Joseph S. Eastern, MD

In his book, “Scam Me If You Can,” fraud expert Frank Abagnale relates the case of a 5-year-old boy whose pediatrician’s computer was hacked, compromising his name, birth date, Social Security number, insurance information, and medical records. The result was a bureaucratic nightmare that may well continue for the rest of that unfortunate young patient’s life. One can only speculate on the difficulties he might have as adult in obtaining a line of credit, or in proving his medical identity to physicians and hospitals.

tomprout/E+

Medical identity theft is increasingly popular with scam artists, because it is so lucrative. Everything a crook needs to commit ordinary identity theft – your Social Security number, bank account numbers, etc. – sells for about $25 on the black market; add health insurance and medical records, and the price can jump to $1,000 or more. That’s because there is a far greater potential yield from medical identity theft – and once your personal information and medical records are breached, they are in the Cloud for the rest of your life, available to anyone who wants to buy them. Older patients are particularly vulnerable: Medicare billing scams cost taxpayers more than $60 billion a year.

If your office’s computer system does not have effective fraud protection, you could be held liable for any fraud committed with information stolen from it – and if the information is resold years later and reused to commit more fraud, you’ll be liable for that, too. That’s why I strongly recommend that you invest in high-quality security technology and software, so that in the event of a breach, the security company will at least share in the fault and the liability. (As always, I have no financial interest in any product or industry mentioned in this column.)

Even with adequate protection, breaches can still occur, so all medical offices should have a breach response plan in place, covering how to halt security breaches, and how to handle any lost or stolen data. Your computer and security vendors can help with formulating such a plan. Patients affected by a breach need to be contacted as well, so they may put a freeze on accounts or send out fraud alerts.

Patients also need to be aware of the risks. If your EHR includes an online portal to communicate protected information to patients, it may be secure on your end, but patients are unlikely to have similar protection on their home computers. If you offer online patient portal services, you should make your patients aware of measures they can take to protect their data once it arrives on their computers or phones.

Patients should also be warned of the risks that come with sharing medical information with others. If they are asked to reveal medical data via phone or email, they need to ask who is requesting it, and why. Any unsolicited calls inquiring about their medical information, from someone who can’t or won’t confirm their identity, should be considered extremely suspicious.

We tell our patients to protect their insurance numbers as carefully as they guard their Social Security number and other valuable data, and to shred any medical paperwork they no longer need, including labels on prescription bottles. And if they see something on an Explanation of Benefits that doesn’t look right, they should question it immediately. We encourage them to take advantage of the free services at MyMedicare.gov, including Medicare Summary Notices provided every 3 months (if any services or medical supplies are received during that period), to make sure they’re being billed only for services they have received.

Your staff should be made aware of the potential for “friendly fraud,” which is defined as theft of identity and medical information by patients’ friends or family members. (According to some studies, as much as 50% of all medical identity theft may be committed this way.) Staffers should never divulge insurance numbers, diagnoses, lab reports, or any other privileged information to family or friends, whether by phone, fax, mail, or in person, without written permission from the patient. And when callers claiming to be patients request information about themselves, your employees should be alert for “red flags.” For example, legitimate patients won’t stumble over simple questions (such as “What is your birth date?”) or request test results or diagnoses that they should already know about.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

In his book, “Scam Me If You Can,” fraud expert Frank Abagnale relates the case of a 5-year-old boy whose pediatrician’s computer was hacked, compromising his name, birth date, Social Security number, insurance information, and medical records. The result was a bureaucratic nightmare that may well continue for the rest of that unfortunate young patient’s life. One can only speculate on the difficulties he might have as adult in obtaining a line of credit, or in proving his medical identity to physicians and hospitals.

tomprout/E+

Medical identity theft is increasingly popular with scam artists, because it is so lucrative. Everything a crook needs to commit ordinary identity theft – your Social Security number, bank account numbers, etc. – sells for about $25 on the black market; add health insurance and medical records, and the price can jump to $1,000 or more. That’s because there is a far greater potential yield from medical identity theft – and once your personal information and medical records are breached, they are in the Cloud for the rest of your life, available to anyone who wants to buy them. Older patients are particularly vulnerable: Medicare billing scams cost taxpayers more than $60 billion a year.

If your office’s computer system does not have effective fraud protection, you could be held liable for any fraud committed with information stolen from it – and if the information is resold years later and reused to commit more fraud, you’ll be liable for that, too. That’s why I strongly recommend that you invest in high-quality security technology and software, so that in the event of a breach, the security company will at least share in the fault and the liability. (As always, I have no financial interest in any product or industry mentioned in this column.)

Even with adequate protection, breaches can still occur, so all medical offices should have a breach response plan in place, covering how to halt security breaches, and how to handle any lost or stolen data. Your computer and security vendors can help with formulating such a plan. Patients affected by a breach need to be contacted as well, so they may put a freeze on accounts or send out fraud alerts.

Patients also need to be aware of the risks. If your EHR includes an online portal to communicate protected information to patients, it may be secure on your end, but patients are unlikely to have similar protection on their home computers. If you offer online patient portal services, you should make your patients aware of measures they can take to protect their data once it arrives on their computers or phones.

Patients should also be warned of the risks that come with sharing medical information with others. If they are asked to reveal medical data via phone or email, they need to ask who is requesting it, and why. Any unsolicited calls inquiring about their medical information, from someone who can’t or won’t confirm their identity, should be considered extremely suspicious.

We tell our patients to protect their insurance numbers as carefully as they guard their Social Security number and other valuable data, and to shred any medical paperwork they no longer need, including labels on prescription bottles. And if they see something on an Explanation of Benefits that doesn’t look right, they should question it immediately. We encourage them to take advantage of the free services at MyMedicare.gov, including Medicare Summary Notices provided every 3 months (if any services or medical supplies are received during that period), to make sure they’re being billed only for services they have received.

Your staff should be made aware of the potential for “friendly fraud,” which is defined as theft of identity and medical information by patients’ friends or family members. (According to some studies, as much as 50% of all medical identity theft may be committed this way.) Staffers should never divulge insurance numbers, diagnoses, lab reports, or any other privileged information to family or friends, whether by phone, fax, mail, or in person, without written permission from the patient. And when callers claiming to be patients request information about themselves, your employees should be alert for “red flags.” For example, legitimate patients won’t stumble over simple questions (such as “What is your birth date?”) or request test results or diagnoses that they should already know about.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

In his book, “Scam Me If You Can,” fraud expert Frank Abagnale relates the case of a 5-year-old boy whose pediatrician’s computer was hacked, compromising his name, birth date, Social Security number, insurance information, and medical records. The result was a bureaucratic nightmare that may well continue for the rest of that unfortunate young patient’s life. One can only speculate on the difficulties he might have as adult in obtaining a line of credit, or in proving his medical identity to physicians and hospitals.

tomprout/E+

Medical identity theft is increasingly popular with scam artists, because it is so lucrative. Everything a crook needs to commit ordinary identity theft – your Social Security number, bank account numbers, etc. – sells for about $25 on the black market; add health insurance and medical records, and the price can jump to $1,000 or more. That’s because there is a far greater potential yield from medical identity theft – and once your personal information and medical records are breached, they are in the Cloud for the rest of your life, available to anyone who wants to buy them. Older patients are particularly vulnerable: Medicare billing scams cost taxpayers more than $60 billion a year.

If your office’s computer system does not have effective fraud protection, you could be held liable for any fraud committed with information stolen from it – and if the information is resold years later and reused to commit more fraud, you’ll be liable for that, too. That’s why I strongly recommend that you invest in high-quality security technology and software, so that in the event of a breach, the security company will at least share in the fault and the liability. (As always, I have no financial interest in any product or industry mentioned in this column.)

Even with adequate protection, breaches can still occur, so all medical offices should have a breach response plan in place, covering how to halt security breaches, and how to handle any lost or stolen data. Your computer and security vendors can help with formulating such a plan. Patients affected by a breach need to be contacted as well, so they may put a freeze on accounts or send out fraud alerts.

Patients also need to be aware of the risks. If your EHR includes an online portal to communicate protected information to patients, it may be secure on your end, but patients are unlikely to have similar protection on their home computers. If you offer online patient portal services, you should make your patients aware of measures they can take to protect their data once it arrives on their computers or phones.

Patients should also be warned of the risks that come with sharing medical information with others. If they are asked to reveal medical data via phone or email, they need to ask who is requesting it, and why. Any unsolicited calls inquiring about their medical information, from someone who can’t or won’t confirm their identity, should be considered extremely suspicious.

We tell our patients to protect their insurance numbers as carefully as they guard their Social Security number and other valuable data, and to shred any medical paperwork they no longer need, including labels on prescription bottles. And if they see something on an Explanation of Benefits that doesn’t look right, they should question it immediately. We encourage them to take advantage of the free services at MyMedicare.gov, including Medicare Summary Notices provided every 3 months (if any services or medical supplies are received during that period), to make sure they’re being billed only for services they have received.

Your staff should be made aware of the potential for “friendly fraud,” which is defined as theft of identity and medical information by patients’ friends or family members. (According to some studies, as much as 50% of all medical identity theft may be committed this way.) Staffers should never divulge insurance numbers, diagnoses, lab reports, or any other privileged information to family or friends, whether by phone, fax, mail, or in person, without written permission from the patient. And when callers claiming to be patients request information about themselves, your employees should be alert for “red flags.” For example, legitimate patients won’t stumble over simple questions (such as “What is your birth date?”) or request test results or diagnoses that they should already know about.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

With myriad complex, high-tech problems facing private practice in this modern era, I am periodically reminded by long-time readers to revisit some of the low-tech issues that will always require our attention.

Few are lower tech (in most cases) and more easily overlooked than theft from within. Embezzlement remains far more common in medical offices than generally assumed – and it often occurs in full view of physicians who think everything is fine. Most embezzlers are not skillful or discreet; their transgressions may go undetected for years, simply because no one suspects it is happening.

Detecting fraud is an inexact science. There is no textbook approach that one can follow, but a few simple measures will prevent or expose the most common forms:

• Make it more difficult. Theft and embezzlement are usually products of opportunity, so minimize those opportunities. No one person should be in charge of the entire bookkeeping process: The person who enters charges should be different from the one who enters payments. The one who writes checks or makes electronic fund transfers should not balance the books, and so on. Internal audits should be done on a regular basis, and all employees should know that. Your accountant can help.
• Reconcile cash receipts daily. Embezzlement does not require sophisticated technology; the most common form is simply taking cash out of the till. In a typical scenario, a patient pays a copay of $15 in cash; the receptionist records the payment as $5, and pockets the rest. Make sure a receipt is generated for every cash transaction, and that someone other than the person accepting cash reconciles the charges, receipts, and cash totals daily.
• Inventory your stock. Cash isn’t the only susceptible commodity. If you sell cosmetics or other products, inventory your stock frequently. And office personnel are not the only potential thieves: Last year, a locum tenens physician down the street conspired with a receptionist to take cash transactions for cosmetic neurotoxins and fillers “off the books” and split the spoils. That office was being ripped off twice; first for the neurotoxin and filler materials themselves, and then for the cash proceeds.
• Separate all accounting duties. Another popular ploy is false invoicing for imaginary supplies. A friend’s experience provides a good example (retold with his permission): His bookkeeper wrote sizable checks to herself, disguising them in the ledger as payments to vendors commonly used by his practice. Since the same employee also balanced the checkbook, she got away with it for years. “It wasn’t at all clever,” he told me, “and I’m embarrassed to admit that it happened to me.” Once again, separation of duties is the key to prevention. One employee should enter invoices into the data system, another should issue the check or make the electronic transfer, and a third should match invoices to goods and services received.
• Verify expense reports. False expense reporting is a subset of the fake invoice scam. When an employee asks for reimbursement of expenses, make sure those expenses are real.
• Consider computer safeguards. Computers facilitate a lot of financial chores, but they also consolidate financial data in one place, where it is potentially accessible to anybody, anywhere. Your computer vendor should be aware of this, and there should be safeguards built into your system. Ask about them. If they aren’t there, ask why.
• Hire honest employees. All applicants look great on paper, so check their references; and with their permission, you can run background checks for a few dollars on any of several public information web sites. My columns on hiring are available on the MDedge Dermatology website.
• Look for “red flags.” Examples include employees who refuse to take vacations, because someone else will have do their work or who insist on posting expenses that are a coworker’s responsibility, “just to be nice.” Anyone obviously living beyond his or her means merits suspicion as well.
• Consider bonding your employees. Dishonesty bonds are relatively inexpensive, and provide assurance of some measure of recovery if your safeguards fail. Also, just knowing that your staff is bonded will scare off most dishonest applicants. One effective screen is a question on your employment application: “Would you object to being bonded?”

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

With myriad complex, high-tech problems facing private practice in this modern era, I am periodically reminded by long-time readers to revisit some of the low-tech issues that will always require our attention.

Few are lower tech (in most cases) and more easily overlooked than theft from within. Embezzlement remains far more common in medical offices than generally assumed – and it often occurs in full view of physicians who think everything is fine. Most embezzlers are not skillful or discreet; their transgressions may go undetected for years, simply because no one suspects it is happening.

Detecting fraud is an inexact science. There is no textbook approach that one can follow, but a few simple measures will prevent or expose the most common forms:

• Make it more difficult. Theft and embezzlement are usually products of opportunity, so minimize those opportunities. No one person should be in charge of the entire bookkeeping process: The person who enters charges should be different from the one who enters payments. The one who writes checks or makes electronic fund transfers should not balance the books, and so on. Internal audits should be done on a regular basis, and all employees should know that. Your accountant can help.
• Reconcile cash receipts daily. Embezzlement does not require sophisticated technology; the most common form is simply taking cash out of the till. In a typical scenario, a patient pays a copay of $15 in cash; the receptionist records the payment as $5, and pockets the rest. Make sure a receipt is generated for every cash transaction, and that someone other than the person accepting cash reconciles the charges, receipts, and cash totals daily.
• Inventory your stock. Cash isn’t the only susceptible commodity. If you sell cosmetics or other products, inventory your stock frequently. And office personnel are not the only potential thieves: Last year, a locum tenens physician down the street conspired with a receptionist to take cash transactions for cosmetic neurotoxins and fillers “off the books” and split the spoils. That office was being ripped off twice; first for the neurotoxin and filler materials themselves, and then for the cash proceeds.
• Separate all accounting duties. Another popular ploy is false invoicing for imaginary supplies. A friend’s experience provides a good example (retold with his permission): His bookkeeper wrote sizable checks to herself, disguising them in the ledger as payments to vendors commonly used by his practice. Since the same employee also balanced the checkbook, she got away with it for years. “It wasn’t at all clever,” he told me, “and I’m embarrassed to admit that it happened to me.” Once again, separation of duties is the key to prevention. One employee should enter invoices into the data system, another should issue the check or make the electronic transfer, and a third should match invoices to goods and services received.
• Verify expense reports. False expense reporting is a subset of the fake invoice scam. When an employee asks for reimbursement of expenses, make sure those expenses are real.
• Consider computer safeguards. Computers facilitate a lot of financial chores, but they also consolidate financial data in one place, where it is potentially accessible to anybody, anywhere. Your computer vendor should be aware of this, and there should be safeguards built into your system. Ask about them. If they aren’t there, ask why.
• Hire honest employees. All applicants look great on paper, so check their references; and with their permission, you can run background checks for a few dollars on any of several public information web sites. My columns on hiring are available on the MDedge Dermatology website.
• Look for “red flags.” Examples include employees who refuse to take vacations, because someone else will have do their work or who insist on posting expenses that are a coworker’s responsibility, “just to be nice.” Anyone obviously living beyond his or her means merits suspicion as well.
• Consider bonding your employees. Dishonesty bonds are relatively inexpensive, and provide assurance of some measure of recovery if your safeguards fail. Also, just knowing that your staff is bonded will scare off most dishonest applicants. One effective screen is a question on your employment application: “Would you object to being bonded?”

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

With myriad complex, high-tech problems facing private practice in this modern era, I am periodically reminded by long-time readers to revisit some of the low-tech issues that will always require our attention.

Few are lower tech (in most cases) and more easily overlooked than theft from within. Embezzlement remains far more common in medical offices than generally assumed – and it often occurs in full view of physicians who think everything is fine. Most embezzlers are not skillful or discreet; their transgressions may go undetected for years, simply because no one suspects it is happening.

Detecting fraud is an inexact science. There is no textbook approach that one can follow, but a few simple measures will prevent or expose the most common forms:

• Make it more difficult. Theft and embezzlement are usually products of opportunity, so minimize those opportunities. No one person should be in charge of the entire bookkeeping process: The person who enters charges should be different from the one who enters payments. The one who writes checks or makes electronic fund transfers should not balance the books, and so on. Internal audits should be done on a regular basis, and all employees should know that. Your accountant can help.
• Reconcile cash receipts daily. Embezzlement does not require sophisticated technology; the most common form is simply taking cash out of the till. In a typical scenario, a patient pays a copay of $15 in cash; the receptionist records the payment as $5, and pockets the rest. Make sure a receipt is generated for every cash transaction, and that someone other than the person accepting cash reconciles the charges, receipts, and cash totals daily.
• Inventory your stock. Cash isn’t the only susceptible commodity. If you sell cosmetics or other products, inventory your stock frequently. And office personnel are not the only potential thieves: Last year, a locum tenens physician down the street conspired with a receptionist to take cash transactions for cosmetic neurotoxins and fillers “off the books” and split the spoils. That office was being ripped off twice; first for the neurotoxin and filler materials themselves, and then for the cash proceeds.
• Separate all accounting duties. Another popular ploy is false invoicing for imaginary supplies. A friend’s experience provides a good example (retold with his permission): His bookkeeper wrote sizable checks to herself, disguising them in the ledger as payments to vendors commonly used by his practice. Since the same employee also balanced the checkbook, she got away with it for years. “It wasn’t at all clever,” he told me, “and I’m embarrassed to admit that it happened to me.” Once again, separation of duties is the key to prevention. One employee should enter invoices into the data system, another should issue the check or make the electronic transfer, and a third should match invoices to goods and services received.
• Verify expense reports. False expense reporting is a subset of the fake invoice scam. When an employee asks for reimbursement of expenses, make sure those expenses are real.
• Consider computer safeguards. Computers facilitate a lot of financial chores, but they also consolidate financial data in one place, where it is potentially accessible to anybody, anywhere. Your computer vendor should be aware of this, and there should be safeguards built into your system. Ask about them. If they aren’t there, ask why.
• Hire honest employees. All applicants look great on paper, so check their references; and with their permission, you can run background checks for a few dollars on any of several public information web sites. My columns on hiring are available on the MDedge Dermatology website.
• Look for “red flags.” Examples include employees who refuse to take vacations, because someone else will have do their work or who insist on posting expenses that are a coworker’s responsibility, “just to be nice.” Anyone obviously living beyond his or her means merits suspicion as well.
• Consider bonding your employees. Dishonesty bonds are relatively inexpensive, and provide assurance of some measure of recovery if your safeguards fail. Also, just knowing that your staff is bonded will scare off most dishonest applicants. One effective screen is a question on your employment application: “Would you object to being bonded?”

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Did you notice that your practice slows down in February? In fact, if you plot your patient census over a few years, you may find that it dips every February. And you will discover other slow periods, perhaps in December, and busy months during other parts of the year.

Seasonality is yet another of those basic business concepts that most physicians have never heard of, because of the conspicuous lack of business training in medical schools. Seasonal fluctuations exist in one form or another in every business, including private medical practices. Why are people more or less willing to spend money at certain times of the year? Analysts usually blame slow business during January or February on reluctance to buy products or services after the holiday season. They attribute summer peaks to everything from warm weather to an increased propensity to buy when students are out of school, and summer slumps to vacationing customers. It is not always easy – or necessary – to explain seasonality. The point is that such behavior patterns do exist.

It would seem that this behavior would be easy to change, by running some ads, or doing an e-mail blast; but unfortunately, altering a seasonal pattern is not an option for a small private practice. It can be done, but it is a deep pockets game requiring long, expensive campaigns that are only practical for large corporations.

For example, soup was traditionally consumed during the winter months since time immemorial. After years of pervasive advertising extolling its nutritional virtues (remember “Soup is Good Food”?), the soup industry succeeded in convincing the public to use their product year-round. Obviously, that kind of large-scale behavior modification is not practical for a local medical practice.

Does that mean there is nothing we can do about our practices’ seasonal variations? Not at all; but we must work within the realities of our patients’ seasonal behavior, rather than attempting to change that behavior outright.

First, you need to know what that behavior is, because it varies from practice to practice, even within the same state or city. Plotting your seasonality is easy; you can make a graph on Excel in a few minutes. Ask your office manager or accountant for month-by-month billing figures for the last 2 or 3 years. (Make sure it’s the amount billed, not collected, since the latter lags the former by several weeks at least.) Plot those figures on the vertical arm and time (in months) on the horizontal. Alternatively you can plot patient visits per month, if you wish; I do both.

Once you know your seasonality, review your options. Modify your own habits when necessary. If you typically take a vacation in August, for example, that’s not a great idea if August is one of your busiest months; consider vacationing during predictable slow periods instead.

Though I have said that you can’t change most seasonal behavior, it is possible to “retrain” some of your long-time, loyal patients to come in during your slower periods for at least some of their care. Use insurance company rules as a financial incentive, where possible. Many of my patients are on Medicare, so I send a notice to all of them in early November each year, urging them to come in during December (one of my light months) before their deductible has to be paid again.

If you advertise your services, do the bulk of it during your busiest months. That might seem counterintuitive; why not advertise during slow periods to fill those empty slots? But once again, you cannot change seasonal behavior with a low-budget, local advertising campaign; physicians who attempt it invariably get a poor response to their ads. So don’t try to move the mountain to Mohammed. Advertise during your busy periods, when seasonal patterns predict that potential patients are more willing to spend money and are more likely to respond to your message.

In short, then, try to “flatten” your seasonal dips by persuading as many existing patients as possible to return during slower seasons. You can then encourage new patients to make appointments when they are receptive to purchasing new services, your seasonal peaks. Once in your practice, some of them can then be shifted into your slower periods, especially for predictable, periodic care.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Did you notice that your practice slows down in February? In fact, if you plot your patient census over a few years, you may find that it dips every February. And you will discover other slow periods, perhaps in December, and busy months during other parts of the year.

Seasonality is yet another of those basic business concepts that most physicians have never heard of, because of the conspicuous lack of business training in medical schools. Seasonal fluctuations exist in one form or another in every business, including private medical practices. Why are people more or less willing to spend money at certain times of the year? Analysts usually blame slow business during January or February on reluctance to buy products or services after the holiday season. They attribute summer peaks to everything from warm weather to an increased propensity to buy when students are out of school, and summer slumps to vacationing customers. It is not always easy – or necessary – to explain seasonality. The point is that such behavior patterns do exist.

It would seem that this behavior would be easy to change, by running some ads, or doing an e-mail blast; but unfortunately, altering a seasonal pattern is not an option for a small private practice. It can be done, but it is a deep pockets game requiring long, expensive campaigns that are only practical for large corporations.

For example, soup was traditionally consumed during the winter months since time immemorial. After years of pervasive advertising extolling its nutritional virtues (remember “Soup is Good Food”?), the soup industry succeeded in convincing the public to use their product year-round. Obviously, that kind of large-scale behavior modification is not practical for a local medical practice.

Does that mean there is nothing we can do about our practices’ seasonal variations? Not at all; but we must work within the realities of our patients’ seasonal behavior, rather than attempting to change that behavior outright.

First, you need to know what that behavior is, because it varies from practice to practice, even within the same state or city. Plotting your seasonality is easy; you can make a graph on Excel in a few minutes. Ask your office manager or accountant for month-by-month billing figures for the last 2 or 3 years. (Make sure it’s the amount billed, not collected, since the latter lags the former by several weeks at least.) Plot those figures on the vertical arm and time (in months) on the horizontal. Alternatively you can plot patient visits per month, if you wish; I do both.

Once you know your seasonality, review your options. Modify your own habits when necessary. If you typically take a vacation in August, for example, that’s not a great idea if August is one of your busiest months; consider vacationing during predictable slow periods instead.

Though I have said that you can’t change most seasonal behavior, it is possible to “retrain” some of your long-time, loyal patients to come in during your slower periods for at least some of their care. Use insurance company rules as a financial incentive, where possible. Many of my patients are on Medicare, so I send a notice to all of them in early November each year, urging them to come in during December (one of my light months) before their deductible has to be paid again.

If you advertise your services, do the bulk of it during your busiest months. That might seem counterintuitive; why not advertise during slow periods to fill those empty slots? But once again, you cannot change seasonal behavior with a low-budget, local advertising campaign; physicians who attempt it invariably get a poor response to their ads. So don’t try to move the mountain to Mohammed. Advertise during your busy periods, when seasonal patterns predict that potential patients are more willing to spend money and are more likely to respond to your message.

In short, then, try to “flatten” your seasonal dips by persuading as many existing patients as possible to return during slower seasons. You can then encourage new patients to make appointments when they are receptive to purchasing new services, your seasonal peaks. Once in your practice, some of them can then be shifted into your slower periods, especially for predictable, periodic care.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Did you notice that your practice slows down in February? In fact, if you plot your patient census over a few years, you may find that it dips every February. And you will discover other slow periods, perhaps in December, and busy months during other parts of the year.

Seasonality is yet another of those basic business concepts that most physicians have never heard of, because of the conspicuous lack of business training in medical schools. Seasonal fluctuations exist in one form or another in every business, including private medical practices. Why are people more or less willing to spend money at certain times of the year? Analysts usually blame slow business during January or February on reluctance to buy products or services after the holiday season. They attribute summer peaks to everything from warm weather to an increased propensity to buy when students are out of school, and summer slumps to vacationing customers. It is not always easy – or necessary – to explain seasonality. The point is that such behavior patterns do exist.

It would seem that this behavior would be easy to change, by running some ads, or doing an e-mail blast; but unfortunately, altering a seasonal pattern is not an option for a small private practice. It can be done, but it is a deep pockets game requiring long, expensive campaigns that are only practical for large corporations.

For example, soup was traditionally consumed during the winter months since time immemorial. After years of pervasive advertising extolling its nutritional virtues (remember “Soup is Good Food”?), the soup industry succeeded in convincing the public to use their product year-round. Obviously, that kind of large-scale behavior modification is not practical for a local medical practice.

Does that mean there is nothing we can do about our practices’ seasonal variations? Not at all; but we must work within the realities of our patients’ seasonal behavior, rather than attempting to change that behavior outright.

First, you need to know what that behavior is, because it varies from practice to practice, even within the same state or city. Plotting your seasonality is easy; you can make a graph on Excel in a few minutes. Ask your office manager or accountant for month-by-month billing figures for the last 2 or 3 years. (Make sure it’s the amount billed, not collected, since the latter lags the former by several weeks at least.) Plot those figures on the vertical arm and time (in months) on the horizontal. Alternatively you can plot patient visits per month, if you wish; I do both.

Once you know your seasonality, review your options. Modify your own habits when necessary. If you typically take a vacation in August, for example, that’s not a great idea if August is one of your busiest months; consider vacationing during predictable slow periods instead.

Though I have said that you can’t change most seasonal behavior, it is possible to “retrain” some of your long-time, loyal patients to come in during your slower periods for at least some of their care. Use insurance company rules as a financial incentive, where possible. Many of my patients are on Medicare, so I send a notice to all of them in early November each year, urging them to come in during December (one of my light months) before their deductible has to be paid again.

If you advertise your services, do the bulk of it during your busiest months. That might seem counterintuitive; why not advertise during slow periods to fill those empty slots? But once again, you cannot change seasonal behavior with a low-budget, local advertising campaign; physicians who attempt it invariably get a poor response to their ads. So don’t try to move the mountain to Mohammed. Advertise during your busy periods, when seasonal patterns predict that potential patients are more willing to spend money and are more likely to respond to your message.

In short, then, try to “flatten” your seasonal dips by persuading as many existing patients as possible to return during slower seasons. You can then encourage new patients to make appointments when they are receptive to purchasing new services, your seasonal peaks. Once in your practice, some of them can then be shifted into your slower periods, especially for predictable, periodic care.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Many medical offices are following a popular trend in the business world: They are replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off” (PTO). There are several reasons why this is a good idea, but it is not without disadvantages, and you should carefully consider all the pros and cons before adopting it.

Employees generally like the concept because most never use all their sick leave. Allowing them to take the difference as extra vacation time makes them happy, and makes your office more attractive to excellent prospects. They also appreciate being treated more like adults who can make time off decisions for themselves.

Employers like it because there is less paperwork and less abuse of sick leave. They don’t have to make any decisions about whether an employee is really sick or not; reasons for absence are now irrelevant, so feigned illnesses are a thing of the past. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee’s duties, you don’t need to know (or care) about the reason for the request.

Critics say employees are absent more frequently under a PTO system, since employees who never used their full allotment of sick leave will typically use all of their PTO; but that, in a sense, is the idea. Time off is necessary and important for good office morale, and should be taken by all employees, as well as by all employers. (Remember Eastern’s First Law: Your last words will NOT be, “I wish I had spent more time in the office.”)

Besides, you should be suspicious of any employee who won’t take vacations. They are often embezzlers who fear that their illicit modus operandi will be discovered during their absence. (More on that next month.)

chokkicx/Digital Vision Vectors

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Many medical offices are following a popular trend in the business world: They are replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off” (PTO). There are several reasons why this is a good idea, but it is not without disadvantages, and you should carefully consider all the pros and cons before adopting it.

Employees generally like the concept because most never use all their sick leave. Allowing them to take the difference as extra vacation time makes them happy, and makes your office more attractive to excellent prospects. They also appreciate being treated more like adults who can make time off decisions for themselves.

Employers like it because there is less paperwork and less abuse of sick leave. They don’t have to make any decisions about whether an employee is really sick or not; reasons for absence are now irrelevant, so feigned illnesses are a thing of the past. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee’s duties, you don’t need to know (or care) about the reason for the request.

Critics say employees are absent more frequently under a PTO system, since employees who never used their full allotment of sick leave will typically use all of their PTO; but that, in a sense, is the idea. Time off is necessary and important for good office morale, and should be taken by all employees, as well as by all employers. (Remember Eastern’s First Law: Your last words will NOT be, “I wish I had spent more time in the office.”)

Besides, you should be suspicious of any employee who won’t take vacations. They are often embezzlers who fear that their illicit modus operandi will be discovered during their absence. (More on that next month.)

chokkicx/Digital Vision Vectors

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Many medical offices are following a popular trend in the business world: They are replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off” (PTO). There are several reasons why this is a good idea, but it is not without disadvantages, and you should carefully consider all the pros and cons before adopting it.

Employees generally like the concept because most never use all their sick leave. Allowing them to take the difference as extra vacation time makes them happy, and makes your office more attractive to excellent prospects. They also appreciate being treated more like adults who can make time off decisions for themselves.

Employers like it because there is less paperwork and less abuse of sick leave. They don’t have to make any decisions about whether an employee is really sick or not; reasons for absence are now irrelevant, so feigned illnesses are a thing of the past. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee’s duties, you don’t need to know (or care) about the reason for the request.

Critics say employees are absent more frequently under a PTO system, since employees who never used their full allotment of sick leave will typically use all of their PTO; but that, in a sense, is the idea. Time off is necessary and important for good office morale, and should be taken by all employees, as well as by all employers. (Remember Eastern’s First Law: Your last words will NOT be, “I wish I had spent more time in the office.”)

Besides, you should be suspicious of any employee who won’t take vacations. They are often embezzlers who fear that their illicit modus operandi will be discovered during their absence. (More on that next month.)

chokkicx/Digital Vision Vectors

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

A few years ago, my seemingly indestructible 94-year-old mother suffered a series of medical setbacks. As her health problems accumulated, so did the complexity and cost of her care, progressing from her home to an assisted-living facility to a nursing home. It was heartbreaking – and expensive. My wife likened it to “putting another kid through college” – an elite private college, at that.

designer451/iStock/Getty Images Plus

Medicare, of course, did not cover any of this, except for physician visits and some of her medications. When it was finally over, my wife and I resolved that, should we face a similar situation in our final years, we could not put ourselves or our children through a similar financial ordeal.

Long-term care insurance (LTCI) is designed to prevent such situations by covering hospice services, nursing home stays, assisted living facilities, in-home services, and other end-of-life expenses. (Covered services vary by policy; and as always, I have no financial interest in any product or service mentioned here.)

According to the American Association for Long-Term Care Insurance (AALTCI), the average annual LTCI premium for a 60-year-old couple is $3,490. Not cheap; but there are ways to lower premiums without gutting your coverage.

The best way to keep costs down is to get in early. In general, the younger you are and the better health you are in, the lower your premiums will be. For example – again according to the AALTCI – that “average” annual premium of $3,490 for a hypothetical 60-year-old couple would increase 34%, to $4,675, if they waited until they were 65 to buy the policy. And if their health were to decline in the interim, they might not be able to obtain adequate coverage at all.

You can also lower premiums by decreasing daily benefits, or increasing the “elimination period” – the length of time after you become eligible for benefits that the policy starts paying them; 30-, 60-, and 90-day periods are common. As long as you have sufficient savings to realistically cover costs until the elimination period is over, choosing a longer one can reduce your costs significantly.

Another variable is the maximum length of time the policy will pay out benefits. Ideally, you would want a payout to continue for as long as necessary, but few if any companies are willing to write uncapped policies anymore. Two to five years of benefits is a common time frame. (The “average” premiums quoted above assume a benefit of $150 per day with a 3-year cap and a 90-day elimination period.)

As with any insurance, it is important not to overbuy LTCI. It isn’t necessary to obtain coverage that will pay for 100% of your long-term care costs – just the portion that your projected retirement income (Social Security, pensions, income from savings) may not be sufficient to cover. Buying only the amount of coverage you need will substantially reduce your premium costs over the life of the policy.

If you work for a hospital or a large group, it’s worth checking to see if your employer offers LTCI. Employer-sponsored plans are often offered at discounted group rates, and you can usually keep the policy even if you leave. If you’re a member of any social or religious groups, check their insurance plans as well.

To be sure, there is considerable debate about whether LTCI is worth the cost. Premiums for new policies are rising at a steep clip – 9% annually, according to the AALTCI – and insurers are allowed to raise premiums even after you buy the policy, so you’ll need to factor that possibility into your budget.

But forgoing coverage can be costly too: If you know you will have to cover your own long-term care costs, you won’t be able to spend that money on things you really care about – like your grandkids, or travel, or charitable work. You might even forgo necessary medical care for fear of running out of money.

Everyone must make their own decision. My wife and I decided that a few thousand dollars per year is a fair price to pay for the peace of mind of knowing we will be able to afford proper supportive care, without help from our children or anyone else, regardless of what happens in the years to come.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

A few years ago, my seemingly indestructible 94-year-old mother suffered a series of medical setbacks. As her health problems accumulated, so did the complexity and cost of her care, progressing from her home to an assisted-living facility to a nursing home. It was heartbreaking – and expensive. My wife likened it to “putting another kid through college” – an elite private college, at that.

designer451/iStock/Getty Images Plus

Medicare, of course, did not cover any of this, except for physician visits and some of her medications. When it was finally over, my wife and I resolved that, should we face a similar situation in our final years, we could not put ourselves or our children through a similar financial ordeal.

Long-term care insurance (LTCI) is designed to prevent such situations by covering hospice services, nursing home stays, assisted living facilities, in-home services, and other end-of-life expenses. (Covered services vary by policy; and as always, I have no financial interest in any product or service mentioned here.)

According to the American Association for Long-Term Care Insurance (AALTCI), the average annual LTCI premium for a 60-year-old couple is $3,490. Not cheap; but there are ways to lower premiums without gutting your coverage.

The best way to keep costs down is to get in early. In general, the younger you are and the better health you are in, the lower your premiums will be. For example – again according to the AALTCI – that “average” annual premium of $3,490 for a hypothetical 60-year-old couple would increase 34%, to $4,675, if they waited until they were 65 to buy the policy. And if their health were to decline in the interim, they might not be able to obtain adequate coverage at all.

You can also lower premiums by decreasing daily benefits, or increasing the “elimination period” – the length of time after you become eligible for benefits that the policy starts paying them; 30-, 60-, and 90-day periods are common. As long as you have sufficient savings to realistically cover costs until the elimination period is over, choosing a longer one can reduce your costs significantly.

Another variable is the maximum length of time the policy will pay out benefits. Ideally, you would want a payout to continue for as long as necessary, but few if any companies are willing to write uncapped policies anymore. Two to five years of benefits is a common time frame. (The “average” premiums quoted above assume a benefit of $150 per day with a 3-year cap and a 90-day elimination period.)

As with any insurance, it is important not to overbuy LTCI. It isn’t necessary to obtain coverage that will pay for 100% of your long-term care costs – just the portion that your projected retirement income (Social Security, pensions, income from savings) may not be sufficient to cover. Buying only the amount of coverage you need will substantially reduce your premium costs over the life of the policy.

If you work for a hospital or a large group, it’s worth checking to see if your employer offers LTCI. Employer-sponsored plans are often offered at discounted group rates, and you can usually keep the policy even if you leave. If you’re a member of any social or religious groups, check their insurance plans as well.

To be sure, there is considerable debate about whether LTCI is worth the cost. Premiums for new policies are rising at a steep clip – 9% annually, according to the AALTCI – and insurers are allowed to raise premiums even after you buy the policy, so you’ll need to factor that possibility into your budget.

But forgoing coverage can be costly too: If you know you will have to cover your own long-term care costs, you won’t be able to spend that money on things you really care about – like your grandkids, or travel, or charitable work. You might even forgo necessary medical care for fear of running out of money.

Everyone must make their own decision. My wife and I decided that a few thousand dollars per year is a fair price to pay for the peace of mind of knowing we will be able to afford proper supportive care, without help from our children or anyone else, regardless of what happens in the years to come.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

A few years ago, my seemingly indestructible 94-year-old mother suffered a series of medical setbacks. As her health problems accumulated, so did the complexity and cost of her care, progressing from her home to an assisted-living facility to a nursing home. It was heartbreaking – and expensive. My wife likened it to “putting another kid through college” – an elite private college, at that.

designer451/iStock/Getty Images Plus

Medicare, of course, did not cover any of this, except for physician visits and some of her medications. When it was finally over, my wife and I resolved that, should we face a similar situation in our final years, we could not put ourselves or our children through a similar financial ordeal.

Long-term care insurance (LTCI) is designed to prevent such situations by covering hospice services, nursing home stays, assisted living facilities, in-home services, and other end-of-life expenses. (Covered services vary by policy; and as always, I have no financial interest in any product or service mentioned here.)

According to the American Association for Long-Term Care Insurance (AALTCI), the average annual LTCI premium for a 60-year-old couple is $3,490. Not cheap; but there are ways to lower premiums without gutting your coverage.

The best way to keep costs down is to get in early. In general, the younger you are and the better health you are in, the lower your premiums will be. For example – again according to the AALTCI – that “average” annual premium of $3,490 for a hypothetical 60-year-old couple would increase 34%, to $4,675, if they waited until they were 65 to buy the policy. And if their health were to decline in the interim, they might not be able to obtain adequate coverage at all.

You can also lower premiums by decreasing daily benefits, or increasing the “elimination period” – the length of time after you become eligible for benefits that the policy starts paying them; 30-, 60-, and 90-day periods are common. As long as you have sufficient savings to realistically cover costs until the elimination period is over, choosing a longer one can reduce your costs significantly.

Another variable is the maximum length of time the policy will pay out benefits. Ideally, you would want a payout to continue for as long as necessary, but few if any companies are willing to write uncapped policies anymore. Two to five years of benefits is a common time frame. (The “average” premiums quoted above assume a benefit of $150 per day with a 3-year cap and a 90-day elimination period.)

As with any insurance, it is important not to overbuy LTCI. It isn’t necessary to obtain coverage that will pay for 100% of your long-term care costs – just the portion that your projected retirement income (Social Security, pensions, income from savings) may not be sufficient to cover. Buying only the amount of coverage you need will substantially reduce your premium costs over the life of the policy.

If you work for a hospital or a large group, it’s worth checking to see if your employer offers LTCI. Employer-sponsored plans are often offered at discounted group rates, and you can usually keep the policy even if you leave. If you’re a member of any social or religious groups, check their insurance plans as well.

To be sure, there is considerable debate about whether LTCI is worth the cost. Premiums for new policies are rising at a steep clip – 9% annually, according to the AALTCI – and insurers are allowed to raise premiums even after you buy the policy, so you’ll need to factor that possibility into your budget.

But forgoing coverage can be costly too: If you know you will have to cover your own long-term care costs, you won’t be able to spend that money on things you really care about – like your grandkids, or travel, or charitable work. You might even forgo necessary medical care for fear of running out of money.

Everyone must make their own decision. My wife and I decided that a few thousand dollars per year is a fair price to pay for the peace of mind of knowing we will be able to afford proper supportive care, without help from our children or anyone else, regardless of what happens in the years to come.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Whenever Don McLean is asked what the lyrics to his iconic song “American Pie” mean, he answers: “They mean that I don’t have to work anymore.”

It would be nice if those of us who have never written an enigmatic hit tune could receive an unequivocal signal when it’s safe to retire. Unfortunately, the road to retirement is fraught with challenges, not least of which is locating the right off-ramp.

We tend to live longer than planned, so we run the risk of outliving our savings, which are often underfunded to begin with. And we don’t face facts about end-of-life care. Few of us have long-term care insurance, or the means to self-fund an extended long-term care situation, as I will discuss next month.

Many of us lack a clear idea of where our retirement income will come from, or if it will be there when we arrive. Doctors in particular are notorious for mismanaging their investments. Many try to self-manage retirement plans and personal savings without adequate time or knowledge to do it right. Involving a qualified financial professional is usually a far better strategy than going it alone.

So, assuming you have a solid savings plan, and solid help with its management – how will you know when you can safely retire? As with everything else, it depends; but to arrive at any sort of reliable ballpark figure, you’ll need to know three things: how much you realistically expect to spend annually after retirement; how much principal will throw off that amount in interest and dividends each year; and how far your present savings are from that target.

An oft-quoted rule of thumb is that, in retirement, your expenses will be about 70% of what they are now. In my opinion, that’s nonsense. While a few bills, such as disability and malpractice insurance premiums, will go away, other costs, such as recreation and medical care, will increase. I suggest assuming that your spending will not diminish significantly in retirement. Those of us who love travel or fancy toys may need even more.

Once you have an estimate of your annual retirement expenses, you’ll need to determine how much principal you’ll need – usually in fixed pensions and invested assets – to generate that income. Most financial advisors use the 5% rule: Assume your nest egg will pay you a conservative 5% of its value each year in dividends and interest. That rule has worked well, on average, over the long term. So if you estimate your postretirement spending will be around $100,000 per year (in today’s dollars), you’ll need about $2 million in assets. For $200,000 annual spending, you’ll need $4 million. (Should you factor in Social Security? Yes, if you’re 50 years or older; if you’re younger, I wouldn’t count on receiving any entitlements, and be pleasantly surprised if you do.)

How do you accumulate that kind of money? Financial experts say too many physicians invest too aggressively. For retirement, safety is the key. The most foolproof strategy – seldom employed, because it’s boring – is to sock away a fixed amount per month (after your retirement plan has been funded) in a mutual fund. $1,000 per month for 25 years with the market earning 10% (its historic long-term average) comes to almost $2 million, with the power of compounded interest working for you. And the earlier you start, the better.

It is never too soon to think about retirement. Young physicians often defer contributing to their retirement plans because they want to save for a new house or for college for their children. But there are tangible tax benefits that you get now, because your contributions usually reduce your taxable income, and your funds grow tax free until you withdraw them, presumably in a lower tax bracket.

At any age, it’s hard to motivate yourself to save, because it generally requires spending less money now. The way I do it is to pay myself first; that is, each month I make my regular savings contribution before considering any new purchases.

In the end, the strategy is very straightforward: Fill your retirement plan to its legal limit and let it grow, tax deferred. Then invest for the long term, with your target amount in mind. And once again, the earlier you start, the better.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Whenever Don McLean is asked what the lyrics to his iconic song “American Pie” mean, he answers: “They mean that I don’t have to work anymore.”

It would be nice if those of us who have never written an enigmatic hit tune could receive an unequivocal signal when it’s safe to retire. Unfortunately, the road to retirement is fraught with challenges, not least of which is locating the right off-ramp.

We tend to live longer than planned, so we run the risk of outliving our savings, which are often underfunded to begin with. And we don’t face facts about end-of-life care. Few of us have long-term care insurance, or the means to self-fund an extended long-term care situation, as I will discuss next month.

Many of us lack a clear idea of where our retirement income will come from, or if it will be there when we arrive. Doctors in particular are notorious for mismanaging their investments. Many try to self-manage retirement plans and personal savings without adequate time or knowledge to do it right. Involving a qualified financial professional is usually a far better strategy than going it alone.

So, assuming you have a solid savings plan, and solid help with its management – how will you know when you can safely retire? As with everything else, it depends; but to arrive at any sort of reliable ballpark figure, you’ll need to know three things: how much you realistically expect to spend annually after retirement; how much principal will throw off that amount in interest and dividends each year; and how far your present savings are from that target.

An oft-quoted rule of thumb is that, in retirement, your expenses will be about 70% of what they are now. In my opinion, that’s nonsense. While a few bills, such as disability and malpractice insurance premiums, will go away, other costs, such as recreation and medical care, will increase. I suggest assuming that your spending will not diminish significantly in retirement. Those of us who love travel or fancy toys may need even more.

Once you have an estimate of your annual retirement expenses, you’ll need to determine how much principal you’ll need – usually in fixed pensions and invested assets – to generate that income. Most financial advisors use the 5% rule: Assume your nest egg will pay you a conservative 5% of its value each year in dividends and interest. That rule has worked well, on average, over the long term. So if you estimate your postretirement spending will be around $100,000 per year (in today’s dollars), you’ll need about $2 million in assets. For $200,000 annual spending, you’ll need $4 million. (Should you factor in Social Security? Yes, if you’re 50 years or older; if you’re younger, I wouldn’t count on receiving any entitlements, and be pleasantly surprised if you do.)

How do you accumulate that kind of money? Financial experts say too many physicians invest too aggressively. For retirement, safety is the key. The most foolproof strategy – seldom employed, because it’s boring – is to sock away a fixed amount per month (after your retirement plan has been funded) in a mutual fund. $1,000 per month for 25 years with the market earning 10% (its historic long-term average) comes to almost $2 million, with the power of compounded interest working for you. And the earlier you start, the better.

It is never too soon to think about retirement. Young physicians often defer contributing to their retirement plans because they want to save for a new house or for college for their children. But there are tangible tax benefits that you get now, because your contributions usually reduce your taxable income, and your funds grow tax free until you withdraw them, presumably in a lower tax bracket.

At any age, it’s hard to motivate yourself to save, because it generally requires spending less money now. The way I do it is to pay myself first; that is, each month I make my regular savings contribution before considering any new purchases.

In the end, the strategy is very straightforward: Fill your retirement plan to its legal limit and let it grow, tax deferred. Then invest for the long term, with your target amount in mind. And once again, the earlier you start, the better.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Whenever Don McLean is asked what the lyrics to his iconic song “American Pie” mean, he answers: “They mean that I don’t have to work anymore.”

It would be nice if those of us who have never written an enigmatic hit tune could receive an unequivocal signal when it’s safe to retire. Unfortunately, the road to retirement is fraught with challenges, not least of which is locating the right off-ramp.

We tend to live longer than planned, so we run the risk of outliving our savings, which are often underfunded to begin with. And we don’t face facts about end-of-life care. Few of us have long-term care insurance, or the means to self-fund an extended long-term care situation, as I will discuss next month.

Many of us lack a clear idea of where our retirement income will come from, or if it will be there when we arrive. Doctors in particular are notorious for mismanaging their investments. Many try to self-manage retirement plans and personal savings without adequate time or knowledge to do it right. Involving a qualified financial professional is usually a far better strategy than going it alone.

So, assuming you have a solid savings plan, and solid help with its management – how will you know when you can safely retire? As with everything else, it depends; but to arrive at any sort of reliable ballpark figure, you’ll need to know three things: how much you realistically expect to spend annually after retirement; how much principal will throw off that amount in interest and dividends each year; and how far your present savings are from that target.

An oft-quoted rule of thumb is that, in retirement, your expenses will be about 70% of what they are now. In my opinion, that’s nonsense. While a few bills, such as disability and malpractice insurance premiums, will go away, other costs, such as recreation and medical care, will increase. I suggest assuming that your spending will not diminish significantly in retirement. Those of us who love travel or fancy toys may need even more.

Once you have an estimate of your annual retirement expenses, you’ll need to determine how much principal you’ll need – usually in fixed pensions and invested assets – to generate that income. Most financial advisors use the 5% rule: Assume your nest egg will pay you a conservative 5% of its value each year in dividends and interest. That rule has worked well, on average, over the long term. So if you estimate your postretirement spending will be around $100,000 per year (in today’s dollars), you’ll need about $2 million in assets. For $200,000 annual spending, you’ll need $4 million. (Should you factor in Social Security? Yes, if you’re 50 years or older; if you’re younger, I wouldn’t count on receiving any entitlements, and be pleasantly surprised if you do.)

How do you accumulate that kind of money? Financial experts say too many physicians invest too aggressively. For retirement, safety is the key. The most foolproof strategy – seldom employed, because it’s boring – is to sock away a fixed amount per month (after your retirement plan has been funded) in a mutual fund. $1,000 per month for 25 years with the market earning 10% (its historic long-term average) comes to almost $2 million, with the power of compounded interest working for you. And the earlier you start, the better.

It is never too soon to think about retirement. Young physicians often defer contributing to their retirement plans because they want to save for a new house or for college for their children. But there are tangible tax benefits that you get now, because your contributions usually reduce your taxable income, and your funds grow tax free until you withdraw them, presumably in a lower tax bracket.

At any age, it’s hard to motivate yourself to save, because it generally requires spending less money now. The way I do it is to pay myself first; that is, each month I make my regular savings contribution before considering any new purchases.

In the end, the strategy is very straightforward: Fill your retirement plan to its legal limit and let it grow, tax deferred. Then invest for the long term, with your target amount in mind. And once again, the earlier you start, the better.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Insurance, so goes the hoary cliché, is the one product you buy hoping never to use. While no one enjoys foreseeing unforeseeable calamities, if you haven’t reviewed your insurance coverage recently, there is no time like the present.

Malpractice premiums continue to rise, despite token “pain and suffering” caps in a few states. “Occurrence” policies remain the coverage of choice, but the cost has become prohibitive in many areas, when insurers are willing to write them at all. “Claims made” policies are cheaper and provide the same protection, but only while coverage is in effect. You will need “tail” coverage against belated claims after your policy lapses, but many companies provide free tail coverage if you are retiring. If you are simply switching workplaces (or policies), ask your new insurer about “nose” coverage, for claims involving acts that occurred before the new policy takes effect.

Other alternatives are gaining popularity as the demand for reasonably priced insurance increases. The most common, known as reciprocal exchanges, are very similar to traditional insurers, but require policyholders to make capital contributions in addition to payment of premiums, at least in their early stages. You get your investment back, with interest, when (if) the exchange becomes solvent.

Another option, called a captive, is a company formed by a consortium of medical practices to write their own insurance policies. All participants are shareholders, and all premiums (less administrative expenses) go toward building the security of the captive. Most captives purchase reinsurance to protect against catastrophic losses. If all goes well, individual owners sell their shares at retirement for a profit, which has grown tax-free in the interim.

Those willing to shoulder more risk might consider a risk retention group (RRG), a sort of combination of an exchange and a captive. Again, the owners are the insureds themselves, but all responsibility for management and adequate funding falls on their shoulders, and reinsurance is not usually an option. Most medical malpractice RRGs are licensed in Vermont or South Carolina, because of favorable laws in those states, but can be based in any state that allows them (36 at this writing). RRGs provide profit opportunities not available with traditional insurance, but there is risk: A few large claims could eat up all the profits, or even put owners in a financial hole.

Malpractice insurance requirements will remain fairly static throughout your career, but other insurance needs evolve over time. A good example is life insurance: As retirement savings increase, the need for life insurance decreases – especially expensive “whole life” coverage, which can often be eliminated or converted to cheaper “term” insurance.

Health insurance premiums continue to soar, but the Affordable Care Act might offer a favorable alternative for your office policy. If you are considering that, the Centers for Medicare & Medicaid Services maintains a website summarizing the various options for employers.

Worker compensation insurance is mandatory in most states and heavily regulated, so there is little wiggle room. However, some states do not require you, as the employer, to cover yourself, so eliminating that coverage could save you a substantial amount. This is only worth considering, of course, if you’re in excellent health and have very good personal health and disability coverage.

Disability insurance is not something to skimp on, but if you are approaching retirement age and have no major health issues, you may be able to decrease your coverage, or even eliminate it entirely if your retirement plan is far enough along.

Liability insurance is likewise no place to pinch pennies, but you might be able to add an “umbrella” policy providing comprehensive catastrophic coverage, which may allow you to decrease your regular coverage, or raise your deductible limits.

Two additional policies to consider are office overhead insurance, to cover the costs of keeping your office open should you be temporarily incapacitated, and employee practices liability insurance (EPLI), which protects you from lawsuits brought by militant or disgruntled employees. I covered EPLI in detail several months ago.

If you are over 50, I strongly recommend long-term-care insurance as well. It’s relatively inexpensive if you buy it while you’re still healthy, and it could save you and your heirs a load of money and aggravation on the other end. If you have shouldered the expense of caring for a chronically ill parent or grandparent, you know what I’m talking about. More about that next month.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Insurance, so goes the hoary cliché, is the one product you buy hoping never to use. While no one enjoys foreseeing unforeseeable calamities, if you haven’t reviewed your insurance coverage recently, there is no time like the present.

Malpractice premiums continue to rise, despite token “pain and suffering” caps in a few states. “Occurrence” policies remain the coverage of choice, but the cost has become prohibitive in many areas, when insurers are willing to write them at all. “Claims made” policies are cheaper and provide the same protection, but only while coverage is in effect. You will need “tail” coverage against belated claims after your policy lapses, but many companies provide free tail coverage if you are retiring. If you are simply switching workplaces (or policies), ask your new insurer about “nose” coverage, for claims involving acts that occurred before the new policy takes effect.

Other alternatives are gaining popularity as the demand for reasonably priced insurance increases. The most common, known as reciprocal exchanges, are very similar to traditional insurers, but require policyholders to make capital contributions in addition to payment of premiums, at least in their early stages. You get your investment back, with interest, when (if) the exchange becomes solvent.

Another option, called a captive, is a company formed by a consortium of medical practices to write their own insurance policies. All participants are shareholders, and all premiums (less administrative expenses) go toward building the security of the captive. Most captives purchase reinsurance to protect against catastrophic losses. If all goes well, individual owners sell their shares at retirement for a profit, which has grown tax-free in the interim.

Those willing to shoulder more risk might consider a risk retention group (RRG), a sort of combination of an exchange and a captive. Again, the owners are the insureds themselves, but all responsibility for management and adequate funding falls on their shoulders, and reinsurance is not usually an option. Most medical malpractice RRGs are licensed in Vermont or South Carolina, because of favorable laws in those states, but can be based in any state that allows them (36 at this writing). RRGs provide profit opportunities not available with traditional insurance, but there is risk: A few large claims could eat up all the profits, or even put owners in a financial hole.

Malpractice insurance requirements will remain fairly static throughout your career, but other insurance needs evolve over time. A good example is life insurance: As retirement savings increase, the need for life insurance decreases – especially expensive “whole life” coverage, which can often be eliminated or converted to cheaper “term” insurance.

Health insurance premiums continue to soar, but the Affordable Care Act might offer a favorable alternative for your office policy. If you are considering that, the Centers for Medicare & Medicaid Services maintains a website summarizing the various options for employers.

Worker compensation insurance is mandatory in most states and heavily regulated, so there is little wiggle room. However, some states do not require you, as the employer, to cover yourself, so eliminating that coverage could save you a substantial amount. This is only worth considering, of course, if you’re in excellent health and have very good personal health and disability coverage.

Disability insurance is not something to skimp on, but if you are approaching retirement age and have no major health issues, you may be able to decrease your coverage, or even eliminate it entirely if your retirement plan is far enough along.

Liability insurance is likewise no place to pinch pennies, but you might be able to add an “umbrella” policy providing comprehensive catastrophic coverage, which may allow you to decrease your regular coverage, or raise your deductible limits.

Two additional policies to consider are office overhead insurance, to cover the costs of keeping your office open should you be temporarily incapacitated, and employee practices liability insurance (EPLI), which protects you from lawsuits brought by militant or disgruntled employees. I covered EPLI in detail several months ago.

If you are over 50, I strongly recommend long-term-care insurance as well. It’s relatively inexpensive if you buy it while you’re still healthy, and it could save you and your heirs a load of money and aggravation on the other end. If you have shouldered the expense of caring for a chronically ill parent or grandparent, you know what I’m talking about. More about that next month.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Insurance, so goes the hoary cliché, is the one product you buy hoping never to use. While no one enjoys foreseeing unforeseeable calamities, if you haven’t reviewed your insurance coverage recently, there is no time like the present.

Malpractice premiums continue to rise, despite token “pain and suffering” caps in a few states. “Occurrence” policies remain the coverage of choice, but the cost has become prohibitive in many areas, when insurers are willing to write them at all. “Claims made” policies are cheaper and provide the same protection, but only while coverage is in effect. You will need “tail” coverage against belated claims after your policy lapses, but many companies provide free tail coverage if you are retiring. If you are simply switching workplaces (or policies), ask your new insurer about “nose” coverage, for claims involving acts that occurred before the new policy takes effect.

Other alternatives are gaining popularity as the demand for reasonably priced insurance increases. The most common, known as reciprocal exchanges, are very similar to traditional insurers, but require policyholders to make capital contributions in addition to payment of premiums, at least in their early stages. You get your investment back, with interest, when (if) the exchange becomes solvent.

Another option, called a captive, is a company formed by a consortium of medical practices to write their own insurance policies. All participants are shareholders, and all premiums (less administrative expenses) go toward building the security of the captive. Most captives purchase reinsurance to protect against catastrophic losses. If all goes well, individual owners sell their shares at retirement for a profit, which has grown tax-free in the interim.

Those willing to shoulder more risk might consider a risk retention group (RRG), a sort of combination of an exchange and a captive. Again, the owners are the insureds themselves, but all responsibility for management and adequate funding falls on their shoulders, and reinsurance is not usually an option. Most medical malpractice RRGs are licensed in Vermont or South Carolina, because of favorable laws in those states, but can be based in any state that allows them (36 at this writing). RRGs provide profit opportunities not available with traditional insurance, but there is risk: A few large claims could eat up all the profits, or even put owners in a financial hole.

Malpractice insurance requirements will remain fairly static throughout your career, but other insurance needs evolve over time. A good example is life insurance: As retirement savings increase, the need for life insurance decreases – especially expensive “whole life” coverage, which can often be eliminated or converted to cheaper “term” insurance.

Health insurance premiums continue to soar, but the Affordable Care Act might offer a favorable alternative for your office policy. If you are considering that, the Centers for Medicare & Medicaid Services maintains a website summarizing the various options for employers.

Worker compensation insurance is mandatory in most states and heavily regulated, so there is little wiggle room. However, some states do not require you, as the employer, to cover yourself, so eliminating that coverage could save you a substantial amount. This is only worth considering, of course, if you’re in excellent health and have very good personal health and disability coverage.

Disability insurance is not something to skimp on, but if you are approaching retirement age and have no major health issues, you may be able to decrease your coverage, or even eliminate it entirely if your retirement plan is far enough along.

Liability insurance is likewise no place to pinch pennies, but you might be able to add an “umbrella” policy providing comprehensive catastrophic coverage, which may allow you to decrease your regular coverage, or raise your deductible limits.

Two additional policies to consider are office overhead insurance, to cover the costs of keeping your office open should you be temporarily incapacitated, and employee practices liability insurance (EPLI), which protects you from lawsuits brought by militant or disgruntled employees. I covered EPLI in detail several months ago.

If you are over 50, I strongly recommend long-term-care insurance as well. It’s relatively inexpensive if you buy it while you’re still healthy, and it could save you and your heirs a load of money and aggravation on the other end. If you have shouldered the expense of caring for a chronically ill parent or grandparent, you know what I’m talking about. More about that next month.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

It goes without saying that as a physician, it’s essential to keep your knowledge and skills current. But too many private practitioners overlook the similar needs of their employees.

Continuing education is as important for your staff as for you. Like you, staff members provide better care to patients when they know the latest findings and techniques. They also provide better information: When patients ask questions of your staff, either in the office or over the phone (which happens more often than you probably think), you certainly want their answers to be accurate and up to date.

But there are lots of other good reasons to invest in ongoing staff training. It’s a win-win strategy for you, your staff, and for your practice.

The more your employees know, the more productive they will be. Not only will they complete everyday duties more efficiently, they will be stimulated to learn new tasks and accept more responsibility.

Staffers who have learned new skills are more willing to take on new challenges. And the better their skills and the greater their confidence, the less supervision they need from you, and the more they become involved in their work.

They will also be happier in their jobs. Investing in your employees’ competence makes them feel valued and appreciated. This leads to reduced turnover – which, alone, often pays for the training.

You probably already do some ongoing education: You do your yearly OSHA training because the law requires it, you run HIPAA updates as necessary, and you have everyone recertified periodically in basic or advanced CPR (I hope). But I’m talking about going beyond the basic stuff, which may satisfy legal requirements, but does not motivate your people to loftier goals.

An obvious example is sending your insurance people annually to coding and insurance processing courses – or at the very least, online refreshers – so they are always current on the latest third-party changes. The use of outdated or obsolete codes can cost you thousands of dollars every month. Other opportunities include keyboarding and computer courses for staff who work with your computers, and Excel and QuickBooks updates for your bookkeepers.

Continuing education does not have to be costly, and in some cases it can be free. For example, pharmaceutical representatives will be happy to run an in-service for your staff on a new medication or procedure or instrument, or refresh their memories on an established one. Be sure to make clear to the rep that the presentation must be as objective and impartial as possible, given the obvious potential conflict of interest involved.

Your office manager should join the Association of Dermatology Administrators and Managers. It holds annual meetings at the same time and in the same city as the American Academy of Dermatology winter meetings, with a good selection of refresher courses and lots of opportunities for networking with other managers, both personally or virtually.

Many other venues are available for employee education, in the cloud and in conventional classrooms. Courses are offered in many relevant subjects; a quick Google search turns up an eclectic mix, including medical terminology, record keeping and accounting, laboratory skills, diagnostic tests and procedures, pharmacology and medication administration, patient relations, medical law and ethics, and many others.

By far the most common question I receive on this issue is, “What if I pay for all that training, and then the employees leave?”

My reply: “What if you don’t, and they stay?”

Well-trained employees are vastly preferable to untrained ones. I suppose there is some risk of an occasional staffer accepting training and then moving on; but in 38 years, it has never happened in my office. In my experience, well-trained employees will stay. Education fosters loyalty. Employees who know you care enough about them to advance their skills will sense that they have a stake in the practice, and thus will be less likely to want to leave. Furthermore, continuing education will always be cheaper than training new employees from scratch.

In any case, everyone will benefit from a well-trained staff – you, your employees, your practice, and most importantly your patients.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

It goes without saying that as a physician, it’s essential to keep your knowledge and skills current. But too many private practitioners overlook the similar needs of their employees.

Continuing education is as important for your staff as for you. Like you, staff members provide better care to patients when they know the latest findings and techniques. They also provide better information: When patients ask questions of your staff, either in the office or over the phone (which happens more often than you probably think), you certainly want their answers to be accurate and up to date.

But there are lots of other good reasons to invest in ongoing staff training. It’s a win-win strategy for you, your staff, and for your practice.

The more your employees know, the more productive they will be. Not only will they complete everyday duties more efficiently, they will be stimulated to learn new tasks and accept more responsibility.

Staffers who have learned new skills are more willing to take on new challenges. And the better their skills and the greater their confidence, the less supervision they need from you, and the more they become involved in their work.

They will also be happier in their jobs. Investing in your employees’ competence makes them feel valued and appreciated. This leads to reduced turnover – which, alone, often pays for the training.

You probably already do some ongoing education: You do your yearly OSHA training because the law requires it, you run HIPAA updates as necessary, and you have everyone recertified periodically in basic or advanced CPR (I hope). But I’m talking about going beyond the basic stuff, which may satisfy legal requirements, but does not motivate your people to loftier goals.

An obvious example is sending your insurance people annually to coding and insurance processing courses – or at the very least, online refreshers – so they are always current on the latest third-party changes. The use of outdated or obsolete codes can cost you thousands of dollars every month. Other opportunities include keyboarding and computer courses for staff who work with your computers, and Excel and QuickBooks updates for your bookkeepers.

Continuing education does not have to be costly, and in some cases it can be free. For example, pharmaceutical representatives will be happy to run an in-service for your staff on a new medication or procedure or instrument, or refresh their memories on an established one. Be sure to make clear to the rep that the presentation must be as objective and impartial as possible, given the obvious potential conflict of interest involved.

Your office manager should join the Association of Dermatology Administrators and Managers. It holds annual meetings at the same time and in the same city as the American Academy of Dermatology winter meetings, with a good selection of refresher courses and lots of opportunities for networking with other managers, both personally or virtually.

Many other venues are available for employee education, in the cloud and in conventional classrooms. Courses are offered in many relevant subjects; a quick Google search turns up an eclectic mix, including medical terminology, record keeping and accounting, laboratory skills, diagnostic tests and procedures, pharmacology and medication administration, patient relations, medical law and ethics, and many others.

By far the most common question I receive on this issue is, “What if I pay for all that training, and then the employees leave?”

My reply: “What if you don’t, and they stay?”

Well-trained employees are vastly preferable to untrained ones. I suppose there is some risk of an occasional staffer accepting training and then moving on; but in 38 years, it has never happened in my office. In my experience, well-trained employees will stay. Education fosters loyalty. Employees who know you care enough about them to advance their skills will sense that they have a stake in the practice, and thus will be less likely to want to leave. Furthermore, continuing education will always be cheaper than training new employees from scratch.

In any case, everyone will benefit from a well-trained staff – you, your employees, your practice, and most importantly your patients.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

It goes without saying that as a physician, it’s essential to keep your knowledge and skills current. But too many private practitioners overlook the similar needs of their employees.

Continuing education is as important for your staff as for you. Like you, staff members provide better care to patients when they know the latest findings and techniques. They also provide better information: When patients ask questions of your staff, either in the office or over the phone (which happens more often than you probably think), you certainly want their answers to be accurate and up to date.

But there are lots of other good reasons to invest in ongoing staff training. It’s a win-win strategy for you, your staff, and for your practice.

The more your employees know, the more productive they will be. Not only will they complete everyday duties more efficiently, they will be stimulated to learn new tasks and accept more responsibility.

Staffers who have learned new skills are more willing to take on new challenges. And the better their skills and the greater their confidence, the less supervision they need from you, and the more they become involved in their work.

They will also be happier in their jobs. Investing in your employees’ competence makes them feel valued and appreciated. This leads to reduced turnover – which, alone, often pays for the training.

You probably already do some ongoing education: You do your yearly OSHA training because the law requires it, you run HIPAA updates as necessary, and you have everyone recertified periodically in basic or advanced CPR (I hope). But I’m talking about going beyond the basic stuff, which may satisfy legal requirements, but does not motivate your people to loftier goals.

An obvious example is sending your insurance people annually to coding and insurance processing courses – or at the very least, online refreshers – so they are always current on the latest third-party changes. The use of outdated or obsolete codes can cost you thousands of dollars every month. Other opportunities include keyboarding and computer courses for staff who work with your computers, and Excel and QuickBooks updates for your bookkeepers.

Continuing education does not have to be costly, and in some cases it can be free. For example, pharmaceutical representatives will be happy to run an in-service for your staff on a new medication or procedure or instrument, or refresh their memories on an established one. Be sure to make clear to the rep that the presentation must be as objective and impartial as possible, given the obvious potential conflict of interest involved.

Your office manager should join the Association of Dermatology Administrators and Managers. It holds annual meetings at the same time and in the same city as the American Academy of Dermatology winter meetings, with a good selection of refresher courses and lots of opportunities for networking with other managers, both personally or virtually.

Many other venues are available for employee education, in the cloud and in conventional classrooms. Courses are offered in many relevant subjects; a quick Google search turns up an eclectic mix, including medical terminology, record keeping and accounting, laboratory skills, diagnostic tests and procedures, pharmacology and medication administration, patient relations, medical law and ethics, and many others.

By far the most common question I receive on this issue is, “What if I pay for all that training, and then the employees leave?”

My reply: “What if you don’t, and they stay?”

Well-trained employees are vastly preferable to untrained ones. I suppose there is some risk of an occasional staffer accepting training and then moving on; but in 38 years, it has never happened in my office. In my experience, well-trained employees will stay. Education fosters loyalty. Employees who know you care enough about them to advance their skills will sense that they have a stake in the practice, and thus will be less likely to want to leave. Furthermore, continuing education will always be cheaper than training new employees from scratch.

In any case, everyone will benefit from a well-trained staff – you, your employees, your practice, and most importantly your patients.
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Many of the personnel questions I receive concern the dreaded “marginal employee” – a person who has never done anything truly heinous to merit firing, but neither anything special to merit continued employment. I advise getting rid of such people and then changing the hiring criteria that bring you marginal employees in the first place.

katleho Seisa/Getty Images

Most bad hires come about because employers do not have a clear vision of the kind of employee they want. Many office manuals do not contain detailed job descriptions. If you don’t know exactly what you are looking for, your entire selection process will be inadequate from initial screening of applicants through assessments of their skills and personalities. Many physicians compound the problem with poor interview techniques and inadequate verification.

So now is the time, before a job vacancy occurs, to reevaluate your entire hiring process.. Take a hard look at your job descriptions, and update them if necessary. A good job description lists the major responsibilities of the position, with the relative importance of each duty and the critical knowledge, skills, and education levels necessary for each function. In other words, it describes, accurately and in detail, exactly what you expect from the employee you will hire to perform that job.

Once you have a clear job description in mind (and in print), take all the time you need to find the best possible match for it. This is not a place to cut corners. Screen your candidates carefully and avoid lowering your expectations. This is the point at which it might be tempting to settle for a marginal candidate, just to get the process over with.

It also is tempting to hire the candidate that you have the “best feeling” about, even though he or she is a poor match for the job, and then try to mold the job to that person. Every doctor knows that hunches are no substitute for hard data.


Be alert for red flags in résumés: significant time gaps between jobs; positions at companies that are no longer in business, or are otherwise impossible to verify; job titles that don’t make sense, given the applicant’s qualifications.

Background checks are a dicey subject, but publicly available information can be found, cheaply or free, on multiple websites created for that purpose. Be sure to tell applicants that you will be verifying facts in their résumés; it’s usually wise to get their written consent to do so.

Many employers skip the essential step of verification; many applicants know that. (I once actually overheard a new hire say, “I won’t be here long if they check my references.” And by golly, she was right!) If a reference is reluctant to tell you anything substantive, ask, “Would you hire this person again?” You can interpret a lot from the answer – or lack of one.

Interviews often get short shrift as well. Many doctors tend to do all the talking. The purpose of an interview is to allow you to size up the prospective employee, not to deliver a lecture on the sterling attributes of your office. Important interview topics include educational background, skills, experience, and unrelated job history.

By law, you cannot ask an applicant’s age, date of birth, sex, creed, color, religion, or national origin. Other forbidden subjects include disabilities, marital status, military record, number of children (or who cares for them), addiction history, citizenship, criminal record, psychiatric history, absenteeism, or workers’ compensation.

There are acceptable alternatives to some of those questions, however: You can ask if applicants have ever gone by another name (for your background check), for example. You can ask if they are legally authorized to work in this country, and whether they will be physically able to perform the duties specified in the job description. While past addictions are off limits, you do have a right to know about current addictions to illegal substances.

Once you have hired people whose skills and personalities best fit your needs, train them well, and then give them the opportunity to succeed. “The best executive,” wrote Theodore Roosevelt, “is the one who has sense enough to pick good [people] to do what he [or she] wants done, and self-restraint enough to keep from meddling with them while they do it.”
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Many of the personnel questions I receive concern the dreaded “marginal employee” – a person who has never done anything truly heinous to merit firing, but neither anything special to merit continued employment. I advise getting rid of such people and then changing the hiring criteria that bring you marginal employees in the first place.

katleho Seisa/Getty Images

Most bad hires come about because employers do not have a clear vision of the kind of employee they want. Many office manuals do not contain detailed job descriptions. If you don’t know exactly what you are looking for, your entire selection process will be inadequate from initial screening of applicants through assessments of their skills and personalities. Many physicians compound the problem with poor interview techniques and inadequate verification.

So now is the time, before a job vacancy occurs, to reevaluate your entire hiring process.. Take a hard look at your job descriptions, and update them if necessary. A good job description lists the major responsibilities of the position, with the relative importance of each duty and the critical knowledge, skills, and education levels necessary for each function. In other words, it describes, accurately and in detail, exactly what you expect from the employee you will hire to perform that job.

Once you have a clear job description in mind (and in print), take all the time you need to find the best possible match for it. This is not a place to cut corners. Screen your candidates carefully and avoid lowering your expectations. This is the point at which it might be tempting to settle for a marginal candidate, just to get the process over with.

It also is tempting to hire the candidate that you have the “best feeling” about, even though he or she is a poor match for the job, and then try to mold the job to that person. Every doctor knows that hunches are no substitute for hard data.


Be alert for red flags in résumés: significant time gaps between jobs; positions at companies that are no longer in business, or are otherwise impossible to verify; job titles that don’t make sense, given the applicant’s qualifications.

Background checks are a dicey subject, but publicly available information can be found, cheaply or free, on multiple websites created for that purpose. Be sure to tell applicants that you will be verifying facts in their résumés; it’s usually wise to get their written consent to do so.

Many employers skip the essential step of verification; many applicants know that. (I once actually overheard a new hire say, “I won’t be here long if they check my references.” And by golly, she was right!) If a reference is reluctant to tell you anything substantive, ask, “Would you hire this person again?” You can interpret a lot from the answer – or lack of one.

Interviews often get short shrift as well. Many doctors tend to do all the talking. The purpose of an interview is to allow you to size up the prospective employee, not to deliver a lecture on the sterling attributes of your office. Important interview topics include educational background, skills, experience, and unrelated job history.

By law, you cannot ask an applicant’s age, date of birth, sex, creed, color, religion, or national origin. Other forbidden subjects include disabilities, marital status, military record, number of children (or who cares for them), addiction history, citizenship, criminal record, psychiatric history, absenteeism, or workers’ compensation.

There are acceptable alternatives to some of those questions, however: You can ask if applicants have ever gone by another name (for your background check), for example. You can ask if they are legally authorized to work in this country, and whether they will be physically able to perform the duties specified in the job description. While past addictions are off limits, you do have a right to know about current addictions to illegal substances.

Once you have hired people whose skills and personalities best fit your needs, train them well, and then give them the opportunity to succeed. “The best executive,” wrote Theodore Roosevelt, “is the one who has sense enough to pick good [people] to do what he [or she] wants done, and self-restraint enough to keep from meddling with them while they do it.”
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Many of the personnel questions I receive concern the dreaded “marginal employee” – a person who has never done anything truly heinous to merit firing, but neither anything special to merit continued employment. I advise getting rid of such people and then changing the hiring criteria that bring you marginal employees in the first place.

katleho Seisa/Getty Images

Most bad hires come about because employers do not have a clear vision of the kind of employee they want. Many office manuals do not contain detailed job descriptions. If you don’t know exactly what you are looking for, your entire selection process will be inadequate from initial screening of applicants through assessments of their skills and personalities. Many physicians compound the problem with poor interview techniques and inadequate verification.

So now is the time, before a job vacancy occurs, to reevaluate your entire hiring process.. Take a hard look at your job descriptions, and update them if necessary. A good job description lists the major responsibilities of the position, with the relative importance of each duty and the critical knowledge, skills, and education levels necessary for each function. In other words, it describes, accurately and in detail, exactly what you expect from the employee you will hire to perform that job.

Once you have a clear job description in mind (and in print), take all the time you need to find the best possible match for it. This is not a place to cut corners. Screen your candidates carefully and avoid lowering your expectations. This is the point at which it might be tempting to settle for a marginal candidate, just to get the process over with.

It also is tempting to hire the candidate that you have the “best feeling” about, even though he or she is a poor match for the job, and then try to mold the job to that person. Every doctor knows that hunches are no substitute for hard data.


Be alert for red flags in résumés: significant time gaps between jobs; positions at companies that are no longer in business, or are otherwise impossible to verify; job titles that don’t make sense, given the applicant’s qualifications.

Background checks are a dicey subject, but publicly available information can be found, cheaply or free, on multiple websites created for that purpose. Be sure to tell applicants that you will be verifying facts in their résumés; it’s usually wise to get their written consent to do so.

Many employers skip the essential step of verification; many applicants know that. (I once actually overheard a new hire say, “I won’t be here long if they check my references.” And by golly, she was right!) If a reference is reluctant to tell you anything substantive, ask, “Would you hire this person again?” You can interpret a lot from the answer – or lack of one.

Interviews often get short shrift as well. Many doctors tend to do all the talking. The purpose of an interview is to allow you to size up the prospective employee, not to deliver a lecture on the sterling attributes of your office. Important interview topics include educational background, skills, experience, and unrelated job history.

By law, you cannot ask an applicant’s age, date of birth, sex, creed, color, religion, or national origin. Other forbidden subjects include disabilities, marital status, military record, number of children (or who cares for them), addiction history, citizenship, criminal record, psychiatric history, absenteeism, or workers’ compensation.

There are acceptable alternatives to some of those questions, however: You can ask if applicants have ever gone by another name (for your background check), for example. You can ask if they are legally authorized to work in this country, and whether they will be physically able to perform the duties specified in the job description. While past addictions are off limits, you do have a right to know about current addictions to illegal substances.

Once you have hired people whose skills and personalities best fit your needs, train them well, and then give them the opportunity to succeed. “The best executive,” wrote Theodore Roosevelt, “is the one who has sense enough to pick good [people] to do what he [or she] wants done, and self-restraint enough to keep from meddling with them while they do it.”
 

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Unless you have been vacationing on some distant astral plane, you are well aware that sexual misconduct and harassment have dominated news coverage and social media forums over the past year or more. It has ended the careers of a number of formerly respectable celebrities, and the #MeToo movement has empowered many additional harassment victims to come forward with their stories.

baona/iStock/Getty Images

Medical offices are far from immune from harassment, of course, and the problem is not limited to staff interactions. According to a Medscape poll, 27% of physicians have been targets of inappropriate behavior in a professional setting. In another poll, 47% of physicians and 71% of nurses reported being harassed (by stalking, persistent attempts at communication, or inappropriate social media contact) by a patient.

The reality is that sexual misconduct can occur anywhere and be perpetrated by anyone; and all medical practices, large and small, have an ethical and legal responsibility to provide a safe and respectful work environment for everyone involved.

The first step in meeting that responsibility is to develop a written policy, if you don’t already have one, starting with a clear definition of sexual harassment. The Equal Employment Opportunity Commission (EEOC) has a good summary on its website of what does and does not constitute harassment, and under what conditions employers may be liable. Once the problem has been defined, a good written policy will provide specific methods for reporting transgressions, along with outlines of investigative and corrective measures to be taken in response. Templates for such documents are available on many websites, if you don’t want to start from scratch.

The next step, once a written policy is in place (and vetted by your attorney), is training for your staff. In particular, you should ensure that those in supervisory roles understand their specific responsibilities, and that everyone knows how to report an incident.

Harassment prevention training is already mandated by law in some states, including New York, California (if you have five or more employees), Maine, Delaware, and Connecticut. Other states, such as Colorado, Florida, Massachusetts, Michigan, Oklahoma, Rhode Island, Tennessee, Utah, and Vermont, have laws that “encourage” employers to provide such training. Other legislation is pending; check for new laws in your state on a regular basis.

Federal EEOC guidelines suggest that all employers “conduct and reinforce” harassment prevention training, whether laws in your particular state require it or not. On a practical level, recent court decisions suggest that offices that do not train their employees may find it difficult to mount an effective defense of a harassment lawsuit, even when they have a written policy in place. They may also be more vulnerable to punitive damage awards.

OSHA and various private companies offer a variety of downloadable training videos at reasonable cost. (As always, I have no financial interest in any product or service mentioned here.)

Misconduct among office staff is a straightforward, zero-tolerance issue. Harassment by patients is more complex, and dealing with it often requires some creativity. No one in your office, however, should think it is something they must accept because it comes from a patient. Any physician or staffer should be empowered to speak up if anyone else’s behavior, including a patient’s, makes them uncomfortable. Even when there is a medical explanation – such as psychiatric or cognitive impairment – it is important (and in some states, mandatory) to call out the behavior and report the incident.

Once reported, it should be documented, so that colleagues and other providers will be aware of the problem, and to protect yourself should the patient ever make false accusations against your practice. At subsequent appointments, take common-sense precautions. Chaperones are always a good idea, but especially so in these situations.

With repeat offenders, everyone has their own barometer of what they can and cannot tolerate. My personal threshold is low; I give one polite warning, explaining that we must provide a respectful and welcoming environment for everyone in the office, and any unacceptable behavior in the future will be grounds for dismissal from my practice. Most get the message; those who don’t are dismissed, politely.

The central point is to prevent harassment whenever possible, and to take every complaint seriously and address it promptly. An effective misconduct policy goes beyond simply avoiding legal liability. Patients and staffers alike should be secure in the knowledge that inappropriate verbal or physical interactions are not acceptable in your office under any circumstances, and will not be ignored or tolerated.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com .

Unless you have been vacationing on some distant astral plane, you are well aware that sexual misconduct and harassment have dominated news coverage and social media forums over the past year or more. It has ended the careers of a number of formerly respectable celebrities, and the #MeToo movement has empowered many additional harassment victims to come forward with their stories.

baona/iStock/Getty Images

Medical offices are far from immune from harassment, of course, and the problem is not limited to staff interactions. According to a Medscape poll, 27% of physicians have been targets of inappropriate behavior in a professional setting. In another poll, 47% of physicians and 71% of nurses reported being harassed (by stalking, persistent attempts at communication, or inappropriate social media contact) by a patient.

The reality is that sexual misconduct can occur anywhere and be perpetrated by anyone; and all medical practices, large and small, have an ethical and legal responsibility to provide a safe and respectful work environment for everyone involved.

The first step in meeting that responsibility is to develop a written policy, if you don’t already have one, starting with a clear definition of sexual harassment. The Equal Employment Opportunity Commission (EEOC) has a good summary on its website of what does and does not constitute harassment, and under what conditions employers may be liable. Once the problem has been defined, a good written policy will provide specific methods for reporting transgressions, along with outlines of investigative and corrective measures to be taken in response. Templates for such documents are available on many websites, if you don’t want to start from scratch.

The next step, once a written policy is in place (and vetted by your attorney), is training for your staff. In particular, you should ensure that those in supervisory roles understand their specific responsibilities, and that everyone knows how to report an incident.

Harassment prevention training is already mandated by law in some states, including New York, California (if you have five or more employees), Maine, Delaware, and Connecticut. Other states, such as Colorado, Florida, Massachusetts, Michigan, Oklahoma, Rhode Island, Tennessee, Utah, and Vermont, have laws that “encourage” employers to provide such training. Other legislation is pending; check for new laws in your state on a regular basis.

Federal EEOC guidelines suggest that all employers “conduct and reinforce” harassment prevention training, whether laws in your particular state require it or not. On a practical level, recent court decisions suggest that offices that do not train their employees may find it difficult to mount an effective defense of a harassment lawsuit, even when they have a written policy in place. They may also be more vulnerable to punitive damage awards.

OSHA and various private companies offer a variety of downloadable training videos at reasonable cost. (As always, I have no financial interest in any product or service mentioned here.)

Misconduct among office staff is a straightforward, zero-tolerance issue. Harassment by patients is more complex, and dealing with it often requires some creativity. No one in your office, however, should think it is something they must accept because it comes from a patient. Any physician or staffer should be empowered to speak up if anyone else’s behavior, including a patient’s, makes them uncomfortable. Even when there is a medical explanation – such as psychiatric or cognitive impairment – it is important (and in some states, mandatory) to call out the behavior and report the incident.

Once reported, it should be documented, so that colleagues and other providers will be aware of the problem, and to protect yourself should the patient ever make false accusations against your practice. At subsequent appointments, take common-sense precautions. Chaperones are always a good idea, but especially so in these situations.

With repeat offenders, everyone has their own barometer of what they can and cannot tolerate. My personal threshold is low; I give one polite warning, explaining that we must provide a respectful and welcoming environment for everyone in the office, and any unacceptable behavior in the future will be grounds for dismissal from my practice. Most get the message; those who don’t are dismissed, politely.

The central point is to prevent harassment whenever possible, and to take every complaint seriously and address it promptly. An effective misconduct policy goes beyond simply avoiding legal liability. Patients and staffers alike should be secure in the knowledge that inappropriate verbal or physical interactions are not acceptable in your office under any circumstances, and will not be ignored or tolerated.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com .

Unless you have been vacationing on some distant astral plane, you are well aware that sexual misconduct and harassment have dominated news coverage and social media forums over the past year or more. It has ended the careers of a number of formerly respectable celebrities, and the #MeToo movement has empowered many additional harassment victims to come forward with their stories.

baona/iStock/Getty Images

Medical offices are far from immune from harassment, of course, and the problem is not limited to staff interactions. According to a Medscape poll, 27% of physicians have been targets of inappropriate behavior in a professional setting. In another poll, 47% of physicians and 71% of nurses reported being harassed (by stalking, persistent attempts at communication, or inappropriate social media contact) by a patient.

The reality is that sexual misconduct can occur anywhere and be perpetrated by anyone; and all medical practices, large and small, have an ethical and legal responsibility to provide a safe and respectful work environment for everyone involved.

The first step in meeting that responsibility is to develop a written policy, if you don’t already have one, starting with a clear definition of sexual harassment. The Equal Employment Opportunity Commission (EEOC) has a good summary on its website of what does and does not constitute harassment, and under what conditions employers may be liable. Once the problem has been defined, a good written policy will provide specific methods for reporting transgressions, along with outlines of investigative and corrective measures to be taken in response. Templates for such documents are available on many websites, if you don’t want to start from scratch.

The next step, once a written policy is in place (and vetted by your attorney), is training for your staff. In particular, you should ensure that those in supervisory roles understand their specific responsibilities, and that everyone knows how to report an incident.

Harassment prevention training is already mandated by law in some states, including New York, California (if you have five or more employees), Maine, Delaware, and Connecticut. Other states, such as Colorado, Florida, Massachusetts, Michigan, Oklahoma, Rhode Island, Tennessee, Utah, and Vermont, have laws that “encourage” employers to provide such training. Other legislation is pending; check for new laws in your state on a regular basis.

Federal EEOC guidelines suggest that all employers “conduct and reinforce” harassment prevention training, whether laws in your particular state require it or not. On a practical level, recent court decisions suggest that offices that do not train their employees may find it difficult to mount an effective defense of a harassment lawsuit, even when they have a written policy in place. They may also be more vulnerable to punitive damage awards.

OSHA and various private companies offer a variety of downloadable training videos at reasonable cost. (As always, I have no financial interest in any product or service mentioned here.)

Misconduct among office staff is a straightforward, zero-tolerance issue. Harassment by patients is more complex, and dealing with it often requires some creativity. No one in your office, however, should think it is something they must accept because it comes from a patient. Any physician or staffer should be empowered to speak up if anyone else’s behavior, including a patient’s, makes them uncomfortable. Even when there is a medical explanation – such as psychiatric or cognitive impairment – it is important (and in some states, mandatory) to call out the behavior and report the incident.

Once reported, it should be documented, so that colleagues and other providers will be aware of the problem, and to protect yourself should the patient ever make false accusations against your practice. At subsequent appointments, take common-sense precautions. Chaperones are always a good idea, but especially so in these situations.

With repeat offenders, everyone has their own barometer of what they can and cannot tolerate. My personal threshold is low; I give one polite warning, explaining that we must provide a respectful and welcoming environment for everyone in the office, and any unacceptable behavior in the future will be grounds for dismissal from my practice. Most get the message; those who don’t are dismissed, politely.

The central point is to prevent harassment whenever possible, and to take every complaint seriously and address it promptly. An effective misconduct policy goes beyond simply avoiding legal liability. Patients and staffers alike should be secure in the knowledge that inappropriate verbal or physical interactions are not acceptable in your office under any circumstances, and will not be ignored or tolerated.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com .