Showing posts with label Money. Show all posts
Showing posts with label Money. Show all posts

Monday, May 31, 2021

Investing when markets are at all-time highs

The equity markets have again pushed against all-time highs. During these times, sentiment amongst investors is often split. Some believe the markets will continue to push higher and continue to buy into the euphoria of the markets rising. Others believe the markets are due for a correction and start pulling out of investments to preserve their profits. This is an action driven by fear. Whether putting more money into the markets with the belief they will continue rising in the short term or pulling money off the table in anticipation of an impending drop, both actions are emotional responses to feelings of euphoria and fear. Investing with emotion can lead to costly mistakes.


When markets are approaching and sometimes exceeding all-time highs, and there is uncertainty about whether they will head higher or lower, what are some non-emotional actions you can take?


Stick to your investment strategy


Having an investment strategy is critical. Staying disciplined during market uncertainty is key to long-term investment success, and your investment strategy is there to protect you from reacting emotionally and making mistakes. The strategy will tell you when to buy, what types of investments to buy, and the circumstances in which it is acceptable to sell. Having this investment strategy will allow you to focus on growing your wealth in a disciplined and planned out manner, while also ignoring the outside noise.


Rebalance


The markets are often cyclical, and while one asset class may be doing well, another may be struggling. This can lead to your asset classes straying from their target percentages. Some categories may become overweighted and others underweighted. One of the keys to long-term investing is keeping your asset allocation in line with its target percentages. If some categories are over or under weight, then your policy is taking on more risk than originally intended.

There are two preferred methods of rebalancing. Option one is to sell a portion of the category that is overweight and reallocate the proceeds to underweight categories. In tax-advantaged accounts like 401(k)s and IRAs, rebalancing is relatively easy to do because you can sell investments without having to worry about capital gains taxes; however, in taxable accounts like individual, joint, and trust accounts, the tax implications of selling must be factored into the rebalancing decision. You could end up owing a hefty capital gains tax if you rebalance by selling an investment with a significant gain. For taxable accounts, rebalancing strategy option two typically works best: add more money to the account and invest in the underweight categories.


Stockpile cash, invest at opportune times


Knowing when the markets will experience a pullback or correction is nearly impossible. However, when the markets head in a negative direction, excellent buying opportunities may arise and some investments may be trading at a discount. You can be prepared to take advantage of these moments by having cash on hand.

Start by determining the amount of cash you want or feel comfortable sitting in reserves. Use this stockpile to invest in categories trading at a discount during market pullbacks. Since it is impossible to know when the market has hit its bottom, use a dollar cost averaging strategy to invest incrementally over a set period. Buying incrementally removes the risk of putting all your chips on the table at one time and have the investments continue to drop. As markets and investment values continue to fall, you will incrementally purchase at more and more advantageous prices. It may not get you quite the return as if you had perfectly picked the bottom of the market pullback, but that is a difficult, if not impossible feat to get right consistently.

No one can really know whether markets will continue climbing or experience a pullback when pushing record highs. Having a plan in place will allow you to stay disciplined and invest without emotion. Remaining well-allocated and diversified across asset classes will reduce the risk in your overall portfolio. Finally, have a little cash available in case some investments are trading at a discount.


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Wednesday, May 12, 2021

Asset protection for physician crypto investors

Crypto currency is all the rage and continues to make some physician coin investors small fortunes even as prices swing widely and scams emerge. These are some basic defensive measures to keep your digital wallet safe.


Crypto Fact vs. Fiction


One common bundle of myths about cryptocurrency is, “My coin is creditor proof because it’s secret and no can find it and only I have the key”. Here’s why that’s false and why you shouldn’t hold crypto currency, (or for that matter, any significant amount of non-qualified investment, savings, or other assets) in your own name:
  • Any strategy that relies on “secrecy” also relies on your willingness to commit “perjury” and lie about the existence or value of your holdings in a debtor’s exam, deposition, or similar sworn testimony
  • Any U.S. court that has jurisdiction over you and your assets can order you to tender the assets to satisfy a judgment, this includes access to your crypto wallet
  • Your crypto assets are discoverable through a variety of methods including your tax returns, where you have a legal duty to report crypto profits to the IRS.
  • Failure to report crypto gains is criminal tax evasion and that includes holdings you may be holding through an offshore trust, LLC or similar device. It has come to my attention that physicians have been targeted by marketing that pitches such schemes as being secret, tax free and creditor remote, they aren’t.
One easy place I’d look for evidence that a debtor had crypto holdings: Their social media accounts. Most investors can’t stop talking about it, hyping their coin of choice up and being triggered by any negative news or comments about their magic beans.


Think about how you hold title


Crypto assets held in your own name are subject to all your personal and professional liabilities, just like all your other liquid assets. As such, holding your coin through a properly structured legal entity that is legally distinct from your unrelated risks is best practice. Some commonly used holding structures include LLCs, Limited Partnerships, and irrevocable trust structures. Long term investors can also consider making their crypto holdings an “exempt’ asset by investing in them through qualified, and legally protected retirement plans including self-directed IRAs.


Are your crypto assets included in your estate plan?


Your estate plan should include your valuable digital assets including your crypto holdings. At a minimum, it should allow the trustee of your estate to identify, take control of, and manage those assets. Some of the basics your crypto estate plan should include are:
  • Access to your private key and passwords. If you die without providing access to this asset, it dies with you
  • What coin you bought, when you bought it, and the purchase price
  • How you are holding it, (i.e., in your own name in an LLC, etc.)
  • Details on the platform you are using to hold it, (i.e., using an exchange like Coinbase vs. holding it in an online wallet or offline, in physical device like a removable hard drive)
  • Any specific instructions or wishes on the management and distribution of the assets

Think about physical and digital security issues


You may have seen horror stories about wallets ranging from thousands to millions of dollars in value being lost when a password is lost or physical device is lost, stolen or destroyed. If you are using a physical device, it should be stored in a water and fire-resistant document safe to protect it from basic, recurring risks like flood, fire, hurricane or burglary.

Make sure you understand the security differences in the basic ways you can hold coin. As a recent Tech Radar report explains,

“Despite being a digital currency, there are four different forms of storage for your Bitcoin to choose from: mobile wallets, desktop wallets, web-based wallets, and physical hardware that acts as a wallet”.

The report also advises that Bitcoin.org itself advises that you maintain two separate wallets, one with limited funds for trading and daily access referred to as a “hot” wallet and a secure, physical, offline “hot wallet” that’s stored in a safe and holds the bulk of your coin. The digital nature of purely online wallets means they are always vulnerable to online hacking and malware, so spreading your risk between several holding methods, including keeping the bulk of your holdings offline on a hardware device, is highly recommended.


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Friday, April 2, 2021

Achieve a financial rebound by restoring your revenue cycle

For years, practices have found themselves in a never-ending battle to adjust to the demands of an evolving healthcare marketplace. Adapting to complicated incentive terms in payer contracts, decreasing payer and patient revenue, increasing operational costs, and keeping up with new legislation have been enormous challenges—especially for those internally managing their revenue cycle. With practices already struggling to stay afloat, adding a year-long global pandemic to their growing list of concerns was detrimental to many. The pandemic not only affected patient volume and revenue but also shifted the healthcare landscape, yet again. Suddenly, there was an immediate need to offer virtual care options and digital registration capabilities, as well as cost transparency and financial aid to patients who desperately need it – as 7.7 million U.S. workers lost their jobs due to COVID-19, with an estimated 15 million also losing healthcare coverage.



These compounding issues have emphasized the need for a strong revenue cycle foundation to sustain unprecedented change. There are a multitude of lucrative opportunities that currently exist within a practice’s revenue cycle, the problem is that many providers are not pursuing every dollar due since they have limited time and resources. While providers’ main focus is rightfully aimed at delivering the highest quality care versus administering the day-to-day operations of their practice, there are ways to propel both business growth and provide patients with the services they need.

This article outlines four specific and proactive measures a practice can implement to better position its organization for long-term success.


Action #1: Automate key revenue cycle workflows


Increased profitability is something all practices desperately need and a critical way to accomplish this is to maintain operational efficiency. Costly errors can decrease overall production causing billing delays on top of mounting patient frustration. Technology needs to be utilized in a way that simplifies complex revenue cycle processes and eliminates redundant, time-consuming tasks. For example, instead of manually addressing denials, leverage a robust rules engine that automates workflows to review claims, correct inaccurate information, and submit a clean claim. With this type of automation, practices can work in a standardized manner to process billing and claims more efficiently and accelerate reimbursement. For many practices, implementing and maintaining automation technology can be an expensive endeavor with the speed to value being too great; however, with the help of a partner that has already made the necessary investments, practices can achieve results much more quickly.



Action #2: Reduce overall days in A/R


As physician practices are operating with reduced staff who can only take on so much, critical revenue cycle functions like A/R follow-up tend to fall by the wayside, leading to negative financial impacts. Becker’s Hospital Review reported that the industry standard for days in A/R is 35 days; however, A/R for many practices is past the 90- or even 120-day mark, most likely indicating issues with reimbursement. To address this, practices can leverage a partner’s business office services and technology-fueled workflows to effectively manage billing and appropriate A/R follow up from both payers and patients. Having dedicated resources and the right overall structure in place will ensure your practice maintains accurate and timely patient statements, flags past due payments and confirms payment posting and deposit reconciliation always remains up to date. All these best practices help accelerate cash flow and enable your practice to collect what’s owed.


Action #3: Start maximizing payer contracts


Given how complicated many payer contracts are, paired with the fact that many practices don’t have access to the type of resources and expertise needed to negotiate and optimize these contracts, many organizations are subsequently leaving money on the table. Practices can increase reimbursement rates with most, if not all, of their payers if they have access to experts who can build a compelling case and utilize data-driven analysis to find opportunities to renegotiate existing contracts. A partner that offers contract management services and solutions can build inventories that assemble a practice’s most frequently billed services, allowing the payer contracting team to analyze critical data points—payer reimbursement requirements, fee schedules, or timelines—and determine if there are openings for negotiations. Regional rates and value-based reimbursement are also considered to identify if a practice can start receiving additional incentives or leverage alternative payment models. Having this inventory and analysis of all contracts and potential reimbursement opportunities allows practices to not only actively monitor contracts moving forward but also gain access to data needed to renegotiate rates and receive better fee schedules.


Action #4: Promote better cost transparency and financial support


While boosting revenue and cash flow is vital to a practice’s financial health, it’s equally important for practices to offer services that financially support and assist their patients as well. Financial clearance programs promote mutual benefits to the practice and patient because they ensure the right financial assistance is given to each patient while also ensuring practices receive full payment for services provided. A program with the right processes and technology in place can enable practices to screen and verify patient eligibility as soon as possible, educate patients on out-of-pocket payments upfront so they can plan accordingly, identify patient funding support if needed, and obtain required prior authorizations to avoid care delays and timely reimbursement. Offering this type of service allows practices to serve as financial advocates for their patients building loyalty and trust within their patient roster—a key advantage in healthcare’s competitive marketplace.

When determining where to go from here, stop focusing on the short-term fixes that allow your business to just get by. Consider a partner who can provide revenue cycle expertise – fueled by automation and bench strength when needed – to perfect internal processes and workflows. By doing so, you’ll be able to re-focus your efforts on your core mission of providing excellent patient care while also yielding better overall financial performance.

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