What are “MEME” Stocks?

A FINANCIAL EXPLANATION

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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Image result for meme stocks

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DEFINITION: The meaning of meme stocks is sort of self-explanatory: hyped stocks that perform well. But from a fundamental perspective, they shouldn’t do well at all.

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

For example, Reddit forums and social media hype drive meme stocks. Speculators on Twitter and Reddit united together to trade their favorite companies in hopes of driving them “to the moon.” 

It may not be fair to call them speculators. These hype beasts want to buy and hold stocks of companies that might not have a great long-term outlook.

Brokerages like Robinhood helped level the playing field with apps and ‘easier’ access. That’s giving retail traders more opportunity. Robinhood traders can buy with just a few clicks on their smartphones and use partial positions to buy chunks of stocks.

And it’s helped create meme stock madness.

MORE: https://www.msn.com/en-us/money/savingandinvesting/7-meme-stocks-with-the-most-potential-for-runaway-success/ss-AAPQbYU?li=BBnbfcL

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Why are CERTIFIED MEDICAL PLANNER® Textbooks SO DARN Popular?

[By Dr. David Edward Marcinko MBA CMP®]

http://www.CertifiedMedicalPlanner.org

OK – I was a Certified Financial Planner® before my academic team launched the Certified Medical Planner™ online and on-ground chartered education and board certification designation program a few years ago. I am now CFP reformed and in remission.

MORE: Enter CPMs

Enter the Certified Medical PlannerChartered Designation

Today, we are of course, gratified that Certified Medical Planner™ mark notoriety is growing organically in the healthcare, as well as financial services, industry.

Even uber-blogger Mike Kitces MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASL has taken note of us in his musings on the Nerd’s Eye View website. And, the reality is that there are a growing number of CFP educational programs at the post-CFP niche market level.

But, none for healthcare industrial complex: for doctors … by doctors!

Popularity of our Text Books

However, it is our modern, innovative and proprietary Certified Medical Planner™ textbooks and dictionaries that have exploded in the academic marketplace.

In fact, they are now redacted in thousands of medical, graduate, law and B-schools and libraries, as well as colleges and universities throughout the nation. This includes the Library of Congress, National Institute of Health and  the Library of Congress.

What Gives?

We have been told that this textbook popularity and publishing success is because of their balanced and peer-reviewed nature; something not very widespread in the financial services industry that is prone to gross and overstated advertising, salesmanship and marketing hyperbole. And, for this we are very gratified.

But, is there another reason our books are so popular?

A bit of networking and research suggests that interested folks may be eschewing the actual course work in favor of just the high quality textbooks! UGH!

Another reason may be that our books and curricula are kept fresh and updated on our corporate website: http://www.MedicalBusinessAdvisors.com

Assessment

So, what do you think? Matriculation with the professional mark versus self study without the designation mark. Please opine.

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.

Book Marcinko: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

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

DOCTORS:

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

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

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

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

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HOSPITALS:

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

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

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Adult Learners and Students:

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What is the FOREX MARKET?

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By Dr. David E. Marcinko MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

The foreign exchange market is a global decentralized or over-the-counter market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined prices.

In terms of trading volume, it is by far the largest market in the world, followed by the credit market.

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

The forex market is not dominated by a single market exchange, but a global network of computers and brokers from around the world. Forex brokers act as market makers as well and may post bid and ask prices for a currency pair that differs from the most competitive bid in the market.

The forex market is made up of two levels—the interbank market and the over-the-counter (OTC) market. The interbank market is where large banks trade currencies for purposes such as hedging, balance sheet adjustments, and on behalf of clients. The OTC market, on the other hand, is where individuals trade through online platforms and brokers.

INDICATORS: https://medicalexecutivepost.com/2014/02/08/top-forex-indicators/

NOTE: FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all physicians or investors.

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

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

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Become a Board CERTIFIED MEDICAL PLANNER®

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Help Physicians and Medical Professionals Thrive

[FINANCIAL PLANNING AND MEDICAL PRACTICE MANAGEMENT]

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XPAS

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LEARN MORE HERE: https://medicalexecutivepost.com/2021/10/02/the-certified-medical-planner-curriculum/

CONTACT: ANN MILLER RN MHA CMP®

Phone: 770-448-0769

EMAIL: MarcinkoAdvisors@msn.com

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The CERTIFIED MEDICAL PLANNER® Program Curriculum

BY DR. DAVID E. MARCINKO MBA CMP®

CMP

THE NEXT GENERATION OF FIDUCIARY FOCUSED FINANCIAL PLANNING AND MEDICAL MANAGEMENT ADVICE FOR DOCTORS

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VISIT: http://www.CERTIFIEDMEDICALPLANNER.org

CURRICULUM: Enter the CMPs

BE AWARE ALL ADVISORS … NEXT GEN FINANCIAL ADVICE IS HERE?

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Are you a financial planner, insurance agent or investment advisor seeking to assist your physician clients with medical practice enhancement solutions, along with healthcare targeted financial planning services, but don’t know where to turn for help?

OR, maybe you’ve already had a bad experience with a young physician or astute healthcare professional client that was actually more informed than you in these areas?

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

OR, a doctor/nurse client who demanded a true fiduciary advisor [not fee-based advice, with no dual licenses and no arbitration clauses] documented in writing].

Read this decade old Federal Government report to learn what can happen when your advisor is not an informed Certified Medical Planner© designated medical management practitioner.

Then, become a Certified Medical Planner© and thrive by helping others …. first!

GOV: https://oig.hhs.gov/fraud/docs/alertsandbulletins/consultants.pdf

True yesterday … more true today.

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

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CONTACT: Ann Miller RN MHA CMP®

Phone: 770-448-0769

EMAIL: MarcinkoAdvisors@msn.com

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What is EBITDA?

A TERM ALL PHYSICIAN INVESTORS MUST KNOW

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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

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

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

Why EBITDA is still a Great Financial Management Metric

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

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

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

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

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

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MENTAL ACCOUNTING: What is it?

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanning.org

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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What is Techno SCAM-BAITING?

BY ANONYMOUS

SPONSOR: http://www.CertifiedMedicalPlanner.org

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Scam-Baiting Behind the Scenes

The most basic form of scambaiting sets out to waste a scammer’s time. At a minimum, scambaiters attempt to make scammers answer countless questions or perform pointless and random tasks. By keeping a scammer busy, scambaiters claim they’re preventing the scammer from defrauding a real victim.

Scambaiting may also be conducted with a specific purpose in mind. Sometimes scambaiters attempt to obtain an offender’s bank account information, for instance, which they then report to a financial institution. But there are other, less benevolent motives in the scambaiting community.

Thousands of scambaiters are organised on the 419eater forum, which describes itself as the “largest scambaiting community on earth”, with over 1.7 million forum threads. The forum was first established in 2003 to tackle the growing issue of 419 emails – a scam that promises people huge sums of cash in return for a small upfront fee.

419eater provides a particularly interesting case study because members are incentivised and rewarded for their scambaits through a unique system of icons, regarded as trophies, that they can obtain in their profile’s signature lines.

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Romance Scam : Find Out How We Uncovered This Chinese Scam

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MORE: https://www.theguardian.com/technology/2021/oct/03/who-scams-the-scammers-meet-the-amateur-scambaiters-taking-on-the-crooks?utm_source=pocket-newtab

Healthcare: https://www.scamwatch.gov.au/types-of-scams/buying-or-selling/health-medical-products

Medical Insurance: https://www.reddit.com/r/scambait/comments/jsgffx/just_got_a_scam_call_to_sign_me_up_for_bogus/

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What Exactly is a Financial DAO?

A decentralized autonomous organization

DR. DAVID EDWARD MARCINKO FACFAS MBA CFP MBBS [Hon] [Executive Summary] -  PDF Free Download

BY. DR. DAVID EDWARD MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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What is DAO - Decentralized Autonomous Organizations

A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC), is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. A DAO’s financial transaction record and program rules are maintained on a blockchain. The precise legal status of this type of business organization is unclear.

A well-known example, intended for venture capital funding, was The DAO, which launched with $150 million in crowdfunding in June 2016, and was nearly immediately hacked and drained of US$50 million in cryptocurrency. The hack was reversed in the following weeks, and the money restored, via a hard fork of the Ethereum blockchain: the Ethereum miners and clients switched to the new fork.

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

MORE: https://www.msn.com/en-us/money/topstocks/what-is-a-dao/ar-AAOIpjw?li=BBnb7Kz

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PODCASTS: What is a STABLECOIN?

HEDGE AGAINST INFLATION

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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What Are Stablecoins? - CB Insights Research

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DEFINITION: Stablecoins are blockchain-based digital currencies that have been created with the aim to have a stable value. Stablecoins achieve price-stability through various different methods such as a peg against a fiat currency or a commodity, through collateralization against other cryptocurrencies or through algorithmic coin supply management.

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

Every stable coin includes a specific set of mechanisms that mostly behave in the same way. In general, stable coins keep collateral of the asset and manage the supply. In this way, they incentivize the market, which allows trade of the coin for no more or less than $1.

A stable coin can be considered the best depending on several factors: It should be stable. PAX is one the most stable stablecoin. It should be liquid and available on most exchanges. It should be backed by FIAT. PAX is 100% collateralized in US bank accounts. It should be regulated. It should be redeemable.

MORE: https://www.msn.com/en-us/money/markets/treasury-fed-fear-stablecoins-could-disrupt-financial-system/ar-AAOE7lO?li=BBnb7Kz

PODCAST #1: https://www.youtube.com/watch?v=O3rVWLhBIPo

PODCAST #2: https://www.youtube.com/watch?v=GsSSLDzKCOE

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What is the US DEBT CEILING?

IN BRIEF

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Invite Dr. 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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SPONSOR: http://www.CertifiedMedicalPlanner.org

What is the domestic national debt ceiling? 

A cap on how much the US government can borrow to finance its operations. 

  • It was introduced during World War I so that Congress wouldn’t have to approve every bond issuance by the Treasury Department as it had done previously—freeing up more time for name-calling. 
  • The debt ceiling has been suspended dozens of times over the years, including 3x during the Trump administration. 

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

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Debt Ceiling: Definition, Current Status

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Without suspending the debt ceiling, the US wouldn’t be able to borrow money to pay its bills—and things would get ugly if that happened. The federal government would have to slash spending for programs like Medicaid, local governments would find it harder to borrow, and financial markets could go haywire.

In short, a failure to act would “produce widespread economic catastrophe,” Treasury Secretary Janet Yellen wrote in the Wall Street Journal. 

Important note: The debt ceiling doesn’t account for new spending, like the $3.5 trillion proposal the Democrats have on the table. Instead, it’s about spending Congress has already authorized, such as paying out Social Security. Over the years, the debt ceiling has become a “political weapon,” according to the AP, as each party tries to blame the other for their spending habits and for heaping more debt on the US. 

IRS: https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/debt-limit

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

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The “BACK-DOOR” & MEGA Roth IRA?

A conversion can get you into a Roth IRA—even if your income is too high

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

If you’re a physician looking to get ahead on planning for retirement, you’re likely familiar with individual retirement accounts, or IRAs. An IRA is a tax-advantaged vehicle that helps you grow your retirement savings. Roth IRAs are particularly attractive, because you don’t pay taxes on withdrawals in retirement.

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

There’s one problem: you can’t contribute to a Roth IRA directly if you make above a certain income. A backdoor IRA, though, can solve your problem by allowing you to convert a traditional IRA into a Roth.

Here’s how it works:

First, place your contribution in a traditional IRA—which has no income limits.

Then, move the money into a Roth IRA using a Roth conversion.

But make sure you understand the tax consequences before using this strategy.

Review Roth IRA income limits

See the source image

How a MEGA Backdoor Roth Works

The mega backdoor Roth allows you to put up to $38,500 in a Roth IRA or Roth 401(k) in 2021, on top of the regular contribution limits for those accounts. If you have a Roth 401(k) at work (and the plan allows for the mega option as described below), generally you can choose whether the final destination of your mega contributions is the Roth 401(k) or a Roth IRA. If your employer offers only a traditional 401(k), then your mega contributions would end up in a Roth IRA.

Here’s a quick summary of what you need to have in place for the ideal mega backdoor Roth strategy:

  • A 401(k) plan that allows “after-tax contributions.” After-tax contributions are a separate bucket of money from your traditional and Roth 401(k) contributions. About 43% of 401(k) plans allow after-tax contributions, according to a 2017 survey of large and midsize employers by consulting firm Willis Towers Watson.
  • Your employer offers either in-service distributions to a Roth IRA — that is, you can take money out of the 401(k) plan while you’re still working at the company — or lets you move money from the after-tax portion of your plan into the Roth 401(k) part of the plan. If you’re not sure, ask your human resources department or plan administrator.
  • You’ve got money left over to save, even after maxing out your regular 401(k) and Roth IRA contributions.

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What is the KIDDIE TAX?

VITAL FOR PHYSICIAN PARENTS TO UNDERSTAND

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

Do your children have income-generating assets in a custodial account?

If so, be sure you understand the so-called kiddie tax.

This law was passed to discourage wealthier individuals from transferring assets to their children to take advantage of their lower tax rates. The kiddie tax has seen many iterations but current rules tax a minor child’s unearned income—including capital gains distributions, dividends, and interest income—at the parents’ tax rate if it exceeds the annual limit ($2,200 in 2021).

The Kiddie Tax - Baker Holtz

The tax applies to dependent children under the age of 18 at the end of the tax year (or full-time students younger than 24) and works like this:

  • The first $1,100 of unearned income is covered by the kiddie tax’s standard deduction, so it isn’t taxed.
  • The next $1,100 is taxed at the child’s marginal tax rate.
  • Anything above $2,200 is taxed at the parents’ marginal tax rate.

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

So – If your child also has earned income, say from a summer job or legitimate work in your medical office or practice, the rules become more complicated.

To learn more, see IRS Publication 929

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What is an ADR / SPDR?

AMERICAN DEPOSITORY RECEIPTS AND S&P RECEIPTS

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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

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

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American Depositary Receipts (ADRs) - Meaning, Types, Examples

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

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

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

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

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

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

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Over Heard in the DOCTOR’S LOUNGE

On “Hard Working” HMO Physicians

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By Dr. David E. Marcinko MBA CMP®

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

One of my favorite patients told me this anecdote as he recalled the story of the old man who spent a day watching his physician son treating HMO patients in the office. 

The doctor had been working at his usual feverish pace all morning, and although he was working hard, bitterly complained to his dad that he was not making as much money as he used to.

Finally, the old man interrupted him and said,

“Son, why don’t you just treat the sick patients?” 

The doctor-son looked annoyed at his father, and responded,

“Dad, can’t you see, I don’t have time to treat just the sick ones.”

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What is a DIVIDEND ARISTOCRAT Stock?

By Dr. David Edward Marcinko MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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A Dividend Aristocrat is a stock that has exhibited a remarkable level of consistency, measured by the fact that only those S&P 500 companies that have increased their annual dividend for 25 straight years — or more — can be called one. The name was coined by cable TV personality and investor Jim Cramer

These companies have raised their dividends through good times and bad, including recessions, crashes, and pandemics. Being able to continue doing so is a tribute to their stability and strength. Now, the past 18 months have been a particularly difficult economic environment to operate in, and many companies were forced to slash or hold the line on their dividends as a result.

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

100+ dividend aristocrats with dividend history

But some companies came through it just fine, like investment manager T. Rowe Price (NASDAQ: TROW), which increased its dividend for the 34th straight year in 2021. It is located in Baltimore Maryland not far from where I grew up. In fact, I used to play stick ball, as a kid, in the parking lot.

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

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The Board CERTIFIED MEDICAL PLANNER® Professional Chartered Designation Program

VISIT: http://www.CERTIFIEDMEDICALPLANNER.org

CURRICULUM: Enter the CMPs

Physicians Beware … the Medical Management Consultants?

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Are you a doctor desperate for practice enhancement solutions, but don’t know where to turn for help? Or, maybe you’ve already had a bad experience with a non-fiduciary business consultant, or management guru, more interested in his bottom line than your success?

Read this decade old Federal Government report to learn what can happen when your advisor is not an informed Certified Medical Planner© designated medical management practitioner.

GOV: https://oig.hhs.gov/fraud/docs/alertsandbulletins/consultants.pdf

True yesterday … more true today.

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PODCASTS: AMA to Teach Medical Students Health Economics?

AMA TO TEACH MEDICAL STUDENTS ABOUT HEALTH ECONOMICS?

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Courtesy: www.CertifiedMedicalPlanner.org

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

Your thoughts are appreciated.

BUSINESS, FINANCE, INVESTING AND INSURANCE TEXTS FOR DOCTORS:

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

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Personal Financial Planning for Physicians and Medical Colleagues

ME Inc = Going it Alone but with a Team

BY DR. DAVID EDWARD MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

The physician, nurse, or other medical professional should easily recognize that there are a vast array of opportunities, obstacles, and pitfalls when it comes to managing one’s finances.  Still, with some modicum of effort, the basic aspects of insurance, investments, taxes, accounting, portfolio management, retirement and estate planning, debt reduction, asset protection and practice management can be largely self-taught. Yet, it is realized that nuances and subtleties can make a well-intentioned financial plan fall short.  The devil truly is in the details.  Moreover, none of these areas can be addressed in isolation. It is common for a solution in one area to cause a new set of problems in another. 

Accordingly, most health care practitioners would be well served to hire [independent, hourly compensated and prn] financial help. Unlike some medical problems, financial issues may not cause any “pain” or other obvious symptoms.  Medical professionals tend to have far more complex financial situations than most lay people. Despite the complexities of the new world of health reform, far too many either do nothing; or give up all control totally, to an external advisor. This either/or mistake can be costly in many ways, and should be avoided. 

In reality, and at various time in their careers, the medical professional needs a team comprised of at least a financial analyst, lawyer, management consultant, risk manager [actuary, mathematician or insurance counselor] and accountant. At various points in time, each member of the team, or significant others, will properly assume a role of more or less importance, but the doctor must usually remain the “quarterback” or leader; in the absence of a truly informed other, or Certified Medical Planner™.

This is necessary because only the doctor has the personal self-mandate with skin in the game, to take a big picture view.  And, rightly or wrongly, investments dominate the information available regarding personal finance and the attention of most physicians.  One is much more likely to need or want to discuss the financial markets with their financial advisor than private letter rulings by the IRS, or with their estate planning attorney or tax accountant. While hiring for expertise is a good idea, there is sinister way advisors goad doctors into using all their retail services; all of the time. That artifice is – the value of time. 

True integrated physician focused and financial planning is at its core a service business, not a product or sales endeavor. And, increasingly money is more likely to be at the top of the list for providers as the healthcare environment is contracting.

So, eschewing the quarterback model of advice, and choosing to self-educate thru this book and elsewhere, may be one of the best efforts a smart physician can make.

ASSESSMENT: Your thoughts are appreciated.

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

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

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

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*****

BUSINESS PLAN CONSTRUCTION: For Health Industry Modernity

FOR MEDICAL AND HEALTHCARE ENTREPRENEURS AND INNOVATORS

By Dr. David Edward Marcinko MBA MEd CMP®

I was asked by business schools and medical colleagues – and their bankers, CPAs and advisors – to speak about this topic several times last year before the pandemic.

Now, with the specter of M-4-A etc; it certainly is a vital concern to all young entrepreneurs, doctors & medical professionals whether live, audio recorded or in podcast form. And so, here is a written transcript of a recent presentation for your review.

Now, with the specter of tele-health, tele-medicine, M-4-A etc; it certainly is a vital concern to all young doctors & medical professionals whether live, audio recorded or in podcast form. And so, here is a written transcript of a recent presentation for your review.

***

New Product Business Plan Sample [2021 Updated] | OGScapital

***

READ: https://healthcarefinancials.files.wordpress.com/2017/08/mba-business-plan-capstone-outline.pdf

YOUR THOUGHTS ARE APPRECIATED.

SECOND OPINIONS: https://medicalexecutivepost.com/schedule-a-consultation/

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Thank You

***

CERTIFIED MEDICAL PLANNER™ Designation: A.I. Allows Adult Learners Take Control

“Robo-Examiners” Let CMP™ Candidates Take Control

Dr. David Marcinko MBA CMP™
[Founding CEO and President]

Enter the CMPs

cmp

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.

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.

READ: https://medicalexecutivepost.com/2020/07/09/robo-examiners-let-cmp-candidates-take-control/

MORE: https://medicalexecutivepost.com/2020/06/16/discover-the-best-medical-risk-management-and-insurance-planning-practices-of-leading-cmps/

Your thoughts and comments are appreciated.

THANK YOU

***

“Churning”, “Front Running” and “Pumping & Dumping”

BE ALERT AND BE AWARE

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

Front Running (Definition, Examples) | How Traders Use it?

Churning: The practice of a provider seeing a patient more often than is medically necessary, primarily to increase revenue through an increased number of visits. A practice, in violation of SEC rules, where a salesperson affects a series of transactions in a customer’s account which are excessive in size and/or frequency in relation to the size and investment objectives of the account. An insurance agent who is churning an account is normally seeking to maximize the income (in commissions, sales credits or mark-ups) derived from the account.  

FRONT-RUNNING: Form of market manipulation where a broker/dealer delays processing of a large customer trade in an underlying security until the firm can execute an options trade in that security in anticipation of the client’ s trade impact on the underlying security.

Pump and dump: A a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money.

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

Your comments are appreciated.

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

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***

AGI: What it is – How it Works?

ADJUSTED GROSS INCOME

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BY Dr. DAVID EDWARD MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

The U.S. individual tax return is based around the concepts of Adjusted Gross Income (AGI) and Taxable Income (TI).  AGI is the amount that shows up at the bottom of page one of Form 1040, individual income tax return.  It is the sum of all of the taxpayer’s income less certain allowed adjustments (like alimony, one-half of self-employment taxes, a percentage of self-employed health insurance, retirement plan contributions and IRAs, moving expenses, early withdrawal penalties and interest on student loans).  This amount is important because it is used to calculate various limitations within the area of itemized deductions (e.g., medical deductions: 10 percent of AGI; miscellaneous itemized deductions: 2 percent of AGI). 

When a healthcare professional taxpayer hears the phrase “an above the line deduction”, the line being referenced is the AGI line on the tax return.  Generally, it is better for a deduction to be an above the line deduction, because that number helps a taxpayer in two ways.  First, it reduces AGI, and second, since it reduces AGI, it is also reducing the amounts of limitations placed on other deductions as noted above.

Obviously, if there is an above the line there is also a “below the line” deduction.  These below the line deductions are itemized deductions (or the standard deduction if itemizing is not used) plus any personal exemptions allowed. AGI less these deductions provides the taxable income on which income tax is actually calculated. All of that being said, it is better for a deduction to be an above the line deduction. Although this is a bit dry, it helps to understand the concepts in order to know where items provide the most benefit to the medical professional taxpayer.

                            PERSONAL TAXATION CALCULATIONS

Gross Income (all income, from whatever source derived, including illegal activities, cash, indirect for the benefit of, debt forgiveness, barter, dividends, interest, rents, royalties, annuities, trusts, and alimony payments-no more)

    Less non-taxable exclusions (municipal bonds, scholarships, inheritance, insurance

                                            proceeds, social security and unemployment income [full or

                                            partial exclusion], etc.).

Total Income

    Less Deductions for AGI (alimony, IRA contributions, capital gains, 1/2 SE tax,

                                               moving, personal, business and investment expenses, and

                                               penalties, etc.). 

Adjusted Gross Income (bottom Form 1040)

    Less Itemized Deductions from AGI, (medical, charitable giving, casualty,

involuntary conversions, theft, job and miscellaneous expenses, etc.), or

    Less Standard Deduction (based on filing status)

    Less Personal Exemptions (per dependents, subject to phase outs)

Taxable Income

   Calculate Regular Tax

      Plus Additional Taxes (AMT, etc.)

      Minus Credits (child care, foreign tax credit, earned income housing, etc.)

      Plus Other Taxes

Total Tax Due

YOUR THOUGHTS ARE APPRECIATED.

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

Thank You

***

***

On Purchasing Individual BONDS!

A Seldom Discussed Investing Topics for Doctors and All Investors Until Now?

By Dr. David Edward Marcinko MBA CMP®

MARKET ALERT: Investors fled into the bond market Monday, pulling the yield on the closely watched 10-year Treasury to its lowest since February, with investors dashing out of equities on fears that rising COVID-19 infections will threaten recovery in the world’s largest economy.

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Now – Trading individual bonds is not like trading stocks. Stocks can be bought at uniform prices and are traded through exchanges. Most bonds trade over the counter, and individual brokers price them.  But, price transparency has gotten better in the last decade. 

For example, in 1999, the bond markets gained clearness from the House of Representatives’ Bond Price Competition Improvement Act of 1999. Responding to this pioneering law, the site http://www.investinginbonds.com was established. This site provides current prices on bonds that have traded more than four times the previous day. With the advent of Investinginbonds.com and real-time reporting of many trades, investors are much better off today.  Many well regarded brokers including Schwab, Ameritrade, and Fidelity Investments now have dedicated websites devoted to bond trading and pricing. 

Fidelity Investments chose to disclose its fee structure for all bonds, making it clear what it will cost you per trade. Fidelity charges $1 per bond trade. Some on-line brokers charge a flat fee as well, ranging from $10.95 at Zions Direct to $45 at TD Ameritrade. Depending on the number of bonds trading, one may be more complimentary than another. The trading fee disclosures, however, do not divulge the spreads between the buy and sell price embedded in the transaction that some dealer is making in the channel. Keep in mind that only by comparison shopping can assist you in finding the best transaction price, after all fees are taken into account. Other sites may not charge any fee, but rather embed the profit in the spread.

Despite the difficulty in pricing and transparency, investing in individual bonds offers several rewards over purchasing bond mutual funds.

First, bond mutual funds never mature.

Second, you know exactly what you will be receiving in interest each year.  You will also know the exact maturity date. 

Furthermore, your individual investment is protected against interest rate risk, at least over the full term to maturity.  Both individual bonds and bond funds share interest-rate risk (the risk of locking up an investment at a given rate, only to see rates rise). This pushes bond prices down.  At least with an individual bond, you can re-invest it at the higher, market rate once the bond matures.

But, the lack of a fixed maturity date on a bond mutual fund causes an open ended problem; there is no promise of the original investment back.  Short of default, an individual bond will return all principal and pay all interest assuming you hold it to maturity.  Bond funds are not likely to default as most funds maintain positions in hundreds of individual bonds.  The force of interest rate risk to individual bond or bond mutual fund prices depends on the maturity of a bond investment: the longer the maturity of a bond or bond fund (average), the more the price will drop due to rising rates. This is known as duration.

Duration is a statistical term that measures the price sensitivity to yield, is the primary measurement of a bond or bond fund’s sensitivity to interest rate changes.  Duration indicates approximately how much the price of a bond or bond fund will adjust in the reverse direction given a rise in interest rates. For instance, an individual bond with an average duration of five years will fall in value approximately 5% if rates rise by 1% and the opposite is accurate as well.

Although stated in years, duration is not simply a gauge of time. Instead, duration signals how much the price of your bond investment is likely to oscillate when there is an up or down movement in interest rates. The higher the duration number, the more susceptible your bond investment will be to changes in interest rates.  If you have money in a bond or bond fund that holds primarily long-term bonds, expect the value of that fund to decline, perhaps significantly, when interest rates rise. The higher a bond’s duration, the greater its sensitivity to interest rates alterations. This means fluctuations in price, whether positive or negative, will be more prominent.

For example, a bond fund with 10-year duration will diminish in value by 10 percent if interest rates increase by one percent. On the other hand, the bond fund will rise in value by 10 percent if interest rates descend by one percent. The important concept to remember is once you recognize a bond’s or bond fund’s duration, you can forecast how it will react to a change in interest rates.

UPDATE:

The yield on the 10-year Treasury note, which serves as a benchmark for interest rates across the US economy, fell for an eighth straight day last week to below 1.3%—the lowest level since February. And, the 10-year yield fell to 1.181% with an intra-day low of 1.176% yesterday, which was the lowest since February 11.

Since bond prices and yields move in opposite directions, falling yields signal higher demand for Treasuries.

Why it matters: At the most basic level, the 10-year yield is a key indicator of investors’ confidence in future US economic growth. As the Delta variant spreads and threatens to slow the economic recovery, the fall in yields means investors are souring on a mega growth spurt and snapping up safer assets rather than riskier stocks.

What does this mean for inflation? Because investors sell bonds when they think inflation is coming, the runup in bond prices means the worst of Wall Street’s inflation concerns may be over. “It feels like we have moved from thinking inflation will be transitory, to fearing growth will be transitory,” Art Hogan, chief marketing strategist at National Securities, said.

ASSESSMENT: Your thoughts are appreciated.

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

ORDER Textbook: 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

SECOND OPINIONS: https://medicalexecutivepost.com/schedule-a-consultation/

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THANK YOU

***

FINANCIAL PLANNING AND INVESTING FOR PHYSICIANS: Purchase Textbook Today & Relax Tomorrow

“MANIC MONDAY” 2021

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

YOUR THOUGHTS ARE APPRECIATED

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THANK YOU

***

FINANCIAL PLANNING: Strategies for Physicians and their Advisors

A Textbook Review

SECOND OPINIONS: https://medicalexecutivepost.com/schedule-a-consultation/

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THANK YOU

***

RISK FACTORS COMMON TO PHYSICIANS

SOME COMMON RISK FACTORS FOR MEDICAL COLLEAGUES TO APPRECIATE

BY DR. DAVID E. MARCINKO MBA CMP®

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AN INCOMPLETE LIST = T.N.T.C.

  • Do you and or any family members drive a vehicle?
  • Do you have employees?
  • Do you have a professional malpractice exposure?
  • Do you have legal responsibility to protect medical, EMRs or personal and patient financial data?
  • Are you married and do you have assets not protected by a prenuptial agreement?
  • Do you have a current tax obligation?
  • Do you own a business?
  • Are you a board member, officer, or director of a corporation, foundation, religious or educational organization?
  • Do you engage in activities like hunting, flying, boating, etc?
  • Do you have business or domestic partners whose actions create joint and several liabilities for you?
  • Do you have personal guarantees on real estate or for business loans; or family members?
  • Do you have tail liability for professional services performed in the past?
  • Have you made specific legal or financial representations that others have relied upon in a business context?
  • What kind and what dollar amount of insurance and legal planning have you implemented against these exposures?

***

FOREWORD BY J. WESLEY BOYD MD PhD MA

[Professor of Psychiatry Harvard and Yale University]

***

ASSESSMENT: Your thoughts and comments are appreciated.

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

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

THANK YOU

***

Medical FINANCIAL PLANNING “Holistic” STRATEGIES

BY AND FOR PHYSICIANS AND THEIR ADVISORS

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

***

SPONSOR: http://www.CertifiedMedicalPlanner.org

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

Your thoughts are appreciated.

THANK YOU

***

What is a MEME Stock?

MEME ME!

BY PROFESSOR DR. DAVID EDWARD MARCINKO MBA Certified Medical Planner®
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A “MEME” stock isn’t as easily defined as a growth or value stock, so to give it a definitive categorization would be inappropriate. Nor would actually categorizing it alongside growth and value stocks. They won’t be found in textbooks anytime soon, but to overlook their impact could potentially be an expensive oversight.

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

Stonks Meme, Explained: What Can It Teach You About Actual ...

READ: https://blog.mywallst.com/what-is-a-meme-stock/#:~:text=A%20meme%20stock%20isn%E2%80%99t%20as%20easily%20defined%20as,their%20impact%20could%20potentially%20be%20an%20expensive%20oversight.

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

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

CONTACT: Ann Miller RN MH

[Executive Director]

MarcinkoAdvisors@msn.com

***

HEDGE FUNDS: History in Brief

ABOUT | DAVID EDWARD MARCINKO

BY DR. DAVID E. MARCINKO MBA CMP®

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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.

See the source image

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™

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

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

THANK YOU

***

PODCAST: What is the “Diluted” Stock Effect?

WHAT IT IS – HOW IT WORKS

BY DR. DAVID E. MARCINKO MBA CMP®

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The lowering of the book or market value of the shares of a company’s stock as a result of more shares outstanding. A company’s initial registration may include more shares than are initially issued when the company goes public for the first time.

Later, an issue of more stock by a company (called a “primary offering,” distinguished from the “initial public offering”) dilutes the existing shares outstanding. 

Also, earnings-per-share calculations are said to be “fully diluted” when all common stock equivalents (convertible securities, rights, and warrants) are included. “Fully diluted” numbers are used in analysis when there is a likelihood of conversion or exercise of rights and warrants.

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

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How does dilution affect my shares? | Startupxplore Blog

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PODCAST: https://duckduckgo.com/?q=Dilutive%22+Stock&t=newext&atb=v275-2&iax=videos&ia=videos&iai=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DtjQzJ7GY0GY

ASSESSMENT: Your thoughts are appreciated.

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

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

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

THANK YOU

***

WHITHER THE CERTIFIED MEDICAL PLANNER™ MARKS?

Wither the CERTIFIED MEDICAL PLANNER™ Professional Certification?

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DEAR INVESTMENT ADVISORS, CPAs, FINANCIAL PLANNERS, FINANCIAL ADVISORS & INSURANCE AGENTS

We believe that:

If you do not have a market niche; you are not deeply informed
If you are not deeply informed; you can’t different yourself
If you can’t differentiate yourself; you can’t differentiate price
If you can’t differentiate price; you have no market power
If you have no market power; you have no unique knowledge
If you have no unique knowledge; you have fewer profits

If you have fewer profits; you are not likely a CMP™

CMP

PROGRAM CURRICULUM: Enter the CMPs

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

Dean Gene Schmuckler PhD MBA MEd CTS
http://www.CertifiedMedicalPlanner.org

THANK YOU

***

What is a REIT, Really?

REITs – The Margarine of Real Estate Investing

See the source image

By Dr. Dennis Bethel MD

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

Just like real estate, butter has been around for thousands of years.  Sometime in the 1800’s someone decided that there was a need for something that looked like butter, tasted similar to butter, but wasn’t butter.  Along came margarine.  Real estate investment trusts (REITs) are the margarine of the real estate investing world.

NAREIT, the National Association of Real Estate Investment Trusts, answers the question

What is a REIT?” in the following way:

“A REIT, or Real Estate Investment Trust, is a type of real estate company modeled after mutual funds.  REITs were created by Congress in 1960 to give all Americans – not just the affluent – the opportunity to invest in income producing real estate in a manner similar to how many Americans invest in stocks and bonds through mutual funds.  Income-producing real estate refers to land and the improvements on it – such as apartments, offices or hotels.  REITs may invest in the properties themselves, generating income through the collection of rent or they may invest in mortgages or mortgage securities tied to the properties, helping to finance the properties and generating interest income.”

While REITs typically own real estate, investors in REITs do not.  REITs are paper assets that represent interest in a company that owns and operates income producing properties.  In essence they are real estate flavored stock.  As such, REITs are generally highly correlated with the stock market.

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https://www.sgobserver.com/wp-content/uploads/2018/08/Screen-Shot-2018-08-26-at-8.41.54-pm.png

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TERMINOLOGY

When discussing REITs, you encounter the following terminology – public, private, traded, and non-traded.  Public REITs can be designated as non-traded or traded depending on whether or not they are traded on a stock exchange.

Since traded REITs are traded on the stock exchange, they enjoy a high degree of liquidity just like any other stock.  Unfortunately, traded REITs tend to follow the economic cycles and can closely correlate with the stock market.  This can lead to a higher degree of volatility than what is usually seen with physical real estate.  Additionally, they do not afford the investor the tax-advantages that come with investments in physical real estate.

MORE: https://medicalexecutivepost.com/2017/11/15/on-non-traded-real-estate-investment-trusts-reits/

Private REITs and non-traded public REITs are not traded on an exchange.  These are usually offered to accredited investors through broker-dealer networks.  These REITs are illiquid and generally have high fees.  They have been plagued with transparency issues as well as conflicts of interest.  Valuation of this stock is difficult and can be misleading to the investor.  Due diligence is very important as the quality of non-traded REITs can vary widely.

MORE: https://medicalexecutivepost.com/2014/06/13/why-i-hate-non-publicly-traded-reits/

ASSESSMENT: Your thoughts and comments are appreciated.

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The CORPORATE PRACTICE of Medicine?

By Dr. David Edward Marcinko MBA CMP®

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CORPORATE PRACTICE OF MEDICINE (CPM) LAWS

OK – I admit that I am not an attorney. But, approximately half of states in the U.S. have made it unlawful for practicing physicians to be employees of corporations. This ban on the corporate practice of medicine (CPM) is intended to keep medical professionals independent and free from financial pressures and influence.

Most states have made exceptions allowing physicians to become employees of not-for-profit organizations and sometimes hospitals. States such as California, Iowa, and Texas, have declined to allow hospitals to employ physicians, although even those states have special exceptions. Iowa hospitals may employ pathologists and radiologists, and Texas public hospitals and California teaching hospitals may employ physicians. Ohio has no ban on the corporate practice of medicine.

ASSESSMENT: Anyone can own a physician practice in Ohio.

QUERY: So, who does the aggrieved patient sue?

YOUR THOUGHTS ARE APPRECIATED

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The Business of Medical Practice [3rd. edition]

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Health Dictionary Series of Administrative Terms

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To keep up with the ever-changing healthcare industrial complex, we must learn new definitions and re-learn old terminology in order to correctly apply it to practice. By aggregating the most up-to-date abbreviations, acronyms, definitions and terms, the Health Dictionary Series offers a wealth of information to help understand the ever-changing terms-of-art in healthcare today.

Each 10,000 item handbook is essential for doctors, nurses, benefits managers, financial advisors/planners, and insurance agents, CPAs, and administrators; as well as graduate and under graduate students and professors. Our goal to for each dictionary to be designated as a Doody’s Core Title.

Dictionary of Health Insurance and Managed Care

With more than 10,000 definitions, 4,000 abbreviations and acronyms, and a 3,000 item oeuvre of resources, readings, and nomenclature derivatives, this dictionary covers the Medicare, managed care and Medicaid, private insurance, Veteran’s Administration and PP-ACA language of the entire health and long-term care insurance sector.

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Dictionary of Health Economics and Finance

Health economics and finance is an integral component of the health care industrial complex. Its language is a diverse and broad-based concept covering many other industries: accounting, mathematics, the actuarial sciences, stochastics and statistics, salary reimbursements, physician payments, compensation and forecasting are all commingled arenas.

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Dictionary of Health Information Technology Security

There is a myth that all healthcare stakeholders understand the meaning of information technology jargon. In truth, the vernacular of contemporary systems is unique, and often misused or misunderstood. Moreover, emerging Heath Information Technology (HIT) thru the HITECG initiatives; in the guise of terms, definitions, acronyms, abbreviations and standards; often puts the non-expert in a position of maximum uncertainty and minimum productivity.

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FOREWORDS

[Mike Stahl PhD MBA] *** [Foreword Dr.Mata MD CIS] *** [Dr. Getzen PhD] 

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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.

YOUR THOUGHTS ARE APPRECIATED

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THE ANATOMIC BASIS OF HUMAN PHYSIOLOGY AND BEHAVIOR?

BRAIN ANATOMY

By Dr. David Edward Marcinko MBA CMP©

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I am not a neurologist, psychologist, or psychiatrist. But, it is well known that emotional and behavioral change involves the human nervous system. And, there are two parts of the nervous system that are especially significant for holistic financial advisor; the first is the limbic system and the second is the autonomic nervous system. 

According to Dr. C. George Boerre of Shippensburg University of Pennsylvania, this is known as the emotional nervous system.

1. The Limbic System

The limbic system is a set of structures that lies on both sides of the thalamus, just under the cerebrum.  It includes the hypothalamus, the hippocampus, the amygdala, and nearby areas.  It is primarily responsible for emotions, memories and recollection. 

Hypothalamus

The small hypothalamus is located just below the thalamus on both sides of the third ventricle (areas within the cerebrum filled with cerebrospinal fluid that connect to spinal fluid). It sits inside both tracts of the optic nerve, and just above the pituitary gland.

The hypothalamus is mainly concerned with homeostasis or the process of returning to some “set point.”  It works like a thermostat:  When the room gets too cold, the thermostat conveys that information to the furnace and turns it on.  As the room warms up and the temperature rises, it sends turns off the furnace.  The hypothalamus is responsible for regulating hunger, thirst, response to pain, levels of pleasure, sexual satisfaction, anger and aggressive behavior, and more.  It also regulates the functioning of the autonomic nervous system, which means it regulates functions like pulse, blood pressure, breathing, and arousal in response to emotional circumstances. In a recent discovery, the protein leptin is released by fat cells with over-eating.  The hypothalamus senses leptin levels in the bloodstream and responds by decreasing appetite.  So, it seems that some people might have a gene mutation which produces leptin, and can’t tell the hypothalamus that it is satiated.   The hypothalamus sends instructions to the rest of the body in two ways.  The first is to the autonomic nervous system.  This allows the hypothalamus to have ultimate control of things like blood pressure, heart rate, breathing, digestion, sweating, and all the sympathetic and parasympathetic functions.

The second way the hypothalamus controls things is via the pituitary gland.  It is neurally and chemically connected to the pituitary, which in turn pumps hormones called releasing factors into the bloodstream.  The pituitary is the so-called “master gland” as these hormones are vitally important in regulating growth and metabolism.

Hippocampus

The hippocampus consists of two “horns” that curve back from the amygdala.  It is important in converting things “in your mind” at the moment (short-term memory) into things that are remembered for the long run (long-term memory).  If the hippocampus is damaged, a patient cannot build new memories and lives in a strange world where everything they experience just fades away; even while older memories from the time before the damage are untouched!  Most patients who suffer from this kind of brain damage are eventually institutionalized.

Amygdala

The amygdalas are two almond-shaped masses of neurons on either side of the thalamus at the lower end of the hippocampus.  When it is stimulated electrically, animals respond with aggression.  And, if the amygdala is removed, animals get very tame and no longer respond to anger that would have caused rage before.  The animals also become indifferent to stimuli that would have otherwise have caused fear and sexual responses.

Related Anatomic Areas

Besides the hypothalamus, hippocampus, and amygdala, there are other areas in the structures near to the limbic system that are intimately connected to it:

  • The cingulate gyrus is the part of the cerebrum that lies closest to the limbic system, just above the corpus collosum.  It provides a pathway from the thalamus to the hippocampus, is responsible for focusing attention on emotionally significant events, and for associating memories to smells and to pain.
  • The ventral tegmental area of the brain stem (just below the thalamus) consists of dopamine pathways responsible for pleasure.  People with damage here tend to have difficulty getting pleasure in life, and often turn to alcohol, drugs, sweets, and gambling.
  • The basal ganglia (including the caudate nucleus, the putamen, the globus pallidus, and the substantia nigra) lie over to the sides of the limbic system, and are connected with the cortex above them.  They are responsible for repetitive behaviors, reward experiences, and focusing attention. 
  • The prefrontal cortex, which is the part of the frontal lobe which lies in front of the motor area, is also closely linked to the limbic system.  Besides apparently being involved in thinking about the future, making plans, and taking action, it also appears to be involved in the same dopamine pathways as the ventral tegmental area, and plays a part in pleasure and addiction.

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2. The Autonomic Nervous System

The second part of the nervous system to have a particularly powerful part to play in our emotional life is the autonomic nervous system. 

The autonomic nervous system is composed of two parts, which function primarily in opposition to each other.  The first is the sympathetic nervous system, which starts in the spinal cord and travels to a variety of areas of the body.  Its function appears to be preparing the body for the kinds of vigorous activities associated with “fight or flight,” that is, with running from danger or with preparing for violence.  Activation of the sympathetic nervous system has the following effects:

  • dilates the pupils and opens the eyelids,
  • stimulates the sweat glands and dilates the blood vessels in large muscles,
  • constricts the blood vessels in the rest of the body,
  • increases the heart rate and opens up the bronchial tubes of the lungs, and
  • inhibits the secretions in the digestive system.

One of its most important effects is causing the adrenal glands (which sit on top of the kidneys) to release epinephrine (adrenalin) into the blood stream.  Epinephrine is a powerful hormone that causes various parts of the body to respond in much the same way as the sympathetic nervous system.  Being in the blood stream, it takes a bit longer to stop its effects, and may take some time to calm down again

The sympathetic nervous system also takes in information, mostly concerning pain from internal organs.  Because the nerves that carry information about organ pain often travel along the same paths that carry information about pain from more surface areas of the body, the information sometimes get confused.  This is called referred pain, and the best known example is the pain in the left shoulder and arm when having a heart attack.

The other part of the autonomic nervous system is called the parasympathetic nervoussystem.  It has its roots in the brainstem and in the spinal cord of the lower back.  Its function is to bring the body back from the emergency status that the sympathetic nervous system puts it into.

Some of the details of parasympathetic arousal include some of the following:.

  • pupil constriction and activation of the salivary glands,
  • stimulating the secretions of the stomach and activity of the intestines,
  • stimulating secretions in the lungs and constricting the bronchial tubes, and;
  • decreases heart rate.

The parasympathetic nervous system also has some sensory abilities:  It receives information about blood pressure, levels of carbon dioxide in the blood, etc.

There is actually another part of the autonomic nervous system that is not mentioned too often: the enteric nervous system.  It is a complex of nerves that regulate the activity of the stomach. 

For example, if you get sick to your stomach with a new financial advisory client – or feel nervous butterflies with your first patient encounter as a doctor- you can blame the enteric nervous system.

ASSESSMENT: Your thoughts are appreciated.

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

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Non-Traditional Physician Compensation Models

Creative Compensation Models

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BY DR. DAVID EDWARD MARCINKO MBA CMP®

A Review of Some Newer Compensation Models

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Today, whether independent or employed, physicians can pursue several creative compensation models, other than fee-for service reimbursement based on Current Procedural Terminology [CPT®] codes, not popular a few decade ago:

  • Pay-for-Performance Initiatives [P4P]: According to Mark Fendrick, MD and Michael E. Chernew, PhD, instead of the one size fits all approach of traditional health insurance, a “clinically-sensitive” cost-sharing system that supports co-payments related to evidence-based value for targeted patients is emerging. In 2014, for example, there were a number of changes to Medicare’s pay-for-performance programs [personal communication]. These value-based payment modifiers will show up in physicians’ paychecks in few years, and will be expanded to practices with 10 or more eligible professionals. The program, mandated by the Affordable Care Act, assesses a provider’s quality of care and costs, and increases Medicare payments for good performers and decreases them for bad ones. And, doctor performance will be reflected in adjustments to 2016 payments. As much as 2% of Medicare payments will be at risk in 2021 based on physician performance in 2019. It was only 1% for 2015, which was based on doctors’ 2013 performance.
  • Physician Quality Reporting Initiative Model.  The Centers for Medicare and Medicaid Services [CMS] paid out more than $40 million in monetary incentives to medical providers who reported data on quality of care delivered between July 2020 and December 2020; as part of its PQRI. Under the PQRI, healthcare providers who participated received bonuses of 1.5 percent of their total CMS payments during the reporting period.
  • Direct Reimbursement Payment Model:  A Health Reimbursement Arrangement (HRA) is a tool which is used to provide direct reimbursement by an employer for qualified medical expenses.  The HRA is an employer-established benefit plan, and contributions to the plan may only be made by the employer.  The HRA can be used in conjunction with any insurance plan, including a high-deductible plan. Qualified reimbursements made under the HRA are tax-deductible for the employer, and the payments are not counted as income for the employee.  Any balance in an HRA can generally be carried over to the next year.  This plan allows for flexibility and tailored to meet the particular needs of both employers and employees in a tax-advantaged manner.  From the physician’s perspective, increasing use of HRAs poses new challenges.  Payment for services in the medical office may be required of the patient/employee before reimbursement from the employer occurs.  These extra steps can easily result in delayed payment or non-payment to medical providers who are not prepared to work with this model of reimbursement.  The provisions for this model are outlined in IRS publication 969, http://www.irs.gov/pub/irs-pdf/p969.pdf.
  • Concierge Practice Model:  The concept of concierge medicine (CM), also known as retainer medicine, first emerged in Seattle, Washington in the 1990’s. With CM, the physician charges an annual retainer fee to patients.  The fee usually ranges from $1,000 to $20,000 per year, and the number of patients in a practice is usually limited to a few hundred.  In return, patients receive increased levels of access and personalized care. This often includes same day appointments, extended visit times, house calls, and 24/7 access to the physician by pager and cell phone. An annual executive physical is often included, as well as an increased emphasis on preventive care.  Many physicians choosing this type of practice model do so for lifestyle and control reasons, although the average income for a successful CM primary care physician is higher than that of a typical primary care physician. .
  • Global Healthcare Model: American businesses are extending their cost-cutting initiatives to include offshore employee medical benefits, and facilities like the Bumrungrad Hospital in Bangkok, Thailand (cosmetic surgery), the Apollo Hospital in New Delhi, India (cardiac and orthopedic surgery) are premier examples for surgical care. Both are internationally recognized institutions that resemble five-star hotels equipped with the latest medical technology. Countries such as Finland, England and Canada are also catering to the English-speaking crowd, while dentistry is especially popular in Mexico and Costa Rica. Although this is still considered “medical tourism,” Mercer Health and Benefits was recently retained by three Fortune 500 companies interested in contracting with offshore hospitals and The Joint Commission [TJC] has accredited 88 foreign hospitals through a joint international commission. To be sure, when India can discount costs up to 80%, the effects on domestic hospital reimbursement and physician compensation may be assumed to increase downward compensation pressures.
  • Locum Tenens Practitioner Model: Locum Tenens (LT) as an alternative to full-time employment is enjoying a comeback for most specialties. Some younger physicians enjoy the travel, while mature physicians like to practice at their leisure. Employment factors to consider include: firm reputation, malpractice insurance, credentialing, travel and relocation expenses (which are negotiable). However, a LT firm typically will not cover taxes [NALTO.org and http://www.studentdoc.com/locum-tenens.html%5D

ASSESSMENT: Your thoughts are appreciated.

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OVER HEARD IN THE FINANCIAL ADVISOR’S LOUNGE

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“TAKE THE FIDUCIARY PLEDGE”

FINANCIAL ADVISORS LOUNGE AT iMBA, Inc.

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DEFINITION: A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons).

Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for example, a corporate trust company or the trust department of a bank, acts in a fiduciary capacity to another party, who, for example, has entrusted funds to the fiduciary for safekeeping or investment. Likewise, financial advisers, financial planners, and asset managers, including managers of pension plans, endowments, and other tax-exempt assets, are considered fiduciaries under applicable statutes and laws.

In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance, and trust in another whose aid, advice, or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.

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

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[Fiduciary Pledge]*

I, the undersigned, ___________________________ (“financial advisor”), pledge to always put the best interests of _______________________________ (“client”) first, no matter what.

As such, I will disclose in writing the following material facts and any conflicts of interest (actual and/or perceived) that may arise in our business relationship:

  • All commission, fees, loads, and expenses, in advance, client will pay as a result of my advice and recommendations;
  • All commission and commissions I receive as a result of my advice and recommendations;
  • The maximum fee discount allowed by my firm and the largest fee discount I give to other customers;
  • The fee discount client is receiving;
  • Any recruitment bonuses and other recruitment compensation I have or will receive from my firm;
  • Fees I paid to others for the referral of client to me;
  • Fees I have or will receive for referring client to any third-parties; and
  • Any other financial conflicts of interest that could reasonably compromise the impartiality of my advice and recommendations.

Jeff Kuest MBA CFA CFP®

[CounterPoint Capital Advisors]

*© 2011-2015. All rights reserved. Courtesy permission with personal communication from Jeff Kuest, MBA, CFA, CFP®

ASSESSMENT: Your thoughts are appreciated.

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COMPREHENSIVE FINANCIAL PLANNING FOR PHYSICIANS & ADVISORS 2.0

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Understanding the Art of Selling Your Medical Practice

Part Two of Medical Practice Valuation

By Dr. David Edward Marcinko, MBA, CMP

By Prof. Hope Rachel Hetico, RN, MHA, CMP

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In Part 1, we discussed how to establish fair market value (FMV) for a medical practice in the article, “Establish Your Practice’s Fair Market Value.” This time, we’ll review important terms and conditions for the sale transaction.

Valuation Types

Unfortunately, as a general rule, medical practice worth is presently deteriorating. A good medical practice is no longer a good business necessarily, and selling doctors can no longer automatically expect to extract a premium sale price. Nevertheless, appraising your medical practice on a periodic basis can play a key role in obtaining maximum value for it.

Competent practice valuation specialists typically charge a retainer to cover out-of-pocket expenses. Fees should not be based on a percentage of practice value, and may take 30-45 days to complete. Flat fees should be the norm because a sliding scale or percentage fee may be biased toward over-valuation in a declining marketplace. Fees range from $7,500-$50,000 for the small to large medical practice or clinic.

Expect to pay a retainer and sign a formal, professional engagement letter. Seek an unbiased and independent viewpoint. Buyer and sellers should each have their own independent appraisal done, using similar statistics, accounting measures, and economic assumptions.

At the Institute of Medical Business Advisors, Inc www.MedicalBusinessAdvisors.com we use three engagement levels that vary in intensity, purpose, and cost:

1. A comprehensive valuation provides an unambiguous value range. It is supported by most all procedures that valuators deem relevant, with mandatory onsite review. This gold standard is suitable for contentious situations. A written “opinion of value” is applicable for litigation support activities like depositions and trial. It is also useful for external reporting to bankers, investors, the public, Internal Revenue Service (IRS), etc.

2. A limited valuation lacks additional suggested Uniform Standards of Professional Appraisal Practice (USPAP) procedures. It is considered to be an “agreed upon engagement,” when the client is the only user. For example, it may be used when updating a buy/sell agreement, or when putting together a practice buy-in for a valued associate. This limited valuation would not be for external purposes, so no onsite visit is necessary and a formal opinion of value is not rendered.

3. An ad-hoc valuation is a low level engagement that provides a gross non-specific approximation of value based on limited parameters or concerns involved parties. Neither a written report nor an opinion of value is rendered. It is often used periodically as an internal organic growth/decline gauge.

Structure Sales Transactions

When the practice price has been determined and agreed on, the actual sales deal can be structured in a couple of ways:

(1) Stock Purchase v. Asset Purchase

In an asset transaction, the buyer will receive a tax amortization benefit associated with the intangible value of the business. This tax amortization represents a non-cash expense benefiting the buyer. In this case, the present value of those future tax benefits is added to the business enterprise value.

(2) Corporate Transactions

Typical private deals in the past involved some multiple (ratio) of earning before income taxes (EBIT)—usually a combination of cash, restricted stock, notes receivable, and possibly assumption of liabilities. For some physician hospital organizations, and public deals, the receipt of common stock can increase the practice price by as much as 40-50 percent (to accept the corresponding business risk, in lieu of cash).

Complete the Deal

The deal structure will vary depending on whether the likely buyer is a private practitioner, health system or a corporate partner. Some key issues to consider in the “art of the deal” include:

  • Working capital (in or out?): Including working capital in the transaction will increase the sale price.
  • Stock vs. asset transaction: Structuring the deal as an asset purchase will increase practice value due to the tax amortization benefits received by the buyer for intangible assets of the practice.
  • Common stock premium: The total sale price can be significantly higher than a cash equivalent price for accepting the risk and relative illiquidity of common stock as part of the payment.
  • Physician compensation: If your goal is to maximize practice value, take home a lower salary to increase practice sale price. The reverse is also true.

Understand Private Deal Structure

Assuming a practice sale is a private transaction, deal negotiations are based on the following pricing methodologies:

Seller financing: Many transactions involve an earn-out arrangement where the buyer puts money down and pays the balance under a formula based on future revenues, or gives the seller a promissory note under similar terms. Seller financing decreases a buyer’s risks (the longer the terms, the lower the risk). Longer terms demand premiums, while shorter terms demand discounts. Premiums that buyers pay for a typical seller-financed practice are usually more than what you would expect from a simple time value of money calculation, as a result of buyer risk reduction from paying over time, rather than up front with a bank loan or all cash. Remember to obtain a life insurance policy on the buyer.

Down payment: The greater the down payment for acquisition of a medical practice, the greater the risk is to the buyer. Consequently, sellers who will take less money up front can command a higher than average price for their practice, while sellers who want more down usually receive less in the end.

Taxation: Tax consequences can have a major impact on the price of a medical practice. For instance, a seller who obtains the majority of the sales price as capital gains can often afford to sell for a much lower price and still pocket as much or more than if the sales price were paid as ordinary income. Value attributed to the seller’s patient list, medical records, name brand, good will, and files qualifies for capital gains treatment. Value paid for the selling doctor’s continuing assistance after the sale and value attributed to a non-compete agreement are taxed at ordinary income. A buyer willing to allocate more for items with capital gains treatment, or a seller willing to take more in ordinary income, can frequently negotiate a better price. This is the essence of economically prudent practice transition planning.

Sidestep Common Buyer Blunders

Here are 10 blunders to avoid, as a buyer:

1. Believing the selling doctor’s attestations. Always verify data through an independent appraisal.

2. Wanting to change the culture of the practice. Be careful: Patients may not adjust quickly to change.

3. Using all available cash without keeping a reserve for potential contingencies.

4. Creating a conflict with the seller by recognizing a weakness and continually focusing on it for a bargain price.

5. Failing to realize that managed care plan contracts can be lost quickly or may not be always transferable.

6. Suffering from analysis paralysis. Money cannot be made by continually checking out a medical practice, only by actually running one.

7. Not appreciating the uniqueness of each practice, and using inaccurate “rules of thumb” from the golden age of medicine.

8. Not realizing that practice worth and goodwill value have plummeted lately and continue to decline in most parts of the country.

9. Not understanding that practice brokers may play both sides of the buy/sell equation for profit. Brokers usually are not obligated to disclose conflicts of interest, are not fiduciaries, and do not provide testimony as a court-approved expert witness.

10. Not hiring an appraisal professional who will testify in court, if need be, using the IRS-approved USPAP methods of valuation. Always assume that the appraisal will be contested (many times, it is).

After pricing and contracting due diligence has been performed, the next step in the medical practice sale process—as Donald Trump might say—is just good, old-fashioned negotiation.

Electronic Downloads

Part I: Part I

Part II: Part II

Additional Reading:

Cimasi, R.J., A.P. Sharamitaro, T.A. Zigrang, L.A.Haynes. Valuation of Hospitals in a Changing Reimbursement and Regulatory Environment. Edited by David E. Marcinko. Healthcare Organizations: Financial Management Strategies. Specialty Technical Publishers, 2008.

Marcinko, D.E. “Getting it Right: How much is a plastic surgery practice really worth?” Plastic Surgery Practice, August 2006.

Marcinko, D.E., H.R. Hetico. The Business of Medical Practice (3rd ed). Springer Publishing,New York,N.Y., 2011.

Marcinko, D.E. and H.R. Hetico. Risk Management and Insurance Planning for Physicians and Advisors. Jones and Bartlett Publishers, Sudbury, Mass., 2007.

Marcinko, D.E. and H.R. Hetico. Financial Planning for Physicians and Advisors. Jones and Bartlett Publishers, Sudbury, Mass., 2007.

Marcinko, D.E. and H.R. Hetico. Dictionary of Health Insurance and Managed Care. Springer Publishers, New York, N.Y., 2007.

Marcinko, D.E. and H.R. Hetico. Dictionary of Health Economics and Finance. Springer Publishers,New York,N.Y., 2007.

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Meet David K. Luke MIM CMP™ [An ME-P Thought-Leader]

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A Physician Focused Financial Advisior and Certified Medical Planner™

Financial Management Experience

https://www.medicuswealthplanning.com/team/david-k-luke

David K. Luke focuses on helping physicians, medical professionals, and successful retirees with financial planning, investment and risk management.

In the past 24 years of industry experience, David has held licenses including general securities registered representative, registered investment advisor, Branch management supervision, and Life, Accident, and Health Producers.

David, a fee-only advisor, is able to help his clients to achieve peace of mind and greater assurance with their financial goals by giving advice and providing investment management that is in their best interest, untainted by commissions or sales objectives. Likewise, in a true fiduciary capacity, he is able to help investors determine the reliability and suitability of products and services that they have been sold by other advisors.

David began his career managing money in 1986 in the General Motors of Canada Banking and Investments department where he was engaged in cash management, foreign currency hedging, and the debt issuance of a $100 million Eurobond and a $300 million Note Issuance facility. In 1988 as Supervisor of Borrowings for GMAC Canada David was responsible for the daily average issuance of $125 million in short-term Commercial Paper. David worked as a stock broker and portfolio manager for 2 major national brokerage firms (A.G. Edwards and Wachovia Securities) from 1989 to 2008.

Additionally, at Wachovia Securities David was among an elite group of financial advisors approved as a PIM (Private Investment Management) Portfolio Manager. Prior to joining Net Worth Advisory Group in 2010, David managed his own independent firm, Luke Wealth Strategies, working as a registered representative and investment advisor.

Education and Designations

  • President 2009/2010, Financial Planning Association (FPA) – Utah Chapter Affiliate
  • National Association of Personal Financial Advisors (NAPFA)
  • Member, Medical Group Management Association Master of International Management (Finance concentration)
  • American Graduate School of International Management Bachelor of Arts, Brigham Young University
  • Certified Medical Planner™ Professiobnal Designation from iMBA, Inc www.CertifiedMedicalPlanner.org

http://www.CertifiedMedicalPlanner.org

Assessment

David is our newest ME-P “thought-leader”. We look foward to his insider comments and posts. So, please welcome him and give his site a click: http://networthadvice.com/our-team/david-k-luke/

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Why 75 Years of American Finance Should Matter to Physician Investors

A Graphic Presentation [1861-1935] with Commentary from the Publisher

By Dr. David Edward Marcinko FACFAS MBA CPHQ CMP™

http://www.CertifiedMedicalPlanner.org

As our private iMBA Inc clients, ME-P subscribers, textbook and dictionary purchasers, seminar attendees and most ME-P readers know, Ken Arrow is my favorite economist. Why?

About Kenneth J. Arrow, PhD

Well, in 1972, Nobel Laureate Kenneth J. Arrow, PhD shocked Academe’ by identifying health economics as a separate and distinct field. Yet, the seemingly disparate insurance, asset allocation, econometric, statistical and portfolio management principles that he studied have been transparent to most financial professionals and wealth management advisors for years; at least until now.

Nevertheless, to informed cognoscenti, they served as predecessors to the modern healthcare advisory era. In 2004, Arrow was selected as one of eight recipients of the National Medal of Science for his innovative views. And, we envisioned the ME-P at that time to present these increasingly integrated topics to our audience.

Healthcare Economics Today

Today – as 2019 nears – savvy medical professionals, management consultants and financial advisors are realizing that the healthcare industrial complex is in flux; and this dynamic may be reflected in the overall economy.

Like many laymen seeking employment, for example, physicians are frantically searching for new ways to improve office revenues and grow personal assets, because of the economic dislocation that is Managed Care, Medi Care and Obama Care [ACA], the depressed business cycle, etc.

Moreover, the largest transfer of wealth in US history is – or was – taking place as our lay elders and mature doctors sell their practices or inherit parents’ estates. Increasingly, the artificial academic boundary between the traditional domestic economy, financial planning and contemporaneous medical practice management is blurring.

I’m Not a Cassandra

Yet, I am no gloom and doom Cassandra like I have been accused, of late. I am not cut from the same cloth as a Jason Zweig, Jeremy Grantham or Nouriel Roubini PhD, for example.

However, I do subscribe to the philosophy of Hope for the Best – Plan for the Worst.

And so dear colleagues, I ask you, “Are the latest swings in the economic, healthcare and financial headlines making you wonder when it will ever stop?”

The short answer is: “It will never stop” because what’s been happening isn’t any “new normal”; it’s just the old normal playing out before a new audience.

What audience?

The next-generation of investors, FAs, management consultants and the medical professionals of Health 2.0.

How do I know all this?

History tells me so! Just read this work, and opine otherwise, or reach a different conclusion.

Evidence from the American Financial Scene, circa 1861-1935

The work was created by L. Merle Hostetler in 1936, while he was at Cleveland College of Western Reserve University (now known as Case Western Reserve University). I learned of him while in B-School, back in the day.

At some point after it was printed, he added the years 1936-1938. Mr. Hostetler became a Financial Economist at the Federal Reserve Bank of Cleveland in 1943. In 1953 he was made Director of Research. He resigned from the Bank in 1962 to work for Union Commerce Bank in Cleveland. He died in 1990.

The volume appears to be self published and consists of a chart, approximately 85′ long, fan-folded into 40 pages with additional years attached to the last page. It also includes a “topical index” to the chart and some questions of technical interest which can be answered by the chart.

Link: http://fraser.stlouisfed.org/75years

Assessment

And so, as with Sir John Templeton’s [whose son is an MD] four most dangerous words in investing (It’s different this time), Hostetler effectively illustrates that it wasn’t so different in his era, and maybe—just maybe—it isn’t so different today for all these conjoined fields.

Conclusion      

Your thoughts and comments on this ME-P are appreciated. While not exactly a “sacred cow,” there is a current theory that investors will experience higher volatility and lower global returns for the foreseeable future.

In fact, it has gained widespread acceptance, from the above noted Cassandra’s and others, as problems in Europe persist and threats of a double-dip recession loom. But, how true is this notion; really?

Is Hostetler correct, or not; and why?

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

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

Our Other Print Books and Related Information Sources:

DOCTORS:

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

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

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

HOSPITALS:

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

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

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

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Dr. Marcinko Interviewed on the Physician Credit Crunch

Financial Experts Share Tips on Obtaining Loans to Start or Expand a Medical Practice

By Michael Gibbons

Editor: ADVANCE Newsmagazines

Maybe you’re a young dermatologist or plastic surgeon who dreams of starting your own practice. Or maybe you’re an established professional but want to expand your palette of anti-aging services. Either way, you’ve probably made an unpleasant discovery: Banks are leery about lending today. Global recessions with seemingly no end in sight tend to give loan officers sticky fingers.HO-JFMS-CD-ROM

Dermatologists and Plastic Surgeons

We have it on good authority that dermatologists and plastic surgeons as a group are less affected by this problem than physicians in some other branches of medicine. Still, there’s no better time than now to absorb some sound advice on how to approach banks for loans—whether you’re a fresh-faced newcomer to the fresh-face business or a wrinkled veteran at eliminating wrinkles.

Start Small

There’s no soft-soaping it: Starting a healthy aging practice is much harder than expanding an existing practice, even in the flushest of times.

“For young dermatologists starting out, I recommend you start small,” advises Jerome Potozkin, MD, who offers facial rejuvenation, liposuction, body contouring and dermatological care through his practice in Walnut Creek, CA. “You can always expand. Keep your overhead low. Know what your credit score is and do everything you can to improve it. Pay your bills on time.”

Lasers aren’t cheap. Besides the initial acquisition costs, a service contract can cost $7,000 to $12,000 a year, according to Dr. Potozkin. “Don’t feel you have to buy every new laser under the sun,” he says. “In fact, renting rather than purchasing is an option many companies offer. When your volume is low you can rent and schedule laser days—although the pitfall there is you don’t have lasers available whenever patients come in.”

Also, young dermatologists “will probably have an easier time getting a loan if they go to a relatively underserved area, as opposed to an area that has a large number of dermatologists per capita,” says Dr. Potozkin, who began practicing 10 years ago. “There are two schools of thought on this: Go where you want to live to start a practice or go to where there’s a need and be instantly successful. I chose the former. It took me longer to get started but I’m very happy where I am.”

Patience, Prudence and Passiondem2

Be patient, prudent, passionate—and start with a spare office and as little debt as possible, advises Dr. David E. Marcinko MBA, a financial advisor and Certified Medical Planner™. Marcinko, a health economist,  is CEO of the Institute of Medical Business Advisors Inc., a national physician and medical practice consulting firm based in Norcross, GA www.MedicalBusinessAdvisors.com

“Patients are looking for passion from you, not lavish trappings,” Dr. Marcinko says. “When a banker or a loan officer sees $175,000 or more of debt they are loath to give a loan—and it’s hard to blame them. Purchase a home after you become a private practitioner. You need to be as close to debt-free as you can be.

Exit Strategy

“Another thing bankers want to know is, ‘If we give you a loan and you start a practice and it fails, how will we be paid back?’ They want an exit strategy.”

The good news is dermatology “remains a very lucrative specialty, and in most parts of the country they are in a shortage position, particularly with the aging population,” says Sandra McGraw, JD, MBA, principal and CEO of the Health Care Group, a financial and legal consulting firm based in Plymouth Meeting, PA., that advises the American Academy of Dermatology, among other groups.

“I would start with a realistic business plan for why you think this practice can succeed, in the specific location,” McGraw says. “How many patients do you expect to see? How will they know you are there and available? Remember that banks lend to all kinds of people, so keep your numbers realistic. Overestimating expenses is as bad as underestimating them. Then determine how you want the money—usually a fixed loan for a period of time and then a line of credit as you get your practice going and sometimes need the cash flow.”biz-book

Expanding a Practice

Established dermatologists should have an easier time getting loans to expand their practices. They have, one hopes, a track record of success and assets to put up as collateral.

Mid-career physicians “have cash flow, physician assets and equity to some degree in a house and personal assets,” Dr. Marcinko observes. “Banks can attach loans to personal assets and savings accounts. Ninety-nine percent of times you must sign a personal asset guarantee. Mid-lifers have assets young ones don’t, so mid-lifers aren’t quite the risk. They have businesses that have value and cash flow. Banks like cash flow.”

However, even veterans must do some homework before approaching a bank. “You still want to establish why you want the money and how the expansion will increase your income,” McGraw says.

Another tip: If the bank has loans out with reputable vendors, you might ask the loan officer to recommend them to you as potential contractors. “Sometimes keeping it local and supporting others with loans at the bank can be helpful,” she says.

Assessment

Dr. Marcinko adds, “Bankers today want you to come in with a well-reasoned, well-thought-out and well-written business plan. Give bankers a 30-second elevator speech on why you are different. It’s really important to ask yourself, ‘What can I offer the community as a doctor in my specialty that nobody else can?’ If you bill yourself as the first dermatologist to do laser surgery, that’s a perceived advantage. You purchased the equipment and learned to use it. But anyone can do that. If you can come up with something that nobody else has or can do, that’s how you’re successful in anything.”

Link: Dr. Marcinko Interview

Link: https://healthcarefinancials.files.wordpress.com/2009/08/dr-marcinko-interview.pdf

Conclusion

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

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

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

Sponsors Welcomed

And, credible sponsors and like-minded advertisers are always welcomed.

Link: https://healthcarefinancials.wordpress.com/2007/11/11/advertise

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