MRI and CT Centers Make Deals With Doctors

Apparantly, MRI and CT centers are making deals with doctors so that doctors who refer patients to a particular center make a profit. According to an article ($) in today's Wall Street Journal, the deal works like this:

The doctor signs an agreement with the MRI or CT center that says the doctor will refer all scans to that particular center. The center will charge the doctor a reduced fee of say $375. The doctor would then receive the going rate from the insurance company (based on geographic location and other factors) of around $700. The doctor would get to keep the $325 difference. At two referrals per day, that works out to about $169,000 in profit per year.

This is basically an illegal practice. But, the MRI and CT centers have found a way around the law by "leasing" out space to the doctor's office. So, when a doctor referres a patient to a center, it is looked at as if the doctor is leasing the space in order to scan the patient.

With the price of healthcare as high as it is, this practice looks like something that is going to be shut down. What do you think?

Tags: MRI, CT Scan, Health Insurance, Wall Street Journal

Investing for Kids

Today I put in an order to buy $146 worth of Microsoft for my sons' accounts. I am trying to take steps while they are still young (ages 8 and 9) to teach them how to grow their money. It has been a lot of fun.

My wife and I give them an allowance each week. They get $1 for each year of their age (the oldest gets $9.00 per week and the youngest gets $8.00 per week). We require them to pay tithe (10%) and put 25% in each of their long-term and short-term savings accounts. They get to spend what's left.

Once they accumulate enough in their long-term accounts, I pull it out and invest it for them. I'm hoping that by doing this, I will be teaching them how to use their money wisely. Time will tell I guess.

Tags: Allowance, Investing, Microsoft, MSFT

The Price of Gas - Illustrated

My buddy, the Assetman (yeah, that's his REAL NAME!), over at the AssetAllocator blog found this cartoon, which pretty much sums up why the price of gas is so FREAKIN' HIGH!:

Where's a Good Place to Put Your Cash - May Update

On March 15^th, I listed several banks that paid some of the highest interest rates on savings accounts. Here's the updated list along with links to the banks.

      Bank Money-Market Accounts
Average                                  0.57%
UFB Direct                               3.30% $     1
Emigrant Bank                            3.25%       1
Capital One FSB                          3.15%     100
Resource Bank                            3.04%  10,000
National InterBank                       3.00%     200
      Taxable Money-Market Funds
Average                                  1.99%
Scudder Money Market Series Premium S    2.86%   2,500
PayPal Money Market Fund                 2.80%       1
Scudder Money Market P.S.R - AARP        2.21%  10,000
Transamerica Premier Cash Reserve Inv.   2.15%   1,000
Vanguard Prime Money Market Fund         2.13%   3,000
     Tax-Exempt Money Market Funds
Average                                  1.25%
Alpine Municipal Money Market Fund Inv.  2.86%   2,500
Vanguard Tax-Exempt Money Market Fund    2.65%   3,000
Strong Tax-Free Money Fund               2.12%   2,500
Scudder Tax Exempt Money Fund            2.34%   1,000
Fidelity Municipal Money Market Fund     1.47%   5,000

Some of these funds may have sales loads. Be sure to thoroughly read the fine print before you send them your money.

Here's a Money Market Resource

Here's a pretty cool website called iMoneynet that is great for those who are looking for money market funds. Money market funds are gaining popularity due to the fact that the Fed has raised interest rates seven consecutive times, which has caused the yeild on low-risk savings accounts to an average of 2.23% from .51%.

The Fed is also expected to raise rates to 3% from 2.75%, making money market accounts even more attractive.

Tags: Money Market Accounts, Interest Rates

Don't Keep Too Much Employer Stock in Your 401(k)

Most financial planners say that a person should have no more than 10% of their total assets in employer stock. But, according to the Retirement Confidence Survey, nearly 25% of 401(k) participants whose plans offer an employer stock option have at least half of their assets in that option. Here's another startling observation: more than 10% of workers have 90% to 100% of their account in employer stock.

In some cases the employer's matching contributions are paid in company stock, making the employee responsible for rebalancing their 401(k). Not rebalancing leaves them facing a huge amount of risk. According to an article entitled "Too Much of a Good Thing," in the May issue of Kiplinger's Magazine, an account balance of $200,000 in insurer Marsh & McLennan before their bid-rigging allegations would be worth $132,000 today. That's a 34% DECREASE! Nobody should have to go through that!

The point of all this is the importance of having a balanced approach when saving for retirement. Don't fall in love with your company's stock. It could end up being a fatal mistake for your retirement plans!

Tags: Retirement Planning, 401(k), Employer Stock

Learn to Read those Footnotes!

Yesterday I was cruising the internet when I came across a pretty cool blog/website (I think it is a little of both) called Footnoted.org, written by Michelle Leder. Michelle is the author of the book Financial Fine Print. Anyway, this site is all about learning how to read the fine print in a company's financial statements. Check it out!

Tags: Michelle Leder, Financial Statements