Your visits to the doctor are likely to take on a different tone as efforts to stem rapidly rising health-care costs move forward, transforming what often feels like a trip to the principal’s office into something more like an intimate dinner conversation.

Much of that conversation will be about not just what treatments and drugs you need, but how much they cost, what they might do for you and whether, in the end, your health will benefit.

Tom Bloom

It will involve getting back to basics where patients and primary-care doctors establish trusting relationships that last beyond one or two visits, says Ted Epperly, president of the American Academy of Family Physicians and a family doctor in Boise, Idaho.

“By having the relationship I can help you avoid having these things you don’t need,” he says. “More care in our health-care system is not necessarily better care.”

That doesn’t mean patients won’t receive life-saving treatments or cutting-edge technologies to improve their health when such things are warranted. Instead, the focus will be on weeding out wasteful spending in more routine cases where less is at stake.

Fewer Costly Drugs or Tests

If there’s a history of mutual honesty and transparency, it’s easier to dissuade patients from receiving an expensive drug they have seen advertised on TV or from doing costly imaging or lab work that won’t improve their health, Dr. Epperly says.

Doctors should be forthcoming about discussing the alternatives, especially when a patient is facing a life-changing diagnosis, he says. “The patient should expect that the physician will share all the options with them — from everything being done to nothing being done.”

In exchange, patients should signal that they don’t necessarily want to act on all the possibilities, Dr. Epperly says. Such verbal reassurance lets doctors avoid the costly, sometimes harmful practice of defensive medicine that aims to protect them from lawsuits.

“That will help the physician not to default to the natural position of overordering things because it’s easier to do things to people than not do things to people, especially if you’re getting paid to do it.”

Overuse of procedures and certain imaging tests actually can lead to poorer health results by needlessly subjecting patients to possible medical errors, hospital-acquired infections or, in the case of increasingly popular CT scans, exposure to a higher lifetime risk of cancer from cumulative radiation.

The culture of health care already is beginning to shift, with two ideas gaining the most traction.

One is shared decision-making, where patients receive unbiased “decision aids” and hash out with their primary-care physicians the risks and benefits of various screening or treatment options before proceeding. The other is evidence-based medicine, where doctors choose remedies based on what’s proven to work in peer-reviewed studies.

In some cases, patients won’t notice a difference in their care because doctors effectively explain the reasons for pursuing a less-aggressive approach, such as forgoing an MRI scan for low-back pain unless symptoms change dramatically or no improvement is shown over a period of time, says Marge Ginsburg, executive director of the Center for Healthcare Decisions, a nonprofit group in Sacramento, Calif.

Far from being fearful of such interactions, patients may welcome these developments as they watch their wallets, she says. “Because there’s so much cost-sharing going on now, they should be relieved,” Ms. Ginsburg says. “You don’t want to waste your co-pay or deductible or whatever on this particular intervention because your clinician doesn’t think it’s what you need.”

But some physicians may need to learn new communication skills to refocus the conversation when patients demand pricey drugs, tests or treatments that are inappropriate for them, she says. “A lot of it is how you word it, developing an action plan that patients understand.”

Likewise, patients need to stay vigilant and question a doctor if the recommended course of action seems too hasty, invasive or extreme.

“It’s not easy to convince people of the likelihood that their doctor may be ordering things that may not have a scientific basis,” Ms. Ginsburg says.

Unbiased Information

That’s where patients can benefit from decision aids, comprehensive summaries of the evidence about common medical choices that are free from industry influence, says Lyn Paget, director of communication and outreach for the Foundation for Informed Medical Decision Making in Boston.

“Every patient should really have access to a complete, balanced decision aid to allow them to be well informed when they make the decision and have a high-level dialogue with their clinicians,” she says.

Patients increasingly are taking a more active role, says Diane Rittenhouse, associate professor of family and community medicine at the University of California-San Francisco.

“They’ve gotten a lot of information out in the world and are trying to make sense of it, and the doctor says, ‘Here’s a choice you have, but let’s make that decision together based on what kind of insurance you have, what your preferences are, where you are in your life and what side effects’ ” can be expected, Dr. Rittenhouse says.

By KRISTEN GERENCHER

Article source: Wall Street Journal

 

Anybody who has taken accounting classes in school is familiar with the terms asset and liability.  Typically, assets are things you own that have value, and liabilities are obligations that you owe to pay for your assets.  This definition is very consistent with how accountants view the world, but Robert Kiyosaki has advanced a different way of viewing assets and liabilities that may be very enlightening.

Kiyosaki advocates classifying ‘assets’ as things that generate cash flow and ‘liabilities’ as things that cause a cash outflow.  This perspective throws a large monkey wrench into the personal ‘balance sheet’ of many people, because it pushes many things such as boats, cars, ATV’s, etc out of the ‘asset’ category and into the ‘liability’ category.  (Some even advocate that your personal home doesn’t even fully count as an asset, because it does not produce any rent income)

The revelation this creates is showcasing the relatively small share of our possessions that are actually working to make us wealthier.  The impact of this revelation is that many of the things we had previously were building our net worth are actually hindering our ability to build wealth.  The overwhelming majority of these items tend to be ‘status symbols’ that we buy to project an image of success.  I won’t attempt to editorialize the relative value of these purchases, but I will point out the simple fact that they do not make us wealthy.  If the purchaser is fully aware of this fact and wishes to do it anyway, it isn’t necessarily the wrong decision.  It is simply a decision that needs to be made with a realistic view of the facts.

The most obvious next step is to shift more of our possessions from ‘liabilities’ to the ‘asset’ category.  The next level of analysis is to determine which types of assets comprise the best wealth creation opportunity.  Factors to consider are the income/appreciation opportunity, the ability to use other people’s money/time (leverage), and relative tax efficiency.

 

Many of us have become accustomed to frequent ‘tips’ and ‘analysis’ about the new hot trade.  Most of us cannot open our email accounts or turn on the radio without being bombarded with an advertisement to buy gold.  What frequently gets lost in all of this noise about fast trades and quick profits is our long-term goals.  The way that this happens is that the daily grind becomes more important than the specific actions that take us to our goals and aspirations.

Because of this, it is critically important for astute individuals to shift their thinking.  Many of us are infected with a terminal desire to produce fast results.  This leads us to seek the “trade of the day” that will immediately shoot up and produce immediate profits.  However, successful people have come to understand that  it’s not about the trade of the day, it’s about the decision of the decade.  By simply making one major, meaningful, and high-impact decision each decade, and then following through on the execution of that decision.  By following this method, it will continually focus your mind on big, long-term goals.  Thus, each day ceases being about finding some new fad, and shifts over toward small, tangible steps that continually move you closer to your long-term goals.

Another advantage of thinking in this manner is that it can serve as a forcing function for prioritization.  If there is one major goal that you seek to accomplish each decade, it stands to reason that the goal deserves some consideration.  Implicit within selecting and pursuing this goal is deciding what will ‘not’ be prioritized while you are accomplishing these aspirations.  In many cases, deciding what you are ‘not’ doing can be just as powerful as deciding what you want to pursue.  The reason for this is that each day brings new distractions and more noise from things that are utterly unimportant to our long-term goals and most important priorities.

In the process of defining your goals, deciding to pursue them, and following through with your decision, eliminating noise will be a major factor in your success.  By systematically shifting focus back to your goals, it will help in eliminating the ‘noise’ that frequently stands in the way of great accomplishments.  Each of us has the ability to accomplish anything we want to do . . . however, we do not have the ability to accomplish everything we want to do.  Success requires that we decide, focus, and accomplish.

 

One of the most prescient concepts in economics is the notion that “all changes occur at the margins”.  Expressed another way, this means that when things change, it happens in small incremental movements.  One of the commonly cited axioms of economics is that “rational people think at the margin”.  What this means is that our decisions should be framed in the context of what impacts our next action or decision, and ignore costs that are sunk or decisions that have already been made.

The importance of this concept comes into play when making both personal and financial decisions.  When deciding whether to fix an old car that has broken down, the only factors relevant to the decision should be the facts at hand.  It does not matter how much money you have already spent to fix the car . . . it only matters what you do with the current situation.  (Note that from a financial perspective, it is optimal to repair your existing automobile unless the cost of repairs exceeds the value of your car in reasonable working order.  The decision to get rid of your old car and buy a new one is almost never financial optimal.  This doesn’t mean that you should never get a new car, only that the purchase is a ‘lifestyle’ decision and not a ‘financial’ one.)

The inevitable result of thinking ‘at the margin’ is a narrowing of focus onto the decisions and opportunities at hand instead of dwelling on mistakes and missed opportunities of the past or fantasizing about expected opportunities in the future.  The only time that anybody ever has to act is now.  The past is gone, and the future has not yet come.  Action must always occur in the present tense.  This is not a renouncement of the benefits that come from planning for the future, but a realization that the future is built on many successive decisions, and that each decision we make builds the road for future decisions.

By zeroing-in on the decisions that you can influence today, it will create a remarkable degree of emotional freedom.  This liberation will come when you are no longer shackled by old decisions and no longer nervous about what will come in the future.  The future is and has always been uncertain.  However, people who have grown accustomed to making rational decisions develop the confidence that they can adapt to whatever future situations unfold.  The most important thing is to use the information and resources at hand to make the best decisions possible.  This crystallizes a seemingly infinite number of possible future options into one decision . . . your next one.  The result of that decision will set the stage for future decisions, but so will external events that are beyond your control.

The single area where most people run into trouble is that they under-estimate the extent to which their future will be shaped by things that they do not control.  Thinking about the unknown is inherently frightening, because we cannot plan for something we do not know will happen.  However, the unknown should not be allowed to become a crutch that scares us into inaction, but should also be appropriately heeded so that actions are not taken that greatly depend on a specific future outcome that is far from guaranteed.

The extent to which we can control our lives always is, always has been, and always will be at the margins.  We can influence small iterative changes that compound over time to produce tremendous results.  On balance, it is best if our actions create outcomes that are robust or adaptable to future changes in the marketplace.  While we may not know what these changes will be, we can be confident in our ability to adapt to them.  By shifting our focus to present things that happen ‘at the margin’ it will allow us to enhance our circle of influence by improving the effectiveness of our decision making.

 

As we go through life, there are many decisions that we will make.  Some of these decisions have a greater impact than others, but there is a single decision that frequently has a greater impact than most other decisions combined.  This monumental decision is the selection of a spouse to be your partner in life, or possibly a decision to be permanently single.  Either decision will have an extremely profound impact to the remainder of your life, and should be made with a significant degree of consideration.

This is complicated by the fact that our character and personality are in a perpetual state of change.  The person who we are at 21 is different than who we are at 31, who is different than we are at 41, who is different than we are at 51.  It is most certainly true that a good marriage can be the greatest of all experiences, but it is also true that a bad marriage can be among the worst.  The inherent difficult of creating a fulfilling marriage comes from the fact that it is not always clear how the character and personality of each person will develop.  In some cases, both people will develop together.  In other cases, one will develop while the other desires for things to stay the same.  In a few cases, both people will develop but they develop in different directions.  In all cases, it is more difficult to anticipate the future than most people imagine.

On the other hand, the window for marrying and raising a family does not last indefinitely.  It is important to keep all of your goals and ambitions in perspective so that imprudent decisions are not made by either rushing into relationships or avoiding them entirely.  In all cases, it is important to be flexible and supportive of the person with whom you decide to dedicate the remainder of your life.  By making the decision to spend the rest of our life with one person, we are implicitly deciding to make sacrifices for the purpose of facilitating a happy and fulfilling relationship.  Sometimes people exhibit a resistance to making these sacrifices, which frequently influences their partner to avoid making sacrifices themselves and can plunge the relationship into a self-defeating spiral.

In the end, marriage is a critical decision that requires considerable commitment for success to be achieved.  In this way, it is similar to (albeit vastly more important than) a business venture.  Nobody realistically expects to enter into business with half-hearted effort and achieve success.  People starting a business expect to invest many years of hard work in exchange for long-term success.  However, there appear to be a disturbingly large number of people who enter into their marriages with the expectation that a minimal level of effort will be sufficient to create success.  By approaching the most important decision of your life with even greater resolve than that of a business entrepreneur, it will cultivate the seeds of success for both you and your family.

 

Many “overweight smokers” know what they need to do in order to become healthy, but do not do it.  Most people that are smokers don’t suffer from a lack of knowledge that smoking is bad for them.  Most people that are overweight already know that there are health risks associated with being overweight.  In both of these cases, a lack of knowledge is not the issue.  Similarly, beating overweight smokers over the head with ‘information’ about the health risks of their lifestyle isn’t very likely to make them change.

It is the same with most people and their finances.  Why do we avoid making what we know is the right decision?  This apparent paradox is further complicated by the fact that the majority of financial literature is focused on trying to intellectually determine the right financial decision.  The unique twist that this revelation uncovers is the surprisingly small share of financial literature that is devoted to helping people actually do what we already know is the right decision.

Thus, the critical element is not necessarily information.  We already have more information than we can use.  What we need is more discipline to actually do the things that we already know to be the right decision.  We need the discipline to delay the purchase of that plasma TV so that we can fund our 401k.  We need the discipline to keep our old car for a few more years instead of taking on a new string of ‘low payments.’  We need the discipline to save for a vacation, instead of using a credit card because I feel like I ‘deserve’ a vacation.

So where does discipline come from?  Ultimately, it must always come from you.  In the end, we all must answer to ourselves.  However, there must be something that we can do to help build the self discipline necessary to be successful financially.  It is my belief that the best way to learn about building discipline is to study the different ways that people build discipline and stay accountable to their goals.

The example that jumps off the page most poignantly is Alcoholics Anonymous.  The hallmark of their success is that they keep each other accountable for meeting their goals.  There is literally strength in numbers when we are trying to build the discipline to change our lives.  Most of us can live with letting ourselves down, but are much more sensitive about letting everybody else know that we have failed to reach our goals.  Thus, the best way to build that financial discipline is to find other people that are also working on the same goal and hold each other accountable.

I believe the basis for this phenomenon is rooted in the fact that many of us are not afraid to let ourselves down because we have low self respect.  In the beginning, it is more shameful for us to let down other people until we have built-up our self respect to the point where we hold ourselves to a higher standard than anybody else holds us to.  Thus, the seeds of discipline are sown.