May the Banking Industry See Greater Prosperity in 2012

Banks are hoping for much greater economic activity and growth in 2012. But, based upon the latest economic statistics, we are looking at a sluggish 2.0%. Many economists are speculating that a slow movingeconomy will be attributed to new and lingering banking regulations. For example, larger banks will be required to limit their financial ties to one another under new proposed rules aimed at preventing the collapse of one big institution from triggering a larger, cascading crisis.

The net credit exposures between any two of the nation's six largest financial firms, including J.P. Morgan Chase & Co. and Goldman Sachs Group Inc., would be limited to 10% of a company's regulatory capital, under a proposed package of regulations released by the Federal Reserve on Tuesday. Most other firms covered by the rule would be subject to a 25% limit, as required by the Dodd-Frank financial-overhaul law.

The new 10% limit for the biggest firms was unanticipated by the banking industry and has the potential to scale back the capital-markets businesses of large institutions, analysts have said.

Credit restrictions are just one piece of a tougher set of regulations the Fed has drafted which apply to the nation's largest, most complex financial firms. These stricter rules are aimed to reduce the ability of any single financial giant to damage the financial system and the broader economy, and is one of several ways Dodd-Frank attempts to end the "too big to fail" phenomenon that led to huge taxpayer-funded bailouts.

It is quite apparent that the more the federal government imposes its iron hand of federal regulations upon banks and related credit companies, increased inefficiencies will negatively impact bottom-lines. This result ultimately decreases investor incentives and could also negatively impact respective stock values; hence 401k and other retirement financial vehicles.

Well, folks these trying times have resulted from a class of economic illiterates who not occupy most government agencies but elected officials who are primarily concerned about their own well-being and re-elections.

Good Luck and call us to help your financial institution see more black than red!

Merry Christmas and Happy Chanukah?

We at URS are wishing everyone the best over this fun filled holiday season of joy and happiness. Well, at least to all those financial institutions which are under the pressing thumb of the `Powers That Be’. The banking industry is becoming increasingly difficult to expand its customer base and grow bottom lines.
Consider the following recent and pending stranglehold tactics:
- Disclosures, notices, statements, forms and tax documents — about 300 pages and just for home loans. Bank processed 455 home loan applications and they created more than two months of `make work’ and the estimated labor costs reached $12,000.
- One bank vice president says the Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in July 2010, nearly doubled the review and reporting process to regulators, with little margin for error. And that is only a portion of the avalanche of new regulation that has executives at smaller banks concerned.
- The bill is massive — 2,300 pages — and bankers expect it to result in 5,000 pages of new rules as regulators turn its mandates into specific instructions for financial institutions in coming years.

Bankers are very concerned about the abundance of new legislation because it will choke neighborhood banks’ bottom line and virtually place them as prime targets for takeovers by larger, national banks. This legislation appears to have been cultivated by some devious and purposeful late night `strategy meetings’ by certain Congress people and bankers. But then again, this is purely speculation.

Small banks in America have been disappearing for decades. For example, in 1984, the largest banks in America — those with more than $10 billion in assets — controlled 28% of the industry, according to FDIC data. Now, these larger banks control 79% of the market. Banks with less than a billion in assets are holding 11% of the market, compared with 40% in 1984. Bankers believe Dodd-Frank will hasten the consolidation.

Bankers are very concerned about the abundance of new legislation because it will choke neighborhood banks’ bottom line and virtually place them as prime targets for takeovers by larger, national banks. This legislation appears to have been cultivated by some devious and purposeful late night `strategy meetings’ over the past decades by certain Congress people and bankers. But then again, this is purely speculation. Since the 1800’s, neighborhood banks have been instrumental in cultivating small geographical population areas and today this wholesome and warm relationship is slowly disappearing.

What Social Media Provides Physicians

Social Media is becoming the common, easily accessible vehicle by which many people, including physicians, are communicating. This form of communication or social interaction is very convenient for all to use; Twitter and Facebook are probably the most common media used and are very simple. Just as celebrities tweet “getting my nails done” and college students tweet about an upcoming party tonight, a physician can tweet about a stomach flu that’s going around in their community.

"If you go back two generations, doctors came to your house. They lived in your community. They probably went to the same church…With social media, "what we're really doing is going back and creating a more personal experience with technology." - Jeff Livingston

People like to feel a part of a community and the more you involve yourself personally, the more you are viewed as approachable, a reliable resource and respectable. Everyday physicians are creating Twitter and Facebook Pages as a way to:

·         Connect among other physicians

·         A resource for patients to turn to

·         A way to view what patients are thinking- since communication is rare between physicians and patients

·         An avenue to voice your opinion- as it can go unnoticed with so much use of WebMD and Google

·         A bigger draw to your practice- if a patient follows you & forwards an informative tweet to a friend, expect    more patients

Even the AMA has placed a social media policy which contains guidelines of implementing privacy settings on sites such as Facebook & Twitter. Also, it encourages maintaining appropriate boundaries of physician-patient relationships on the web. However some physicians aren’t respecting these guidelines according to Kevin Pho, a primary doctor based in New Hampshire, “The problem is that some [physicians on Twitter] break Pho's cardinal rule: Never use Twitter to dispense medical advice or comment on a patient.” source

The guidelines to setting the privacy on social accounts weren’t as thorough as expected from AMA, however. If you are concerned about your privacy, here are step-by-step guides for Twitter and Facebook.

More Government Intrusion...Why?

Illinois Democrat, Dick Durbin, has pushed legislation which went into effect a week ago. This legislation limits the fees big banks collect from merchants and he now finds himself the fall guy for Bank of America’s new $5 monthly debit care fee. His response was a ranting and raving and even suggested that consumers “get the heck out of that bank”. Holy cow, you’ve got to be kidding me! Since when does a politician publicly denounce a specific business entity then recommends do not buy or use its services?

Many Americans have always been under the impression that they have the capabilities of deciding which goods and services better suit them, including prices. Over the past several years I have noticed that the intelligence level of Americans has precipitously declined and, fortunately, some Senators and House members are there to rescue us from any and all financial disasters.

I firmly believe that when unfettered competition is allowed to determine the value of products and services offered, businesses and individuals are fully capable of taking decisions as to which products or services serve them best based upon specific cost-benefit evaluations. However, over the past several decades, politicians have been forcing their influence into both consumer and business buying habits of certain products and services. It appears this trend has taken effect because many politicians are easily convinced through glib lobbying persuasion tactics. For example, company A has been investing millions into its new business service software products and, unfortunately, several competitors have quickly developed products which have cut into company A market and, in some cases, have received positive news. In order for company A to regain its market share dominance, it solicits the services of a renowned lobbyist who successfully influences politicians to place expensive legal restrictions, special software licenses and federal and state licensing restrictions to legally market similar services. Smaller and new entrants might find these new restrictions to be cost prohibitive and leave the competition thus freeing up company A to greater success.

Similar tactics have proven successful in the banking industry when large national and regional banks place additional financial burdens on local and smaller successful banks. This would include enforcing greater scrutiny on mortgage loans, including larger down payments and imposing larger reserve funds. The latter reduces available funds loans and constrains cash flow. So sooner or later these smaller banks become increasingly frustrated and sell to a larger financial institution. One way smaller banks can extend life is to evaluate and utilize the talent of outside sources. This serves several critical financial benefits such as savings on hiring and training personnel in the collection or credit granting departments. Banks can observe, manage, evaluate, change, observe and manage operations at the drop of a pen.

Results are Changing Quality of Care by Richard L. Tamburello

Medical practices need to re-design office operations because costs are rising and reimbursements are on a downward trend. In fact, reimbursements are expected to decline over the next several years. What is adding more pressure to the practice’s survival is the patient! Patients are becoming more demanding about the care which they receive, including expecting to be seen by the doctor at the scheduled appointment time. Patients are also becoming more impatient because of added bureaucracy such as being asked to see insurance cards, completing various demographic forms and being asked a barrage of questions on each visit.

Patients now have access to a variety of resources where they can see opinions of healthcare providers written by other patients who have received care by the prospective practice.  Additionally, patients are paying higher premiums along with deductibles. Patients are becoming `healthcare’ shoppers looking for quality care at bargain prices. The quality of care is changing…maybe to better serve patients.

Practices are in turn becoming increasingly competitive such as asking patients more questions, spending more time during each visit and improving `bedside’ manner. Many medical practices are seeking alternative ways to reducing and better controlling both administrative and operations costs, as these factors can negatively impact cash flow. Practices must also take into account that addition and increasing costs are coming down the pike.

More and more healthcare providers are exploring alternative cost-effective methods for managing several key aspects of typical front desk and `backdoor’ staff activities. For example, the specialist’s staff focuses on obtaining authorizations, determining eligibility and validating or obtaining referrals.  However, all practices in addition to entering and scrubbing charges are filing claims, posting payments, conducting insurance follow-up campaigns, sending statements, responding to patient inquiries, filing appeals, greeting patients and making appointments. Many medical practices have discovered there are several key and viable solutions which do offer significant expense and cost reduction controls. One is securing the services of a trusted and proven medical billing service.

Medical billing services can perform the day-to-day billing tasks with greater efficiency because of fewer non-billing interruptions. Some billing services will also conduct eligibility, authorization and insurance contract services. Fees charged by billing services are usually based upon generated revenues, meaning there is an incentive to perform. Those medical practices using a trusted and proven billing service will, in most cases, begin to see the positive results in the bottom-line, thus giving doctors more time to provide quality care and see more patients. Times are changing and now is the time for medical practices to focus on and provide patients with quality care!       

Insurance Lobbying by Richard L. Tamburello

The number of companies and various organizations that work to put their imprint on legislation is diverse, ranging from health care interests and advocacy groups to giant corporations and small businesses of all types including many insurance companies.

Among the lobbying groups, there are over 200 hospitals and 100 insurance companies which line the halls of Congress to be heard and generate influence. One of the most visible organizations to lobby Congress is AARP.  It has anywhere between 56-60 in-house lobbyists and two from outside firms to work the issue on behalf of its members. The American Medical Association has 33 and 11 professional lobbyists from outside firms.

Influence peddling is big business and Congress loves the attention and the selective influence it generates. Think about it, advocacy groups invest over $3.50 billion for lobbyists to represent them on all kinds of issues, according to the nonprofit group Center for Responsive Politics. And I thought `we the people’ who voted for our elected officials had influence – Yea Right! So what actually happens is that once the votes are counted, our elected officials immediately align themselves with various advocacy groups, lawyers, special interest groups, lobbyists and we, the constituents, are to a large extent, forgotten until the next election.

Insurance lobbyists represent the financial interests of the insurance company industry and the members of Congress supposedly represent their respective constituents. Today, many Americans have become disillusioned with elected officials because politicians are more interested in power, influence and themselves.

The exact amount spent on health reform is difficult to quantify because most health care lobbyists work on other issues and lobby disclosure rules do not require businesses to report how much is paid on each issue.

In conclusion, the AMA succeeded in molding House and Senate bills to make sure cuts would not come out of doctors’ pockets, Wilson said. The AMA helped kill a $300 yearly fee for doctors who participate in Medicare or Medicaid, a tax on cosmetic surgery, 5% Medicare payment cuts to the top 10 percent of Medicare billers and Medicare payment cuts for primary care physicians. Now we hear that many physicians are opposed to the AMA because of recent speculation that the government now wants all physicians to provide it with the once thought `private patient’ data. When will it stop?

Outsourcing: Should We?

Credit decisions greatly impact and influence revenues, bad debts and bottom lines. In today’s weak economy many or should I say most bank credit departments have tightened the rains on extending credit. Today, this practice is evidenced in fewer mortgages, personal and business loans applications and approvals.

As a result, many banks and related financial institutions are reducing employee levels by offering early retirements and imposing terminations. It is likely that the current economic conditions will continue for several more years. The housing market is still sluggish and it is having a domino effect on all those businesses which comprise the housing industry: masons, carpenters, roofers, window manufacturers, landscapers and many other related small businesses.

These unfortunate, poor economic times are causing many businesses to rethink how better to control and manage billing and collecting departments. Although there are `ebbs and tides’ in our economy, businesses are re-thinking and re-evaluating the cost-effective attraction of outsourcing some and all these related departments to professionals. There are several clear advantages outsourcing offers; one of which is that the client only pays for results. For example, ABC Bank employs a staff of 20 in the collections department and it costs about $500,000 – $600,000 in salaries and benefits. These fixed expenses remain constant regardless of the level of generated collection revenues.

The company which outsources its collections department only pays for results. That is to say, using the same example, ABC Bank contracts a professional outsource company to conduct the same responsibilities produces about the same level of revenues, yet it would cost the bank about half the amount, but all of the headaches.

There are additional benefits that can result from outsourcing: fewer personnel to supervise, better manage reduce payroll and related expenses, develop new products and services, promotion of personnel to more challenging positions and, more importantly, grow the business.

Finally, businesses and banks are and will be accumulating data and taking decisions on the financial benefits of outsourcing certain or all aspects of collections and credit granting processes. The ideal outsource candidate has in-depth personal and business loan credit and collection experience, performs credit approvals utilizing secure web-based credit bureaus and criminal background checks resources. It’s becoming quite clear that businesses which are on the cutting edge of growth and market penetration will dominate tomorrow’s businesses.