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Cards and Accounts That Pay You

Unless you’re hardcore off the grid and don’t need a credit score or credit history (not advised), you’re going to need bank accounts and at least one credit card. If you need them anyway, why not find the accounts that pay you back? There are tons of promotions for cards and accounts that will give you perks for signing up. It’s up to you to determine what account fits your needs, but these are the main types of offers we’ve seen.

 

Cards with Cash Back

Some people swear by cards that give them cash back. Cashback rewards tend to work best for people who use their credit card for all or most purchases and then pay it off in full each month. A quick tip is to pay the balance off before the interest accrues each month. If you choose not to pay off the balance each month you could actually be spending that money. Basically, what you pay in interest is going to reduce or even negate your reward. The average individual will not pay off their card’s balance each month this is how it makes sense for the credit card company to offer the reward. If you’re smart about it and don’t charge more than you can pay off each month, you’ll reap the reward.

 

There are multiple options for receiving cash back rewards. How you cash back will be applied will be dependent on what your credit card provider allows. Some cards will allow you to redeem your cash back for gift cards, paper checks, direct deposits, or even putting the cash back you earned back to your credit card balance.

 

If you believe that this type of card is best for you, understand the redemption threshold. Cash back credit cards often have a minimum redemption threshold. A minimum redemption is the amount of rewards that you must achieve before cashing in your cash back rewards. These redemption minimums can often be associated with reward credit cards as well.

 

Cards with Rewards

If rewards like frequent flier miles or points you can redeem for travel expenses are more your speed, check out cards with other types of rewards. Look at the conversion from dollars to points to what your points can be redeemed for. If you have to spend $10,000 for a $100 gift card, then that probably isn’t enough of a reward for you to care. But if you fly often for work or find a card that has good travel rewards and you can pay it off each month, this might be a nice way to add to your travel nest egg or get a good discount on a few trips each year.

 

How the rewards are calculated will be determined based on the credit card that you select and get approved for. Some reward cards will provide the same rewards rate per purchase regardless of balance. Another type is similar to a tiered cash-back credit card. Each purchase you make will fall into a category. Some categories offer a larger return than other categories.

 

A quick word of caution before signing up for a card like this is to know the type of borrower you are. If you typically do not pay your credit cards on time, have a balance, or budgeting is not your strong suit this is probably not the right credit card for you.

 

 

Cash Rewards on Bank Accounts

Bank accounts often offer cash rewards for signing on or setting up an account. You may often times see at your local community bank a large sign in the window with an amount on it for new customers who open up an account. This sign-on bonus is by far the most common type of cash back for a bank account. When considering opening up an account to get the sign-on bonus there may be conditions you have to meet. The small print and terms are so important when opening up any type of account. When opening an account, you have to make a pretty substantial initial deposit, and you might have to maintain it for a period of time as well in order to keep the sign-on bonus. You don’t want to count on a reward and then find out that it requires you to deposit $20,000 if you don’t have that much money.

 

Conditions can include a number of direct deposits or purchases you have to make within a certain period to qualify. This type of offer is fairly common when looking into high-yield checking or savings accounts. You’ll typically be required to have a specified number of transactions per month and have to have a direct deposit. If you’ve read all the terms and small print and feel the account is the right choice you should move forward.

 

Other Things to Consider

 

Know the Interest

If you are looking at a card for the rewards and it has a much higher interest rate than others, this should weigh into your decision. Even if you plan to pay the card off each month, you don’t want to end up using it in an emergency and struggle to make payments with interest later. If you already have other credit cards, have a plan for which card should be used where and how you’re going to pay them.

 

Look at Annual Fees

Some reward and cash-back cards have a pretty hefty annual fee. Don’t sign up for a card until you know what the annual fee is. Make sure if there is a fee, that it makes sense for how you intend to use the card. If saving money is the name of the game for you, look for a card with no annual fee.

 

Know the Requirements

Requirements for different types of accounts vary wildly. There could be a minimum deposit, amount, number of purchases, or balance. Many companies utilize different types of requirements that you may have to meet to get rewarded. Keep an eye out for those requirements and see if you qualify. If it doesn’t match your situation, don’t do it.

 

Check the Terms and Conditions

Always read the fine print and make sure you understand it. This rule should be applied t anything and everything. Make sure you’re reading any documentation fully and that you understand. Reading the terms and conditions will help to prevent any surprises. If there’s something you’re not sure of, read further or talk to customer service for more information. You always want to be sure that you know what you’re getting into before you sign up so that you don’t end up in a bad situation.

 

 

Check Out These Common Credit Card Myths

Cosigners and Cosigner Release – What You Need to Know

As more millennials are stepping into experienced job roles and making more money than we were a few years ago, cosigner release is becoming a popular topic. You may have seen a letter in the mail from your student loan servicer or heard from others that they were able to release a parent or relative from cosigner duties. But what does this mean?

 

What are the responsibilities of a cosigner?

A common misconception about cosigning a loan is that you’ll be the sole responsible party for the loan. Being a cosigner means that you and the student taking out the student loan are jointly responsible for paying the balance of the loan. In the event that the borrower is not able to pay, the cosigner becomes the focus of repayment efforts by the loan holder or servicer. If the borrower is unable to make payments because of a disability, the loans might be forgiven. There are some special cases like this where the cosigner won’t have to pay, but in general, being a cosigner is a long-term commitment that can’t be eliminated except through payoff, release, or extenuating circumstances.

 

How does cosigning affect credit?

Before asking a friend or family member to take on the responsibilities of a cosigner it’s important to understand how that will affect their credit. Since a cosigner and borrower share the responsibility of a loan, it appears on both of their credit reports. If loan payments are made on time and the borrower is in good standing, then the cosigner will also benefit from the good credit. If the loan has late payments or does into delinquency, this will negatively affect the cosigner’s credit. In addition to affecting the credit score of the cosigner, they may become limited as to the amount of credit available to them. Before asking someone to be a cosigner verify they are not looking to have any large amounts of credit like a mortgage, credit card, or car loan.

 

When do I not need a cosigner?

Students do not need cosigners to qualify for Federal loans like a Stafford or Direct Loan, but it can improve the chances of being approved. It’s very common for students who apply for private loans to add a cosigner to get the amount that they need and a typically qualify for a much better rate than they could get on their own.

 

What is cosigner release?

Cosigner release is when the person who cosigned on a loan for you is taken off of the agreement and no longer considered partially responsible for the loan. This makes the borrower solely responsible for the remaining amount of the loan. Some student loan refinancing lenders don’t offer cosigner release.

 

When student loans are granted, they are provided based on your cosigner’s credit and the borrower’s credit.  In traditional cosigner releases the terms of the loan would remain the same as when the borrower took out the loan with the cosigner on it. The only difference with the cosigner release is the cosigner is being removed. When they allow you to release your cosigner depends on the company, if it is offered at all.

 

Most companies that offer cosigner release allow you to do so, once you’ve made two consecutive years of payments on time. Others may have longer terms for on-time payments before they allow you to apply for release. If you haven’t been making the full payment, that might eliminate your eligibility to release your cosigner. The release also has to be initiated by the borrower and can’t be requested through the servicer by the cosigner.

 

Not all companies offer cosigner releases. As we mentioned earlier some since loans are originated to include that cosigner, just removing them can be tough. That’s why many companies don’t offer cosigner releases but don’t stress. If you choose to refinance a loan with a cosigner but then decide You’d like to remove that cosigner, there are other options available to you.

 

Will refinancing my student loan release my cosigner?

People often ask, “What if I just refinance my loan without the cosigner on it. Is it the same as a cosigner release?” Refinancing student loans is not the same thing as getting a cosigner release.  Before we go into greater detail it’s important to understand that very few loans are refinanced with a cosigner.

 

If you are in a position to refinance and qualify, then you don’t need a cosigner to make the new loan possible. There are some exceptions, but during refinancing, you’d be able to check with the servicer to see what terms you could get on your own and then go from there. Most companies that refinance student loan debt will allow you to add a cosigner if you do not qualify on your own, but the cosigner will need to submit some information. If you choose to set up a new refinanced loan without the cosigner, it releases them from the obligation of the former loan.

 

You may be asking “Is there another way that a cosigner can be removed from a loan without utilizing a cosigner release?” well the answer is yes. Aside from utilizing a cosigner release or refinancing the loan without the cosigner, the borrower or cosigner can pay off the debt. Once the debt is paid off both parties are no longer responsible for the debt.

 

Before you ask someone to cosign on a loan, consider these things and be sure that they are okay with the responsibility. Make sure that you as a borrower have an understanding and a plan for paying back that debt. If you don’t think that you can pay back the debt or are uncertain of how you will pay off the debt you should not involve a cosigner.

 

Most students ask their parents to cosign, but frequently have another relative help them by cosigning to get a loan. Know that cosigner release might be possible later, but don’t count on it, and check with the financial institution that holds your loans about cosigner release. You might be able to let mom or dad off the hook by refinancing or paying the debt down in full.

 

Click For the Difference Between Parent PLUS Loans & Cosigning Education Loans

Glossary of Student Loan Refinancing Terms

There are so many terms that borrower’s encounter in the student loan application process, most borrowers may not be exactly sure what each means. If you’re getting ready to apply or just want to know what the documents are talking about, here’s our glossary of common student loan terms that you should know.

 

Adjusted Gross Income (AGI) and Gross Income

Gross income is the total income you earn in a year before deductions for federal or state taxes, credits, and so on. Adjusted gross income is the income you earn in a year which is eligible to be taxed after accounting for deductions. AGI is usually lower than your gross income and is what many institutions use to determine if you can get perks like loan tax benefits or financial aid, grants, etc. The easiest place to find these are on your official tax return.

 

Adverse Action Letter

When you apply for credit, insurance, a loan, or sometimes even employment, and are denied due to something negative on your credit report, the organization inquiring might be required to send you one of these. It explains why you were turned down and it’s important because it gives you a reason to see if something is wrong on your credit report.

 

Amortization

This term describes how the principal is paid over the course of a loan.  Most student loans are fully amortized, meaning that if all payments are made as scheduled over the life of the loan the principal balance will be fully repaid at the maturity date.  Other types of loans, including some types of mortgage loans, have a feature known as a balloon payment.  With a balloon payment, regularly scheduled payments do not fully repay the principal amount borrowed, so when the loan matures the final payment contains a larger, or balloon, payment of all remaining principal.

 

Annual Loan Limit

This is the maximum loan amount you can borrow for an academic year. Loan limits can vary by facts like grade level and loan type.

 

Award Letter

If you received financial aid, expect to see an award letter that explains the different types of aid for which you are eligible. The document will also include information about your loans, grants, or scholarships, and you’ll see a new one each year that you’re in school.

 

Borrower

The person who is responsible for paying back a student loan. You may not be the only one responsible, like if you signed with a cosigner, but the loan is for you and your academic fees and tuition. You’re the borrower.

 

Capitalized Interest

When unpaid interest gets added to the principal balance (increasing your overall balance and future interest), this is called capitalization. This is why it’s important to pay interest whenever possible. Capitalization might happen at the end of a grace period or deferment, or after forbearance, depending on whether it’s a federal or private loan. When a loan is consolidated or if it enters default, capitalization may occur.

 

Cosigner

If needed, borrowers can add a second person who shares responsibility for a student loan. This second person co-signs the loan and becomes partially responsible for repayment in the event that the primary borrower is not able to pay.

 

Consolidation Loan

Consolidation is when a new loan replaces your current student loans. People might do this to make payments easier to manage or to reduce the amount you owe each month or in total. There are lots of things to know about consolidation.

 

Default/Delinquent

A loan is considered delinquent when a scheduled payment is not made in a timely manner.  Delinquency can result in the imposition of late charges, collection calls or letters, and negative information being placed on a credit report.  Default is when the lender determines that the borrower has failed to honor the terms of the loan agreement in such a way that the lender is entitled to declare the entire loan balance due and payable, even if the loan has not yet reached its maturity date.  Serious delinquency is very often the reason for a loan being declared in default, but loan agreements typically provide that certain other events can trigger a default.  Before entering into a loan agreement, always read the loan agreement carefully and understand what can constitute a default under that loan.

 

Deferment

Students can usually postpone loan repayment if they meet certain criteria. This might be a pre-set time limit or can be when someone is in school and not able to make payments. Unsubsidized loans accrue interest while being deferred, but subsidized loans do not accrue interest while in deferment.

 

Disbursement

This is when your school receives funds like financial aid money or student loan funds. The institution then applies it to your bill for tuition and school-related fees. If you consolidate, the disbursement happens when money is sent to pay off your old loans.

 

Discharge

When some or all of your student loan debt is canceled, this is called discharge.

 

Entrance/Exit Interview or Counseling

Schools provide entrance or exit counseling to help students understand important financing topics like how to repay loans and stay in good standing with student loans. This can happen during enrollment as an entrance to the process, and after graduation as part of leaving the school system.

 

Expected Family Contribution (EFC)

This amount is an estimate based on how much money you, your spouse, and/or family can contribute to your tuition for the academic year. It’s calculated with information provided on your FAFSA and helps determine your financial need. Financial need is calculated as the cost of attendance minus your EFC. This determines your eligibility for aid including Stafford loans, Perkins loans, scholarships, and grants.

 

Fixed or Variable Interest Rate

If an interest rate cannot change over time, it is fixed. A variable interest rate can change over the life of the loan.  Variable rates can move up or down based upon changes to an identified index, such a prime rate, a particular U.S. Treasury note, or LIBOR.  LIBOR stands for the London Interbank Offered Rate, and is an index commonly used with student loans.  Some variable rate loans may have a “cap” and/or a “floor.”  A cap is the maximum rate that can be applied to the loan, regardless of changes to the index.  A floor is just the opposite – the minimum rate for the loan regardless of changes to the index.

 

Forbearance

Forbearance is when you can postpone or reduce student loan payments, but interest continues to accrue and increase the total amount you owe.

 

Free Application for Federal Student Aid (FAFSA)

FAFSA is the application a student must complete to apply for any type of federal student aid including loans, grants, or scholarships.

 

Full-Time/Part-Time Enrollment

Whether you are enrolled or not, and your status as part-time or full-time can affect different aspects of student loan financing and repayment. Part-time is usually six credit hours and full-time is twelve, but this can vary.

 

In-School Deferment

While in actively enrolled in school, you might be able to postpone your federal or private student loan payments until you graduate or drop below half time.

 

Loan Forgiveness

When you qualify for certain programs, you may be able to have the final balance of your loans forgiven after a certain period of time. There are specific criteria for eligibility and usually a detailed application process.

 

Master Promissory Note (MPN)

This document states the terms of repayment for your student loans and is the official document proving your commitment to repay the money you borrowed with interest. To receive federal loans, all borrowers must sign an MPN.

 

Principal Balance

The principal balance is the amount of money borrowed under the loan that you currently owe. It doesn’t include interest or fees that are either unpaid or yet to accrue.

 

Repayment Period

This amount of time is what you have to repay your student loans. Standard for Stafford loans is ten years, but this can be extended with reduced repayment plans. The longer you take to pay your loans, usually, the more you end up paying in interest. A repayment plan is the formal agreement you have with a servicer that details how you plan to repay your loans each month.

 

Repayment Terms

These terms represent all of your rights and responsibilities for the student loan, including what you’ll pay for monthly payments. Lenders are required to disclose repayment terms to you before you can commit to borrowing a loan.

 

Right to Cancel

Once an approved application has been accepted by the borrower, the federal Truth in Lending Act requires the lender to provide a Final Truth in Lending disclosure statement.  This final disclosure statement includes a three business day right to cancel, during which time the borrower can change their mind and cancel the loan.  To protect borrowers, the lender cannot disburse the loan proceeds until the right to cancel period has expired.

Servicer

The loan servicer handles your student loan billing like collecting payments and offering customer service between you and the lender.

 

Student Aid Report (SAR)

The SAR is a detailed list of all of the financial and personal information you submitted for your FAFSA, including financial info for your family. Your school receives a copy of this and you should receive one as well.

 

Subsidized and Unsubsidized Loans

While in school and during your grace period, the government pays the interest on your subsidized loans so you don’t have to. Federal loans that are not based on financial need are unsubsidized, meaning you’re responsible for paying the interest that accrues.

 

Top Tips for Finding the Right Student Loan Refinance Lender

5 Tips for Spreading Holiday Cheer to Employees

The most wonderful time of year can often be the most confusing for employers looking to bring holiday cheer to the office. It’s usually a busy time for everyone and sometimes it can be a lot of work for not a lot of reward, but no need to bah-humbug. Here are some ideas, including the ever difficult to answer gifts for employees question.

Employee gifts

 

Gifts for employees change with the times because the economy is always changing and people’s preferences for the gifts they want to receive change. Some might think, a gift is a gift, when in fact nothing could be further than the truth. There are parameters. Some gifts may even have the opposite reaction of what you intended. We’ve all had that “gift” from a relative or someone that didn’t seem like a gift at all. It may feel like more like a joke, or worse, a burden that you feel you need to outwardly appreciate, but you really don’t.

 

First off, a gift is a gift. If you’re basing it on performance it’s a performance bonus. If there are no strings attached, it’s a gift. That’s not to say that all gifts must be equal, but they should come from a good place. Forget about giving out company branded SWAG, that always ranks as one of the most hated gifts.

 

What do most employees want? Ask them and they’ll tell you they want cash. They may appreciate the gesture of fruit, gift cards, or motivational books. When it comes down to it when you ask if they would have rather had cash the answer is usually, yes. The great thing about cash is it’s easy. The problem with cash is it’s impersonal. It’s not always fun to give and sometimes easy to forget when it’s from your employer.

 

Education Loan Finance for Business can help out here in a unique way because you can give them something that has the power of cash, with added sentiment and thoughtfulness. You can help pay some of their student loans for the month. By providing a yearly contribution to student loan debt it is the same as giving cash, but it tells employees you understand. It shows that you understand the financial obligations they have and you want them to be in a more financially secure place. They can use the extra money they don’t have to pay loans with, on their holiday gifts, or they can pay down their loans even faster. It’s a win-win.

 

Not every employee will have student loans obviously, but it’s a great option for those that do. For the rest? What employees seem to love most is a choice. That may seem a little impersonal, but really it’s not. Say you offer, cash, a gift card to a nice restaurant or an extra day off next year. Employees who get to choose what they want will be happy because they were involved in the process. Happy employees mean fewer complaints and that can help make the holidays a little happier.

 

Educational Lunch

Around the holidays many people become stressed about finances due to gift-giving and popular shopping days. Something you can do as an employer to ease stress for your employees is to set up a financial education lunch. This type of lunch would be great before the holidays to share some budgeting tips and ideas. Have a local banker, partner, or client come in and share their top tips for the holidays. Cater the lunch and allow employees to ask as many questions as they’d like during the sessions. If you want to make it fun try giving away some surprise gifts for those who attend.

 

Remote Working Days

As the holidays draw near, the workload of employees will continue to get bigger. Consider offering your employees some remote days around the holidays. This will allow employees to work from home saving time on commuting and they can get more of their own personal chores done too. If you cannot permit employees to work from home try offering flexible working hours. Any additional flexibility that can be offered during the holidays will have a large impact on employees.

 

Let your employees share in the giving or not.

 

Whether it’s a secret Santa, white elephant, or a grab-bag, most offices have some sort of gift exchange. This can be an easy way to have fun that doesn’t take a lot of time. Put a strict limit on cost, usually $20 or less and let it be known that you don’t have to participate. No one likes to be forced into a secret Santa or some sort of gift giving organized by their employer.

 

Share the company’s edible gifts and let employees share their treats.        

 

Sometimes vendors, clients, or partners will send gifts to management, often in the form of edible treats. Why not open it up to everyone to share in the goodies? It doesn’t cost anything. Additionally, invite employees to share their holiday treats if they want. You’ll find that a lot of people enjoy sharing their favorite things about the holidays as much as they do getting gifts. You could even host a holiday lunch where employees are invited to bring in their favorite treats.

 

Regardless of how your company chooses to proceed through the holidays, it’s important to keep in mind your employees. It’s best to facilitate an environment where workers like to come to work. Though it may seem counter-intuitive to spend money on educational lunches or remote working days, these can help to ease employee stress. Employees who are stressed less will do better work and be more willing to stay to get work done.

 

Five Things Millennial Employees Look For

Experiential Gift Giving Guide

We’ve all heard the millennial generation has shifted their focus from material possessions to experiences. They don’t want a thing that’s just going to take up space they don’t have, they want to do something. It should come as no surprise that for the holidays they’d prefer experiential gifts. If you have a Millennial in your life here are a few gift ideas we’ve gathered. Before making a purchase, consider the person you are buying for and their unique taste, your location and obviously your budget. For ease, we’ve broken it up into the categories Mind, Body, Soul, and Stomach.

 

Mind

 

Art

 

If someone on your list is into art, consider getting them a membership to the art museum in your area. Memberships often include more access and special events. If they’re really into art you can’t beat this VIP tour of an empty Met museum in New York City. You’ll have the ability to go before the museum opens. Groups are 25 people max allowing you to see some of the world’s greatest artwork like you’ve never seen it before.

 

Travel

 

For most of us, travel is one of the most eye-opening experiences. To be in a place that’s uniquely different from normal awakens the senses and expands your imagination. We could recommend a number of travel experiences like sand boarding at Sand Dunes National ParkExploring ancient caves in South America, but travel is so personal. We recommend sites like IF ONLY that offer more curated experiences in the United States and you can’t beat an AirBnB gift card that lets people choose their own adventure.

 

 

Body

 

Gym

 

Now, if the person you buy for spends most of their evenings on the couch, this probably isn’t the gift for them. If they are into sports and fitness and they don’t already have a gym membership, it may be just the right thing. You could do a month or even a year. You could even get one yourself and go together – built-in gym partners. If you’re gifting to someone who is always on the go, look into getting them a Classpass. This allows them to take classes at a gym located in different areas. For a person who is traveling a lot or is always moving, it’s great.

 

Salon

 

When you look good you feel good, but a lot of us don’t splurge for the fancy salon. When you can take advantage of a fancy salon, without the guilt of spending money it’s all the better. Find their salon and let them get their hair or nails did. Places like Drybar offer gift cards and you can get a wash and blowout for around $40. The best part that includes wine!

 

Massage

 

With the stress of the holidays, most of us just want to be in a quiet room for an hour. Throw in a relaxing massage that lets your friend unplug and escape the world for a bit. It may not be the most personal gift, but it never goes unappreciated.

 

 

Soul

 

Zen

 

If they’re down with the downward dog, you could get them some local yoga classes or consider one of the many companies that offer amazing yoga retreats like Yogascapes, where you can join a small group of like-minded people for an amazing yoga retreat in “off the beaten path locations.”

 

Music

 

There’s nothing more personal than music. Consider tickets to a show one of their favorite artists or a subscription to a music service if they don’t have one. For those that are a little more free-spirited consider finding music in a really intimate setting through sites like Sofarsounds.com.

 

 

Stomach

 

There’s no experience more common or universal than food and eating. And you have to do little more than scan Instagram to see how much people love food. With this in mind, there are so many directions you can go with food. From cooking classes to meal delivery services to full-on molecular gastronomy experiences it’s hard to go wrong with the food. Don’t have a big budget? Then you can always give actual food that you’ve made, it’s almost sure to be appreciated.

 

7 Money Mistakes Young Professionals Should Avoid

 

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The 4 Most Common Causes of Physician Burnout in 2018

This is Part II of our three-part research series with LeverageRx, an online financial marketplace exclusively for doctors.

 

Changes in healthcare often have a domino effect on employees and patients. The medical profession has to evolve and change to share the latest in medical findings. But what if those changes cause the people that patients depend on to burnout? Recent changes in the industry are taking a serious toll on physicians. Medscape’s annual Physician Lifestyle Report surveyed more than 15,000 physicians from 29 specialties. Of survey respondents, 42% of physicians reported burnout.

 

Could change in the healthcare industry be boosting the number of physicians who experience burnout? What factors could be contributing to physician burnout?Let’s take a closer look at the four most common causes of physician burnout in 2018.

 

Relationships

Mergers and acquisitions are on the rise in healthcare. In fact, they were up 57% in the first half of 2018 compared to the same period of 2017 per The Wall Street Journal.

 

Nowadays, it can be rare to find a physician who isn’t practicing within a large healthcare group.

Due to the rising costs of owning your own practice, joining a healthcare system may seem like a no-brainer. For physicians, it means less to worry about when it comes to things like:

 

  • New technology.
  • Medical equipment.
  • Insurance.

 

But does joining a healthcare system alleviate physician burnout? Or could it actually be adding to it?

 

On one hand, these large healthcare systems can be a great fit for physicians:

 

  • With no time to run their own practice.
  • Looking to take on less risk.

 

On the other hand, large healthcare systems can be a source of stress for patients. And that patient stress often ends up taking a toll on their physician.

 

Healthcare systems tend to increase efficiency by utilizing multiple locations and specialties. For patients, this may have removed the basic comforts of seeing a local physician. Instead of calling the office’s front desk, patients pass through large, automated phone systems. Other factors that may cause stress for ill patients seeking treatment include changes in:

 

  • Location.
  • Hours of operation.
  • In-network insurance.

 

As physicians advance in their careers, their workload grows. This often times means they can no longer communicate with patients like they once could. The endless chase for answers can cause damage to the relationship a physician may have spent years building.

 

33% of physicians surveyed said that they’re easily exasperated with patients. 32% said they are less engaged with patients due to physician burnout.

 

Could this loss of loyalty be adding to physician burnout?

 

Loyalty

 

When patients lack loyalty to physicians, this causes a lack of enthusiasm for physicians. Patient loyalty may decrease due to the healthcare system and the absence of a personal touch.

 

An underlying reason for the lack of patient loyalty to physicians is insurance. For patients and healthcare systems, coverage is subject to constant change. As of 2018, many health systems see this as a concern for their business. As a result, many have transitioned from volume-based care to value-based care. Utilizing a value-based strategy should help health systems rebuild lost patient relationships. Value-based care restores relationships by offering patients easier communication and more convenience. This shift to a value-based strategy will affect physicians in several ways, including:

 

  • An increasing focus on technology.
  • A more holistic approach to health in the community.

 

Due in part to this lagging patient loyalty, physicians do not receive the praise they once did. For most physicians, the reward they seek goes beyond their paycheck. Patient approval justifies their hard work as time well spent. This attitude shift toward the medical profession raises concerns when considering the results of a recent Prophet/GE study. It found a staggering 81 percent of consumers are unsatisfied with their healthcare experience.

 

Emphasis on Profits

 

For many healthcare systems, a value-based strategy may cause additional physician burnout. This strategy requires physicians to perform more administrative tasks, which takes away from patient care.

 

For example, if testing is required under this type of strategy, it would be imperative to explain as to why the additional testing is needed. Not only is there more paperwork that falls on the responsibility of physicians, but there could be less staffed physicians. In addition, health systems routinely only contract with a percentage of physicians of one type of specialty. This lack of staff depth leads to:

 

  • Longer regular working hours.
  • More overtime hours.
  • More on-call duties.

 

The medical profession already faces a great deal of pressure and stress. Add to this a lack of work-life balance, and naturally, they are at a greater risk for depression and burnout.

 

Health systems are often for-profit based organizations. Like any industry, the desire to drive bottom lines is huge.

 

According to the 2018 Medscape compensation report, physician salaries have been on a steady incline. Supply and demand for physicians is as strong as ever. But for physicians who feel overworked and undervalued, the minor salary bump may not be enough. According to the Medscape National Burnout & Depression Report of 2018, here are the top three contributing factors:

 

  1. Too many bureaucratic tasks (paperwork) – 56%
  2. Spending too many hours at work – 39%
  3. Insufficient compensation – 24%

 

Student Loan Debt

 

Physicians illustrate a concern for financial wellness.

 

To pursue a career in medicine, most need student loans to finance their education. In turn, seventy-five percent of medical school graduates begin practice with debt. What’s worse is that the average medical school grad carries $192,000 in debt. It’s no surprise that the burden to pay off these loans can cause extreme financial strain for young physicians. And although many overcome to lead successful careers, some never fully recover.

 

According to the Medscape Physician Wealth and Debt Report of 2018, most school loans are paid off by age 50. Thirty-two percent of physicians surveyed were still paying down their own student loan debt from medical school.

 

With so many physicians paying down student loan debt, it’s no wonder their financial outlook is unique. More money for student loan payments means less money for lifestyle spending and retirement planning. This financial stress extends beyond large monthly payments, too. It also impacts their experience as first-time homebuyers.

 

In addition to the long hours physicians typically work, they now have little money to add to their budgets. In fact, 24% of physicians in the Medscape survey said that insufficient compensation contributed to their burnout. And when asked what could be done to reduce burnout, 35% said: “increase compensation to avoid financial stress.”

 

In a large healthcare system, it can be tough to stand out. Most CFOs are not closely involved with physicians. This lack of engagement means physicians are less likely to get the financial resources they need. Most raises and bonuses in large healthcare systems come at a preset rate or a generic structure. As a physician, refinancing student loans can offer significant cost savings.

 

Depending on the repayment plan, this is possible both:

 

  • Over the life of the loan.
  • On a monthly basis.

 

Large health systems should consider offering student loan debt assistance to physicians and other employees.

 

Key takeaways

 

Like student loan debt, physician burnout is a crisis affecting the healthcare industry today. Based on our research, the former is actually fueling the latter. But that’s not the only culprit. Other leading causes include:

 

  • Less meaningful relationships.
  • A decline in patient loyalty.
  • Profits over work-life balance.

 

The healthcare industry is subject to constant change. Although advancements in medicine are needed, they should not overshadow those who provide care. Prioritizing the personal and financial well-being of physicians is the first step to overcoming the burnout crisis.

 

9 Signs it’s Time to Refinance Student Loan Debt

 

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