhD, a professor at Columbia University, writes of the extraordinary value of using the patient’s personal story in the treatment plan. She notes that, “medicine practiced with narrative competence will more ably recognize patients and diseases; convey knowledge and regard, join humbly with colleagues, and accompany patients and their families through ordeals of illness.” In many ways, attention to narrative returns medicine full circle to the compassionate and caring foundations of the patient-physician relationship. The educational analog to this book is, The Ethics of Teaching [A Casebook], co-edited by my teacher and colleague Deborah Ware Balogh PhD of the University of Indianapolis.

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The Ohio State University
 Photo by Kevin Fitzsimons

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Assessment

Finally, these thoughts represent only a handful of examples to illustrate the myriad of new skills that tomorrow’s healthcare professionals, and modern educators, must master in order to meet their timeless professional obligations of compassionate patient care and contemporary teaching effectiveness.

Dr. Marcinko Teaching Philosophy

CHAIR: Chair 3.0 Philosophy Dr. Marcinko

Conclusion

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STO LOT Spring Greetings = Life to 100 Hundred Years?

About Centenarians

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By Dr. David Edward Marcinko MBA CMP™

SPONSOR: http://www.CertifiedMedicalPlanner.org

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DEFINITION: A centenarian is a person who has reached the age of 100 years. Because life expectancy worldwide are below 100 years, the term is invariably associated with longevity. In 2012, the United Nations estimated that there were 316,600 living centenarians worldwide.

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

Sto Lat (One Hundred Years) is a traditional Polish song that is sung to express good wishes, good health and long life to a person. It is also a common way of wishing someone a happy birthday in Polish. Sto lat is used in the Spring, many birthdays and on international days of language.

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What Percentage of the Population Lives to 100?

According to the Social Security Administration, the overall chances of living to 100 aren’t actually that great. And, according to the World Economic Forum, there are over 500,000 centenarians among the 7.9 billion people worldwide. That means that only a 0.006% of the population is 100 or more.

Here are a few additional facts from the most recently available information from the Society of Actuaries and the Social Security Administration:

  • One out of three males and one out of two females who are in their mid-50s today will live to be 90.
  • For a couple who is 65 today, there is a 50% chance that one person will be alive at 92.
  • If you have lived to be 65, you will likely live another 20 years, on average.
  • If you live to be 75, the average life expectancy is 88.
  • If you live to be 85, the average life expectancy is 92.
  • And, if you live to be 95, the average life expectancy is 98.

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3 FINANCIAL SLANG “T” Terms

DEFINITIONS Physician-Investors Need to Know

By. Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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Trading AheadUnethical and illegal trading by specialists or market makers.
A specialist may buy a stock for themselves from Dr. John Q. Public even though a better price is available from another seller. The specialist can view bid and ask prices and then manually mis-match them, or see ahead to a less favorable price. It happens in this editor’s experience, by observing how long it takes for a stop order to execute after the stop price was reached.
This practice is a form of shimming.
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Trading ImbalanceA situation where a large block of stock is put up for sale, but not enough buyers are available for purchase, and a market maker is unable to buy the imbalance. Lightly traded and tightly held stocks are considered temporarily illiquid during such imbalances.
On occasion, a trading halt is put into place until enough buyers are available to purchase the deficit. On rare occasion, a handful of buyers can buy the stock at a huge discount if the stock was not halted during the imbalance.
On the New York Stock Exchange, large stocks usually have a “delayed open” for such imbalances, as a trading specialist will fill the order by lining up buyers for the block, and then open trading for the stock for the day.
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Triple Witching HourThe final hour of trading on a Friday when stock index futures, stock index options, and stock options all expire. This happens on the third Friday in March, June, September, and December. See Quadruple Witching Hour.
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CITE: https://www.r2library.com/Resource/Title/0826102549

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MEDICAL PRACTICE: Business Uses of Life Insurance for Doctors

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Dr. David Edward Marcinko | The Leading Business Education Network for  Doctors, Financial Advisors and Health Industry Consultants

By Dr. David E. Marcinko MBA CMP®

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[A] Key Person Insurance

Hospitals, a local family practice office, a pharmaceutical company, all likely have one thing in common. Somewhere within these companies or partnerships, there are key employees or profit makers. Due to their expertise, management skills, knowledge, or “history of why,” they have become indispensable to their employers.

If this key employee were to die prematurely, what would potentially happen to the company?  In many cases, especially in smaller companies, it would have a devastating effect on the bottom line, or even precipitate a bankruptcy. In these circumstances, a form of business insurance, called key person coverage, is recommended in order to alleviate the potential financial problems resulting from the death of that employee.

The business would purchase and own a life insurance policy on the key person. Upon the death of the employee, the life insurance proceeds could be used to:

  • Pay off bank loans.
  • Replace the lost profits of the company.
  • Establish a reserve for the search, hiring and training of a replacement.

[B] Business Continuation Funding

See the chapters on buy-sell agreements and asset protection planning.

[C] Executive Bonus Plan

An executive bonus plan (or § 162 plan) is an effective way for a company to provide valued, select employees an additional employment benefit.  One of the main advantages to an executive bonus plan, when compared to other benefits, is its simplicity. In a typical executive bonus plan, an agreement is made between the employer and employee, whereby the employer agrees to pay for the cost of a life insurance policy, in the form of a bonus, on the life of the employee.

The major benefits of such a plan to the employee are that he or she is the immediate owner of the cash values and the death benefit provided.  The only cost to the employee is the payment of income tax on any bonus received.  The employer receives a tax deduction for providing the benefit, improves the morale of its selected employees, and can use the plan as a tool to attract additional talent.

[D] Non-Qualified Salary Continuation

Commonly referred to as deferred compensation, this is a legally binding promise by an employer to pay a salary continuation benefit at a specific point in the future, in exchange for the current and continued performance of its employee.  These plans are normally used to supplement existing retirement plans.

Although there are different variations of deferred compensation, in a typical deferred compensation agreement, the employer will purchase and own a life insurance policy on the life of the employee. The cash value of the policy grows tax deferred during the employee’s working years. After retirement, these cash values can be withdrawn from the policy to reimburse the company for its after-tax retirement payments to the employee. 

Upon the death of the employee, any remaining death benefit would likely be received income tax free by the employer (Alternative Minimum Taxes could apply to any benefit received by certain larger C corporations).  The death benefit could then be used to pay any required survivor benefits to the employee’s spouse, or provide partial or total cost recovery to the employer.

In a typical plan, the terms of the agreement are negotiated as to the amount of benefit received by the employee, when retirement benefits can begin, how long retirement benefits will be paid, and if benefits will be provided for death or disability.  The business has established what is commonly referred to as “golden handcuffs” for the employee.  As a result, the benefit will only be received if the employee continues to work for the company until retirement. If the employee is terminated or quits prior to retirement, the plan would end and no benefits would be payed.

[E] Split Dollar Plans

Split dollar arrangements can be a complicated and confusing concept for even the most experienced insurance professional or financial advisor. This concept is, in its simplest terms, a way for a business to share the cost and benefit of a life insurance policy with a valued employee. In a normal split dollar arrangement, the employee will receive valuable life insurance coverage at little cost to them. The business pays the majority of the premium, but is usually able to recover the entire cost of providing this benefit at termination of employment, death or surrender of the policy.

Following the publication of IRS Notices 2002-8 and 2002-59, there are currently two general approaches to the ownership of business split-dollar life insurance: Employer-owned or Employee-owned.

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[1] Employer-Owned Method

In the employer-owned method the employer is the sole owner of the policy. A written split-dollar agreement usually permits the employee to name the beneficiary for most of the death proceeds. The employer owns all the cash value and has the unfettered right to borrow or withdraw it as necessary. At the end of the formal agreement, the business can generally (1) continue the policy as key person insurance, (2) transfer ownership to the insured and report the cash values as additional income to the insured, (3) sell the policy to the insured, or (4) use a combination of these methods. This is commonly referred to as “rollout.”

Practitioners should be careful not to include rollout language in the split-dollar agreement. The reason the rollout should not be included is that if the parties formally agree that after a specified number of years—or following a specific event—related only to the circumstances surrounding the policy, that the policy will be turned over to the insured, the IRS could declare that the entire transaction was a sham and that its sole purpose was to avoid taxation of the premiums to the employee, generating substantial interest and penalties in addition to the additional taxes due.

The death proceeds available to the insured employee’s beneficiary is considered a current and reportable economic benefit (REB), and it is an annually taxable event to the employee. If an individual policy is involved, the REB is calculated by multiplying the face amount times the government’s Table 2004 rates or the insurance company’s alternative term rates, using the insured’s age. If a second-to-die policy is involved, the government’s PS38 rates or the company’s alternative PS38 rates will be used. Any part of the premium actually paid by the employee is used to offset any REB dollar-for-dollar.

[2] Employee-Owned Method

With the employee-owned method, the insured-employee is generally the applicant and owner of the policy. Any premiums paid by the business are deemed to be loans to the employee and the employee reports as income an imputed interest rate on the cumulative amount of loan based on Code § 7872. A collateral assignment is made for the benefit of the business to cover the cumulative loan amount. In some cases, the assignment may allow the assignee to have access to the cash values of the policy by way of a policy loan. This method is unavailable for officers and executives of publicly- held corporations because of the current restrictions on corporate loans (the Sarbanes-Oxley Act of 2002).

The employee-owned method is somewhat similar to the older collateral assignment form of split-dollar. The benefits for the employee are both the ability to control large amounts of death proceeds as well as developing equity in the policy. Whether or not this new method catches on will depend greatly on the imputed interest rate published by the IRS every July. If set low enough, this may be an excellent opportunity for the employee to use inexpensive business dollars to pay for life insurance. 

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

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CELEBRATE: National Public Health Week 2022

By Dr. David Edward Marcinko MBA

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National Public Health Week is observed during the first week of April every year. That’s seven days to champion the health of all Americans. It’s a week to recognize that everyone should lead healthier lives, irrespective of where they live, work, or come from. Since its founding in 1955, the initiative has become an important movement to highlight issues that can improve the health and happiness of a nation. You could choose to crush a workout or any workout challenge today. It’s a great week to start eating healthy and stick to it. Whatever you do, remember to involve your friends, family, and the larger community. It’s also a week when we campaign for health policies that are fair, inclusive, and accessible to all communities in the United States.

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

HISTORY

The first National Public Health Week took place in April 1955 and was organized by the American Public Health Association (A.P.H.A.). Since then, the initiative has received tremendous support from civil societies and administrations across the United States. The day recognizes the long history and achievements in public health. It also serves to highlight critical issues to help people lead healthier and happier lives.

In attempting to reach these goals, National Public Health Week seeks to address the root causes of poor health, disease, and lifestyles. It starts with recognizing that healthcare is still a privilege many cannot afford. Where people are born, their neighborhoods, places of work, different lives, and backgrounds determine the quality of healthcare access.

For example, a child who goes to school hungry will not be an engaged student. People working for minimum wages sacrifice health for the sake of an income. It’s thousands of families who have no access to nutritious food in their communities. Or those without the means to travel to access quality healthcare, often located far away.

National Public Health Week is committed to making health inclusive and equitable. It hopes to foster decision-making that considers the health of all communities — irrespective of income, race, or gender. Each year, the first full week in April celebrates the power of the community in realizing this vision. The A.P.H.A. usually announces different themes for each day of the week. From fitness challenges and discussions to sharing healthy recipes — it’s seven days of committing to health as a country.

So, no matter where you are, APHA invites you to join us as we celebrate National Public Health Week! This year’s theme, Public Health Is Where You Are, celebrates what we know is true: The places where we are, physically, mentally and societally, affect our health and our lives.

Celebrate and promote health in your community by hosting your own NPHW event!

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Here are a few ideas:

  1. Host virtual health panels and discussions. …
  2. Team up to reach new audiences and build community. …
  3. Take advantage of Student Day. …
  4. Organize around the daily themes. …
  5. Make advocacy easy. …
  6. Find movement opportunities.

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Professor and physician executive David Edward Marcinko MBBS DPM MBA MEd BSc CMP® is originally from Loyola University MD, Temple University in Philadelphia and the Milton S. Hershey Medical Center in PA; Oglethorpe University, and Atlanta Hospital & Medical Center in GA; and the Aachen City University Hospital, Koln-Germany. He is one of the most innovative global thought leaders in health care business and entrepreneurship today.

Dr. Marcinko is a multi-degreed educator, board certified physician, surgical fellow, hospital medical staff President, Chief Education Officer and philanthropist with more than 400 published papers; 5,150 op-ed pieces and over 125+ international presentations to his credit; including the top 10 biggest pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

Dr. Marcinko is past Editor-in-Chief of the prestigious “Journal of Health Care Finance”, and a former Certified Financial Planner®, who was named “Health Economist of the Year” in 2001. He is a Federal and State court approved expert witness featured in hundreds of peer reviewed medical, business, management and trade publications [AMA, ADA, APMA, AAOS, Physicians Practice, Investment Advisor, Physician’s Money Digest and MD News].

As a licensed insurance agent, RIA and SEC registered endowment fund manager, Dr. Marcinko is Founding Dean of the fiduciary focused CERTIFIED MEDICAL PLANNER® chartered designation education program; as well as Chief Editor of the HEALTH DICTIONARY SERIES® Wiki Project. His professional memberships include: ASHE, AHIMA, ACHE, ACME, ACPE, MGMA, FMMA and HIMSS.

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What is the SELLING AWAY of Securities?

Information All Physician Investors Should Know

By Dr. David Edward Marcinko MBA CMP®

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According to Wikipedia, selling away in the U.S. securities brokerage industry is the inappropriate practice of an investment professional who sells, or solicits the sale of, securities not held or offered by the brokerage firm with which he is associated.

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

An example of the term expressed in a sentence is, “The broker was selling investments away from the firm.” Brokers marketing securities must have obtained the appropriate securities licenses for various types of investments. Brokers in the U.S. may be “associated” with one or more Brokerage firms and must obtain licenses by passing standardized Financial Industry Regulatory Authority exams such as the Series 6 or Series 7 exam.

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In the past I’ve held these as well as a Series 63 and 65 license [SEC].

CFI: https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/selling-away/

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What are OTC “PINK” Sheets?

LOW PRICED “PENNY STOCKS?

By Dr. David E. Marcinko MBA CMP®

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Pink sheets are an over-the-counter (OTC) market that connects broker-dealers electronically. There is no trading floor and the quotations are also all done electronically. Since there is no central trading floor or stock exchange like the New York Stock Exchange (NYSE), the pink sheet-listed companies do not have the same criteria to fulfill as the companies listed on national stock exchanges. Many stocks listed on the pink sheets are low-priced penny stocks that trade for under $5 a share.

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

Pink sheets got their name because the original pink sheets listing the stocks were actually printed and distributed on pink pieces of paper. Trading over-the-counter (OTC) refers to the process of how securities listed on the pink sheets are traded through a broker-dealer network.

MORE: https://en.wikipedia.org/wiki/OTC_Markets_Group

Pink Sheets | Explanation | Examples with Advantages and Disadvantages

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What is the VIP [Patient] Syndrome

VERY IMPORTANT PERSONS

By Dr. David Edward Marcinko MBA

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VERY IMPORTANT PATIENTS

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DEFINITION: “VIP syndrome” is a term coined in 1964 by the psychiatrist Walter Weintraub to describe an intriguing paradox: Throughout history, the rich and famous, with all their resources and fancy doctors, have often received worse medical treatment, and suffered from worse health outcomes, than the average person. When physicians afford “special privileges” to their powerful patients, from “Mad King” George III to Michael Jackson, they seem to get sicker and even die. While Weintraub, a psychoanalyst, attributed the problem in part to doctors unconsciously resenting their influential patients, it seems doctors simply get starstruck around famous people and high-ranking figures. Despite their medical expertise, these physicians find themselves opting out of basic tests for “privacy” or prescribing dangerous medications for “comfort.”

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

RELATED: https://journal.chestnet.org/article/S0012-3692(16)37268-3/fulltext

MORE: https://www.msn.com/en-us/health/medical/an-easy-treatment-promised-me-a-sharper-jawline%e2%80%94except-for-one-little-catch/ar-AAVpHz9?li=BBnb7Kz\

DKE: https://medicalexecutivepost.com/2018/09/14/what-is-the-dunning-kruger-effect/?preview_id=188020&preview_nonce=b5c7f4a5de&preview=true

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MEDICAL ETHICS: Managing Risk is a Component of Real Health Caring

Demanding High Moral Standards of Self … and Economic HEALTHCARE Organizations

Dr. David Edward Marcinko MBA CMP®

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It has been argued that physicians have abdicated the “moral high ground” in health care by their interest in seeking protection for their high incomes, their highly publicized self-referral arrangements, and their historical opposition toward reform efforts that jeopardized their clinical autonomy. 

Experts Speak

In his book Medicine at the Crossroads, colleague and Emory University professor Melvin Konnor, MD noted that “throughout its history, organized medicine has represented, first and foremost, the pecuniary interests of doctors.” He lays significant blame for the present problems in health care at the doorstep of both insurers and doctors, stating that “the system’s ills are pervasive and all its participants are responsible.” 

In order to reclaim their once esteemed moral position, physicians must actively reaffirm their commitment to the highest standards of the medical profession and call on other participants in the health care delivery system also to elevate their values and standards to the highest level.

Evolution

In the evolutionary shifts in models for 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 parties to the health care delivery system to raise their ethical bar. 

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.” 

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.”

Incumbent in these activities is the expectation that the forces that control our health care delivery system, the payers, the regulators, and the providers will reach out to the larger community, working to eliminate the inequities that have left so many Americans with limited access to even basic health care. 

Charles Dougherty clarified this obligation in Back to Reform, when he noted that “behind the daunting social reality stands a simple moral value that motivates the entire enterprise”. 

ASSESSMENT

Health care is indeed grounded in caring. And, managing risk is a component of caring. It arises from a sympathetic response to the suffering of others.

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Physician Medical Risk Management and Insurance Planning Practices of Leading CERTIFIED MEDICAL PLANNERS®

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MENTAL ACCOUNTING: What is it?

By Dr. David E. Marcinko MBA CMP®

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DEFINITION: Mental accounting attempts to describe the process whereby people code, categorize and evaluate economic outcomes. The concept was first named by Richard Thaler. Mental accounting deals with the budgeting and categorization of expenditures. People budget money into mental accounts for expenses or expense categories

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

Mental Accounting is the act of bucketizing investments and then reviewing the performance of the individual buckets separately (e.g. investing at low savings rate while paying high credit card interest rates).

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Mental Accounting • Money is

Examples of mental accounting are: (1) matching costs to benefits (wanting to pay for vacation before taking it and getting paid for work after it was done, even though from perspective of time value of money the opposite should be preferred0, (2) aversion to debt (don’t like long-term debt for short-term benefit), (3) sunk-cost effect (illogically considering non-recoverable costs when making forward-going decisions).

In investing, treating buckets separately and ignoring interaction (correlations) induces people not to sell losers (even though they get tax benefits), prevent them from investing in the stock market because it is too risky in isolation (however much less so when looked at as part of the complete portfolio including other asset classes and labor income and occupied real estate), thus they “do not maximize the return for a given level of risk taken).

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Welcome ARPA-H [health]

By Dr. David Edward Marcinko MBA CMP

SPONSOR: http://www.CertifiedMedicalPlanner.org

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Recent advances in biomedical and health sciences—from immunotherapy to treat cancer, to the highly effective COVID-19 vaccines—demonstrate the strengths and successes of the U.S. biomedical enterprise. Such advances present an opportunity to revolutionize how to prevent, treat, and even cure a range of diseases including cancer, infectious diseases, Alzheimer’s disease, and many others that together affect a significant number of Americans.

NIH: https://www.nih.gov/arpa-h

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To improve the U.S. government’s capabilities to speed research that can improve the health of all Americans, President Biden is proposing the establishment of the Advanced Research Projects Agency for Health (ARPA-H). Included in the President’s FY2022 budget as a component of the National Institutes of Health (NIH) with a requested funding level of $6.5B available for three years, ARPA-H will be tasked with building high-risk, high-reward capabilities (or platforms) to drive biomedical breakthroughs—ranging from molecular to societal—that would provide transformative solutions for all patients.

MORE: https://thehealthcareblog.com/blog/2022/03/22/arpha-h-needs-to-think-bigger/

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