The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants

A By-Product of Health 2.0?

By Dr. David Edward Marcinko FACFAS MBA CMP*

[Founder and CEO]

www.MedicalBusinessAdvisors.com

A decade ago, Editor Gregory J. Kelley of Physician’s MONEY DIGEST and I reported that a 47 year old-doctor with $184,000 annual income would need about $5.5 million dollars for retirement at age 65. Then came the “flash-crash’ of 2007-08, the home mortgage fiasco and the Patient Protection and Accountable Care Act [PP-ACA] of 2010; etc.

No wonder that medical provider career panic is palpable. Much like the new medical home concept, the idea of holistic life planning was born.

Life Planning

Life planning has many detractors and defenders. Formally, life planning has been defined in the following way. 

Financial Life Planning is an approach to financial planning that places the history, transitions, goals, and principles of the client at the center of the planning process.  For the client, their life becomes the axis around which financial planning develops and evolves.

But, for physicians, life planning’s quasi-professional and informal approach to the largely isolated disciplines of medically focused financial planning, was still largely inadequate.

Why? 

Today’s personal financial and practice environment is incredibly more complex than it was in 2007-08, as economic stress from HMOs, Wall Street, liability fears, criminal scrutiny from government agencies, IT mischief from hackers, economic benchmarking from hospitals and the lost confidence of patients all converged to inspire a robust new financial planning 2.0 approach for medical professionals.

Example of a financial planning mistake 

Recall the tale of Dr. Debasis Kanjilal, a pediatrician from New York who put more than $500,000 into the dot.com company, InfoSpace, upon the advice of Merrill Lynch’s star but non fiduciary analyst Henry Bloget.

Is it any wonder that when the company crashed, the analyst was sued, and Merrill settled out of court? Other analysts, such as Mary Meeker of Morgan Stanley, Dean Witter and Jack Grubman from Salomon Smith Barney, were involved in similar fiascos.

Although sad, this story is a matter of public record. Hopefully, doctors now understand that the big brokerage houses that underwrite and recommend stocks may have credibility problems, and that physicians got burned with the adrenalin rush of “self-directed” investment portfolios.

Example of a medical practice management mistake 

Just reflect a moment on colleagues willing to securitize their medical practices a few years ago, and cash out to Wall Street for perceived riches that were not rightly deserved

Where are firms such as MedPartners, Phycor, FPA and Coastal now? A recent survey of the Cain Brothers Physician Practice Management Corporation Index of publicly traded PPMCs revealed a market capital loss of more than 95%, since inception. 

Another Approach?

This disruptive narrative shift was formally noted by the Institute of Medical Business Advisors Inc [iMBA, Inc] and introduced to the medical and financial services industry. This research and corpus of work resulted in hundreds of publications in the Library of Medicine, National Institute of Health (NIH) and the Library of Congress, along with related publications, a dozen textbooks and white papers

http://www.ncbi.nlm.nih.gov/nlmcatalog?term=marcinko

The iMBA approach to financial planning, as championed by the www.CertifiedMedicalPlanner.org professional charter designation, integrates the traditional concepts of fiduciary focused financial planning, with the increasing complex business concepts of medical practice management.

The former ideas are presented in our textbook on financial planning for doctors: Financial Planning for Physicians and Advisors

The later in our companion book: Business of Medical Practice [Edition 3.0]

A textbook for hospital CXOs and physician-executives: Hospitals & Healthcare Organizations

While most issues of risk management, liability and insurance are found in Risk Management and Insurance Strategies for Physicians and Advisors

And, for the perplexed, all definitions are codified in the dictionary glossary Health Dictionary Series

Health 2.0 Paradigm Shift

And so, the ME-P community now realizes that a more integrated approach is needed.  The traditional vision of medical practice management, personal physician financial planning and how they may look in the future are rapidly changing as the retail mentality of medicine is replaced with a wholesale philosophy.

Or, how views on maximizing current practice income might be more profitably sacrificed for the potential of greater wealth upon eventual practice sale and disposition.

Or, how Yale University economist Robert J Shiller warns in “The New Financial Order” [Risk in the 21st Century] that the risk for choosing the wrong healthcare profession or specialty might render physicians obsolete by technological changes, managed care systems or fiscally unsound demographics. 

My Assessment

Yet, the opportunity to re-vise the future at any age through personal re-engineering, exists for all of us, and allows a joint exploration of the medicine, business and the meaning and purpose of life.

To allow this deeper and more realistic approach, the advisor and the doctor must build relationships based on fiduciary trust, greater self-knowledge and true medical business and financial enhancement acumen.

Are you up to the task?

Conclusion

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

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

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

• DICTIONARIES: http://www.springerpub.com/Search/marcinko
• PHYSICIANS: www.MedicalBusinessAdvisors.com
• PRACTICES: www.BusinessofMedicalPractice.com
• HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
• CLINICS: http://www.crcpress.com/product/isbn/9781439879900
• ADVISORS: www.CertifiedMedicalPlanner.org
• BLOG: www.MedicalExecutivePost.com
• FINANCE:Financial Planning for Physicians and Advisors
• INSURANCE:Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: "Doctors Only", Career Development, Estate Planning, Financial Planning, Investing, Practice Management, Professional Liability, Research & Development, Risk Management, Taxation | Tagged: david marcinko, Dean Witter, Financial Planning, Jack Grubman, life planning, Morgan Stanley, Patient Protection and Accountable Care Act, physician's money digest, Salomon Smith Barney, Wall Street | 5 Comments »