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Lessons Learned for both Physicians and Financial Advisors

By David K Luke MIM, Certified Medical Planner® candidate

[Physician Financial Advisor – Fee-Only]

http://www.NetWorthAdvice.com

http://www.DocFP.com

www.CertifiedMedicalPlanner.org

Physicians are constantly being trained in new techniques and methodologies, learning about new treatments and new drugs as they become available. For example, Elaine Zablocki (Zalocki, Elaine, Changing Physician Practice Patterns: Strategies for Success in a Capitated Health Care System, New York: Aspen Publishers, 1995 Print) gives examples from a physician profiling study done by Blue Cross Blue Shield of Nebraska (p 13-14).

BCBSN circa 1993

In 1993 BCBSN began to analyze data on Nebraska patients and discovered striking variations in practice patterns in different parts of the state.  One observation was that in two small rural areas there was a particularly high hospital surgical admission rates for nonmalignant gynecological conditions. Another observation was of wide variations in physician practice patterns for ENT surgical procedures such as tympanostomy tubes and surgery for nose and sinus problems. Some ENT physicians were performing three times as many procedures per patient as the average. According to medical director David Bouda, MD “our overall approach has been to take this information to the local physician group or area that seems to be different compared to others, present the data, and then have some kind of dialogue with the physicians. We say, ‘Here’s a group of physicians who seem to be exceptional in these ways – – what do you think about this?’”. The effort seems to pay off.  In the case of the high admission rates for hysterectomy cases, BDBSN saw a steady decline over 3 years. In the ENT example, questionable claims dropped markedly. The general approach to changing physician practices patterns was to take an educational approach getting physicians to pay attention to established parameters modified or created by his or her peers which would have a greater impact on health care costs than harassing the physicians over the phone regarding hospital length of stay or procedure questioning.

Defensive Doctors?

Not surprisingly, physicians often became defensive the first time they see this type of data. There is no point challenging an individual at this point. What I found interesting about the study, in spite of it being dated, was the comment that “…after all, educating physicians about practice patterns to promote better health care is a long-term process”. Are you a better doctor today then you were X years ago? Of course! Change is good even though it can be painful. Are you disingenuous because you practice medicine in a better fashion than you did years ago? Of course not! The concern would be if a practitioner doesn’t change (or worse refuses to change) in spite of being enlightened by a different method or approach.

Of the Financial Advisory Business

Enlightenment occurs in the financial advisory business as well. I started in the financial world in May of 1986  as a new recruit with my new graduate business degree working for GM of Canada in the Treasury Department. I spent time managing the foreign currency exposure, assisting the chief investment officer in the daily cash management (taking over for him while he was on vacation) and supervising the Borrowings Department at GMAC of Canada. All of these responsibilities involved making daily multiple transactions with brokers in the million dollars plus territory. In 1989 we moved our small family to Arizona so I could ply my trade as a stockbroker and help people retire successfully. Over the years the business has evolved greatly. When I got started in the trade, pretty much everything was sales commission driven. While “fee-only” existed, it was still very much in the pioneering phase with very fee practitioners. Over the years, especially beginning around 5 years ago, like the physician that observes the data in the above examples, I began to perceive that perhaps there was a better way to give advice to my clients. In the beginning I was defensive and even suspicious that these “fee-only” folks were just a little too bit self-righteous. Changing a few words from the observation of physicians above we could say:

“after all, educating financial advisors about practice patterns to promote better financial advice is a long-term process”

My Own Journey as a Financial Advisor

In 2010 I joined Net Worth Advisory Group as a fee-only advisor and have not looked back.  Am I a hypocrite because now I espouse a view and business model that is in some respects totally different then the views and business model I used 5, 10 or 20 years ago? I don’t think so.  In fact, to NOT have changed would have been the easier thing to do. I believe that following my conscience (yes, I used that self-righteous word “conscience” in this discussion) and changing to a much more client centric model, dropping thousands of dollars in retainer fees, dropping licenses that I had worked so hard to obtain, and really learning how to be a better financial planner was certainly initially a big sacrifice.

The point is … I knew I had to do it … and that was that. I believe the business model I have now is absolutely in the best interest of our clients. I wish I had this model available 23 years ago.

And today, in the medical industry, a better model is patient centered care. What an exciting opportunity, for all physicians, to reduce practice variation and pursue the grail of evidence based medicine [EBM].

NOTES: It should be noted that the “father” of medical variations may be Jack Wennberg MD, who studied prostatectomy, hysterectomy and appendectomy rates in the 1970’s and continues his work today at http://www.dartmouthatlas.org/

Conclusion

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Filed under: Career Development, CMP Program, Experts Invited, Health Economics, Research & Development | Tagged: David K Luke MIM, Elaine Zablocki, http://www.dartmouthatlas.org/, Jack Wennberg MD, Variations in Medical Practice Patterns for Advisors, www.CertifiedfMedicalPlanner.org | 2 Comments »