Med Students Call for Business Training

Jeff Brown, MD

More medical students want their training to include more relevance to business, specifically billing and coding. Plus, starting pay negotiations are more critical than ever for doctors as a majority is taking salaried jobs.

Sweet vindication for this column' main theme! An Epocrates survey found that over 70% of medical students want their training to include more relevance to business. Specifically, 62% mentioned billing and coding while just 19% said they needed help with their “bedside manner.” Alas, in my experience both as a medical director and as a patient, I would assess that need as a low estimate, a very low estimate.

— You know those annoying insurance ads that say “15 minutes can save you 15% on car insurance”? A Consumer Reports survey said 30% of those surveyed called, but of those, only 11% found that it was worth the trouble to switch. That's only about 3% of those who even responded to the survey, so the actual percentage must have been a lot less. But in the scramble for market share, the insurance companies must deem saturation TV ads as money well spent.

Rebalancing your portfolio — meaning scheduled trimming of the winners and adding to your losers — can add .25% to .50% to your annual return. It may not sound like much, but money markets and Treasury bills are returning about the same. It's another example of the “free money” concept I regularly tout. Even those seemingly small amounts compound to many thousands over an investing career.

— All financial strategies have one thing in common: once they are published their returns shrink. A recent study looked at 82 separate strategies (I didn't know that many existed) and found their average returns after publication shrank by 35%. That’s just more proof that the Wall Street types who get the highest returns are people that we will never hear about (or get near to) until well after the fact. And even if we can or do, it's too late for the splashy return.

This is just one more reason for us to push savings and investing prudently to avoid loss instead of chasing will-o'-the-wisp returns.

— Now that a majority of docs are taking salaried jobs, it is important to note that negotiating starting pay is critical. Research has shown that people who fail to negotiate their starting salaries lose more than $1/2 million of potential earnings by age 60. Just for not speaking up.

— The average car is the U.S. is now about 11 years old and experts advise that you could save a lot of money by canceling your collision coverage when the annual cost of it exceeds 10% of your car’s book value (check Edmunds.com to find out what that is). The basic rule of insurance is never to insure something you can afford to pay for yourself. Why pay for an insurance company’s profit, administration and commissions?

— John Bogle, the founder of Vanguard Funds, has long maintained that Social Security should be considered an annuity, part of your bond allocation, so that the stock percentage of your portfolio could be higher than is usually recommended. Ask your advisor.

— A Duke study looked at 11,600 economic forecasts by chief financial officers and the correlation with what actually happened was less than zero. No wonder they call economics “the dismal science.”

— People who check their investments every day get measurably worse returns than those who only check once a quarter. It seems they make terrible decisions based upon over-reactions to the daily distractions of news “noise.”

— Boone Pickens, the oil billionaire, was asked how he made money buying up large cattle ranches. He said "Simple. Change the use of the land." Well, it's simple if there is oil under the land…

— FYI: There are now 140 medical schools in the U.S., 3,900 colleges and universities, and 200 law schools.

— This year, 8,000 Americans are expected to give up their U.S. citizenship and move to tax havens. We’re not alone; already a whopping 27% of newly wealthy Chinese have emigrated and another 47% say that they are thinking about it. Also, 40,000 Spaniards have emigrated abroad just in the first half of 2012 alone, taking 75 billion euros with them.

Where are they going? One-fifth (21%) of the global share of offshore money is coming to the U.S. For safety, presumably. Luxembourg gets 13% of the world's offshore wealth, Switzerland 6%, Germany 5%, the Cayman Islands 5%, Hong Kong 4% and Singapore 3%. The reasons involved in each are very technical and not for the likes of us.