Medical Claims Analyst Jobs

A Medical Claims Analyst works in the insurance industry to determine levels of reasonable and necessary charges for all medical claims. These are then used when ascertaining which costs will be covered by a medical insurance policy.

Nature of the Work

A Medical Claims Analyst is responsible for maintaining “cost containment” for their employer, usually an insurance company. Cost containment is basically the ability to keep costs (payout for medical insurance claims) to a minimum in order to provide a reasonable profit for the insurance company.

In order to determine whether specific medical/surgical bills are reasonable and necessary, a medical claims analyst evaluates what the “usual and customary” billings are; these are then used to determine what amount will be paid when a claim is filed. Items which are reviewed and analyzed may include: length and appropriateness of hospital stay, surgical procedures, claims referred for medical management, appropriate follow-up physician visits, and similar items.

Analysts may also perform a second review of claims which have been denied in whole or in part to determine the appropriateness of the payments authorized, or interpret the Workers’ Disability Compensation Act to determine eligibility. They may also be required to attend hearings or mediations to defend the decisions made if they are disputed.

Analysts prepare reports and records which analyze and interpret data related to claims quality of service, as well as produce forecasts of claim receipts.

Training and Qualifications Needed√£EUREUR

Most Medical Claims Analyst jobs require a bachelor’s degree in nursing, physician assistant, pharmacy, or business administration or the equivalent combination of education and experience with several years claims analysis experience. Opportunity For Advancement

After working at an entry level analyst job for several years, a typical career path would be to become a lead supervisor over a group of analysts, perhaps eventually promoting to senior supervisor over a department.

Long Term Job Outlook

With the healthcare industry experiencing greater than average growth, these jobs should continue to offer good long term potential. In addition, with the potential of the new national healthcare system, more analysts may be needed to ensure the appropriate levels of care are met.

Salary and Earnings Potential

Medical Claims Analysts make an average of $53,000, with a range of mid $40k to low $60k. Differences depend on geographical location and experience. A working knowledge of medical billing claims terminology, and the medical claims process is necessary. In addition, a strong base in mathematics and statistics is desirable.

Healthcare Staffing Companies Poised For Growth Amid Nursing Shortage

The United States is currently facing a healthcare staffing crisis, based primarily in a shortage of nurses. There is a growing need for nurses, especially travel nurses, and the problem is anticipated to become more acute in the next year. Since 2006, patients have won significant settlements from hospitals for negligence due to nursing shortage, and as the cost of hiring too few nurses comes to outweigh the cost of adequately employing, healthcare staffing companies should have definite growth.

People who feared that healthcare staffing would slow in today’s shaky economy and sold their shares in such companies now regret the decision, as these businesses have jumped in value. Shares of several companies providing travel nurses and temporary physicians initially fell due to fear in our current recession, but have since rebounded sharply.

According to BMO Capital Markets analyst Jeffrey Silber, “an aging population and advances in medical technology should drive demand, while supply may be constrained as caregivers age with few replacements coming through the pipeline. This should bode well for healthcare staffing supplier stocks.”

Silber estimated a travel-nurse staffing revenue of $2.5 billion annually, which is 21 percent of total healthcare staffing revenue. The growth forecast for travel nurses is set particularly slow as tough times push people towards stable jobs at home. He also pointed out that growth in the travel-nursing segment is estimated at 3.5 percent in 2009, compared with 8 percent in 2006.

This has not, however, affected many healthcare staffing companies. For hospitals to even maintain current (depleted) numbers of nurses, they must continue to hire new nurses on a regular basis. The U.S. Bureau of Labor Statistics reported that the median age of registered nurses (RNs) was 45 years in 2007. Also, another study reported that a third of all current nurses plan to leave their job within the next year.

Furthermore, staffing companies specializing in travel nurses are expected to continue to do well financially because of the nature of the job of travel nurse. These healthcare workers are employed by hospitals from around one to four months, so staffing companies increase their profit margins because of the rise in billed rates.

The New Approach to Healthcare Enterprise Information Management – EHR, EMR, EIM

Introduction –

The lack of a healthcare specific, compliant, cost-effective approach to Enterprise Information Management (aka EIM) is the #1 reason integration, data quality, reporting and performance management initiatives fail in healthcare organizations. How can you build a house without plumbing? Conversely, the organizations that successfully deploy the same initiatives point to full Healthcare centric EIM as the Top reason they were successful (February, 2009 – AHA). The cost of EIM can be staggering – preventing many healthcare organizations from leveraging enterprise information when strategically planning for the entire system. If this is prohibitive for large and medium organizations, how are smaller organizations going to be able to leverage technology that can access vital information inside of their own company if cost prevents consideration?

The Basics –

What is Enterprise Information Management?

Enterprise Information Management means the organization has access to 100% of its data, the data can be exchanged between groups/applications/databases, information is verified and cleansed, and a master data management method is applied. Outliers to EIM are data warehouses, such as an EHR data warehouse, Business Intelligence and Performance Management. Here is a roadmap, in layman terminology, that healthcare organizations follow to determine their EIM requirements.

Fact #1: Every healthcare entity, agency, campus or non-profit knows what software it utilizes for its business operations. The applications may be in silos, not accessible by other groups or departments, sometimes within the team that is responsible for it. If information were needed from groups across the enterprise, it has to be requested, in business terminology, of the host group, who would then go to the source of information (the aforementioned software and/or database), retrieve what is needed and submit it to the requestor – hopefully, in a format the requestor can work with (i.e., excel for further analysis as opposed to a document or PDF).

Fact #2: Because business terminology can be different WITHIN an organization, there will be further “translating” required when incorporating information that is gathered from the different software packages. This can be a nightmare. The gathering of information, converting it into a different format, translating it into common business terminology and then preparing it for consumption is a lengthy, expensive process – which takes us to Fact #3.

Fact #3: Consumers of the gathered information (management, analysts, etc) have to change the type of information required – one-off report requests that are continuously revised so they can change their dimensional view (like rotating the rows of a Rubik’s cube to only get one color grouped, then deciding instead of lining up red, they would really like green to be grouped first). In many cases, this will start the gathering process all over again because the original set of information is missing needed data. It also requires the attention of those that understand this information – typically a highly valued Subject Matter Expert from each silo – time-consuming and costly distractions that impact the requestor as well as the information owner’s group.

Fact#4: While large organizations can cope with this costly method in order to gather enough information to make effective and strategic business decisions, the amount of time and money is a barrier for smaller or cash strapped institutions, freezing needed data in its silo.

Fact #5: If information were accessible (with security and access controls, preventing unauthorized and inappropriate access), time frames for analysis improve, results are timely, strategic planning is effective and costs in time and money are significantly reduced.

Integration (with cleansing the data, aka Data Quality) should not be a foreign concept to the mid and smaller organizations. Price has been the overriding factor that prevents these tiers from leveraging enterprise information. A “glass ceiling”, solely based on being limited from technology because of price tag, bars the consideration of EIM. This is the fault of technology vendors. Business Intelligence, Performance Management and Data Integration providers have unknowingly created class warfare between the Large and SMB healthcare organizations. Data Integration is the biggest culprit in this situation. The cost of integration in the typical BI deployment is usually four times the cost of the BI portion. It is easy for the BI providers to tantalize their prospects with functionality and reasonable cost. But, when integration comes into play, reluctance on price introduces itself into the scenario. No action has become the norm at this point.

What are the Financial Implications for a Healthcare Organization by maintaining the status quo?

Fraud detection is the focal point for CMS in their EHR requirements of healthcare organizations, Let’s take a deeper, more meaningful look at the impact of EHR. Integration, a prominent component of Enterprise Information Management in the New Approach, brings data from all silos of the organization, allowing a Data Quality component to verify and cleanse it. The next step would be to either send it back to its originating source in an accurate state and/or put it into a repository where it will be accessible to auditing (think CMS Sanctions Auditors), Business Intelligence solutions, and Electronic Health Records applications. With instantly accessible EHRs, hospitals and their outlying practices can verify patients with payors, retrieve medical histories for diagnosis and treatment decisions, and update/add patient related information. What impact to treatment does a review of a new patient’s history have for both patient and practice? Here are some elements to consider:

1. Diagnosis and treatments that are based on previous patient dispositions – reducing recovery time, eliminating Medicare/Medicaid/Payor denials (based on their interpretation as to fault of the practitioner in original treatment or error incurring additional treatment).

2. Instant fraud detection of patients seeking treatment for the same malady across the practices within the organization. Prescription abuse and Medicare fraud saves money not only for the payors, but the healthcare organization as well.

3. The Association of Fraud Examiners states that 9% of a Hospital’s revenue each year is actually lost to fraud.

One overlooked but common impact is in the cost of managing patient records. Thousands of file folders in storage with new instances being added each time a new patient enters into the system. Millions of pieces of paper capturing patient information, payer data, charts, billing statements, and various items such as photo copies of patient IDs, are all stored in those folders. The folders are then stored in vast filing cabinets – constantly being accessed by filing clerks, nurses, practitioners and assorted staff. Contents of the files being misplaced or filed incorrectly. Hundreds, if not thousands, of square feet being consumed for storage. The AHA projects that an enterprise leveraging Electronic Health Records will recover no less than 15,000 square feet of usable space. That space can be used for additional services, opening up new channels of revenue. The justification is easy: how much would it cost the hospital to build out 15,000 square feet for a new service? The average cost to build space utilized for Health Services is $65 per square foot, or $975,000 total. An EIM solution through the New Approach would be less than 20% of that. Not only has the EIM solution reduced dollars lost to fraud, lowered the days for payor encounters to be paid, increased cash on hand, but it will also open up new services for the patient community and revenue back to the healthcare organization.

Electronic data is costly in its own way. Bad aka “Dirty” data has enormous impact. Data can be corrupted by error in data entry, systems maintenance, database platform changes or upgrades, feeds or exchanges of data in an incompatible format, changes in front end applications and fraud, such as identity theft. The impact of bad data has a cause and effect relationship that is pervasive in the financial landscape:

1. Bad data can result in payor denials. Mismatched member identification, missing DRG codes, empty fields where data is expected are examples of immediate denials of claims. The delay lowers the amount of Cash on Hand as well as extends the cycle of submitted claim to remittance by at least 30 days.

2. Bad data masks fraud. A reversal of digits in a social security number, a claim filed as one person for the treatment of another family member, medical histories that do not reflect all diagnosis and treatments because the patient could not be identified. Fraud has the greatest impact on cost of delivering healthcare in the United States. Ultimately, the health system has to absorb this cost – reducing profitability and limiting growth.

3. Bad data results in non-compliance. CMS has already begun the architecture and deployment of Sanctions Data Exchanges. These exchanges are a network of data repositories that are used to connect to health healthcare system, retrieve CMS related data, and store it for auditing. The retrieval will only be limited to the patient encounters that show a potential for denial or fraud, so the repository will not be a store of all Medicare and Medicaid patient encounters. But, the exchange has to be able to read the data in its provider data source in order for CMS to apply certain conditions against the information it is reading. What happens when the information is incomplete or wrong? The healthcare system is held accountable for the encounters it cannot read. That means automatic and unrecoverable denials of claims PRIOR to an audit, regardless of claim legitimacy.

The Price Fix by Big Box Healthcare Technology Firms

Are the major healthcare software and technology vendors (Big Box) price gouging? Probably not. They are a victim of their own solution strategies. Through acquired and some organic growth (McKesson, Eclipsys, Cerner, etc), they find their EIM solutions lose their agnostic approach. This is bad…very bad for health systems of all sizes. With very few exceptions, the vast majority of healthcare organizations DO NOT BUY all applications and modules from a single stack player. How could they? Healthcare systems grow similarly – some organic, some through acquisition. When a hospital organization finds over the course of time, an application that is reliable, such as a billing system, there is tremendous reluctance to remove a proven solution that everyone knows how to use. Because the major technology providers in the healthcare space act as a “One Stop Shop”, they spend most of their time working on integrating in their own product suite with little to no regard to other applications. Subsequently, they find themselves trapped: they have to position all products/modules to maintain the accessibility and integrity of their data. This is problematic for the hospital that is trying to solve one problem but then must purchase additional solutions to apply to areas that are not broken, just to be able to integrate information. That is like going to the hardware store for a screwdriver and coming back with a 112 piece tool set with a rolling, 4 foot cart built for NASCAR. You will probably never use 90+% of those tools and will no longer be able to park in your own garage because the new tool box takes up too much space!

IT resources – including people – must be utilized. In today’s economy, leveraging internal IT staff to administer a solution post-deployment is a given. If those IT resources do not feel comfortable in supporting the integration plan, then status quo will be justified. This is the “anti” approach to providing solutions in the healthcare industry: the sales leaders from Big Box technology firms want their sales people in front of the business side of the organization and to stop selling to IT. While this is a common sense approach, the economy in 2010 mandates that IT has to at least validate their ability to administer new technology solutions. The prospect of long-term professional consulting engagements to follow post installation has been shrinking at the same rate as healthcare organizations profit margins.

Empowering the healthcare organization to utilize its existing IT staff to administer and develop with the new products is not part of the business plan when Big Box players market to the industry. It is the exact opposite – recurring revenue from lengthy, and sometimes permanent, professional services consulting engagements is part of the overall target. The initial price quote for a Big Box solution is scary enough, but the fact remains that it is still not representative of what the ongoing cost to maintain through consulting arrangements. This is a variable cost, which is difficult to predict, and drives finance managers and executives crazy.

Solving the Dilemma – A Better Solution through a New Approach at a Fraction of the Cost

When Healthcare Business Experts combine talents with Technology Architects, EIM Solutions cost drop dramatically. This is the New Approach to Healthcare EIM, providing the way health organizations will be able to provide successful solutions at significantly reduced costs – opening the door for health systems of all sizes.

The EIM Firm (using the New Approach) versus Big Box Healthcare Technology Providers:

Smaller, more agile firms bring many benefits to Healthcare Organizations of any size. The benefits:

1. They are focused on specific verticals – just like the Big Box Health Technology providers. Subject Matter Experts (SME) in the smaller firms typically are industry veterans with years of experience and success in their approach who see their resume as a service offering better utilized when they are able to apply their methods for successful strategy planning as opposed to learning the methods of a Big Box player. Their income is better since their revenue is applied into a smaller operating cost, extending lower pricing for solutions that are MORE EFFECTIVE and offering stronger client/vendor relationships as the SME limits themselves to a certain number of clients.

2. Solutions built on proven approaches and strategies. Again, the firm’s SMEs are able to define a methodology that can be re-used or re-configured in each client instance. This saves time and money for the client as delivery is accelerated and the cost of architecting is eliminated.

3. The firms themselves develop solutions and methodologies agnostically. Their understanding of the diversity of systems that exist in the technology of a healthcare organization allows them to not only develop adaptable solutions but also add a Business Process Management Plan (BPM). The BPM will define for the organization EXACTLY how information is received, processed, cleansed, stored, shared and accessed. It also will define an action plan for training IT for administration and support as well as end users at all levels on how they will leverage it going forward. BPM planning in a healthcare organization is a low six figure investment with an outside consulting group. The EIM firms will include it in the cost of the solution. Basically, it is the difference in being told what is wrong and here are the recommendations to fix it versus here is what is wrong and this is how it will be fixed with the new solution.

What is a typical EIM Firm solution?

1. Solution Assessment, noting the current systems, data sources and methods of sharing information as well as business processes, key personnel identification that are gate keepers if information, timeliness of providing information and overall effectiveness in leveraging enterprise information for strategic business planning. See figures 1 for an example of the information process flow visual component of an actual assessment.

2. EIM solution that contains an integration engine that accesses all data sources – reading and writing back to the database or application, providing data quality services and maintaining HIPAA as well as HL7 requirements. See Figure 2 for a diagram.

3. EHR Data Warehouse. A repository to build Electronic Health Records through the integrated data flow.

4. EHR Portal for patient entry (when additional information needs to be added) via a browser.

5. Business Intelligence Dashboards for metrics, AD Hoc analysis and Performance Management Scorecards on organizational goals and objectives.

6. Onsite implementation and integration of the EIM solution.

7. Onsite training during installation for IT and end users. Ongoing training provided via webinars, documentation and technical support staff.

8. Relationships maintained by the Subject Matter Experts for the life of the solution.

9. Stimulus “HITECH” Act pays $44,000 per physician for an EHR solution implemented. The SME creates the grant request to be submitted so the healthcare organization receives Stimulus funds to pay for the total EIM solution

Key Element of the Solution

Onsite Delivery and full time support are key. But, the most important element is training. Why? As noted earlier, it is paramount that existing IT investments, namely personnel, be able to not only administer but also conduct development as the need arises. In Healthcare, CMS managed Medicare/Medicaid is already margins that are in the negative. As private payers follow suit, the number of uncollectable encounters will increase, impacting current profitability models and increasing future cost for treatment. By mitigating IT costs, the Total Cost of Ownership (TCO) qualifier should actually evolve to a Return on Investment (ROI). ROI is immediate for this solution approach, but it is sustained year over year by leveraging internal IT to support and develop. Now, the Healthcare Organization has eliminated costly professional service consulting engagements and re-investments into new feature licensing. This takes a variable cost every year and makes it a fixed, yet smaller amount – a sensible financial approach to accomplish a proven strategy.

Summary –

Why EIM? Whether it is Omnibus, “Obama”-care or an edit (not overhaul) of the Healthcare industry, Healthcare Organizations know these truths:

1. Electronic Health Records are necessary for the Fraud detection unit of CMS. Each organization must comply with accessibility, HIPAA and format. Fraud reduces overall revenues for a hospital by 9% (ACFE)

2. EHR/EHR have proven to be highly effective in eliminating internal waste, patient fraud, practice fraud and paper overhead. Vast amount of space within the facilities that had been used to store patient records in hard copy can now be utilized to provide additional services and open new revenue streams.

3. Bad or “dirty” data in electronic or hard copy format is costly. According to the AHA (September, 2008), the average cost of a patient record with good or accurate information is $343 annually. The annual cost of a patient record with bad information is $2,054 annually. On average, 18% of patient information within a healthcare organization is bad.

4. Strategies developed by healthcare organizations without 100% of the information they own that is also timely and relevant are ineffective. Objectives cannot be defined, successful processes cannot be identified and improvement plans have little to no metrics in which to determine success.

5. Stimulus/HITECH Act pays $44,000 per physician when EHR is part of the EIM solution. With the smaller EIM firms, Stimulus pays for the entire solution.

Why a New Approach EIM Firm?

1. Subject Matter Expertise from consultants that have proven methodologies.

2. Agility to adapt to the client need instead of the Big Box approach of the client adapting to their product limitations.

3. A Better Solution at a Fraction of the Cost. Their solutions are based on needs and not features.

4. Relationships with the vendor, resulting in improved services, maximum values from vendor solutions and a focused approach to the client needs and goals.

5. A Return on Investment as opposed to a Total Cost of Ownership. Clients need to see solutions that immediately pay for itself and then recover lost revenue while offering channels to new profit centers.

Scott Schledwitz is a Subject Matter Expert in Healthcare Strategic Planning, Information Integration, Data Quality, and Balanced Scorecard Methodologies. He has developed solution products and practices for compliance measures, reporting and planning utilized by various agencies within the United States on the Federal and State levels. Within healthcare, he has consulted with hospital systems ranging from 1 to 100 campuses, providing them assessments and solutions to improve information efficiencies, extend information across the enterprise, develop organizational strategies that start at the top and cascade to the individual contributor. Through a Balance Scorecard Methodology, he has advised these organizations on how to identify their objectives, successful processes, define projects to overcome deficiencies and view the results in an easy to understand dashboard.

The Role of a Securities Analyst and Their Biases

It is important to first understand the function of a securities analyst at a brokerage firm. Brokerage firms are Wall Street investment banking firms on the sell side, “selling” investment securities primarily to institutional investors.

Unlike a stock analyst at a mutual fund, bank, or investment management firm, research analysts at a brokerage firm do not cater their research to portfolio managers. Their job is to research a particular industry sector and “sell” their research to the brokerage’s institutional clients.

Analysts narrow their focus on a limited number of companies to track them as thoroughly as possible. They want to be knowledgeable about as many details as possible so they can best assess how both internal and external factors will impact the company.

Having assessed the industry and an individual company’s outlook, analysts must then conclude if the company’s stocks are desirable investments (a Buy rating), have a high probability of devaluation (a Sell rating) or rate them somewhere between, and summarize their conclusions in a research report. All of the companies an analyst tracks must be observed and scrutinized continually, and the assessments communicated to various audiences, including: the brokerage firm’s institutional investor clients, the in-house sales force and traders on the desk, and outside media sources.

Brokerage research analysts do not deal with individual investors or their financial consultants. Rather, they are marketing their views to institutional investors.

The sales force at the brokerage firm caters first and foremost to institutional clients–mutual funds, hedge funds, pension funds, banks, and others. The sales force is continually relaying their analysts’ research to these firms.

While research analysts are required to assign ratings such as “Buy” or “Sell” to investments, institutional investors do not stress these ratings so much as an analyst’s industry knowledge. In fact, the analysts that were ranked highest in an Institutional Investor (II) magazine poll had some of the worst stock picks.

While brokerage analysts typically excel at providing thorough and analytical research about an industry and its companies, their record of rating stocks accurately is mediocre at best. This is because perceptive analysis and an astute understanding of companies and industries have little influence over an analyst’s investment recommendations.

The Wall Street system encourages this trend for five primary reasons:

1. Analyst Compensation. Analysts are compensated for their status on the Street, their access to CEOs, their profile and clout, and depth of knowledge as opposed to the accuracy of their investment ratings. Salaries depend on institutional client polls (e.g. the annual II rankings), their overall influence on the Street, institutional sales and trading evaluations, and generally subjective assessments by research department management.

There are no quantitative performance measurements. Author Stephen T. McClellan of the book “Full of Bull” goes so far as to say to “discount any flamboyant opinion upgrades from April to June” because the timing is suspiciously during when II votes are being angled for.

Consider that in 2006 the mean compensation for an II ranked analyst was $1.4 million versus $590,000 for un-ranked senior analysts. These kinds of incentives tarnish what should be more objective research.

2. Analyst Pressures. Analysts are risk averse to being wrong so they are typically late to change ratings. Brokerage analysts are often harshly critiqued so their reasons for choosing to downgrade a stock from a Hold to a Sell must be nearly unquestionable.

Most choose to ignore negative changes in a company for too long so that by the time the evidence is undeniable, most of a stock’s losses have already happened. For instance, only after Lehman Brothers’ stock fell from $80 per share to $7 did the three largest firms on Wall Street finally downgrade their ratings.

Additionally, brokerage firms realize that a shift of opinion from Hold to Sell will compel only a small portion of stock owners to sell the stock, thereby creating a commission for the firm. On the other hand, an upgrade to a Buy opinion is more easily marketed to all the firm’s investors and will generate vastly more transactions and commissions.

Analysts are therefore incentivized to rate stocks higher than they otherwise might. Consequently, it is virtually impossible to understand how enthusiastic or skeptical an analyst truly is simply from their published ratings.

A rating of Underperform could mean either the analyst suspects the stock will fall within a year or that it will not appreciate as much as its competitors with higher ratings. Conversely, a Hold rating could imply either that the analyst is leaning toward an upgrade to Buy but does not yet have enough evidence or that company’s outlook is poor, but they fear upsetting interested parties by downgrading to a Sell.

3. The Street’s Short Term Bias. Wall Street favors stocks that are rising now, not those that require patience to see significant upside. Just as downgrades are typically late, so too are upgrades to Buy.

Quarterly earnings reports are the Street’s “paramount milestone.” They carry considerable influence over stock valuation and are analyzed critically. Institutions are “trapped on the treadmill of quarterly performance evaluations” with very short investment time horizons.

Individual investors must recognize that analysts are writing for an audience of traders not investors. Analysts are torn between looking at long-term indicators such as earnings estimates or price targets, and the demands of institutional players such as mutual funds who measure performance quarterly and use those figures to compare themselves to the competition.

Consequently, analyst recommendations usually reflect how the stock might perform in a one to five month time span, not one to two years. Lastly, analysts are forced to make quick calls rather than quality ones. Once they have chosen a position, it is more likely they will stick with it even if later evidence suggests something else.

4. The Street’s Positive Bias. This positive bias is analogous to the auto industry. Regardless of the market, auto dealers have a vested interest to always say “buy.”

Similarly, Wall Street has a distorted number of Buy or Hold recommendations. Wall Street does not want to suggest capital preservation or any timely retreat from the market. Even in a deep bear market, brokerage firms need to convince investors to keep buying stocks.

5. The Street’s Big Companies Bias. A final bias is toward big companies/stocks with the greatest market capitalization. These securities are traded most frequently, held most extensively, and have the greatest institutional investor interest.

This also means that large companies tend to be excessively analyzed and reported on. The most researched sectors include technology, telecommunications, and healthcare because research departments place the most analysts where the most trading business is done, not necessarily where the best investment opportunities lie.

Unlike the individual investor, mutual funds and other institutions must purchase substantial volumes of stocks. Because these are a brokerage firm’s key target audience, there is not a sizable enough financial payoff for analysts to recommend smaller stocks.

Given these factors that can distort brokerage analyst’s stock recommendations, individual investors must understand that most ratings cannot be taken as literal advice for a personal portfolio. There is some value in the Street’s securities research for the individual investor, however.

First, research reports are excellent for providing background understanding and the essential business metrics of companies and industries. Figures such as the earnings outlook and profit forecasts are examined as are the business’ operations, management, market, competition, potential challenges, and financial stability.

Secondly, if investors listen in on companies’ public conference calls, they can be attuned to analysts’ questions and executive responses. Analysts have a greater awareness of a company’s culture, goals, and management style, sometimes having direct access to CEOs.

Having more information than those outside of Wall Street, analysts can ask more pointed questions on conference calls and hint at critical issues or what the company may be attempting to cover up. Finally, analysts can offer detached, unemotional observations about how certain events might influence the company’s future.

Wall Street may act as though it is fit to offer investment advice to individuals, but that is not what it is structured to do. The Street is structured to “trade securities, perform securities transactions, distribute and sell securities as a dealer, and do corporate finance deals.

Wall Street is not suited to be an investment manager, financial advisor, or stock selector. These services are a conflict of interest with the bedrock brokerage and banking functions.”

With a better understanding of how research on Wall Street operates, individual investors can employ the following tips for a better investment strategy:

* Look for stocks that are not currently being pushed by analysts or widely recommended, but still show promise and sound financials. Analyst upgrades to Hold are often a good signal to Buy. Any opinion change that involves a downgrade should be read as a literal Sell recommendation.

* Make an early investment in healthy and promising smaller companies not yet over-covered by Wall Street. Small stocks offer individual investors the best opportunity for future upside.

* Because Wall Street is subject to a short-term bias, the best prospects for individual investors involve looking at long-term value versus quarterly performance. Individuals are not judged on a quarterly basis like institutional investors, giving them the potential to realize more substantial gains over the course of two to three years.

* Take note of a “lone wolf analyst,” one who is willing to singularly downgrade their stance. Analysts often mirror each others’ opinions and it takes courage for one to be honest about a negative stance.

* Note an analyst’s level of experience. Younger analysts do not have the same relationships with executives or the seasoned perspective that senior ones do. Look for at least ten years of experience.

* Conference calls offer individual investors the closest to an inside look at a company as they can find. It is helpful to be attuned not only to what is said but to the tone of the call and what is left to be read between the lines. Notice what types of questions analysts are asking the executive.

* Take advantage of being an individual investor who does not have the biases and distractions that analysts on the Street have. Take the time to be like a research analyst independently, listening in on conference calls, reviewing earnings models and examining companies’ financials.

Samantha Johnson is the online content creator for Business Book Summaries. Business Book Summaries (BBS) provides comprehensive, concise summaries of the best business books available. Using stringent criteria, only the top business books published each year are selected to be summarized.

Risky Business – Self-Insurance, Healthcare Trusts Gain Favor

Ford hasn’t always had the best relationship with the United Autoworkers Union (UAW). Back in 2007, the company’s employee healthcare costs were eating up the carmaker’s meager profits. After posting quarter after quarter of disappointing earnings, stockholders were putting the big squeeze on America’s pioneer of the modern automobile. That was before economists noticed (or perhaps, acknowledged) that sub-prime mortgages were a bad thing.

To dig out from under its messy employee obligation to provide ongoing, long-term healthcare to its retirees, Ford reluctantly agreed to begin depositing cash into a trust fund that would be administered and operated by UAW once $6.5 billion piles up. By New Years’ Day, Ford had not only met the monetary benchmark, but exceeded it by another half-mil.

“The transfer of these health care liabilities to the VEBA trust is the culmination of several years of work and will significantly improve our competitiveness in the United States,” Ford CFO Lewis Booth said in a statement. “We also have shown confidence in our liquidity…by pre-paying $500 million of debt.”

At the time the arrangement was made, Ford’s public tone was far less positive when it came to its future outlook. Its cars were considered tired, quality suffered and continuous public spats between Henry Ford’s great grandchildren (who held controlling public interest and managed the company) and the stockholders were routinely covered in national headlines. Now the company has not only rebounded, refusing to accept any part of a public government bailout that its peers would later have to extend payment on, but Ford has become a trend-setter in automotive design. Can industry analysts expect the automaker to extend its leadership into the boardrooms of health insurers as well?

When a company or large organization becomes a self-insured entity, the company is assumed to have amassed enough financial liquidity to assume its own risk and the financial risk associated with its employees’ health insurance. In Ford’s case, the company accepted responsibility for its retiree’s healthcare in a long-term buy-out agreement so management could reduce its workforce quickly and stave off continued losses.

Traditionally, only public / government businesses had the financial pull and employee base to justify funding its own health insurance plan. But as planned federal healthcare reforms become law, self-insurance may be more common among smaller corporations and those not typically self-insured today. That’s because one of the most controversial provisions in the Senate’s health reform plan provides for broad new taxes on commercial insurance companies.

5 Job Trends in Healthcare Information Technology

There are many trends in healthcare information technology to cover. With the US government’s economic stimulus package geared to improve heathcare IT, there will be areas were expertise will be greatly needed.

Outlined below will touch on 5 hot trends that will be need qualified professionals to help implement the large efforts of the healthcare industry:

1. EMR (electronic medical records) or EHR (electronic health records) – This is going to a huge effort on the part of many medical establishments. This system will take the “health history” of an individual and create a so called electronic medical record that will follow a patient anywhere for patient safety and more accurate treatments. All of the is over a huge network and storage systems along with integrating several applications.

Job Title Examples: Developers, Programmers, Project Managers, Billing and Coding specialists, systems analysts but most will say EMR or EHR.

2. Informatics – Informatics as it related to healthcare will include using medical information from clinical, nursing, medical, biotechnology and similar disciplines into an electronic format to be either stored, retrieved, shared, analyzed to help make informative medical decisions.

Job Title Examples: Clinical informatics analyst, Informatics consultants, medical informatics – employers may seek specific degrees in the discipline (ie. RN, BSN, Biotechnology )

3. Enterprise Architecture – Enterprise architecture with work within a healthcare organization like in other institutions. It is most commonly used to better outline a method of business and uses tools to understand and best document the structure of an organization. Very much strategic in nature.

Job Title Examples: Almost always will have the terms “enterprise architecture” or “data architecture” or “data modeler” in the title. Usually a mix of SOA, data warehousing, ER modeling, Diagram modeling, frameworks, and strategy.

4. Patient Safety related systems & Quality – This area of healthcare will use systems and applications to reduce with the goal to eliminate medical errors in and efforts to drastically increase healthcare quality and communication.

Job Title Examples: Quality and patient safety will usually be part of the title and are non technical. The technical positions will be developers/programmers or applications tester of these types of applications.

5. Interoperability – Overall this area covers bringing together healthcare information technology systems together and integrating them in order for them to work together across locations and then have the ability to deliver quality useful information to service it’s end user.

Job Title Examples: Project management, software engineer, sometimes within informatics, architect and, analysts.

There is so much to know within each of these 5 but there is much opportunity for one with technical skills to seek out so many facets of healthcare.

Healthcare Schools Online – Call the Shots on Your Career

As demand for healthcare services continues to increase, it takes a specially trained person to run the oft-overlooked position that some people don’t think much about – that of a healthcare manager. That’s where healthcare schools online come in: they offer courses that train a person to be management material when the time comes for a promotion or a new job. Healthcare managers are the brains behind the operation and they ensure that things run smoothly. Healthcare schools online are a great resource for a person that needs the training, but may not have the convenient hours that other less demanding jobs can afford.

Those in healthcare management keep the day-to-day operations of any type of patient facility running efficiently. They make decisions on patient healthcare and treatment. They also work in conjunction with nurses and other administrative workers to ensure that the quality of healthcare is up to regulations and medical records and reports are accurately kept or given. These men and women must always be ready for new healthcare implementations – anything from new technology to new methods of patient care. They are typically very busy and may be called upon at all hours for advice and/or assistance in a problem. They also travel to attend healthcare conferences, or to meet with the government or private affiliates and owners of a company.

Healthcare managers work in all sorts of environments. Anywhere there is a facility that treats patients, no matter old or young, in-patient or out-patient, there is a manager that makes sure everything is carried out in a respected and efficient manner. Managers can work in hospitals, for example, but there is probably one that works in every ward who also answers to the manager in charge of the entire hospital. In a nursing home, there is one main manager, and a few managerial assistant managers to help keep the workload manageable. This type of management system is seen in all aspects of healthcare.

On a day-to-day basis, the variety of people whom a healthcare manager works with is vast. They work with nurses and nurse’s aides, medical recorders and information analysts. Every day brings a whole pack of problems to solve, but also an equal amount of reward. A great hospital with satisfied patients and workers is a sign of a great healthcare manager, who at the end of the day, is a people-person that aims to make everyone happy while keeping care effective and up to standards. Healthcare managers also have to answer to their own bosses. They must attend conferences that inform and advise them on new and effective ways of managing and on the developments that constantly happen in the healthcare industry.

Getting into this oft forgotten administrative job usually requires a master’s degree at minimum. It can be in healthcare administration, but there is also a combination of other degrees that could put the candidate in the right spot for a promotion. This could be an MBA with combined experience in the nursing field, for example. Another good example is experience and an advanced degree in a specialized field, combined with a graduate certificate in healthcare administration.