I have started a new blog, based entirely on physician contract issues.  Please check it out here.

In the Physicians Contracts Blog I intend to write only about issues related to contracts that physicians are involved in, such as physician employment agreement, managed care agreements, and medical practices sales agreements..

I will continue to post items of general interest to physicians on this blog.

Please check out my new blog!

Hursh & Hursh P.C. is a law firm for physicians in Pennsylvania.

In the 5th and final part of my series of guest blogs for Falcon Healthcare Agency, I share the importance of choosing an experienced legal counsel to negotiate your physician employment agreement. How you negotiate the contract you ultimately sign impacts everything about your professional career. Learn about why an experienced physician employment contract lawyer should be part of your team that decides how your career proceeds. Read part 5 here.

Dennis Hursh focuses on Physician Employment Contract Review and Negotiation.

In the 4th part of my series of guest blogs for Falcon Healthcare Agency, I share the importance of preserving your ability to practice medicine when you leave this position. Have you considered the impact a “restrictive covenant” could have on your ability to practice medicine? Read on to learn about why this is another deadly mistake physicians make in their employment agreements.

Dennis Hursh focuses on Physician Employment Contract Review and Negotiation

I would like to share with you all the next blog series for physician contract negotiations, through Falcon Healthcare Agency. This third Deadly Mistake for Physician Contracts is one that many might not even consider: Tail Coverage. Most often there are two main types of malpractice converage offered. The language can easily be misinterpreted, if unsure of what to look for. Read what you should know about this particular insurance in the full blog: http://bit.ly/1apyH86

Dennis Hursh focuses on Physician Employment Contract Review and Negotiation


I am excited to share my next piece of advice for physician contracts, courtesy of Falcon Healthcare Agency. In this particular Deadly Mistake for Physician Contracts, I share a personal story about dealing with the negotiations of on-call hours. This is one of the most important factors for physicians to consider, since it will directly affect their working hours and consequentially their off-work hours as well. I invite you to read the entire story on Falcon Healthcare Agency’s blog: http://bit.ly/1e1h673

Dennis Hursh focuses on Physician Employment Contract Review and Negotiation

For new physicians just completing their residency, the first job they take is of the utmost importance. It has the chance to impact the rest of their career. Navigating the contract side of their first job is not always an aspect of job hunting that many physicians are comfortable with. My colleagues over at Falcon Healthcare Agency are equipped to help residents navigate through the job hunting process and find the position that best fits their needs. To aid Falcon Healthcare Agency, I’ve begun a series of blog posts: The 5 Deadly Mistakes in Physician Employment Agreements. The first in the series discusses the improper reliance on the language in the physician offer letter. I invite you to read the entire blog on Falcon Healthcare Agency’s blog: http://bit.ly/1fgVlAg. I hope that you will continue this journey with me about these 5 deadly mistakes and that it aids your physician job search.

Dennis Hursh focuses on Physician Employment Contract Review and Negotiation

Although there is no “silver bullet” that can provide physicians total protection from the claims of malpractice attorneys, there are several low or no cost strategies that can provide significant asset protection for physicians, or enhance the asset protection physicians may already have.

First, don’t make it easy for a malpractice attorney to “pierce the corporate veil.” You already know that practicing through a professional corporation can keep your assets safe from malpractice claims against your partners and employees. But are you making it easy for a plaintiff’s attorney to “pierce the corporate veil”? Implement the following immediately:

• Have the corporation hold regular meetings of the board of directors and shareholders, and keep minutes of these meetings.
• Sign documents for the practice only in your capacity as a corporate officer.
• Have an appropriate professional review the legal, insurance, financial and tax foundations of your practice regularly to assure they are appropriate.

Dennis Hursh is an attorney for physicians.

If you are starting a medical practice, you obviously will NEED to accept credit cards.  Many consumers put their entire lives on credit cards, and will be slightly more willing to accept a co-pay if it is “on the card”.

Fees and expenses for accepting credit cards in a medical practices are hard to compare – sometimes the lowest percentage fees are combined with other fees that make the processor more expensive.

I can’t do the research for you, but I can tell what works for me.  I’m on my third credit card processor, but I think I’m going to stick with PowerPay.  I like their HIPAA compliance, and, most of all, I like their customer service.

By all means, do your own research.  But take a look at PowerPay.

Hursh & Hursh, P.C. is a law firm for physicians.

It took nearly 4½ years, but the cumulative wealth of an S&P 500 strategy with dividends reinvested finally reached an all-time record (measured on a month-end basis) in March 2012, and finished the year 3.3% above the previous high-water mark set in October 2007. Results were slightly better for a small-company Russell 2000 strategy: As of December 2012, cumulative wealth was 8.5% higher than the previous peak in May 2007.

The table below shows how many years were required to achieve a new high in terminal wealth during some of the major market cycles in the past. Although many investors have expressed frustration with stock market fluctuations in recent years, the time required to recover losses from the peak in October 2007 appears broadly consistent with past cycles. We can draw some measure of solace in acknowledging that past generations of investors often found their patience sorely tested, as well.

Market Cycles Based on Month-End Value of S&P 500 Index with Reinvested Dividends

Peak Month Trough Month Loss at Trough Recovery Month Years to Recovery
Oct 2007 Feb 2009 –50.9% Mar 2012 4.4
Mar 2000 Sep 2002 –43.8% Oct 2006 6.6
Aug 1987 Nov 1987 –29.5% May 1989 1.8
Dec 1972 Dec 1974 –37.2% Jun 1976 3.5
Dec 1961 Jun 1962 –22.3% Apr 1963 1.3
Feb 1937 Mar 1938 –50.0% Mar 1944 7.1
Aug 1929 Jun 1932 –83.4% Jan 1945 15.4

Every year brings its share of surprises. Perhaps the biggest surprise of 2012 was the strength in stock and bond prices around the world despite a steady stream of discouraging news events. Individual investors and professionals alike were often flummoxed by markets that failed to behave in accordance with their pessimistic assessment of the future. A few examples are listed below.

(Index performance data represents total return for each respective three-month period.)

First Quarter 2012

S&P 500 Index: 12.59%

MSCI World ex-USA Index: 11.34%

“Investors go into 2012 hunkered down, frustrated, and skeptical. … If there is a common theme among analysts’ forecasts for stocks, commodities, and currencies, it is to brace for more of the wild swings that were the hallmark of 2011.”

Tom Lauricella, “World’s Woes Leave Lasting Scars,” Wall Street Journal, January 3, 2012.

“Morgan Stanley’s chief US equity strategist is the most bearish market strategist at any major Wall Street firm when it comes to forecasting the outlook for stocks in 2012. He took the same pessimistic view last year—and it turned out to be the most accurate.”

Jonathan Cheng, “A New Year But the Same Ol’ Pessimism,” Wall Street Journal, January 7, 2012.

“Clearly we are in a cycle of reaching pinnacle earnings, and at some point we are going to drop.”

Quotation attributed to John Butters, senior analyst, FactSet. Michael Mackenzie and Ed Crooks, “Earnings Growth Falters for S&P 500,” Financial Times, January 9, 2012.

“The world economy will experience a brutal slowdown. … Every European country will be in recession in 2012, and probably in 2013. … Equity markets around the world will top out during this quarter and then enter the next down leg in the cyclical bear market that started last spring.”

Quotation attributed to Felix Zulauf, Zulauf Asset Management. Lauren R. Rublin, “Barron’s 2012 Roundtable, Part One,”Barron’s, January 16, 2012.

“Unemployment in the euro zone jumped to a 15-year high Thursday, while inflation unexpectedly accelerated.”

Brian Blackstone, “Poor Economic Data Slam Europe,” Wall Street Journal, March 2, 2012.

Second Quarter 2012

S&P 500 Index: -2.75%

MSCI World ex-USA Index: -7.38%

“Nearly one Spaniard in four is unemployed, according to data released yesterday, as the country’s financial predicament prompted a government minister to talk of a ‘crisis of enormous proportions.’ ”

Victor Mallet and Robin Wigglesworth, “Spain Jobless Rate Nears One in Four,” Financial Times, April 28, 2012.

“Suddenly it has become easy to see how the euro—that grand, flawed experiment in monetary union without political union—could come apart at the seams. We’re not talking about a distant prospect, either. Things could fall apart with stunning speed in a matter of months, not years.”

Paul Krugman, “Apocalypse Soon,” New York Times, May 18, 2012.

“Feeble hiring by US employers in May roiled markets and dimmed the already cloudy outlook for an economy that appears to be following Europe and Asia into a slowdown.”

Josh Mitchell, “Grim Jobs Report Sinks Markets,” Wall Street Journal, June 2, 2012.

“Greece will be forced to return to the drachma and devalue, and the default will cause bank runs and money flowing into Germany and the United States as the only viable safe haven bet.”

Quotation attributed to Mark J. Grant, managing director, Southwest Securities. Andrew Ross Sorkin, “One Wall Street Seer Says the Greek Tragedy Is Near,” New York Times, June 18, 2012.

“With leading investors shunning shares, a six-decade passion for equities has come to an end—leading to a less flexible, more conservative model of corporate financing.”

John Authers and Kate Burgess, “Out of Stock,” Financial Times, June 24, 2012.

“There is no natural flow into equities for the next five to 10 years. The rules of the game have changed.”

Quotation attributed to Andreas Uttermann, Allianz Investment Management. John Authers and Kate Burgess, “Out of Stock,”Financial Times, June 24, 2012.

“The quarterly rite known as earnings ‘preannouncement’ season is under way—and so far it isn’t boding well for stocks. … The downward revision in [earnings] guidance could portend a long slog for stocks and the overall economy, say analysts.”

Joe Light, “Earnings Bode Ill for Stocks,” Wall Street Journal, June 30, 2012.

Third Quarter 2012

S&P 500 Index: 6.35%

MSCI World ex-USA Index: 7.49%

“Investors already fretting about the health of the world’s biggest economies now face another worry: disappointing earnings. ‘The pillar of strength is US corporate earnings, and now we’re seeing signs that that is cracking,’ [says Morgan Stanley’s chief stock analyst].”

Jonathan Cheng, “New Jolt Looms for Investors: Earnings,” Wall Street Journal, July 9, 2012.

“The US economy slowed sharply in the second quarter, growing just 1.5% as consumers slashed spending and businesses grew more cautious about hiring and investing, underscoring that an already wobbly recovery is losing even more steam.”

Neil Shah, “Weak Economy Heads Lower,” Wall Street Journal, July 28, 2012.

“If small investors needed any more reason to be disgusted with the stock market, they got it Wednesday.”

Neil Shah, “Weak Economy Heads Lower,” Wall Street Journal, July 28, 2012.

“Wednesday’s tumble wasn’t quite as scary as the nearly $1 trillion drop of May 6, 2010, but it conveyed the same sense of markets spinning out of control and trading machinery gone mad.”

Jason Zweig, “When Will Retail Investors Call it Quits?” Wall Street Journal, August 2, 2012.

“The global slowdown in demand is hitting the manufacturing sector in the world’s largest economies, with activity sinking to its lowest level since June 2009, when most industrialized countries were mired in recession.”

Norma Cohen, “Manufacturing Hits Three-Year Low,” Financial Times, August 2, 2012.

“Activity in China’s manufacturing sector—the engine for much of Asia’s economy—shrank at the fastest pace since the depth of the global financial crisis.”

Arran Scott and Alex Brittain, “Manufacturing Downturn Spreads Gloom across Asia, Europe,” Wall Street Journal, September 4, 2012.

Fourth Quarter 2012

S&P 500 Index: -0.38%

MSCI World ex-USA Index: 5.89%

“The slowdown in the global economy and anemic US recovery are expected to result in one of the worst US quarterly earnings seasons since late 2009.”

Mahmudova and Michael Mackenzie, “Slowdown Set to Take Toll on US Earnings,” Financial Times, October 8, 2012.

“This is unquestionably the worst earnings season relative to expectations that we’ve had in two or three years.”

Quotation attributed to Chris Jones, J.P. Morgan Asset Management. Jonathan Cheng and Kate Linebaugh, “Weak Earnings Spark Selloff,” Wall Street Journal, October 24, 2012.

“Wall Street’s post-election stupor is turning into a real headache for some stocks, as many well-known and even ballyhooed names fall into bear market territory. … Nearly a quarter of the stocks in the Standard & Poor’s 500—122—are in a bear market, unofficially defined as a 20% decline from a recent high.”

Matt Krantz, “Big Name Stocks Hit Bear Markets,” USA Today, November 9, 2012.

“China’s main stock index closed at its lowest level in almost four years Tuesday and slipped below a key psychological level, indicating investor worries over the health of the nation’s public equity market.”

Shen Hong, “Shares Hit 4-Year Low in China,” Wall Street Journal, November 11, 2012.

“Fears that Washington will prove unable to avoid looming tax increases and spending cuts have eclipsed concerns about Europe’s debt crisis, top business executives said Tuesday, and they worry that political gridlock might tip the economy into recession next year.”

Damian Palette and Sudeep Reddy, “Business Leaders Spooked by Fiscal Cliff,” Wall Street Journal, November 14, 2012.

“Moody’s downgrades France sovereign debt rating, citing its ‘persistent structural economic challenges.’ ”

William Horobin, “France Loses Another Top Rating,” Wall Street Journal, November 20, 2012.

Throughout 2012, nervous investors did not have to look hard for reasons to avoid the financial markets. The daily headlines provided abundant gloom to feed their doubts, but investors who acted on impulse could have missed a potential opportunity to participate in strong returns across the global financial markets.

The year opened with lingering concern about the weak US recovery, the debt crisis in Europe, and political uncertainty around the world. Many financial pundits had predicted another lackluster year for stocks and more market volatility. Some predicted a euro zone breakup triggered by impending debt defaults in Greece and Portugal. The global economy was showing early signs of a slowdown, and many investors were weighing the potential economic impact of the US elections and so-called “fiscal cliff.”

Despite a steady diet of bad news, most markets around the world climbed the proverbial “wall of worry” to log strong returns. Major market indices around the globe delivered double-digit total returns, and as a group, the non-US developed and emerging markets outperformed the US equity market. The total market value of global equities, as measured by the MSCI All-Country World Index, increased by an estimated $6.5 trillion in 2012, while market-wide volatility fell to its lowest level in six years.


The above graph highlights some of the year’s prominent headlines in context of broad US market performance, as measured by the Russell 3000 Index. These headlines are not offered to explain market returns. Instead, they serve as a reminder that investors should view daily news events from a longer-term perspective, and avoid making investment decisions based solely on the news.

The world stock market performance chart below offers a snapshot of global stock market performance, as measured by the MSCI All Country World Index. The global headlines show that despite an abundance of negative news during the year, global stocks had an exceptional year.



Economic Backdrop

Sluggish US Recovery

The current expansion, which started in mid-2009, has been deemed the weakest in postwar history. In past cycles, strong recessions were followed by strong recoveries. But the current rebound has produced economic growth of just 2.4%, compared with a 3.4% postwar average. In 2012, investors watched eagerly for signs that the US recovery was gaining steam. The weak economy was the central focus in the presidential election, and the debate raged over what combination of fiscal, tax, and regulatory policies would lead to higher growth and job gains.

Overall, there was continued weakness in job growth, real wages, consumer confidence, and spending. Positive news also surfaced throughout the year, including healthy corporate earnings and strong balance sheets, continued low inflation, falling oil prices, historically low mortgage rates, a strengthening housing market, and upticks in auto sales and manufacturing activity late in the year.

Continued European Debt Troubles

The euro zone continued its struggle to contain the sovereign debt problems of several member nations, including Spain, Italy, and Greece. The inability of these governments to pay interest on their debt has impacted the banks in stronger European countries, notably France and Germany, which have large exposure to the sovereign bonds. The European recession prompted banks that are holding the troubled assets to reduce lending, which contributed to lower growth across the region.

During 2012, the euro finance ministers agreed on a second bailout package for Greece, which included a 53% write-down for investors in Greek bonds. In May, concern grew over Spain’s fiscal health when a major bank requested a massive bailout and disclosed troubled assets. Following the Greek election in June, the European central bank pledged to provide monetary support to protect the euro, triggering a rally in stocks and bonds.

Rising Global Economic Worries

According to International Monetary Fund estimates, the global economy grew 3.3% in 2012—down from 3.8% in 2011 and 5.1% in 2010. There was concern that the worsening euro debt crisis would spread to other economies and markets. Europe accounts for a large portion of global demand, especially for export-dependent China. Germany’s economy is the fourth largest in the world, followed closely by France. Together, the combined economies of all 17 euro-area countries are nearly equal to that of the US, in GDP terms.

During the first half of 2012, China’s economy showed signs of weakening, with growth expected to fall to around 8%—a significant drop from its historical growth rate. China exports heavily to the euro zone. The crisis also threatened to reduce China’s exports to poorer emerging economies in Africa and Latin America, where nations rely heavily on European banks for trade financing. In the latter part of 2012, concerns over slowing growth in emerging markets had begun to ease as economies appeared to bottom out.

Stabilizing Actions by Central Banks

Many investors did not appear to anticipate the degree to which markets would positively respond to central bank actions. Many analysts credit the US and European central banks with boosting investor confidence in both markets, and in the case of the European Union, helping avert a euro breakup. The injection of liquidity into the respective economies also helped mute volatility between currencies. In September and October, the Bank of Japan announced measures to provide monetary stimulus through 2013 in response to slowing economic activity.

A Search for Higher Yield

Interest rates dropped slightly to near-record lows during the year. The rate move drove up bond market prices and total returns. But with the Fed and other central banks committing to keeping the financial markets liquid for an indefinite period, some investors found appeal in riskier fixed income securities, such as junk bonds, emerging market debt, and collateralized loan obligations that offer higher yields.

Wall Street responded to rising demand with new offerings. Junk bond issuance hit a record $350 billion in 2012, with many of the issues carrying fewer protections for bondholders. Investors also flocked to high-yielding alternative investments, such as energy partnerships and venture capital funds. Observers warned that the combination of unchecked risk appetites, low interest rates, and high bond prices may present danger for investors who are pursuing yield in markets they do not understand.

Year in Review Major World Indices


2012 Investment Overview


After a flat 2011, the US stock market posted a strong first quarter as the US economy showed signs of improvement and perceptions of the European debt crisis improved. The S&P 500 had its best first-quarter rally in 14 years, closing near a four-year high and a 12.6% total return. When the second quarter began, markets retreated as Europe’s debt crisis returned to center stage and signs of slowing global growth emerged—especially in China, where lower world demand had begun to affect exports.

By June, US stocks had surrendered all of the year’s gains as markets weighed how credit problems in Spain and the anticipated Greek elections would affect the euro zone’s sovereign debt problems. The US economy showed more signs of weakness. Stock markets around the globe stumbled in the second quarter, with non-US stocks suffering the most. During the summer, the markets improved, as European tensions eased on increased European Central Bank loans to Spain and Italy. There was also rising speculation that the Federal Reserve was prepared to deliver additional monetary stimulus to the US economy. Throughout the summer, analysts reduced their estimates of expected corporate earnings growth as an economic slowdown threatened to reduce profits.

In September, the Fed announced its third round of quantitative easing to push long-term interest rates lower and encourage more borrowing and investment. The Bank of Japan also announced an ambitious plan to stimulate its economy. These central bank actions helped drive the markets during the third quarter. The S&P 500 surged 14% from its June 1 low and reached a five-year high on September 14. US economic indicators sent mixed signals, but the economy reportedly expanded at a 3.1% rate for the quarter—the fastest pace since late 2011. Mortgage rates reached historical lows, and year-over-year home prices rose for the first time since the 2007 financial crisis. Heightened inflation fears led to a modest decline in Treasury prices, while gold and most other commodities rallied.

In the fourth quarter, investor attention turned to the close US election and the prospect of gaining certainty regarding future government spending, taxes, growth policy, and regulation. Stocks fell in the weeks following the election as investors gauged the prospects of continued political gridlock and the economic impact of spending cuts and tax hikes, known as the “fiscal cliff.” The S&P recovered its earlier losses by late December, however, and as the year ended, lawmakers scrambled to reach a compromise.

Year in Review Major World Indices

Market Summary

All major US market indices were up substantially for 2012. The S&P 500 gained 13.4%, and with dividends included, logged a total return of 16%. The NASDAQ Composite Index gained 15.9% for the year, and the Russell 2000, a popular benchmark for small company US stocks, returned 16.3%. The Dow Jones Industrial Average gained 7.3%. The market’s strong performance came with lower volatility, as gauged by the CBOE Volatility Index, which had its largest annual decrease since 2009.

Non-US developed market indices performed even better. The MSCI World ex USA Index, a benchmark for large cap stocks in developed markets outside the US, returned 16.4%. The MSCI Emerging Markets Index returned 18.2%.

Most country market returns were positive, although the dispersion of returns was broad. Among the 45 equity markets tracked by MSCI, only three—Chile (–0.1%), Israel (–6.2%), and Morocco (–12.6%)—posted negative total returns (gross dividends) in their local currency. Turkey, Egypt, and Belgium were the top three performers, with returns of 55.8%, 54.6%, and 38.5%, respectively. Greece (4.1%), Portugal (3.3%), Spain (3.1%), and the Czech Republic (0.2%) had the lowest positive total returns (gross dividends; local currency).

The currency markets were relatively stable for the year due to the offsetting effect of US, European, and Japanese central banks. The US dollar lost ground against the euro and many emerging market currencies, which boosted equity returns for US investors. The dollar gained against the yen as a result of Bank of Japan’s monetary easing.

Small cap and large cap stocks had similar performance in the US, but small cap substantially outperformed large cap in both the non-US developed and emerging markets. Along the price dimension, value stocks outperformed growth stocks in the US and non-US developed markets, while slightly underperforming growth in emerging markets.

In the fixed income arena, US TIPS performed exceptionally well, returning 6.9%, and short-term government bonds returned 2.1%. Investors seeking a safe haven from global market uncertainty poured money into US Treasury securities, which pushed down yields.

Real estate securities in the US also had a strong 2012, returning 17.1%. Global real estate had a banner year, with a total return of 31.9%, which was the highest-ranked return of major world asset classes. Commodities were the only group to show negative returns for the year, at -1.06%. The decline was their second annual drop, which had not occurred since the late 1990s.

Russell data copyright © Russell Investment Group 1995-2013, all rights reserved. Dow Jones data provided by Dow Jones Indexes. MSCI data copyright MSCI 2013, all rights reserved. S&P data provided by Standard & Poor’s Index Services Group. The BofA Merrill Lynch Indices are used with permission; copyright 2013 Merrill Lynch, Pierce, Fenner & Smith Inc.; all rights reserved. Citigroup bond indices copyright 2013 by Citigroup. Barclays data provided by Barclays Bank PLC. Indices are not available for direct investment; their performance does not reflect the expenses associated with the management of an actual portfolio.

Past performance is no guarantee of future results. This information is provided for educational purposes only and should not be considered investment advice or a solicitation to buy or sell securities.