Help Solve This Pricey Problem

Last Thursday, I gave a presentation to a group of financial advisors interested in focusing on tax planning. At lunch, I sat next to Dr. Vicki Rackner, an MD who coaches accountants and financial professionals looking to target doctors. (If she sounds like someone we should bring into TaxCoach, you’re right – look for her to co-host a TCU class on targeting doctors on July 12.)

During my presentation that afternoon, I outlined an analogy to explain the tax-planning process. Just like when you go to the doctor when you’re sick, it starts with a diagnosis, then moves to a prescription, then ends when someone fills that prescription. Sitting down with the client to review their tax return is when you diagnose their mistakes and missed opportunities. The plan you prepare is the prescription. And implementing the plan (setting up new business entities, retirement plans, etc.) is filling the prescription.

Dr. Rackner was intrigued by that analogy, and she raised an interesting point that might surprise you. It turns out that half of all patients don’t take their medication as prescribed. More than one in five prescriptions don’t get filled at all. And “medication adherence,” as it’s called, is lowest among chronically ill patients.

Medication adherence is an expensive problem. It costs at least 125,000 lives every year, and increases emergency room visits and hospital stays. All told, according to the New England Healthcare Institute, the problem costs America $290 billion per year.

I was stunned to realize how many people just don’t take their medication. But how surprised should I be? Have you ever given a client some really good advice – maybe a concept or strategy that could save them a lot of money in taxes – and watched them completely ignore you? Of course you have! It turns out that “medication adherence” is a problem in our business, too!

So here’s my suggestion how you can help solve it: think of ways that you can use TaxCoach to help your “patients” comply in ways that go beyond preparing a plan.

Let’s say you meet a prospective client who thinks they might be paying too much tax. (That shouldn’t be too hard, right?) They sit down to meet, and you realize that, among other things, they’re a perfect candidate for a medical expense reimbursement plan. You pitch a full-blown plan, but they don’t bite.

Is all lost? Not at all… perhaps you can drop down to a MERP-only engagement. TaxCoach lets you prepare a plan with as few modules as you like, or you can even print a single stand-alone module from the “Tax Strategy Reference” menu at the bottom of the button on the TaxCoach home page. Throw in the MERP implementation guide, and you’ve got a mini-planning engagement that gets them in the door for less than the price of a full-blown plan, and still delivers the savings you know you can create. (When I was launching my own practice, I sold these all day long for $300.)

Here’s another example. Let’s say a longtime client on a monthly maintenance agreement comes to you and asks whether it makes more sense to buy or lease their next car. You could simply answer the question, in person or over the phone. But if you give them a copy of the “buy versus lease” module, they’ll appreciate your advice more.  Even if they don’t pay separately for it, the extra effort and tangible deliverable will make a lasting impact.

TaxCoach is full of resources you can use to reinforce your value with clients and help make sure they take their medicine – even if you never prepare a comprehensive plan. Too many members miss out on those sorts of everyday resources. It may not cost $290 billion. But it’s still an expensive problem!