Money Minutes for Doctors #17 - Real Estate as an Investment

This month’s edition of MMFD features part 2 of Kristy and Katherine’s deep dive into the home-buying maze. In this part of the podcast, our intrepid financial seafarers discuss the concept of real estate as an investment. “Flip this House”, “Good Bones”, etc…it has to be pretty easy! RIGHT?? No so fast… Back to help us navigate the shifting tides of the real estate market and the shoals of home purchasing is Ms. Katherine Vessenes.

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About Ms. Vessenes:

Ms. Vessenes works with over 300 physicians and dentists from Hawaii to Cape Cod. Her firm uses a team of experts to provide comprehensive financial planning to help doctors build their wealth and protect their wealth while reducing taxes now and in the future. Katherine is a longtime advocate for ethics in the financial services industry; and has written three books on the subject of investment strategies. She has received many honors and awards including: numerous tributes from Medical Economics as a top advisor for doctors, multiple 5-Star Advisor Awards, honored as a Top Woman in Finance, in addition to being selected to be on the CFP® Board of Ethics. Katherine can be reached at: Katherine@mdfinancialadvisors.com or 952-388-6317. Her website: www.mdfinancialadvisors.com.

Quick Summary:

Money Minutes Episode #17 – Real Estate as an Investment

Previously there were significant tax benefits to owning real estate which allowed for generous deductions to reduce your tax liability.  New tax laws have changed things significantly:

  • decreased tax benefit on home mortgage now limited to $750k

  • deduct interest on mortgage only if “acquisition indebtedness” the money must be used to buy the home or improve the home. If you plan to use the funds to pay off student loans or other purchases cannot qualify for the tax right off.

  • must be primary residence that is owner occupied

  • home equity line of credit (HELOC) interest can be tax right off if used to improve the home ** must keep records for IRS.

 Capital gains – any purchase you made that gains profit while in your possession (i.e. real estate, art etc.) is subject to capital gains tax or long-term capital gains (if owned for > 1 year) which is currently at 15-20% federally plus state capital gains (5-10% + depending on state).  Once can avoid long term capital gains tax by taking profit and rolling it in to next home, currently a max profit of $500K if married or $250K if single.

  • Can only work if home principal residence

  • Have to live as resident for 2 y years before you sell otherwise considered investment property and subject to ordinary income tax

  • Legal residence is a grey area and variable by state that is quite complex, need to finalize details w financial planner/lawyer/accountant as you make these decisions

  • Current sales price - Original purchase price= profit -> this amount subject to capital gains

 Real estate as an investment – part owner in building, investor in real estate development etc.

  • Advantageous tax laws are no longer - Tax laws have change significantly and at one time real estate was very attractive investment but things have changed. i.e. depreciation deductions have changed

  • Real estate investments are highly “ill liquid” and if market changes you could be in the position to hold the property for years until the market recovers

  • If you find yourself “upside down” in the property can cost lots of money to get out of the deal, can cause a significant hit to your credit rating, and may have to pay out of your monthly budget to cover costs.

  • Never a primary investment strategy however may be an option in certain circumstances. 

  • Real estate mutual funds can be a more flexible option allowing you to be in the real estate market but giving you more liquidity

  • If you partner on a building realize that you are responsible for the entire debt (not just your percentage) so make sure you are dealing w responsible and ethical partners that will uphold their end of the deal.

  • Very rare that an apartment building will be a successful investment if you are paying a mortgage along w regular taxes, maintenance costs etc.  If you can purchase outright then may be sensible option but should be reviewed with your trusted financial adviser.

Acromioclavicular Joint Injury

Case

A 19 year-old male presents to the emergency department with a complaint of right shoulder pain. He was tackled from behind in a rugby game three days prior to presentation and has been experiencing pain over the anterior aspect of his right shoulder since that time. Physical exam is notable for tenderness over the right acromioclavicular (AC) joint and pain with both active and passive range of motion of the right shoulder. X-rays (Figure 1) show “no obvious fracture or subluxation.” However, based on your exam and clinical suspicion, closer inspection reveals abnormal alignment between the clavicle and the acromion consistent with AC joint injury.

Figure 1

Figure 1

The Acromioclavicular Joint

The acromioclavicular joint is formed by the AC ligament and the coracoclavicular (CC) ligament (Figure 2). The AC ligament provides horizontal stability to the joint while the CC ligaments provide vertical stability. (1)

In normal configuration, the inferior cortices of the clavicle and acromion are in alignment (Figure 3). Additionally, the coracoclavicular distance is normally less than 13 mm or there is a less than 5 mm difference between the left and right coracoclavicular distances. (1; 3) Figure 4 depicts normal alignment of the inferior cortices of the acromion in red and highlights the coracoclavicular distance in white.

Figure 2

Figure 2

Figure 3

Figure 3

Figure 4

Figure 4

Mechanism of Injury, Physical Examination, and Diagnosis

Acromioclavicular joint subluxation and dislocation account for approximately 10% of all traumatic shoulder injuries. (1; 3) AC joint injury results from either direct or indirect injury to the shoulder. Direct injury to the joint occurs with a direct blow to the shoulder or, more commonly, when an individual falls with their arm in an adducted position. Indirect injury to the AC joint typically occurs as a result of a fall on an outstretched hand. (1; 4) On exam, patients will have pain over the acromioclavicular joint and pain with range of motion of the shoulder. (3) Patients may hold their arm in an adducted position and there may be a visible or palpable step-off deformity over the AC joint. Additionally, the ipsilateral clavicle may appear to be high-riding or the ipsilateral shoulder may appear displaced inferiorly (Figure 5). (1; 3) In less obvious cases, provocative maneuvers (such as the cross-body adduction test and AC shear test) may be used to localize discomfort to the AC joint. (2)

If acromioclavicular joint injury is suspected, three-view radiographs of the shoulder (anteroposterior view, scapular-Y view, axillary view) and a Zanca view (a specialized anteroposterior radiograph which removes the scapula from behind the joint) allow for identification of vertical displacement of the clavicle and for anteroposterior displacement of the clavicle. (2) AP comparison views of both AC joints can also be helpful in diagnosis of AC joint injury.

Figure 5

Figure 5

Acromioclavicular Joint Injury: Rockwood Classification

Acromioclavicular joint injuries are characterized by the degree of damage to the AC ligament and the CC ligaments. (3). These injuries are further classified using the Rockwood System (Figure 6).  

Figure 6

Type I

AC Ligament Sprain
CC Ligament Intact
Joint Capsule Intact

Inferior cortices of the
clavicle and acromion
are aligned.

Type II

AC Ligament Rupture
CC Ligament Sprain
Joint Capsule Rupture

The CC distance is
increased <25%
compared to the
contralateral AC joint.

Type III

AC Ligament Rupture
CC Ligament Rupture
Joint Capsule Rupture

The CC distance is
increased 25-100%
compared to the
contralateral AC joint.

Type IV

AC Ligament Rupture
CC Ligament Rupture
Joint Capsule Rupture

The clavicle is displaced
posteriorly towards the ipsilateral
trapezius. Identify on axillary
view radiograph.

Type V

AC Ligament Rupture
CC Ligament Rupture
Joint Capsule Rupture

The CC distance is
increased >100%
compared to the
contralateral AC joint.

Type VI

AC Ligament Rupture
CC Ligament Rupture
Joint Capsule Rupture

Clavicle is displaced
inferiorly and the distal
end is located
posterior to the
coracobrachialis and
biceps tendons.

Management

Non-Operative Management

  • Type I and Type II AC joint injuries are managed non-operatively. Patients should be immobilized in a sling for 7-14 days and should then proceed with progressive range of motion exercises. Return to full activity is indicated when patients are pain-free. (1; 3)

  • Type III AC joint injuries are often managed non-operatively with immobilization in a sling and range of motion/strengthening exercises. These individuals should be referred for outpatient orthopedic follow-up. (1)

Operative Management

  • Urgent orthopedic referral is indicated in patients with neurovascular compromise, skin tenting, and significant deformity. Additionally, Type IV-VI AC injuries are typically managed surgically and, as such, require urgent orthopedic consultation.

 

Case Outcome

The patient’s radiograph and clinical exam was most consistent with a Type III acromioclavicular joint injury. He was immobilized in a sling, provided with prescriptions for ibuprofen and acetaminophen, and instructed to follow up with orthopedics for further evaluation on an outpatient basis.

Faculty Reviewer: Dr. Jeffrey Feden


References

  1. Egol, K. A., Koval, K. J., & Zuckerman, J. D. (2010). Handbook of fractures. Lippincott Williams & Wilkins.

  2. Koehler, Scott M. (2018). Acromioclavicular joint disorders. UpToDate. < https://www.uptodate.com/contents/acromioclavicular-joint-disorders?search=acromioclavicular%20joint&sectionRank=2&usage_type=default&anchor=H9685354&source=machineLearning&selectedTitle=1~35&display_rank=1#H9685354>.

  3.  Marx, J., Walls, R., & Hockberger, R. (2013). Rosen's Emergency Medicine-Concepts and Clinical Practice E-Book. Elsevier Health Sciences.

  4.  Tintinalli, J. (2015). Tintinallis emergency medicine A comprehensive study guide. McGraw-Hill Education.


Images

Figure 1: Case courtesy of Dr Henry Knipe, <a href="https://radiopaedia.org/">Radiopaedia.org</a>. From the case <a href="https://radiopaedia.org/cases/30774">rID: 30774</a>

 Figure 2: Egol, K. A., Koval, K. J., & Zuckerman, J. D. (2010). Handbook of fractures. Lippincott Williams & Wilkins.

Figure 3: Richardson, Michael L. (1998). Radiographic anatomy of the skeleton: Shoulder—Internal rotation view. Obtained from <http://uwmsk.org/RadAnat/IntRotLabelled.html>.

Figure 4: Kang, K. S., Lee, H. J., Lee, J. S., Kim, J. Y., & Park, Y. B. (2009). Long term follow up results of the operative treatment of the acromioclavicular joint dislocation with a Wolter plate. Journal of the Korean Fracture Society, 22(4), 259-263.

Figure 5: Greene, Tim (ND). CoreEM: Acromioclavicular joint injury. Obtained from <https://coreem.net/core/ac-joint-injuries/>.

Figure 6:

Type I: Case courtesy of Dr Henry Knipe, <a href="https://radiopaedia.org/">Radiopaedia.org</a>. From the case <a href="https://radiopaedia.org/cases/28623">rID: 28623</a>

Type II: Case courtesy of Dr Henry Knipe, <a href="https://radiopaedia.org/">Radiopaedia.org</a>. From the case <a href="https://radiopaedia.org/cases/60140">rID: 60140</a>

Type III: Case courtesy of Dr Henry Knipe, <a href="https://radiopaedia.org/">Radiopaedia.org</a>. From the case <a href="https://radiopaedia.org/cases/30949">rID: 30949</a>

Type IV: Case courtesy of Dr Craig Hacking, <a href="https://radiopaedia.org/">Radiopaedia.org</a>. From the case <a href="https://radiopaedia.org/cases/64411">rID: 64411</a>

Type V: Case courtesy of Dr Bruno Di Muzio, <a href="https://radiopaedia.org/">Radiopaedia.org</a>. From the case <a href="https://radiopaedia.org/cases/44768">rID: 44768</a>

 Type VI: Case courtesy of Dr Jeffrey Hocking, <a href="https://radiopaedia.org/">Radiopaedia.org</a>. From the case <a href="https://radiopaedia.org/cases/48600">rID: 48600</a>

AEM Early Access 29: Do Financial Incentives Change Length of Stay Performance in Emergency Departments?

Welcome to the twenty-ninth episode of AEM Early Access, a FOAMed podcast collaboration between the Academic Emergency Medicine Journal and Brown Emergency Medicine. Each month, we'll give you digital open access to an recent AEM Article or Article in Press, with an author interview podcast and suggested supportive educational materials for EM learners.

Find this podcast series on iTunes here.

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DISCUSSING (CLICK ON TITLE FOR FULL TEXT, OPEN ACCESS THROUGH August 31):

Do financial incentives change length-of-stay performance in emergency departments? A retrospective study of the Pay-for-Performance program in Metro Vancouver. Yuren Wang, MS, Yichuan Ding, PhD, Eric Park, PhD, Garth Hunte, MD, PhD

LISTEN NOW: AUTHOR INTERVIEW WITH Yichuan Ding, PhD and Eric Park, PhD

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Yichuan Ding, PhD

Assistant Professor, Desautels Faculty of Management, McGill University

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Eric Park, PhD

Assistant Professor, Innovation and Information Management, Faculty of Business and Economics, The University of Hong Kong

ABSTRACT:

Background: Pay-for-performance (P4P) programs have been implemented in various forms to reduce emergency department (ED) patient length of stay (LOS). This retrospective study investigated to what extent the timing of patient disposition in Metro Vancouver EDs was influenced by a LOS-based P4P program.

Methods: We analyzed ED visit records of four major hospitals in Metro Vancouver, Canada. For each ED, we individually tested whether LOS was distributed discontinuously at the LOS target before and after the P4P program was terminated. For the P4P effective period, we examined whether patients discharged just prior to the LOS target had a higher 7-day return-and-admission (RA) rate—the probability that a patient, after being discharged home, returned to any ED within 7 days and was admitted to an inpatient unit—than patients discharged just after the target.

Results: Prior to the termination of the P4P program, in all four EDs, the LOS density of admitted patients was discontinuous and had a significant drop at the P4P 10-hours admission LOS target; a similar phenomenon was observed among discharged patients at the 4-hours discharge LOS target, but only in the two lower-volume EDs. Furthermore, in a lower-volume ED, patients who were discharged right before the 4-hours P4P LOS target had a higher 7-day RA rate than patients discharged right after the LOS target. After the termination of the discharge incentive, the discontinuity at the discharge LOS target became less evident, but patients were still more frequently admitted just before 10 hours in three of the four EDs as the local health authority continued to support the admission incentive scheme after the government terminated the P4P program.

Conclusions: The LOS-based financial incentive scheme appears to have influenced the timing of ED patient dispositions. The results suggest mixed consequences of the P4P program—it can reduce access block for admitted patients but may also lead to discharges associated with return visits and admissions.